Lars P. Syll

What is this thing called Bayesianism? A major, and notorious, problem with this approach, at least in the domain of science, concerns how to ascribe objective prior probabilities to hypotheses. What seems to be necessary is that we list all the possible hypotheses in some domain and distribute probabilities among them, perhaps ascribing the same probability to each employing the principal of indifference. But where is such a list to come from? It might...

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Causal assumptions in need of careful justification As is brilliantly attested by the work of Pearl, an extensive and fruitful theory of causality can be erected upon the foundation of a Pearlian DAG. So, when we can assume that a certain DAG is indeed a Pearlian DAG representation of a system, we can apply that theory to further our causal understanding of the system. But this leaves entirely untouched the vital questions: when is a Pearlian DAG...

Mainstream economics — slipping from the model of reality to the reality of the model A couple of years ago, Paul Krugman had a piece up on his blog arguing that the ‘discipline of modelling’ is a sine qua non for tackling politically and emotionally charged economic issues: In my experience, modeling is a helpful tool (among others) in avoiding that trap, in being self-aware when you’re starting to let your desired conclusions dictate your analysis. Why?...

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‘New Keynesian’ DSGE models — unparalleled spectacular failures The problem of the DSGE-models (and more generally of rational expectations macroeconomic models) is that they assume extraordinary cognitive capabilities of individual agents … The fact that the assumption of rational expectations is implausible does not necessarily mean that models using such an assumption cannot be powerful tools in making empirical predictions. The problem, however, is that...

Affärsbankerna är de opartiska expertbedömarna av den ekonomiska politiken. Men ska man väcka uppmärksamhet ska man vara näringslivets tankesmed. Det är de två mest självklara slutsatserna när svenska medier i måndags rapporterade om vårbudgeten. I en TT-artikel som publicerades redan under förmiddagen intervjuas Nordeas chefsekonom Annika Winsth och Swedbanks chefsekonom Mattias Persson, samt, sist i texten, dessutom Konjunkturinstitutets generaldirektör … Expertisen är...

The importance of not equating science with statistical calculations All science entails human judgment, and using statistical models doesn’t relieve us of that necessity. Working with misspecified models, the scientific value of statistics is actually zero — even though you’re making valid statistical inferences! Statistical models are no substitutes for doing real science. Or as a famous German philosopher famously wrote 150 years ago: There is no royal...

Stephanie Kelton till Stockholm När tankesmedjan Katalys nu firar tioårsjubileum har man passande nog valt att bjuda in författaren till en av årtiondet största megahit inom ekonomiområdet — Underskottsmyten — Stephanie Kelton. Har ni vägarna förbi Stockholm den 6 maj tycker jag definitivt ni ska lägga ettpar timmar på att besöka ABF-huset! Yours truly har under flera års tid nu frågat sig varför vi i det här landet har  begåvats med regeringar som inte...