Lars P. Syll

Does it — really — take a model to beat a model? No! Many economists respond to criticism by saying that ‘all models are wrong’ … But the observation that ‘all models are wrong’ requires qualification by the second part of George Box’s famous aphorism — ‘but some are useful’ … The relevant  criticism of models in macroeconomics and finance is not that they are ‘wrong’ but that they have not proved useful in macroeconomics and have proved misleading in...

What’s my problem with the nudgelords? Aren’t they a force for good in the world? My answer is that I’m not sure. The problem is that good advice is good, and bad advice is bad, but Sunstein and his friends doesn’t seem to distinguish between them. They seem to be spewing out research or claims about research or claims about behavior based on what they already want to believe, without regard to the quality of evidence. And they rarely seem to go back and assess what went...

Hans Albert turns 100 .[embedded content] Clearly, it is possible to interpret the ‘presuppositions’ of a theoretical system … not as hypotheses, but simply as limitations to the area of application of the system in question. Since a relationship to reality is usually ensured by the language used in economic statements, in this case the impression is generated that a content-laden statement about reality is being made, although the system is fully immunized...

Unfortunately, the greater part of economic controversies arise from confronting dogmas. The style of argument is that of theology, not of science … In economics, new ideas are treated, in theological style, as heresies and as far as possible kept out of the schools by drilling students in the habit of repeating the old dogmas, so as to prevent established orthodoxy from being undermined … On the plane of academic theory, the importance of the Keynesian revolution was to show...

The world’s worst writing . From The Guardian: Each year Philosophy and Literature, an academic journal, runs a bad-writing contest to celebrate “the most stylistically lamentable passages found in scholarly books and articles” … Here are the 1998 results. The journal found it hard to suppress its delight that “two of the most popular and influential literary scholars in the US are among those who wrote winning entries.” “The move from a...

Interview with Tony Lawson Jamie Morgan: Let’s return to your work on economics and place this in the context of how you came to work in the field. As suggested in the biographical introduction, you have been closely associated with the critique of the ‘formalisation’ of theory and the dominance of mathematical modelling, including the use of statistical techniques, not least econometrics. Were you always critical of these? Tony Lawson: I was. Or at...

La Sagrada Famiglia (personal) Tora (27), Amanda (30), David (30), Sebastian (27), Linnea (21) and Hedda (6). It was great to be able to have all our sons and daughters home over Christmas holidays in spite of the ongoing pandemic. To me that was the greatest pandemic depression antidote of all.

The future of macroeconomics But why are DSGE models still in the mix at all, and in a key position? Given all the criticisms, what can such models tell us, even as a ‘first pass at important questions’? Multiple equilibria do allow for discussion of a wider range of scenarios, but any discussion of a particular scenario is still constrained by the requirements of general equilibrium theory. These requirements are at the root of the more fundamental...

When should we trust science? .[embedded content] Using formal mathematical modelling, mainstream economists sure can guarantee that the conclusions hold given the assumptions. However the validity we get in abstract model-worlds does not warrant transfer to real-world economies. Validity may be good, but it isn’t — as Nancy Cartwright so eloquently argues — enough. From a realist perspective, both relevance and soundness are sine qua non. In their search...

Clearly, neoclassical economists believe that neoclassical microeconomic theory is theoretically coherent and provides the best explanation of economic activity; therefore there is no good reason to not teach it, if not exclusively. Many heterodox economists also broadly agree with this position, although not with all the particulars. However, sufficient evidence exists showing that as a whole neoclassical microeconomic theory is theoretically incoherent and without empirical...