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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

Om konsten att läsa och skriva

17 hours ago

Om konsten att läsa och skriva

Hur ska man läsa? Det är nog en rätt vanlig fundering alla någon gång har haft kring vårt förhållningssätt till litteratur och läsande.
Själv får jag anledning fundera kring detta när min älskade — som oförtrutet slukar nya böcker i ett rasande tempo — åter igen försöker övertala mig att ställa tillbaka Röda rummet, Hemsöborna, Martin Bircks ungdom, Den allvarsamma leken, Jerusalem eller Gösta Berlings saga i biblioteket och “pröva någon ny bok” för en gångs skull. För henne är det obegripligt att någon ens kommer på tanken att läsa om en roman när det finns så mycket oupptäckt och nytt att kasta sig över i litteraturens underbara värld. För henne — och säkert många andra bokslukare — är det bara dårar som hängivet ägnar

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Vor 80 Jahren: Der Hitler-Stalin-Pakt

21 hours ago

Der deutsch-sowjetische Nichtangriffspakt — auch als Hitler-Stalin-Pakt bekannt — wurde am 23. August 1939 unterzeichnet. Der Pakt garantierte dem Deutschen Reich die sowjetische Neutralität bei einer kriegerischen Auseinandersetzung mit den Westmächten.
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Modern macroeconomics

2 days ago

Rethinking Economics actually gives a pretty good description of the state of modern macroeconomics here.
There is a purist streak in economics that wants everything to follow from asumming things like ‘rationality’ and ‘equilibrium.’ That purist streak has given birth to a kind ‘deductivist blindness’ of mainstream economics, something that also to a larger extent explains why it contributes to causing economic crises rather than to solving them. But where does this ‘deductivist blindness’ of mainstream economics come from? To answer that question we have to examine the methodology of mainstream economics.
The insistence on constructing models showing the certainty of logical entailment has been central in the development of mainstream economics. Insisting on formalistic

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What — if anything — do p-values test?

3 days ago

What — if anything — do p-values test?

Unless enforced by study design and execution, statistical assumptions usually have no external justification; they may even be quite implausible. As result, one often sees attempts to justify specific assumptions with statistical tests, in the belief that a high p-value or ‘‘nonsignificance’’ licenses the assumption and a low p-value refutes it. Such focused testing is based on a meta-assumption that every other assumption used to derive the p-value is correct, which is a poor judgment when some of those other assumptions are uncertain. In that case (and in general) one should recognize that the p-value is simultaneously testing all the assumptions used to compute it – in particular, a null p-value actually tests

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Econometrics and the problem of unjustified assumptions

3 days ago

Econometrics and the problem of unjustified assumptions

There seems to be a pervasive human aversion to uncertainty, and one way to reduce feelings of uncertainty is to invest faith in deduction as a sufficient guide to truth. Unfortunately, such faith is as logically unjustified as any religious creed, since a deduction produces certainty about the real world only when its assumptions about the real world are certain …
Unfortunately, assumption uncertainty reduces the status of deductions and statistical computations to exercises in hypothetical reasoning – they provide best-case scenarios of what we could infer from specific data (which are assumed to have only specific, known problems). Even more unfortunate, however, is that this exercise is

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Pourquoi un changement de direction théorique est nécessaire

4 days ago

Pourquoi un changement de direction théorique est nécessaire

Il y a une certaine tendance française à attribuer à l’utilisation des mathématiques les difficultés des modèles à expliquer les phénomènes économiques … Pour moi, le problème ne réside pas dans l’utilisation des méthodes formelles mais plutôt dans une obsession poussant à améliorer et même à perfectionner des modèles qui semblent être totalement détachés de la réalité. Comme Robert Solow l’a observé:
«Maybe there is in human nature a deep-seated perverse pleasure in adopting and defending a wholly counterintuitive doctrine that leaves the unini tiated peasant wondering what planet he or she is on.
(Solow [2007])»
Cependant, je vais suggérer que cette tendance n’est que le reflet d’une longue

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Hicks on the lack of scientific progress in economics

4 days ago

Hicks on the lack of scientific progress in economics

Economics, also, is prone to revolutions; but they are mostly, I believe, of a different character … They are not clear advances in the scientific sense.
This is not the fault of economists. It is a consequence of the nature of the facts which we study. Our facts are not permanent, or repeatable, like the facts of the natural sciences; they change incessantly, and change without repetition … Our practical concern is with the facts of the present world; but before we can study the present, it is already past …
Our theories … are rays of light, which illuminate a part of the target, leaving the rest in darkness. As we use them, we avert our eyes from things which may be relevant, in order that we should

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Marginal productivity theory — a dangerous thought virus

5 days ago

Marginal productivity theory — a dangerous thought virus

The marginal productivity theory of income distribution was born a little over a century ago. Its principle creator, John Bates Clark, was explicit that his theory was about ideology and not science. Clark wanted show that in capitalist societies, everyone got what they produced, and hence all was fair:
“It is the purpose of this work to show that the distribution of the income of society is controlled by a natural law, and that this law, if it worked without friction, would give to every agent of production the amount of wealth which that agent creates. (John Bates Clark in The Distribution of Wealth)”
Clark was also explicit about why his theory was needed. The stability of the capitalist order

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The ‘practical’ theory of the future

5 days ago

The ‘practical’ theory of the future

Now a practical theory of the future … has certain marked characteristics. In particular, being based on so flimsy a foundation, it is subject to sudden and violent changes. The practice of calmness and immobility, of certainty and security, suddenly breaks down. New fears and hopes will, without warning, take charge of human conduct. The forces of disillusion may suddenly impose a new
conventional basis of valuation. All these pretty, polite techniques, made for a well-panelled Board Room and a nicely regulated market, are liable to collapse. At all times the vague panic fears and equally vague and unreasoned hopes are not really lulled, and lie but a little way below the surface …
Tho this is how we behave in the

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Wren-Lewis trying to cope with ideology

6 days ago

Wren-Lewis trying to cope with ideology

Simon Wren-Lewis has also commented on the study by Mohsen Javdani and Ha-Joon Chang — on economics and ideology — that I wrote about earlier today. Says Wren-Lewis:
I also, from my own experience, want to suggest that in their formal discourse (seminars, refereeing etc) academic economists normally pretend that this ideological bias does not exist. I cannot recall anyone in any seminar saying something like ‘you only assume that because of your ideology/politics’. This has one huge advantage. It means that academic analysis is judged (on the surface at least) on its merits, and not on the basis of the ideology of those involved.
The danger of doing the opposite should be obvious. Your view on the theoretical and

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We need more redistribution

6 days ago

We need more redistribution

Income inequality as measured by the Gini coefficient rose by about 36% in the 1980s under Thatcher, but the real story is the share of income that goes to people at the very top:
According to Greg Mankiw … in the United States the 1%’s share of total income, excluding capital gains, rose from about 8 percent in 1973 to 17 percent in 2010. Between 2010 and 2015 it’s risen from 17% to 22%!!
It’s incredibly concentrated even among the super-rich. The top 0.01%’s share of national income – this is just 16,000 people in a country of 330 million – rose from 0.5% in 1973 to 3.3% in 2010 to 5% in 2015. Their share of income quadrupled in just 35 years …
Just giving people money is fine if you don’t mind them playing video games all

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Donald Trump — un poisson d’avril totalement hors-saison

6 days ago

Donald Trump — un poisson d’avril totalement hors-saison

Stupéfaction, haussements de sourcils inquiets, abattement. Les Danois sont passés par toutes les phases de la surprise vendredi 16 août, en découvrant l’article du quotidien américain The Wall Street Journal. Celui-ci affirmait que le président américain, Donald Trump, aurait demandé à plusieurs occasions à ses conseillers s’il serait possible d’acheter le Groenland, un territoire danois. Une information non confirmée par la Maison Blanche.
« Le Groenland n’est évidemment pas à vendre », a réagi de ­manière succincte le gouvernement groenlandais. L’ancien premier ministre libéral danois Lars Lokke Rasmussen a été plus imagé : c’est « un poisson d’avril avant l’heure » …

Le Monde

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Economics and ideology

6 days ago

Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the discipline, characterizing economists and their views as objective, unbiased, and non-ideological …
Acknowledging that ideology resides quite comfortably in our economics departments would have huge intellectual implications, both theoretical and practical. In spite (or because?) of that, the matter has never been directly subjected to empirical scrutiny.
In a recent study, we do just that. Using a well-known experimental “deception” technique embedded in an online survey that involves just over 2400 economists from 19 countries, we fictitiously attribute the source of 15 quotations to famous economists of different leanings. In other words, all participants received

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Damon Runyon’s law

7 days ago

To get right down to it, I suspect that the attempt to construct economics as an axiomatically based hard science is doomed to fail. There are many partially overlapping reasons for believing this …
A modern economy is a very complicated system. Since we cannot conduct controlled on its smaller parts, or even observe them in isolation, the classical hard- science devices for discriminating between competing hypotheses are closed to us. The main alternative device is the statistical analysis of historical time-series. But then another difficulty arises. The competing hypotheses are themselves complex and subtle. We know before we start that all of them, or at least many of them, are capable of fitting the data in a gross sort of way. Then, in order to make more refined

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Axel Leijonhufvud

9 days ago

[embedded content]Trying to delineate the difference between ‘New Keynesianism’ and ‘Post Keynesianism’ — during an interview a couple of years ago — yours truly was confronted by the odd and confused view that Axel Leijonhufvud was a ‘New Keynesian.’ I wasn’t totally surprised — I had run into that misapprehension before — but still, it’s strange how wrong people sometimes get things.
The  last time I met Axel, we were both invited keynote speakers at the conference “Keynes 125 Years – What Have We Learned?” in Copenhagen. Axel’s speech was later published as Keynes and the crisis and contains the following thought provoking passages:
For many years now, the main alternative to Real Business Cycle Theory has been a somewhat loose cluster of models given the label of New

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Statistics and mathematics — not very helpful for understanding economies

9 days ago

Statistics and mathematics — not very helpful for understanding economies

Statistical science is not really very helpful for understanding or forecasting complex evolving self-healing organic ambiguous social systems – economies, in other words.
A statistician may have done the programming, but when you press a button on a computer keyboard and ask the computer to find some good patterns, better get clear a sad fact: computers do not think. They do exactly what the programmer told them to do and nothing more. They look for the patterns that we tell them to look for, those and nothing more. When we turn to the computer for advice, we are only talking to ourselves …
Mathematical analysis works great to decide which horse wins, if we are

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Sloppy regression interpretations

10 days ago

In most econometrics textbooks the authors give an interpretation of a linear regression such as
Y = a + bX,
saying that a one-unit increase in X (years of education) will cause a b unit increase in Y (wages).
Dealing with time-series regressions this may well be OK. The problem is that this ‘dynamic’ interpretation of b is standardly also given as the ‘explanation’ of the slope coefficient for cross-sectional data. But in that case, the only increase that can generally come in question is in the value of X (years of education) when going from individual to another individual in the population. If we are interested — as we usually are — in saying something about the dynamics of an individual’s wages and education, we have to look elsewhere (unless we assume cross-unit and

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Economics and identity

10 days ago

In the late 80s half of 25-34 year-olds owned their own home. Now, only a quarter do. This has changed how young people vote.
But what exactly is the mechanism here? I’m not sure that it is simple mechanical self-interested support for specific policies … Instead, what’s going on is a change of identity. In the 80s, many young people identified themselves as property-owners and voted accordingly. Today, they see themselves as propertyless and so vote Labour. There’s a reason why Thatcher was keen on home ownership. She knew that property ownership would make people more likely to identify with other owners of wealth, whilst tenancy made more likely to identify with the traditional party of the propertyless …
Now, this is not to adopt a crude economic determinism. Although

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Low interest rates and leveraged loans — a dangerous combination

11 days ago

Low interest rates and leveraged loans — a dangerous combination

A la longue, l’environnement de taux d’intérêt très bas a fini par désorienter les investisseurs et les professionnels des marchés financiers. Puisque placer de l’argent dans des fonds obligataires ne rapporte quasiment rien et que de nombreux titres s’échangent désormais sur des niveaux de taux de rendement négatifs, les hedge funds, mais aussi de grandes compagnies d’assurances et des fonds de pension se sont mis en quête d’actifs plus risqués …
Problème : le niveau de rendement des actifs risqués a lui aussi fondu, laissant l’investisseur sans points de repère. « Nous sommes dans une zone dangereuse. Entre 2005 et 2007, la prime de risque avait également disparu. Dans un tel contexte, le

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No reality, please. We’re economists!

11 days ago

No reality, please. We’re economists!

Mathematics, especially through the work of David Hilbert, became increasingly viewed as a discipline properly concerned with providing a pool of frameworks for possible realities. No longer was mathematics seen as the language of (non-social) nature, abstracted from the study of the latter. Rather, it was conceived as a practice concerned with formulating systems comprising sets of axioms and their deductive consequences, with these systems in effect taking on a life of their own. The task of finding applications was henceforth regarded as being of secondary importance at best, and not of immediate concern.
This emergence of the axiomatic method removed at a stroke various hitherto insurmountable constraints facing

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Understanding regression assumptions

12 days ago

Although most social scientists can recite the formal definitions of the various regression assumptions, many have little appreciation of the substantive meanings of these assumptions. And unless the meanings of these assumptions are understood, regression analysis almost inevitably will be a rigid exercise in which a handful of independent variables are cavalierly inserted into a standard linear additive regression and coefficients are estimated. Although such an exercise may occasionally produce results that are worth believing, it will do so only when an analyst is very lucky … This monograph was written to encourage students to … think of regression assumptions as a vital set of conditions the applicability of which must be explicitly analyzed each time regression

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