Lars P. Syll

What inferential leverage do statistical models provide? Experimental (and non-experimental) data are often analyzed using a regression model of the form Yi =a+bZi +Wiβ+εi, where Wi is a vector of control variables for subject i, while a, b, and β are parameters (if Wi is 1×p, then β is p×1). The effect of treatment is measured by b. The disturbances εi would be assumed independent across subjects, with expectation 0 and constant variance. The Zi and Wi...

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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...