Lars P. Syll

Facebook’s digital currency Libra — just for suckers or a global economic revolution? Mit 20 Partnern hat Facebook die digitale Weltwährung “Libra” angekündigt … Mit einem Schlag kann das Konsortium alle nur denkbaren Netzwerkeffekte im digitalen Zahlungsbereich ausschöpfen. Damit ist Libra unmittelbar und überall präsent. Eine globale ökonomische Revolution. Die Digitalökonomie folgt der Regel “The winner takes it all”. Wer die Netzwerkeffekte auf seiner...

Do models make economics a science? Well, if we are to believe most mainstream economists, models are what make economics a science. In a Journal of Economic Literature review of Dani Rodrik’s Economics Rules, renowned game theorist Ariel Rubinstein discusses Rodrik’s justifications for the view that “models make economics a science.” Although Rubinstein has some doubts about those justifications — models are not indispensable for telling good stories or...

Capital et idéologie — le nouveau livre de Thomas Piketty Que trouve-t-on dans ce nouvel opus imposant de 1 200 pages ? Il faut revenir sur ce qui a fait le succès du livre précédent : le constat empirique de la dynamique des inégalités sur une longue période. Le propos est à la fois plus historique – on remonte jusqu’au XVIIIe siècle – et plus large, couvrant de nombreux pays européens, en particulier la France et le Royaume-Uni, mais aussi les Etats-Unis,...

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The lack of positive results in econometrics For the sake of balancing the overly rosy picture of econometric achievements given in the usual econometrics textbooks today, it may be interesting to see how Trygve Haavelmo — with the completion (in 1958) of the twenty-fifth volume of Econometrica — assessed the role of econometrics in the advancement of economics.  We have found certain general principles which would seem to make good sense. Essentially,...

The quasi-peaceable gentleman of leisure, then, not only consumes of the staff of life beyond the minimum required for subsistence and physical efficiency, but his consumption also undergoes a specialisation as regards the quality of the goods consumed. He consumes freely and of the best, in food, drink, narcotics, shelter, services, ornaments, apparel, weapons and accoutrements, amusements, amulets, and idols or divinities. Thorstein Veblen

It’s not just p = 0.048 vs. p = 0.052 “[G]iven the realities of real-world research, it seems goofy to say that a result with, say, only a 4.8% probability of happening by chance is “significant,” while if the result had a 5.2% probability of happening by chance it is “not significant.” Uncertainty is a continuum, not a black-and-white difference” … My problem with the 0.048 vs. 0.052 thing is that it way, way, way understates the problem. Yes, there’s no...

Les entreprises baignent dans un océan de dettes Mercredi 4 septembre, l’entreprise la plus fortunée du monde, Apple, assise sur son trésor de 200 milliards de dollars (180 milliards d’euros), a jugé qu’il était temps d’emprunter un peu d’argent. Elle a émis pour sept milliards de dollars d’obligations, des titres de dettes, alors qu’elle ne sait manifestement pas quoi faire de son argent. Au total, les entreprises américaines ont émis, pendant cette seule...

Central bank independence — institutionalizing monetary handcuffs Imposing a hard target can bind the central bank, but the government must then act on failures to hit the target. Why would it if it is self-interested? If it does, that amounts to saying it is not selfish, which undermines the argument that independence is needed. The same argument can be used to deconstruct independence itself. Suppose independence is a solution to time inconsistency. Why...

When I present this argument … one or more scholars say, “But shouldn’t I control for everything I can in my regressions? If not, aren’t my coefficients biased due to excluded variables?” This argument is not as persuasive as it may seem initially. First of all, if what you are doing is misspecified already, then adding or excluding other variables has no tendency to make things consistently better or worse … The excluded variable argument only works if you are sure your...