Lars P. Syll

Economics — an egregious case of theory denialism . [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 warrantly 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...

While one can understand that some of the elements in DSGE models seem to appeal to Keynesians at first sight, after closer examination, these models are in fundamental contradiction to Post-Keynesian and even traditional Keynesian thinking. The DSGE model is a model in which output is determined in the labour market as in New Classical models and in which aggregate demand plays only a very secondary role, even in the short run. In addition, given the fundamental philosophical...

Adorno und Horkheimer über die verwaltete Welt . [embedded content]

Robert Boyer sur le capitalisme et la pandémie Pour qualifier la crise que nous traversons, les économistes oscillent entre « crise sans précédent », « récession la plus grave depuis 1929 », ou encore « troisième crise du siècle » – après celles des subprimes de 2008 et de l’euro en 2010. Qu’en pensez-vous ? Le terme de « récession » s’applique au moment où un cycle économique, arrivé à une certaine étape, se retourne pour des raisons endogènes – ce qui...

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Revealed preference theory — much ado about almost nothing Twenty-seven years ago yours truly wrote an article on revealed preference theory that got published in History of Political Economy (no. 25, 1993). Paul Samuelson wrote a kind letter and informed me that he was the one who had recommended it for publication. But although he liked a lot in it, he also wrote a comment — published in the same volume of HOPE — saying: Between 1938 and 1947, and since...

Game theory — theory with little substantive content I don’t see that we are even entitled to assume that reality accords to some model that humans are able to envisage … To say that Pandora knows what decision model she is facing can therefore be taken as meaning no more than that she is committed to proceeding as though her model were true … The price of abandoning psychology for revealed-preference theory is therefore high. We have to give up any...

Freier Kapitalverkehr und Freihandel Das letzte Mal, dass die USA einen Außenhandels-überschuss erzielten, war im Jahr 1980. Seitdem wies das Land massive Defizite auf. Im November 2016 war die Zahl der Amerikaner, die sich zusammen mit anderen Gruppen als Verlierer des Freihandels betrachteten, groß genug, um Trump zum Präsidenten zu wählen. Das bedeutet, dass das von den USA angeführte Freihandelsregime, das der Menschheit seit 1945 beispiellosen...

The value of uncertainty What is the evolutionary utility of the predictive strategy if it allows our models to remain so persistently disconnected from our external situation? To fully understand the self-reinforcing power of such habits, we need to look once more beyond the brain. We need to attend to how the process of acting to minimise surprise ensnares our environment into the overarching error-minimising process. At the simplest level, such actions...

Cauchy logic in economics (wonkish) What is 0.999 …, really? It appears to refer to a kind of sum: .9 + + 0.09 + 0.009 + 0.0009 + … But what does that mean? That pesky ellipsis is the real problem. There can be no controversy about what it means to add up two, or three, or a hundred numbers. But infinitely many? That’s a different story. In the real world, you can never have infinitely many heaps. What’s the numerical value of an infinite sum? It doesn’t...