Lars P. Syll

Dani Rodrik’s Ten Commandments Dani Rodrik is not satisfied with the critique of mainstream economics put forward by yours truly and other mostly non-orthodox economists. So he has put up a list of ten commandments for economists, hoping thereby to somehow ‘save’ mainstream ‘the model is the message’ economics from​ the critique. The two central commandments are 3. Make your model simple enough to isolate specific causes and how they work, but not so simple...

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The truth about the minimum wage It has been more than eight years since many of the United States’ cashiers, dishwashers, janitors, lifeguards, baggage handlers, baristas, manicurists, retail employees, housekeepers, construction laborers, home health aides, security guards, and other minimum-wage workers last got a raise. The federal minimum wage now stands at just $7.25. In real terms, these workers’ earnings have declined by nearly 13 percent since the...

Modern economics — an intellectual game without practical relevance Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. To pick up a copy of The American Economic Review or The...

Schlechte Lehrer, schlechtere Schüler Eine neue Studie, die der ZEIT vorab vorliegt, enthält eine Mahnung, die genau jetzt notwendig ist. Diese Mahnung lautet: Es kommt nicht nur darauf an, wie viele Lehrer und Erzieher es gibt, sondern vor allem darauf, wie gut sie sind. Denn von der Qualität des Personals hängt ab, wie viel die Kinder lernen. Kindergärten und Schulen boomen derzeit allerdings so stark, dass sie diesen Anspruch bisweilen hintanstellen: So...

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DSGE models — unparalleled and spectacular failures The unsellability of DSGE models — private-sector firms do not pay lots of money to use DSGE models — is one strong argument against DSGE. But it is not the most damning critique of it. To me the most damning critiques that can be levelled against DSGE models are the following two: DSGE models are unable to explain involuntary unemployment In the basic DSGE models the labour market is always cleared –...

Krugman’s misapplication of neoclassical growth models The fallacies loanable funds theory commits might be explainable by the misapplication​ of some ideas and concepts of neoclassical growth models … to the sphere of money and finance … The Ramsey and Solow models are models of real investment only. Financial markets, financial assets and financial saving do not play any role in those models. There is only one good which, for simplicity, will be called...