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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

Statistical philosophies and idealizations

3 days ago

Statistical philosophies and idealizations

As has been long and widely emphasized in various terms … frequentism and Bayesianism are incomplete both as learning theories and as philosophies of statistics, in the pragmatic sense that each alone are insufficient for all sound applications. Notably, causal justifications are the foundation for classical frequentism, which demands that all model constraints be deduced from real mechanical constraints on the physical data-generating process. Nonetheless, it seems modeling analyses in health, medical, and social sciences rarely have such physical justification …
The deficiency of strict coherent (operational subjective) Bayesianism is its assumption that all aspects of this uncertainty have been captured by

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Cambridge economics has died out

5 days ago

Cambridge economics has died out

A couple of weeks ago yours truly had a review of Diane Coyle’s Cogs and Monsters in WEA Commentaires. As I wrote, there’s a lot in the book to like, but unfortunately also some things very hard to swallow. James Galbraith seems to argue along the same lines in his Project Syndicate review:
Coyle subscribes to the grand illusion that price adjustment is the economy’s prime mover. But as the Cambridge Keynesian economist Nicholas Kaldor noted in his slim 1985 book, Economics without Equilibrium, “the intuitive belief that prices are the key to everything” is simply wrong. The foundation on which Coyle places modern mainstream economics is a myth …
When I attended the University of Cambridge in 1974-75, I read Keynes, met

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Juloratoriet (personal)

5 days ago

Kjell-Åke Andersson turned Göran Tunström’s s epic masterpiece The Christmas Oratory into a stunningly beautiful and emotionally upsetting movie.
Stefan Nilsson wrote the breathtaking music.
And it still breaks my heart every time I watch it …
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Does MMT have an inflationary bias?

6 days ago

From Lars Syll
A view yours truly often encounters when debating MMT is that there is an inflationary bias in MMT and that its framework ignores expectations.
It is extremely difficult to recognize that description. Given its roots in the writings of Keynes, Lerner, and Minsky, it is — to say the least — rather amazing to attribute that view to MMT.
Let me just quote one source to show how ill-founded the critique is on this issue:
MMT recommends a different approach to the federal budgeting process, one that integrates inflation risk into the decision-making process so that lawmakers are forced to stop and think about whether they have taken the necessary steps to guard against inflation risk before approving any new spending. MMT would make us safer in this respect because it

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Bayesian superficiality

6 days ago

The bias toward the superficial and the response to extraneous influences on research are both examples of real harm done in contemporary social science by a roughly Bayesian paradigm of statistical inference as the epitome of empirical argument. For instance the dominant attitude toward the sources of black-white differential in United States unemployment rates (routinely the rates are in a two to one ratio) is “phenomenological.” The employment differences are traced to correlates in education, locale, occupational structure, and family background. The attitude toward further, underlying causes of those correlations is agnostic … Yet on reflection, common sense dictates that racist attitudes and institutional racism must play an important causal role. People do have

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Scientific realism and inference to the best explanation

6 days ago

Scientific realism and inference to the best explanation

In inference to the best explanation we start with a body of (purported) data/facts/evidence and search for explanations that can account for these data/facts/evidence. Having the best explanation means that you, given the context-dependent background assumptions, have a satisfactory explanation that can explain the fact/evidence better than any other competing explanation — and so it is reasonable to consider/believe the hypothesis to be true. Even if we (inevitably) do not have deductive certainty, our reasoning gives us a license to consider our belief in the hypothesis as reasonable.
Accepting a hypothesis means that you believe it does explain the available evidence better than any other

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Why Bayesianism doesn’t resolve scientific disputes

6 days ago

Why Bayesianism doesn’t resolve scientific disputes

The occurrence of unknown prior probabilities, that must be stipulated arbitrarily, does not worry the Bayesian anymore than God’s inscrutable designs worry the theologian. Thus Lindley (1976), one of the leaders of the Bayesian school, holds that this difficulty has been ‘grossly exaggerated’. And he adds: ‘I am often asked if the [Bayesian] method gives the right answer: or, more particularly, how do you know if you have got the right prior [probability]. My reply is that I don’t know what is meant by ‘right’ in this context. The Bayesian theory is about coherence, not about right or wrong.’ Thus the Bayesian, along with the philosopher who only cares about the cogency of arguments, fits in with the

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The power and poison of MMT

8 days ago

From Lars Syll
MMT includes both problematic propositions and perfectly reasonable — even highly useful — positions.
In the latter category, the idea that stands out is essentially functional finance theory. Proposed by Abba Lerner in 1943, FFT holds that, because governments borrowing in their own currency can always print money to service their debts, but still face inflation risks, they should aim to balance supply and demand at full employment, rather than fret about balancing the budget. In Lerner’s view, well-targeted deficit spending is an effective way for governments to “maintain prosperity” …
But MMT and FFT are not synonymous. MMT includes two additional propositions that, in my view, are unsound. The first is that monetary policy should be conducted in such a way that it

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Beyond Bayesian probabilism

8 days ago

Although Bayes’ theorem is mathematically unquestionable, that doesn’t qualify it as indisputably applicable to scientific questions. Science is not reducible to betting, and scientific inference is not a branch of probability theory. It always transcends mathematics. The unfulfilled dream of constructing an inductive logic of probabilism — the Bayesian Holy Grail — will always remain unfulfilled.
Bayesian probability calculus is far from the automatic inference engine that its protagonists maintain it is. That probabilities may work for expressing uncertainty when we pick balls from an urn, does not automatically make it relevant for making inferences in science. Where do the priors come from? Wouldn’t it be better in science if we did some scientific experimentation and

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Bayesianism — the new positivism

9 days ago

Bayesianism — the new positivism

No matter how atheoretical their inclination, scientists are interested in relations between properties of phenomena, not in lists of readings from dials of instruments that detect those properties …
Here as elsewhere, Bayesian philosophy of science obscures a difference between scientists’ problems of hypothesis choice and the problems of prediction that are the standard illustrations and applications of probability theory. In the latter situations, such as the standard guessing games about coins and urns, investigators know an enormous amount about the reality they are examining, including the effects of different values of the unknown factor. Scientists can rarely take that much knowledge for granted. It should not be

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Uncertainty and “trailing clouds of vagueness”

11 days ago

From Lars Syll
We live in a world permeated by unmeasurable uncertainty — not quantifiable stochastic risk — which often forces us to make decisions based on anything but ‘rational expectations.’ Our expectations are most often based on the confidence or ‘weight’ we put on different events and alternatives, and the ‘degrees of belief’ on which we weigh probabilities often have preciously little to do with the kind of stochastic probabilistic calculations made by the rational agents as modelled by ‘modern’ social sciences. Often we simply do not know.
So why do economists, companies and governments continue with the expensive, but obviously ratherworthless, activity of trying to forecast/predict the future?
A couple of years ago yours truly was interviewed by a public radio journalist

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Bayes and the ‘old evidence’ problem

11 days ago

Bayes and the ‘old evidence’ problem

Among the many achievements of Newton’s theory of gravitation was its prediction of the tides and their relation to the lunar orbit. Presumably the success of this prediction confirmed Newton’s theory, or in Bayesian terms, the observable facts about the tides e raised the probability of Newton’s theory h.
But the Bayesian it turns out can make no such claim. Because the facts about the tides were already known when Newton’s theory was formulated, the probability for e was equal to one. It follows immediately that both C (e ) and C (e |h ) are equal to one (the latter for any choice of h ). But then the Bayesian multiplier is also one, so Newton’s theory does not receive any probability boost from its prediction of

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Does MMT have an inflationary bias?

11 days ago

Does MMT have an inflationary bias?

A view yours truly often encounters when debating MMT is that there is an inflationary bias in MMT and that its framework ignores expectations.
It is extremely difficult to recognize that description. Given its roots in the writings of Keynes, Lerner, and Minsky, it is — to say the least — rather amazing to attribute that view to MMT.
Let me just quote one source to show how ill-founded the critique is on this issue:

MMT recommends a different approach to the federal budgeting process, one that integrates inflation risk into the decision-making process so that lawmakers are forced to stop and think about whether they have taken the necessary steps to guard against inflation risk before approving any new spending. MMT

Read More »

The power and poison of MMT

13 days ago

The power and poison of MMT

MMT includes both problematic propositions and perfectly reasonable — even highly useful — positions.
In the latter category, the idea that stands out is essentially functional finance theory. Proposed by Abba Lerner in 1943, FFT holds that, because governments borrowing in their own currency can always print money to service their debts, but still face inflation risks, they should aim to balance supply and demand at full employment, rather than fret about balancing the budget. In Lerner’s view, well-targeted deficit spending is an effective way for governments to “maintain prosperity” …
But MMT and FFT are not synonymous. MMT includes two additional propositions that, in my view, are unsound. The first is that monetary policy

Read More »

Causal identification

15 days ago

From Lars Syll
Causal identification requires nonstatistical information in addition to information encoded as data or their probability distributions …
This need raises questions of to what extent can inference be codified or automated (which is to say, formalized) in ways that do more good than harm. In this setting, formal models – whether labeled ‘‘causal’’ or ‘‘statistical’’ – serve a crucial but limited role in providing hypothetical scenarios that establish what would be the case if the assumptions made were true and the input data were both trustworthy and the only data available. Those input assumptions include all the model features and prior distributions used in the scenario, and supposedly encode all information being used beyond the raw data file (including information

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Intelligence

15 days ago

Several years later I developed a broader theory of what separates the two general classes of learners—helpless versus mastery-oriented. I realized that these different types of students not only explain their failures differently, but they also hold different “theories” of intelligence. The helpless ones believe that intelligence is a fixed trait: you have only a certain amount, and that’s that. I call this a “fixed mind-set.” Mistakes crack their self-confidence because they attribute errors to a lack of ability, which they feel powerless to change. They avoid challenges because challenges make mistakes more likely and looking smart less so … Such children shun effort in the belief that having to work hard means they are dumb.
The mastery-oriented children, on the other

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Uncertainty and “trailing clouds of vagueness”

16 days ago

We live in a world permeated by unmeasurable uncertainty — not quantifiable stochastic risk — which often forces us to make decisions based on anything but ‘rational expectations.’ Our expectations are most often based on the confidence or ‘weight’ we put on different events and alternatives, and the ‘degrees of belief’ on which we weigh probabilities often have preciously little to do with the kind of stochastic probabilistic calculations made by the rational agents as modelled by ‘modern’ social sciences. Often we simply do not know.
So why do economists, companies and governments continue with the expensive, but obviously ratherworthless, activity of trying to forecast/predict the future?
A couple of years ago yours truly was interviewed by a public radio journalist

Read More »

Causal identification

18 days ago

Causal identification requires nonstatistical information in addition to information encoded as data or their probability distributions …
This need raises questions of to what extent can inference be codified or automated (which is to say, formalized) in ways that do more good than harm. In this setting, formal models – whether labeled ‘‘causal’’ or ‘‘statistical’’ – serve a crucial but limited role in providing hypothetical scenarios that establish what would be the case if the assumptions made were true and the input data were both trustworthy and the only data available. Those input assumptions include all the model features and prior distributions used in the scenario, and supposedly encode all information being used beyond the raw data file (including information about

Read More »

Why global inequality is at an all-time high 

20 days ago

There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.
Warren Buffett

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For the first time … researchers have gathered systematic data that allows for a comparison of wealth distributions in all countries of the world, from the bottom of the distribution to the top. The overall conclusion is that wealth hyper-concentration affects all world regions (and it has worsened during the Covid pandemic). At global level, in 2020 the poorest 50% of the world’s population owned just 2% of total private property (real estate, business and financial assets, net of debt), while the richest 10% own 76% of the total.
Latin America and the Middle East have the highest levels of inequality, followed by Russia and

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