Lars P. Syll

Just playing games? Count me out! I have spent a considerable part of my life building economic models, and examining the models that other economists have built. I believe that I am making reasonably good use of my talents in an attempt to understand the social world.I have no fellow-feeling with those economic theorists who, off the record at seminars and conferences, admit that they are only playing a game with other theorists. If their models are not intended seriously, I want to say...

The open society and its enemies Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them … We should therefore claim, in the name of tolerance, the right not to tolerate the intolerant. Karl Popper The Open Society and Its Enemies (1945)

 [embedded content] Though I speak with the tongues of angels, If I have not love… My words would resound with but a tinkling cymbal. And though I have the gift of prophesy… And understand all mysteries… and all knowledge… And though I have all faith So that I could remove mountains, If I have not love… I am nothing.

November 13th, 2015 — a date which will live in infamy   The verdict of history will be harsh.

Are economic models ‘true enough’? Stylized facts are close kin of ceteris paribus laws. They are ‘broad generalizations true in essence, though perhaps not in detail’. They play a major role in economics, constituting explananda that economic models are required to explain. Models of economic growth, for example, are supposed to explain the (stylized) fact that the profit rate is constant. The unvarnished fact of course is that profit rates are not constant. All sorts of non-economic...

Econometrics — fictions masquerading as science In econometrics one often gets the feeling that many of its practitioners think of it as a kind of automatic inferential machine: input data and out comes casual knowledge. This is like pulling a rabbit from a hat. Great — but first you have to put the rabbit in the hat. And this is where assumptions come in to the picture. As social scientists — and economists — we have to confront the all-important question of how to handle uncertainty and...

Deductivist modeling leading economics astray To achieve explanatory success, a theory should, minimally, satisfy two criteria: it should have determinate implications for behavior, and the implied behavior should be what we actually observe. These are necessary conditions, not sufficient ones. Rational-choice theory often fails on both counts. The theory may be indeterminate, and people may be irrational. In what was perhaps the first sustained criticism of the theory, Keynes emphasized...

Methodological foundations of heterodox economics  [embedded content] [h/t Jan Milch]

Economic models are getting more and more sophisticated — and totally useless  [embedded content] Those of us in the economics community who are impolite enough to dare question the preferred methods and models applied in mainstream economics, are as a rule met with disapproval. But 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 “received theory” always say that the critique is “nothing...

Spekulationsbubblor får konsekvenser för hela samhället. Men hur skapas de? Priserna på finansmarknaden sätts efter en annan logik än varor i vår vardag, säger professor Lars Pålsson Syll. Man köper tillgångar, inte för att använda dem, utan för att sälja dem vidare. Tulpanmanin i Holland på 1600-talet är den först kända spekulationsbubblan. Då drabbades bara de som handlade med lökar. Men i dagens globaliserade värld påverkas många fler när marknaden kraschar. Lyssna på programmet...