Lars P. Syll

Subjective probability — answering questions nobody asked Solve for x — give a single, unique number — in the following equation: x + y = 3. Of course, it cannot be done: under no rules of mathematics can a unique x be discovered; there are one too many unknowns. Nevertheless, someone holding to the subjective interpretation of probability could tell us, say, “1 feel x = 7.” Or he might say, “The following is my distribution for the possible values of x.”...

Why MMT is needed Mainstream economists do not believe that “countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt.” Looking at the result from a survey, not a single economist agreed with that statement. If these economists had been right, we would see lots of governments running out of money in 2020 and 2021. After all, tax revenues collapsed, government spending...

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Attending economics seminars — a total waste of time! Visiting economics conferences and seminars, the sessions usually start with the presentation of mathematical-statistical models building on assumptions somewhat analogous to “let us assume that people are green and descending from Mars” — and then long technical discussions follow on how good these models are at making us better understand contemporary societies and economies. Yours truly finds it...

Trygve Haavelmo — with the completion (in 1958) of the twenty-fifth volume of Econometrica — assessed the role of econometrics in the advancement of economics, and although mainly positive of the “repair work” and “clearing-up work” done, he also found some grounds for despair: We have found certain general principles which would seem to make good sense. Essentially, these principles are based on the reasonable idea that, if an economic model is in fact “correct” or “true,” we...

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Twist in my sobriety .[embedded content]

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...