Lars P. Syll

The Spirit of Tallis [embedded content] Heavenly beautiful!

The people inside the model have much more knowledge about the system they are operating in than is available to the economist or econometrician who is using the model to try to understand their behavior. In particular, an econometrician faces the problem of estimating probability distributions and laws of motion that the agents in the model are assumed to know. Further the formal estimation and inference procedures of rational expectations econometricians assumes that the...

Keynes’s revolution after 80 years British economist John Maynard Keynes published his General Theory on Employment, Interest and Money 80 years ago in 1936. Modern macroeconomics arose in the aftermath of its publishing, and Keynesian ideas also revolutionized economic policy making during the Bretton Woods era. Full employment became a central policy target for economists and governments. In the 1970s monetarism and rational expectations revolution...

Chicago economics — only for people unlucky when trying to think I ask myself what I could legitimately assume a person to have rational expectations about, the technical answer would be, I think, about the realization of a stationary stochastic process, such as the outcome of the toss of a coin or anything that can be modeled as the outcome of a random process that is stationary. If I don’t think that the economic implications of the outbreak of World war...

IMF economists admit — austerity hasn’t delivered! Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand — and thus worsen employment and unemployment.The notion that fiscal consolidations can be expansionary (that is, raise output and employment), in part by raising private sector confidence and investment, has been championed by, among others, Harvard economist Alberto Alesina in the academic...

[embedded content] [h/t Eric Schüldt]

Amartya Sen on austerity rat poison How was it possible, it has to be asked, for the basic Keynesian insights and analyses to be so badly lost in the making of European economic policies that imposed austerity? Some of the dominant figures in the financial world have had a long-standing scepticism of the economic relations on which Keynes focused which is being emended only now, with reality checks being made in observations of the penalty of the neglect of Keynesian relations … If failing...

Comptine d’un autre été  [embedded content] (h/t David Syll)

Euro — the inevitable disaster 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 central government must perform is to put a safety net under the...

Blott en dag ett ögonblick i sänder  [embedded content] Freddie Wadling (1951-2016) En av Sveriges stora musikprofiler har gått ur tiden. Vän! I förödelsens stund, när ditt inre av mörker betäckes, När i ett avgrundsdjup minne och aning förgå, Tanken famlar försagd bland skugggestalter och irrbloss, Hjärtat ej sucka kan, ögat ej gråta förmår; När från din nattomtöcknade själ eldvingarne falla, Och du till intet, med skräck, känner dig sjunka på nytt, Säg, vem räddar dig då?- Vem är den...