Lars P. Syll

On the fundamental difference between ergodic and non-ergodic processes in economics Yours truly has tried to explain the fundamental difference between time averages and ensemble averages repeatedly on this blog. Still people obviously seem to have problems grasping it. Maybe this video will help … [embedded content] div{float:left;margin-right:10px;} div.wpmrec2x div.u > div:nth-child(3n){margin-right:0px;} ]]> Advertisements...

Let’s say we have a stationary process. That does not guarantee that it is also ergodic. The long-run time average of a single output function of the stationary process may not converge to the expectation of the corresponding variables — and so the long-run time average may not equal the probabilistic (expectational) average. Say we have two coins, where coin A has a probability of 1/2 of coming up heads, and coin B has a probability of 1/4 of coming up heads. We pick either...

The laws of mathematics and economics Some commentators on this blog — and elsewhere — seem to have problems with yours truly’s critique of the overly debonair attitude with which mathematics is applied to economics. In case you think the critique is some odd outcome of heterodox idiosyncrasy, well, maybe you should think twice … Advertisements

Taylor series (student stuff)  [embedded content] Advertisements

Mainstream economics — an emperor turned out to be naked The main reason why the teaching of microeconomics (or of “ micro foundations” of macroeconomics) has been called “autistic” is because it is increasingly impossible to discuss real-world economic questions with microeconomists – and with almost all neoclassical theorists. They are trapped in their system, and don’t in fact care about the outside world any more. If you consult any microeconomic...

How to live your life (personal)  [embedded content] Among documentaries this is my absolute favourite. Whenever my soul gets tired, watching this wonderful video of simple — good — life gives me new energy and hope. Advertisements

You’re done Tommy boy! [embedded content] I really love this guy. With razor-sharp logic he immediately goes for the essentials. He has no time for bullshit. And neither should we! Advertisements

Formal mathematical modeling in economics — a dead-end Using formal mathematical modeling, mainstream economists sure can guarantee that the conclusions hold given the assumptions. However, the validity we get in abstract model worlds does not warrantly transfer to real world economies. Validity may be good, but it isn’t enough. From a realist perspective both relevance and soundness are sine qua non. In their search for validity, rigour and precision,...

In a blog post the other day, Noah Smith returned again to the discussion about the ’empirical revolution’ in economics and how to — if it really does exist — evaluate it. Counter those who think quasi-experiments and RCTs are the true solutions to finding causal parameters, Noah argues that without structural models empirical results are only locally valid. And you don’t really know how local “local” is. If you find that raising the minimum wage from $10 to $12 doesn’t reduce...

Truth and economics (II) Reading some of the comments on my earlier post on the status of truth in ‘modern’ economics, yours truly came to think of Robert Solow’s assessment of ludicrously ‘post-real’ model assumptions … Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the battle of Austerlitz....