Tag Archives: Economics

The tragedy of pseudoscientific and self-defeatingly arrogant economics The problem of any branch of knowledge is to systematize a set of particular observations in a more coherent form, called hypothesis or ‘theory.’ Two problems must be resolved by those attempting to develop theory: (1) finding agreement on what has been observed; (2) finding agreement on how to systematize those observations. In economics, there would be more agreement on the second...

Axiomatic variation is not equivalent to genuine plurality The DSGE mainstream – which is made up of new classical macroeconomics and neo-Keynesianism – is unanimously based on the core assumptions that characterize the paradigm of social exchange theory. These are rationality, ergodicity and substitutionality, the exclusive acceptance of a formal mathematical-deductive, positivist reductionism. After the ‘empirical turn’ of the last two or three decades,...

Why Cramer’s rule works (student stuff)  [embedded content] Advertisements

Nationalekonomin som vetenskap har världen över förlorat otroligt mycket i prestige och status under senare år. Inte minst på grund av dess oförmåga att se den senaste finansiella krisen i antågande och på grund av dess avsaknad av konstruktiva och hållbara förslag på att ta oss ur krisen. Hur återskapar vi förtroendet för nationalekonomin? Fem förändringar är helt avgörande. (1) Sluta låtsas som om vi har exakta och riktiga svar på allting. För det har vi inte. Vi bygger...

Conventional economics — a severe form of brain damage  [embedded content] I’m extremely fond of scientists like David Suzuki. With razor-sharp intellects they immediately go for the essentials. They have no time for bullshit. And neither should we. Advertisements

Mainstream textbooks — full of utter nonsense! The other day yours truly was sent a copy of the new edition of Chad Jones intermediate textbook Macroeconomics (4th ed, W W Norton, 2018). There’s much in the book I like, e. g. Jones’  combining of more traditional short-run macroeconomic analysis with an accessible coverage of the Romer model — the foundation of modern growth theory — and DSGE business cycle models. Unfortunately it also contains some utter...

Economics — the triumph of ideology over science Research shows not only that individuals sometimes act differently than standard economic theories predict, but that they do so regularly, systematically, and in ways that can be understood and interpreted through alternative hypotheses, competing with those utilised by orthodox economists. To most market participants – and, indeed, ordinary observers – this does not seem like big news … In fact, this...

Yours truly lyssnade för ett tag sedan på ett radioprogram där man diskuterade huruvida nationalekonomin verkligen är en vetenskap. För att ‘försvara’ nationalekonomin hade man bjudit in en av de få genuint vidsynta och tvärvetenskapligt orienterade ekonomiprofessorer vi har i landet. Vi hade så vitt jag kan bedöma — efter 40 års umgänge med svenska nationalekonomer — fått en mer rättvis bild av vad det svenska nationalekonomi-etablissemanget står för om man istället låtit den...

Guest post by Jeff Mosenkis of Innovations for Poverty Action. Chris Blattman & Stefan Dercon have an op-ed in the New York Times, reporting on their study with IPA and the Ethiopian Development Research Institute. They randomly offered poor workers in Ethiopia who were applying for factory jobs the jobs they wanted or an alternative entrepreneurship opportunity. Turns out the jobs were pretty bad – most quit and those that stayed weren’t any better off than those who never god a job...

The dangers of neglecting methodology Alex Rosenberg — chair of the philosophy department at Duke University, renowned economic methodologist and author of Economics — Mathematical Politics or Science of Diminshing Returns? — had an interesting article up on What’s Wrong with Paul Krugman’s Philosophy of Economics some time ago. Writes Rosenberg: Krugman writes: ‘So how do you do useful economics? In general, what we really do is combine...