Lars P. Syll

Economists — nothing but a bunch of idiots savants Let’s be honest: no one knows what is happening in the world economy today. Recovery from the collapse of 2008 has been unexpectedly slow … Policymakers don’t know what to do. They press the usual (and unusual) levers and nothing happens. Quantitative easing was supposed to bring inflation “back to target.” It didn’t. Fiscal contraction was supposed to restore confidence. It didn’t … Most economics students...

Econometrics textbooks — vague and confused causal analysis Econometric textbooks fall on all sides of this debate. Some explicitly ascribe causal meaning to the structural equation while others insist that it is nothing more than a compact representation of the joint probability distribution. Many fall somewhere in the middle – attempting to provide the econometric model with sufficient power to answer economic problems but hesitant to anger traditional...

Proper use of regression analysis Level I regression analysis does not require any assumptions about how the data were generated. If one wants more from the data analysis, assumptions are required. For a Level II regression analysis, the added feature is statistical inference: estimation, hypothesis tests and confidence intervals. When the data are produced by probability sampling from a well-defined population, estimation, hypothesis tests and confidence...

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To complete the reconciliation of Keynesian economics with general equilibrium theory, Paul Samuelson introduced the neoclassical synthesis in 1955 … In this view of the world, high unemployment is a temporary phenomenon caused by the slow adjustment of money wages and money prices. In Samuelson’s vision, the economy is Keynesian in the short run, when some wages and prices are sticky. It is classical in the long run when all wages and prices have had time to adjust…. Although...

Mainstream economics — nothing but an assumption-making Nintendo game In advanced economics the question would be: ‘What besides mathematics should be in an economics lecture?’ In physics the familiar spirit is Archimedes the experimenter. But in economics, as in mathematics itself, it is theorem-proving Euclid who paces the halls … Economics … has become a mathematical game. The science has been drained out of economics, replaced by a Nintendo game of...

Det är inte ofta som skillnader mellan olika ekonometriska modellspecifikationer skapar rubriker i media men när PISA-undersökningen släpptes för några veckor sedan hände just detta. Orsaken var att OECD hävdade att svenska friskolor presterade sämre än kommunala skolor medan Skolverket kommit fram till att skillnaden mellan offentliga och privata huvudmän var liten och statistiskt osignifikant. Eftersom det är samma datamaterial som används kan det vara värt att klargöra vari...

Probability and confidence — Keynes vs. Bayes An alternative possibility is to accept the consequences of the apparent fact that the central prediction of the Bayesian model in its descriptive capacity, that people’s choices are or are ‘as if’ they are informed by real-valued subjective probabilities, is, in general, false … According to Keynes’s decision theory it is rational to prefer to be guided by probabilities determined on the basis of greater...

On analytical statistics and critical realism In this paper we began by describing the position of those critical realists who are sceptical about multi-variate statistics … Some underlying assumptions of this sceptical argument were shown to be false. Then a positive case in favour of using analytical statistics as part of a mixed-methods methodology was developed. An example of the interpretation of logistic regression was used to show that the...