Lars P. Syll

Rational expectations — a theory without empirical content Cassidy: What about the rational-expectations hypothesis, the other big theory associated with modern Chicago? How does that stack up now? Heckman: I could tell you a story about my friend and colleague Milton Friedman. In the nineteen-seventies, we were sitting in the Ph.D. oral examination of a Chicago economist who has gone on to make his mark in the world. His thesis was on rational expectations. After he’d left, Friedman...

My first love (private)  [embedded content]

 [embedded content] Absolutely fabulous. This flashmob made my day!

Evidence-based theories and policies are highly valued nowadays. Randomization is supposed to control for bias from unknown confounders. The received opinion is that evidence based on randomized experiments therefore is the best. More and more economists have also lately come to advocate randomization as the principal method for ensuring being able to make valid causal inferences. I would however rather argue that randomization, just as econometrics, promises more than it can deliver,...

The false analogy between private and public debt One of the most effective ways of clearing up this most serious of all semantic confusions is to point out that private debt differs from national debt in being external. It is owed by one person to others. That is what makes it burdensome. Because it is interpersonal the proper analogy is not to national debt but to international debt…. But this does not hold for national debt which is owed by the nation to citizens of the same nation....

Jag har rätt och du har fel! [embedded content] Äntligen någon som vågar tala klarspråk. Tack Hans Rosling! (h/t Ella Johansson)

Rational expectations — a monstrous assumption ‘Rational expectations’ remains for me a sort of monster living in a cave. I have never ventured into the cave to see what he is like, but I am always uneasily aware that he may come out and eat me. If you will allow me to stir the cauldron of mixed metaphors with a real flourish, I shall suggest that ‘rational expectations’ is neo-classical theory clutching at the last straw. Observable circumstances offer us suggestions as to what may be the...

 [embedded content] And don’t even for a second think it’s different in economics and other social sciences!

Why most published research is wrong  [embedded content]

Never Seek to Tell Thy Love  [embedded content]