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Lars Pålsson Syll

Lars Pålsson Syll

Professor at Malmö University. Primary research interest - the philosophy, history and methodology of economics.

Articles by Lars Pålsson Syll

Econometrics — a crooked path from cause to effect

2 days ago

Econometrics — a crooked path from cause to effect

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In their book Mastering ‘Metrics: The Path from Cause to Effect Joshua Angrist and Jörn-Steffen Pischke write:
Our first line of attack on the causality problem is a randomized experiment, often called a randomized trial. In a randomized trial, researchers change the causal variables of interest … for a group selected using something like a coin toss. By changing circumstances randomly, we make it highly likely that the variable of interest is unrelated to the many other factors determining the outcomes we want to study. Random assignment isn’t the same as holding everything else fixed, but it has the same effect. Random manipulation makes other things equal hold on average across the

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To my children

2 days ago

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This one is for my sons and daughters — David, Tora, Linnea, Sebastian, Amanda.

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Vinstdrivna friskolor? Nej tack!

3 days ago

Vinstdrivna friskolor? Nej tack!

Min gamla kollega från tiden vid nationalekonomiska institutionen i Lund, Anne-Marie Pålsson, förklarar varför det här med vinstdrivna friskolor kanske inte är en särskilt begåvad idé. Bra rutet Anne-Marie!
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[h/t Jan Wiklund]

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The ‘New Keynesian’ Monetarist fantasy is finally over

3 days ago

The ‘New Keynesian’ Monetarist fantasy is finally over

Kenneth Rogoff of Harvard recently argued that fiscal stabilization policy “is far too politicized to substitute consistently for modern independent technocratic central banks.” But instead of considering how this defect might be overcome, Rogoff sees no alternative to continuing with the prevailing monetary-policy regime – despite the overwhelming evidence that central banks are unable to play their assigned role. At least fiscal policy might in principle be up to the task of economic stabilization; there is no chance that central banks will be …
A less skeptical observer than Rogoff would have looked more closely at proposals to strengthen automatic fiscal stabilizers, rather than dismissing them

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Friskoleförespråkarnas blinda fläck

4 days ago

I Sydsvenskan skrev för ett par veckor sedan tidningens politiske chefredaktör Heidi Avellan apropå friskolor följande:
Friskolor … infördes 1992. Blev det bra? Det finns mycket att invända mot. Forskningen visar att det fria skolvalet och fler friskolor är viktiga förklaringar till skolsegregation, det är framför allt resursstarka föräldrar med god ekonomi och hög utbildning som väljer. Lägg till misstanke om betygsinflation och övervinster. Det är klart att det inte är bra.
Det finns mycket i Avellans artikel som man som forskare kan skriva under på. Men här finns också något som stör. Är det bara “övervinster” som är problemet med det unika svenska friskolesystemet? Varför skulle vinster som baseras enkom på skattemedel vara acceptabla så länge de inte är “övervinster”?I

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Lisa Gerrard

5 days ago

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I sing in the language of the heart, It’s an invented language that I’ve had for a very long time. I believe I started singing in it when I was about 12. Roughly that time. And I believed that I was speaking to God when I sang in that language.

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On randomization and regression (wonkish)

5 days ago

On randomization and regression (wonkish)

Randomization does not justify the regression model, so that bias can be expected, and the usual formulas do not give the right variances. Moreover, regression need not improve precision …
What is the source of the bias when regression models are applied to experimental data? In brief, the regression model assumes linear additive effects. Given the assignments, the response is taken to be a linear combina- tion of treatment dummies and covariates, with an additive random error; coefficients are assumed to be constant across subjects. The Neyman [potential outcome] model makes no assumptions about linearity and additivity. If we write the expected response given the assignments as a linear combination of treatment

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Endogeneity bias — fiction in a fictitious world (wonkish)

7 days ago

Endogeneity bias — fiction in a fictitious world (wonkish)

The bivariate model base and its a priori closure destines ‘endogeneity bias’ to a fictitious existence. That existence, in turn, confines applied research in a fictitious world. The concept loses its grip in empirical studies whose findings rely heavily on forecasting accuracy, e.g. a wide range of macro-modelling research as mentioned before. It remains thriving in areas where empirical results are evaluated virtually solely by the statistical significances of estimates of one or two predestined structural parameters in models offering highly partial causal explanations of the data at hand. These models are usually presented to serve the practical purpose of policy evaluation. Since conclusive

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My favourite statistics books

7 days ago

My favourite statistics books

Mathematical statistician David Freedman‘s Statistical Models and Causal Inference (Cambridge University Press, 2010)  and Statistical Models: Theory and Practice (Cambridge University Press, 2009) are marvellous books. They ought to be mandatory reading for every serious social scientist — including economists and econometricians — who doesn’t want to succumb to ad hoc assumptions and unsupported statistical conclusions!
How do we calibrate the uncertainty introduced by data collection? Nowadays, this question has become quite salient, and it is routinely answered using wellknown methods of statistical inference, with standard errors, t -tests, and P-values … These conventional answers, however, turn out to depend

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Paul Romer explains what went wrong with economics

8 days ago

Paul Romer explains what went wrong with economics

Economists cannot simply dismiss as “absurd” or “impossible” the possibility that our profession has imposed total costs that exceed total benefits. And no, building a model which shows that it is logically possible for economists to make a positive net contribution is not going to make questions about our actual effect go away. Why don’t we just stipulate that economists are now so clever at building models that they can use a model to show that almost anything is logically possible. Then we could move on to making estimates and doing the math.
In the 19th century, when it became clear that the net effect of having a doctor assist a woman in child-birth was to increase the probability that she would

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Rejecting positivism — the case of statistics

8 days ago

Rejecting positivism — the case of statistics

Rejecting positivism requires re-thinking the disciplines related to data analysis from the foundations. In this paper, we consider just one of the foundational concepts of statistics. The question we will explore is: What is the relationship between the numbers we use (the data) and external reality? The standard conception promoted in statistics is that numbers are FACTS. These are objective measures of external reality, which are the same for all observers. About these numbers there can be no dispute, as all people who go out and measure would come up with the same number. In particular, there is no element of subjectivity, and there are no value judgments, which are built into the numbers we use. Our main

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We need a ‘Fridays for Keynesianism’ movement!

8 days ago

Basically, the classical model is a model for a corn economy: households decide whether to consume the corn or to save it. If it is saved it can be supplied to investors who sow the grains, repaying to the households one period later the credit amount plus interest.
In the Keynesian model the ‘funds’ exchanged on the capital market are made up of money—‘funds’ are bank deposits. Funds are not created here by a renunciation of consumption but by the banks granting credit …
In the classical model, there is a strict crowding out of private investors on the capital market by government deficits. The all-purpose good, which functions equally as ‘funds’ and as investment good, can only be used once.
In the Keynesian model, on the other hand, ‘funds’ (money) and investment goods

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What is truth in economics?

10 days ago

What is truth in economics?

In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner.
Robert Aumann

What a handy view of science …
How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to kids’ teeth. Now a ‘Nobel prize’ winning economist tells you that if there are such things as tooth fairies or not doesn’t really matter. Scientific theories are not about what is true or false, but whether ‘they enable us to organize and understand our observations’!
What Aumann and other defenders of

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Gretl — econometrics made easy

11 days ago

Gretl — econometrics made easy

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Thanks to Allin Cottrell and Riccardo Lucchetti we today have access to a high-quality​ tool for doing and teaching econometrics — Gretl. And, best of all, it is totally free!
Gretl is up to the tasks you may have, so why spend money on expensive commercial programs?
The latest snapshot version of Gretl can be downloaded here.
[And yes, I do know there’s another fabulously good and free program — R. But R hasn’t got as nifty a GUI as Gretl — and at least for students, it’s more difficult to learn to handle and program. I do think it’s preferable when students are going to learn some basic econometrics to use Gretl so that they can concentrate more on ‘content’ rather than on ‘technique.’]

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Critical realism

11 days ago

What properties do societies possess that might make them possible objects of knowledge for us? My strategy in developing an answer to this question will be effectively based on a pincer movement. But in deploying the pincer I shall concentrate first on the ontological question of the properties that societies possess, before shifting to the epistemological question of how these properties make them possible objects of knowledge for us. This is not an arbitrary order of development. It reflects the condition that, for transcendental realism, it is the nature of objects that determines their cognitive possibilities for us; that, in nature, it is humanity that is contingent and knowledge, so to speak, accidental. Thus it is because sticks and stones are solid that they can be

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A primer on causal inference

12 days ago

A primer on causal inference

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D H Kim’s twelve videos give a splendid introduction to modern thinking on causality. Highly recommendable student stuff!

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Econometrics as a testing device

14 days ago

Econometrics as a testing device

Debating econometrics and its short-comings yours truly often gets the response from econometricians that “ok, maybe econometrics isn’t perfect, but you have to admit that it is a great technique for empirical testing of economic hypotheses.” I usually respond by referring to the text below …
Most econometricians today … believe that the main objective of applied econometrics is the confrontation of economic theories with observable phenomena. This involves theory testing, for example testing monetarism or rational consumer behaviour. The econometrician’s task would be to find out whether a particular economic theory is true or not, using economic data and statistical tools. Nobody would say that this is easy. But is it

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Living legends

15 days ago

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Better than ever. Absolutely awesome. The Silver Girl still sails on.

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Econometrics — a matter of BELIEF and FAITH

15 days ago

Econometrics — a matter of BELIEF and FAITH

Everybody who takes regression analysis course, studies the assumptions of regression model. But nobody knows why, because after reading about the axioms, they are rarely mentioned. But the assumptions are important, because if any one assumption is wrong, the regression is not valid, and the interpretations can be completely wrong. In order to have a valid regression model, you must have right regressors, the right functional form, all the regressors must be exogenous, regression parameters should not change over time, regression residuals should be independent and have mean zero, and many other things as well. There are so many assumptions that it is impossible to test all of them. This means that

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