Lars P. Syll

Read my lips — regression analysis does not imply causation Many treatments of regression seem to take for granted that the investigator knows the relevant variables, their causal order, and the functional form of the relationships among them; measurements of the independent variables are assumed to be without error. Indeed, Gauss developed and used regression in physical science contexts where these conditions hold, at least to a very good approximation. Today, the textbook theorems that...

Why do I have a blog?  

Mainstream economics — nothing but pseudo-scientific cheating A common idea among mainstream — neoclassical — economists is the idea of science advancing through the use of ‘as if’  modeling assumptions and ‘successive approximations’. But is this really a feasible methodology? I think not. Most models in science are representations of something else. Models “stand for” or “depict” specific parts of a “target system” (usually the real world).  All theories and models have to use sign...

The ultimate argument for scientific realism Realism and relativism stand opposed. This much is apparent if we consider no more than the realist aim for science. The aim of science, realists tell us, is to have true theories about the world, where ‘true’ is understood in the classical correspondence sense. And this seems immediately to presuppose that at least some forms of relativism are mistaken … If realism is correct, then relativism (or some versions of it) is incorrect … Whether or...

Macroeconomic forecasts produced with macroeconomic models tend to be little better than intelligent guesswork. That is not an opinion – it is a fact. It is a fact because for decades many reputable and long standing model based forecasters have looked at their past errors, and that is what they find. It is also a fact because we can use models to generate standard errors for forecasts, as well as the most likely outcome that gets all the attention. Doing so indicates errors of a similar...

Some unfounded expectations of economic theory The weaknesses of social-scientific normativism are obvious. The basic assumptions refer to idealized action under pure maxims; no empirically substantive lawlike hypotheses can be derived from them. Either it is a question of analytic statements recast in deductive form or the conditions under which the hypotheses derived could be definitively falsified are excluded under ceteris paribus stipulations. Despite their reference to reality, the...

One may conclude that … theoretical analysis still has not yet absorbed and digested the simplest fact establishable by the most casual observation. This is a situation ready-made for armchair theorists willing to make a search for mathematical tools appropriate to the problems indicated. Since the mathematical difficulties have so far been the main obstacle, it may be desirable in initial attempts to select postulates mainly from the point of view of facilitating the analysis, in prudent...

Walked-out Harvard economist Greg Mankiw has more than once tried to defend the 1 % by invoking Adam Smith’s invisible hand: [B]y delivering extraordinary performances in hit films, top stars may do more than entertain millions of moviegoers and make themselves rich in the process. They may also contribute many millions in federal taxes, and other millions in state taxes. And those millions help fund schools, police departments and national defense for the rest of us … [T]he richest 1...

Trickle-down economics — neoliberal mumbo jumbo  [embedded content]

Hedda is the latest addition to the Meyer-Syll family. Two years today. And yes — Ibsen is one of our favourite dramatists …