Lars P. Syll

En av landets mest välbetalda journalister — Per T Ohlsson — har i sin återkommande söndagskrönika i Sydvenskan i dag en mer än vanligt dåligt underbyggd artikel. Denna gången handlar det om Ilmar Reepalus utredning om vinster i den skattefinansierade välfärdssektorn. Följande lilla stycke är belysande: Den enda rationella lösningen på detta frågekomplex – att värna och utveckla gemensam och likvärdig välfärd med bevarad valfrihet – är en kraftig skärpning av systemen för...

The Bourbaki-Debreu delusion of axiomatic economics By the time that we have arrived at the peak first climbed by Arrow and Debreu, the central question boils down to something rather simple. We can phrase the question in the context of an exchange economy, but producers can be, and are, incorporated in the model. There is a rather arid economic environment referred to as a purely competitive market in which individuals receive signals as to the prices of...

Reepalus utredning om vinster i välfärden I november presenteras utredningen om vinster i välfärden som Ilmar Reepalu (S) är ordförande för. Men redan nu har nyhetsmedier tagit del av förslag från utredningen om hur en vinstbegräsning skulle kunna se ut. SVT rapporterade i förra veckan att Joachim Landström, doktor i företagsekonomi vid Uppsala universitet, har tagit fram ett förslag till utredningen. Lite förenklat innebär den en begränsning på vinster på...

Hicks’ misrepresentation of Keynes — the Wicksellian connection Having read my post on Krugman and Hicks’ IS-LM misrepresentation of Keynes’ theory, professor Jan Kregel kindly sent an unpublished article he wrote back in 1984 — The Importance of Choosing a Model: Hicks vs. Keynes on Money, Interest and Prices — in which it is argued that Hicks’ particular presentation of Keynes’ theory and choice of model was “crucial to its destruction”: Hicks’ choice of...

At least since the time of Keynes’s famous critique of Tinbergen’s econometric methods, those of us in the social science community who have been unpolite enough to dare questioning the preferred methods and models applied in quantitive research in general and economics more specifically, are as a rule met with disapproval. Although people seem to get very agitated and upset by the critique — just read the commentaries on this blog if you don’t believe me — defenders of...

The euro disaster — Wynne Godley was spot on already back in 1992! 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. Another important role which any...

No man is an island! Given how sweeping the changes wrought by SMD (Sonnenschein-Mantel-Debreu) theory seem to be, it is understandable that some very broad statements about the character of general equilibrium theory were made. Fifteen years after General Competitive Analysis, Arrow (1986) stated that the hypothesis of rationality had few implications at the aggregate level. Kirman (1989) held that general equilibrium theory could not generate falsifiable...

Sacrificing content for the sake of mathematical tractability A commodity is a primitive concept (Debreu 1991), and the model comprises a finite set of classes of commodities. The number of distinguishable commodities (Debreu 1959) or commodity labels (Koopmans and Bausch 1959) is a natural number. The Arrow—Debreu model continues by defining these commodities as goods that are physically determined … But after asserting that commodities are physically...

General equilibrium — the art of denying the obvious General equilibrium is fundamental to economics on a more normative level as well. A story about Adam Smith, the invisible hand, and the merits of markets pervades introductory textbooks, classroom teaching, and contemporary political discourse. The intellectual foundation of this story rests on general equilibrium, not on the latest mathematical excursions. If the foundation of everyone’s favourite...

General equilibrium theory — still dead after all these years Raphaële Chappe has written a very interesting article about the value of general equilibrium theory, concluding in the following words: For a student of real world markets, general equilibrium theory appears strangely distant. It is not surprising that a highly abstract framework consisting of hyper-rational agents might be ill equipped to provide a sufficiently credible account of markets in...