Lars P. Syll

COVID-19 depression antidote (II)  [embedded content]

Many American undergraduates in Economics interested in doing a Ph.D. are surprised to learn that the first year of an Econ Ph.D. feels much more like entering a Ph.D. in solving mathematical models by hand than it does with learning economics. Typically, there is very little reading or writing involved, but loads and loads of fast algebra is required. Why is it like this? … One reason to use math is that it is easy to use math to trick people. Often, if you make your...

Good reasons to become a Keynesian Until [2008], when the banking industry came crashing down and depression loomed for the first time in my lifetime, I had never thought to read The General Theory of Employment, Interest, and Money, despite my interest in economics … I had heard that it was a very difficult book and that the book had been refuted by Milton Friedman, though he admired Keynes’s earlier work on monetarism. I would not have been surprised by,...

Chicago economics — in praise of superficiality To observe that economics is based on a superficial view of individual and social behaviour does not seem to me to be much of an insight. I think it is exactly this superficiality that gives economics much of the power that it has. Its ability to predict human behaviour without knowing very much about the make up and lives of the people whose behaviour we are trying to understand. Robert Lucas The purported...

UK measures against Covid-19 — cosmetic and inefficient The error in the UK is on two levels. Modelling and policymaking. First, at the modelling level, the government relied at all stages on epidemiological models that were designed to show us roughly what happens when a preselected set of actions are made, and not what we should make happen, and how. The modellers use hypotheses/assumptions, which they then feed into models, and use to draw conclusions...

Covid-19 and the magic money tree What will be the lasting effects of the covid-19 pandemic? Start with the size of the state. Over the next year government debt will rise sharply, as spending jumps and tax revenues collapse. When the economy recovers, attention will turn to paying it down. “Capital and Ideology”, a new book by Thomas Piketty, shows that after the first and second world wars many governments in the West turned to heavier taxation of the...

Yours truly among the top economics influencers to follow Yours truly is — together with people like e.g. Paul Krugman, Nate Silver, Dani Rodrik, Thomas Piketty, Steve Keen — ranked on Focus Economics’ Top 75 Influencers to Follow list. The list features academics, journalists, and central bankers who are widely followed on Twitter. I am – of course – truly awed, honoured and delighted.   [Added: And thanks everyone for all your congratulations and kind...

Economic growth and the size of the ‘private sector’ Economic growth has since long interested economists. Not least, the question of which factors are behind high growth rates has been in focus. The factors usually pointed at are mainly economic, social and political variables. In an interesting study from the University of  Helsinki, Tatu Westling expanded the potential causal variables to also include biological and sexual variables. In the report Male...

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On the non-neutrality of money Paul Krugman has repeatedly over the years argued that we should continue to use neoclassical hobby horses like IS-LM and Aggregate Supply-Aggregate Demand models. Here’s one example: So why do AS-AD? … We do want, somewhere along the way, to get across the notion of the self-correcting economy, the notion that in the long run, we may all be dead, but that we also have a tendency to return to full employment via price...