Lars P. Syll

Propensity scores — bias-reduction gone awry .[embedded content]

Hegel in 60 minuten .[embedded content]

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Mainstream economics — the art of building fantasy worlds Mainstream macroeconomic models standardly assume things like rational expectations, Walrasian market clearing, unique equilibria, time invariance, linear separability and homogeneity of both inputs/outputs and technology, infinitely lived intertemporally optimizing representative household/ consumer/producer agents with homothetic and identical preferences, etc., etc. At the same time, the models...

In other words, if a decision-maker thinks something cannot be true and interprets this to mean it has zero probability, he will never be influenced by any data, which is surely absurd. So leave a little probability for the moon being made of green cheese; it can be as small as 1 in a million, but have it there since otherwise an army of astronauts returning with samples of the said cheese will leave you unmoved. To get the Bayesian probability calculus going you sometimes...

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Evidence-based economics — the fundamentals Many economists still think that “evidence” is only of one kind, i.e. statistical/econometric analysis. Whilst this is important, it is not enough on its own. One reason for its privileged position may be that it is typically contrasted with “anecdotal evidence”, which is unreliable. But the truth is richer than that. It is true that basing one’s thinking about the economy on one or more stories carries the danger...

The Fed is making a big mistake .[embedded content]

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The geometry of Bayes theorem .[embedded content] An informative visualization of a theorem that shows how to update probabilities — calculating conditional probabilities — when new information/evidence becomes available. But … Although Bayes’ theorem is mathematically unquestionable, that doesn’t qualify it as indisputably applicable to scientific questions. Bayesian statistics is one thing, and Bayesian epistemology is something else. Science is not...