Tag Archives: assumptions

Wassily Leontief quote from "Theoretical Assumptions and Nonobserved Facts." Lars P. Syll’s BlogMainstream economics — like butter scraped over too much breadLars P. Syll | Professor, Malmo University

AbstractIn science publishing and many areas of research, the status quo is a lexicographic decision rule in which any result is first required to have a p-value that surpasses the 0.05 threshold and only then is consideration—often scant—given to such factors as prior and related evidence, plausibility of mechanism, study design and data quality, real world costs and benefits, novelty of finding, and other factors that vary by research domain. There have been recent proposals to change the...

Although this sounds extremely harsh, it is the only way to describe aspects of DSGE macro such as the assumption that the level of interest rates is a key determinant of economic behaviour. In practice, this assumption is built into all mainstream models, and the empirical methodologies have no way of rejecting the assumption. It is not entirely an accident that the consensus has been shocked by the slow pace of recovery after modern recessions -- after all, it was believed that the level...

Paul Rosenbaum’s 1999 paper “Choice as an Alternative to Control in Observational Studies” is really thoughtful and well-written. The comments and rejoinder include an interesting exchange between Manski and Rosenbaum on external validity and the role of theories.... Important in the most studies in social science, including economics, are necessarily observational rather than experimental. The question is how to design observational studies to make them as close as possible to experimental...

I agree that "unrealistic assumptions" has to be just about the laziest econ critique in existence. I wrote a post I was particularly proud of about how a lot of econ criticism is starting to look like vacuous art criticism. Information Transfer EconomicsLazy econ critique critiquesJason Smith