Lars P. Syll

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Econometrics — science built on untestable assumptions  Just what is the causal content attributed to structural models in econometrics? And what does this imply with respect to the interpretation of the error term? … Consider briefly the testability of the assumptions brought to light in this section. Given these assumptions directly involve the factors omitted in the error term, testing these empirically seems impossible without information about what is...

Why econometric models by necessity are endlessly misspecified The impossibility of proper specification is true generally in regression analyses across the social sciences, whether we are looking at the factors affecting occupational status, voting behavior, etc. The problem is that as implied by the three conditions for regression analyses to yield accurate, unbiased estimates, you need to investigate a phenomenon that has underlying mathematical...

Elizabeth Warren roasting top bank CEOs .[embedded content] That’s the right spirit, senator! Watching Warren give these baloney talking guys a well-earned lecture on public decency is absolutely fabulous.

Why economic models do not explain Analogue-economy models may picture Galilean thought experiments or they may describe credible worlds. In either case we have a problem in taking lessons from the model to the world. The problem is the venerable one of unrealistic assumptions, exacerbated in economics by the fact that the paucity of economic principles with serious empirical content makes it difficult to do without detailed structural assumptions. But the...

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Testing causal explanations in economics Third, explanations fail by question (3.1) [“are the factors cited as possible causes of an event in fact aspects of the situation in which that event occurred?”] where the factors invoked as possible causes are idealisations. No doubt this claim will be considered contentious by some economists, accustomed as they are to explanations based on such dramatic assumptions as rational expectations, single-agent...

Functional finance and Ricardian equivalence According to Abba Lerner, the purpose of public debt is “to achieve a rate of interest which results in the most desirable level of investment.” He also maintained that an application of Functional finance will have a tendency to balance the budget in the long run: Finally, there is no reason for assuming that, as a result of the continued application of Functional Finance to maintain full employment, the...

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The cancel culture idiocy .[embedded content]