Lars P. Syll

A guide to econometrics 1. Thou shalt use common sense and economic theory. 2. Thou shalt ask the right question. 3. Thou shalt know the context. 4. Thou shalt inspect the data. 5. Thou shalt not worship complexity. 6. Thou shalt look long and hard at thy results. 7. Thou shalt beware the costs of data mining. 8. Thou shalt be willing to compromise. 9. Thou shalt not confuse statistical significance with substance. 10. Thou shalt confess in the presence of...

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Summers and Stansbury only get it half right The new Keynesian school emerged from the synthesis, propelled by the invention of a slew of frictions and rigidities – staggered contract negotiations perturbing labor markets, “menu costs” of changing prices and wages, prices locked into inefficient levels by contracts, probabilistic price revision, monopsony power of firms in labor markets, on and on. In the process, any and all discussion of effective demand...

Les banquiers centraux sont les pompiers pyromanes Pour la première fois depuis l’après-guerre, les banquiers centraux sont confrontés à un problème contre lequel ils sont impuissants, le chaos politique. Les Etats-Unis étaient un acteur fiable, dont la devise était le pilier du système monétaire international ? Ils sont devenus imprévisibles, tandis que le rôle pivot du billet vert est remis en cause … Ce n’est pas tout. En maintenant des taux très bas...

On the irrelevance of economics I believe that as an economic theorist, I have very little to say about the real world and that there are very few models in economic theory that can be used to provide serious advice. However, economic theory has real effects. I cannot ignore the fact that our work as teachers and researchers influences students’ minds and does so in a way with which I am not comfortable. Can we find a way to be relevant without being...

Auch wenn nur wenige ÖkonomInnen aus dieser Epoche sich explizit zu einem aprioristisch-platonischen Wahrheitsbegriff bekannt haben mögen (eine Ausnahme bildet Ludwig Mises), erlangte die ohnehin von großem Selbstvertrauen getragene Eigendarstellung der frühen Neoklassik spätestens mit den 1930er Jahren eine neue Qualität, die den wesentlichen Inhalt zentraler neoklassischer Theoreme als unwiderlegbar deklarierte. So schrieb etwa Lionel Robbins in seinem tausendfach zitierten...

External validity and experiments — a Faustian bargain Under control conditions bed nets have been shown to be highly effective in preventing malaria: Households randomly “treated” with bed nets experience a reduction in malaria incidence relative to households randomly allocated to control conditions. These controlled experiments identify the “effects of causes”, in this case bed net use reduces malaria incidence. Based on this evidence, numerous programs...

Why monetary policies are impotent Even if interest-rate cuts at all points proximately increase demand, there are substantial grounds for concern if this effect is weak. It may be that any short-run demand benefit is offset by the adverse effects of lower rates on subsequent performance … From a macro perspective, low interest rates promote leverage and asset bubbles by reducing borrowing costs and discount factors, and encouraging investors to reach for...

Expected utility theory and ergodicity — poor guides to decision-making Behavioural scientists generally explore decision making using simple gambles with “additive dynamics.” In each gamble, a person wins or loses fixed amounts of money – say, gaining £1 for a win, and losing £0.50 for a loss. Gambles of this kind turn out to be “ergodic” in the sense that averages over the possible outcomes really are equal to averages over time if the gamble is played...

Wie konnten sie diesen Präsidenten wählen? Gregg Popovich sagt: “Der Mann im Oval Office ist ein seelenloser Feigling, der denkt, er könne groß werden, indem er andere erniedrigt.” Er sagt: “Wir haben einen pathologischen Lügner im Weißen Haus.” Er sagt auch: “Ich würde mich besser fühlen, wenn jemand dieses Amt bekleiden würde, der die Reife sowie das psychologische und emotionale Level gezeigt hat, das andere in seinem Alter haben.” Und: “Unser Land ist...