Lars P. Syll

Solow’s Nobel Prize lecture One of the achievements of growth theory was to relate equilibrium growth to asset pricing under tranquil conditions. The hard part of disequilibrium growth is that we do not have — and it may be impossible to have — a​ really good theory of asset valuation under turbulent conditions … One important tendency in contemporary macroeconomic theory evades this problem in an elegant but (to me) ultimately implausible way. The idea is...

Moments you never forget (personal) Courage is a capability to confront fear, as when in front of the powerful and mighty, not to step back, but stand up for one’s rights not to be humiliated or abused. Courage is to do the right thing in spite of danger and fear. To keep on even if opportunities to turn back are given. Dignity, a better life, or justice and rule of law, are things worth fighting for. Not to step back — in spite of confronting the mighty...

DSGE models — false by construction Advances in mathematical tools and in economic theory rapidly changed the landscape. From the perspective of macroeconomics, the streamlined DSGE models of the 1980s begot much richer models in the 1990s. One remarkably successful extension was the introduction​ of nominal and real rigidities, i.e., the conception that agents cannot immediately adjust to changes in the economic environment. In particular, many of the new...

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The Lucas critique comes back with a vengeance in DSGE models Both approaches to DSGE macroeconometrics (VAR and Bayesian) have evident vulnerabilities, which substantially derive from how parameters are handled in the technique. In brief, parameters from formally elegant models are calibrated in order to obtain simulated values that reproduce some stylized fact and/or some empirical data distribution, thus relating the underlying theoretical model and the...

The loanable funds fallacy The loanable funds theory is in many regards nothing but an approach where the ruling rate of interest in society is — pure and simple — conceived as nothing else than the price of loans or credits set by banks and determined by supply and demand — as Bertil Ohlin put it — “in the same way as the price of eggs and strawberries on a village market.” It is a beautiful fairy tale, but the problem is that banks are not barter...

Scientific racism and the alt-right Welche Rolle Gene beim IQ spielen, kann man untersuchen, indem man identische Zwillinge findet, die bei ihrer Geburt getrennt wurden und getrennt voneinander groß wurden. Es gibt nur wenige untersuchte Fälle, in denen Zwillinge in unterschiedlichen Familien aufgewachsen sind, die gleichzeitig zu verschiedenen sozialen Schichten mit abweichendem Bildungsniveau zählten. Untersuchungen zeigten hier deutliche Unterschiede in...

Finland ends basic income experiment Europe’s first national government-backed experiment in giving citizens free cash will end next year after Finland decided not to extend its widely publicised basic income trial and to explore alternative welfare schemes instead. Since January 2017, a random sample of 2,000 unemployed people aged 25 to 58 have been paid a monthly €560 (£475), with no requirement to seek or accept employment … The scheme – aimed primarily...

A ‘tractable’ model is one that you can solve, which means there are several types of tractability:​ analytical tractability (finding a solution to a theoretical model), empirical tractability (being able to estimate/calibrate your model) and computational tractability (finding numerical solutions). It is sometimes hard to discriminate between theoretical and empirical, or empirical and computational tractability … What I’d like to capture is the effect of those choices...

Manifeste contre le nouvel antisémitisme L’antisémitisme n’est pas l’affaire des Juifs, c’est l’affaire de tous. Les Français, dont on a mesuré la maturité démocratique après chaque attentat islamiste, vivent un paradoxe tragique. Leur pays est devenu le théâtre d’un antisémitisme meurtrier. Cette terreur se répand, provoquant à la fois la condamnation populaire et un silence médiatique que la récente marche blanche a contribué à rompre … La dénonciation de...