Lars P. Syll

Follies and fallacies of Chicago economics Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both. This form of “crowding out” is just accounting, and doesn’t rest on any perceptions or behavioral assumptions. John...

Top 10 critiques of econometrics •Achen, Christopher (1982). Interpreting and using regression. SAGE •Berk, Richard (2004). Regression Analysis: A Constructive Critique. SAGE •Freedman, David (1991). ‘Statistical Models and Shoe Leather’. Sociological Methodology •Kennedy, Peter (2002).  ‘Sinning in the Basement: What are the Rules? The Ten Commandments of Applied Econometrics’. Journal of Economic Surveys •Keynes, John Maynard (1939). ‘Professor...

Is Dani Rodrik really a pluralist? Unlearning economics has a well-written and interesting review of Dani Rodrik’s book Economics Rules up on Pieria. Although the reviewer thinks there is much in the book to like and appreciate, there are also things he strongly objects to. Such as Rodrik’s stance on the issue of pluralism: If Rodrik is at his strongest when discussing particular neoclassical models and their applications, he’s at his weakest when...

Econometric inferences — idiosyncratic, unstable and inconsistent The impossibility of proper specification is true generally in regression analyses across the social sciences, whether we are looking at the factors affecting occupational status, voting behavior, etc. The problem is that as implied by the three conditions for regression analyses to yield accurate, unbiased estimates, you need to investigate a phenomenon that has underlying mathematical...

Friedman enters this scene arguing that all we need to do is predict successfully, that this can be done even without realistic theories, and that unrealistic theories are to be preferred to realistic ones, essentially because they can usually be more parsimonious. The first thing to note about this response is that Friedman is attempting to turn inevitable failure into a virtue. In the context of economic modelling, the need to produce formulations in terms of systems of...

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Economics — an academic discipline gone badly wrong Three economics graduates have savaged the way the subject is taught at many universities. Joe Earle, Cahal Moran and Zach Ward-Perkins are all, they write in The Econocracy: The Perils of Leaving Economics to the Experts, “of the generation that came of age in the maelstrom of the 2008 global financial crisis” and embarked on economics degrees at the University of Manchester in 2011 precisely in order to...

NHST — a case of statistical pseudoscience NHST is an incompatible amalgamation of the theories of Fisher and of Neyman and Pearson (Gigerenzer, 2004). Curiously, it is an amalgamation that is technically reassuring despite it being, philosophically, pseudoscience. More interestingly, the numerous critiques raised against it for the past 80 years have not only failed to debunk NHST from the researcher’s statistical toolbox, they have also failed to be...

Modern econometrics is fundamentally based on assuming — usually without any explicit justification — that we can gain causal knowledge by considering independent variables that may have an impact on the variation of a dependent variable. This is however, far from self-evident. Often the fundamental causes are constant forces that are not amenable to the kind of analysis econometrics supplies us with. As Stanley Lieberson has it in his modern classic Making It Count: One can...

Hur mycket ojämlikhet tål samhället? Igår kväll arrangerade Malmö högskola ett samtal om ekonomi och ojämlikhet i dagens Sverige. Under Cecilia Nebels kompetenta ledning samtalade serietecknaren Sara Granér, professor Tapio Salonen och yours truly om vad de växande inkomst- och förmögenhetsklyftorna gör med vårt samhälle. Ni som inte hade möjlighet vara där, kan följa samtalet här.