Lars P. Syll

Angus Deaton gets Nobel prize in economics Not bad at all. Deaton has made very interesting contributions to many fields in economics. The one below — on the restricted applicability of RCTs — is one of my favourites:  [embedded content] An area where Deaton has made significant contributions is income and consumption modeling. Here he has always shown a healthy doubt about the value of microfounded representative actors models: I realized, after a lot of agonizing and checking my...

The Nobel prize in economics is a disgrace. Dump it! The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, usually — incorrectly — referred to as the Nobel Prize in Economics, is an award for outstanding contributions to the field of economics. The Prize in Economics was established and endowed by Sweden’s central bank Sveriges Riksbank in 1968 on the occasion of the bank’s 300th anniversary.The first award was given in 1969. The award this year is presented in...

Why studying economics makes you more corrupt There seems to be growing evidence that markets corrupt morals. For example, Falk and Szech (2013) showed that individuals behaved less morally in market frameworks than in non-market frameworks. It seems that people behave less morally if there is potential for greed to pay off … But markets and money are central topics in economics teaching. A study which focused on the education of individuals was provided by Frank and Schulze (2000) … They...

Ekonomistudier leder till ökad korruption Orsakerna till korruption är mångahanda men ett överraskande resultat är att befolkningen i länder med svårartad korruption ingalunda internaliserar detta beteende som en del av sin kultur. Tvärtom tar de i allmänhet starkt avstånd från sådant beteende och de inser också att korruption svårt skadar deras samhällen. Anledningen till att de deltar i denna verksamhet är att de inte uppfattar att de har något egentligt val. Det nyttar föga att vara den...

Mainstream economics and the perils of simplicity Mainstream — neoclassical — economics has become increasingly irrelevant to the understanding of the real world. The main reason for this irrelevance is the failure of economists to match their deductive-axiomatic methods with their subject. It is — sad to say — a fact that within mainstream economics internal validity is everything and external validity nothing. Why anyone should be interested in that kind of theories and models — as long...

Statistical significance testing — pseudo-intellectual garbage Decisions based on statistical significance testing certainly make life easier. But significance testing doesn’t give us the knowledge we want. It only gives an answer to a question we as researchers never ask — what is the probability of getting the result we have got, assuming that there is no difference between two sets of data (e. g. control group – experimental group, sample – population). On answering the question we...

Economic convergence and the Markov chain approach In the Markov chain approach to income convergence … the “law of motion” driving the evolution of the income distribution is assumed memory-less and time invariant. Upon having estimated probabilities of moving up or down the income hierarchy during a transition period of a given length, the law is used to calculate a limiting income distribution characterizing a stochastic steady-state income distribution to which the system converges...

Nobel prize and self-righteous Chicago drivel In 2007 Thomas Sargent gave a graduation speech at University of California at Berkeley, giving the grads “a short list of valuable lessons that our beautiful subject teaches”: 1. Many things that are desirable are not feasible. 2. Individuals and communities face trade-offs. 3. Other people have more information about their abilities, their efforts, and their preferences than you do. 4. Everyone responds to incentives, including people you want...

Ergodicity and the law of large numbers If n identical trials A occurs v times, and if n is very large, then v/n should be near the probability p of A …This is one form of the law of large numbers and serves as a basis for the intuitive notion of probability as a measure of relative frequencies … It is usual to read into the law of large numbers things which it definitely does not imply. If Peter and Paul toss a perfect coin 10 000 times, it is customary to expect that Peter will be in the...

Bostadsbubblan på väg spricka! Konjunkturinstitutets generaldirektör Mats Dillén gick igår ut och varnade för en påtaglig risk för att bostadspriserna ligger på en ohållbart hög nivå. De höga bostadspriserna går inte att förklara med ökade inkomster, låga räntor och skattelättnader. Med en årlig prisökningstakten på 10-15 procent är vi uppenbarligen på väg mot en situation där bostadsbubblan spricker och en ny finansiell och ekonomisk krasch är ett faktum. Det är glädjande att...