Lars P. Syll

The trouble with econometrics In the process of translating a theory into implications about data, so many auxiliary assumptions are made that all contact with reality is lost. Any conflict can be resolved by adjusting the auxiliary assumptions. For example, suppose we want to learn if a production process satisfy diminishing, constant, or increasing returns to scale. The issue is of substantial significance from the point of view of theory. In carrying out...

This genuinely original book, with its lively and engaging argumentation, is a must read for students of economics who want to remedy the deficiencies of mainstream economics as it is practiced today. Scrutinizing the weird make-believe world of mainstream economics and its narrative dogmatism, determinism and atomism, it constitutes a powerful plaidoyer for real pluralism in economics. Fullbrook brings bold new perspectives on the logic of economic choice, rationality,...

Socialdemokratins svek mot den svenska skolan Under flera decennier hade det förefallit som om den likvärdiga gemensamma skolan var allmänt accepterad. Men det var, när allt kom omkring, bara skenbart. När de nyliberala vindarna började blåsa allt hårdare på 80-talet yppades ett ”window of opportunity” att vrida klockan tillbaka, nu med hjälp av den alltmer kraftfulla marknadsideologin och med valfrihet som slagord. En både väljarmässigt och ideologiskt...

The end of Ricardo-Heckscher-Ohlin-Samuelson trade theory [embedded content] In 1817 David Ricardo presented — in Principles — a theory that was meant to explain why countries trade and, based on the concept of opportunity cost, how the pattern of export and import is ruled by countries exporting goods in which they have comparative advantage and importing goods in which they have a comparative disadvantage. Ricardo’s theory of comparative advantage,...

The vanity of rigour in economics Reasoning is the process whereby we get from old truths to new truths, from the known to the unknown, from the accepted to the debatable … If the reasoning starts on firm ground, and if it is itself sound, then it will lead to a conclusion which we must accept, though previously, perhaps, we had not thought we should. And those are the conditions that a good argument must meet; true premises and a good inference. If either...

The implicit argument in favor of representative-agent models as empirically relevant to aggregate economic data runs something like this: a representative-agent model is not itself an acceptable representation of the whole economy … but it is a first step in a program which step by step will inevitably bring the model closer to the agent-by-agent microeconomic model of the whole economy … I call this argument eschatological justification: it is the claim that there is a...

‘New Keynesian’ nonsense taught at our economics departments What can the central bank do to counter the bad animal spirits? If it cuts [real interest rate] r(t) below [rate of time-preference] n, even temporarily, we know there exists no rational expectations equilibrium in which there is always full employment. All we know is that we must have negative equilibrium growth in consumption for as long as r(t) remains below n. It is not obvious to me how...

OECD: Det fria skolvalet leder till ökad ojämlikhet Elevers bakgrund och hemförhållande betyder allt mer för skolresultaten. Den enskilda elevens klassbakgrund påverkar numera skolresultaten mer i Sverige än i OECD-länderna i genomsnitt, och betydligt mer än exempelvis i USA … När det gäller effekten på resultatet av vilken skola eleven går på, så ligger Sverige på genomsnittet i OECD. Betydelsen av de andra elevernas hemförhållanden och bakgrund har...

How to save us from inferential mistakes when doing econometrics This is where statistical analysis enters. Validation comes in many different forms, of course, and much good theory testing is qualitative in character. Yet when applicable, statistical theory is our most powerful inductive tool, and in the end, successful theories have to survive quantitative evaluation if they are to be taken seriously. Moreover, statistical analysis is not confined to...