Tag Archives: Economics

Noah Smith has a fantastic essay on the problem with economics papers. Some excerpts: …in practice, I think what often happens in econ is more like the following: 1. Some papers make structural models, observe that these models can fit (or sort-of fit) a couple of stylized facts, and call it a day. Economists who like these theories (based on intuition, plausibility, or the fact that their dissertation adviser made the model) then use them for policy predictions forever after, without ever...

Truth and economics (II) Reading some of the comments on my earlier post on the status of truth in ‘modern’ economics, yours truly came to think of Robert Solow’s assessment of ludicrously ‘post-real’ model assumptions … Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the battle of Austerlitz....

So much for the ’empirical’ revolution in economics Sometimes a picture is worth a thousand words … Source: Merijn Knibbe Advertisements

Blah blah blah economics A key part of the solution to the identification problem that Lucas and Sargent (1979) seemed to offer was that mathematical deduction could pin down some parameters in a simultaneous system. But solving the identification problem means feeding facts with truth values that can be assessed, yet math cannot establish the truth value of a fact. Never has. Never will. In practice, what math does is let macroeconomists locate the FWUTVs...

Guest post by Jeff Mosenkis of Innovations for Poverty Action. Chris Blattman had a nice interview with Stephen Ladek of the Terms of Reference podcast (iTunes). Chris talked about his approach to what RCTs are good for – less about that specific program but more about testing our assumptions behind the mechanism through which something might work. They also get into how he got started studying conflict and resolution (because someone offered to let him borrow some Land Rovers), but why he’s...

Does truth matter in economics? In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner. Robert Aumann What a handy view of science. How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to...

Why diversity trumps ability  [embedded content] Advertisements

Lump to live — the rationale for categorical models  [embedded content] Great lecture by one of my favourite lecturers — Scott Page. Advertisements

Kruskal’s algorithm (student stuff)  [embedded content] Advertisements

Debt deflation and liquidity traps Deflationary policies are deflationary. To a large extent deflations have been caused by tight monetary and fiscal policies pursued by central banks. With a defensive fiscal policy and a targeted inflation rate set at a very low level, real inflation easily turn negative. Another consequence of austere fiscal and monetary policies is that overall unemployment get stuck at a high level. This is deeply worrying, especially...