Lars P. Syll

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Econometrics — analysis with incredible​ certitude​ There have been over four decades of econometric research on business cycles … But the significance of the formalization becomes more difficult to identify when it is assessed from the applied perspective … The wide conviction of the superiority of the methods of the science has converted the econometric community largely to a group of fundamentalist guards of mathematical rigour … So much so that the...

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Wynne Godley on what it means for a nation not to have its own currency If a government stops having its own currency, it doesn’t just give up “control over monetary policy” as normally understood; its spending powers also become constrained in an entirely new way. If a government does not have its own central bank on which it can draw cheques freely, its expenditures can be financed only by borrowing in the open market in competition with businesses, and...

Comment les discriminations minent la cohésion sociale Vous (l’économiste Stéphane Carcillo) avez publié, avec l’économiste Marie-Anne Valfort, un ouvrage sur les discriminations dans le monde du travail qui montre qu’il y a une corrélation entre les discriminations et la confiance dans les relations ­sociales. Comment fonctionne ce lien ? Le politiste américain Robert Putnam est le premier à avoir identifié, au début des années 2000, un lien entre la...

Den sista grisen — Horace Engdahl Ibland säger en boktitel mer än tusen ord … Advertisements

Wynne Godley — the man who saw through the euro If there were an economic and monetary union, in which the power to act independently had actually been abolished, ‘co-ordinated’ reflation of the kind which is so urgently needed now could only be undertaken by a federal European government. Without such an institution, EMU would prevent effective action by individual countries and put nothing in its place … What happens if a whole country – a potential...

What RCTs can and cannot tell us We seek to promote an approach to RCTs that is tentative in its claims and that avoids simplistic generalisations about causality and replaces these with more nuanced and grounded accounts that acknowledge uncertainty, plausibility and statistical probability … Whilst promoting the use of RCTs in education we also need to be acutely aware of their limitations … Whilst the strength of an RCT rests on strong internal validity,...

Your model is internally consistent? So what! ‘New Keynesian’ macroeconomist Simon Wren-Lewis has a post on his blog discussing how evidence is treated in modern macroeconomics (emphasis added): The unique property that DSGE models have is internal consistency. Take a DSGE model, and alter a few equations so that they fit the data much better, and you have what could be called a structural econometric model. It is internally inconsistent, but because it...

‘Controlling for’ — a methodological urban legend Trying to reduce the risk of having established only ‘spurious relations’ when dealing with observational data, statisticians and econometricians standardly add control variables. The hope is that one thereby will be able to make more reliable causal inferences. But — as Keynes showed already back in the 1930s when criticizing statistical-econometric applications of regression analysis — if you do not manage...