Tag Archives: Economics

Krugman’s textbook — mistaking the map for the territory Paul Krugman has — together with Robin Wells — written an economics textbook that is used all over the world. As all the rest of mainstream economics textbooks, it stresses from the first pages the importance of supplying the student with a systematic way of thinking through economic problems with the help of simple models. Modeling is all about simplification … A model is a simplified representation of reality that is used to better...

Economic modelers — in need of a code of conduct Auditors have a code of conduct because financial information is open to abuse and people rely on this information to make important decisions. Actuaries … have a code of conduct that includes context, basic rules and a declaration of fairness and accuracy. A consistent standard would be in the interest of the economic modelling industry and its reputation. We call on the government to develop a code of conduct to ensure the standard of all...

Mainstream economics — a wildly inconsistent project In fact, most mainstream economists have never concerned themselves much with the workings of the economic systemm as a whole … The dominant concern, rather, has been, and remains, with highly specific or partial analyses of some highly restricted sectors or forms of behaviour … To the extent that it has ever been meaningful for the various disparate results or theorems of these economists to be considered as a whole, the clearest...

Scandalous and dangerous economics It cannot be denied that there is something scandalous in the spectacle of so many people refining the analyses of economic states which they give no reason to suppose will ever, or have ever, come about. It probably is also dangerous. Equilibrium economics … is easily convertible into an apologia for existing economic arrangements and it is frequently so converted.   Frank Hahn    

Taking into account the subtle nature of the underlying differentiation of assumptions, whose subtlety is exponentially increased by the structural lack of transparency with regard to the question how to assign one’s assumptions to explanatory and auxiliary hypotheses, it is unsurprising to see interpretations according to both extremes within the whole of economic literature. For neoclassical theory as an intellectual construct such a state implies an enormously advantageous situation....

Robert Solow on Chicago economics 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. If I do that, I’m getting tacitly drawn into the game that he is Napoleon. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with...

This paper explores zero lower bound (ZLB) economics. The ZLB is widely invoked to explain stagnation and it fits with the long tradition that argues Keynesian economics is a special case based on nominal rigidities. The ZLB represents the newest rigidity. Contrary to ZLB economics, not only does a laissez-faire monetary economy lack a mechanism [...]

My new book now available in paperback This collection of previously published and new papers is a major intervention in the on-going debate about the nature and future of economics. Instead of the present deductivist-formalist orientation of mainstream economics, Lars Syll advocates for the adoption of a more pluralist approach to economics, arguing for more realism and relevance with less insistence on mathematical modeling. This challenging and thought-provoking book will prove a...

Bayes vs. Keynes on probability and belief in economic theory An alternative possibility is to accept the consequences of the apparent fact that the central prediction of the Bayesian model in its descriptive capacity, that people’s choices are or are ‘as if’ they are informed by real-valued subjective probabilities, is, in general, false … According to Keynes’s decision theory it is rational to prefer to be guided by probabilities determined on the basis of greater evidential ‘weight’,...

William K. Black February 29, 2016     Brooklyn, N.Y. A blogger has trolled all heterodox economists as believers in the “occult.”  More precisely, he is upset about “econ people” (who are likely not economists) and who tweet him or post comments on his blog site.  The blogger further complains that these commenters say that they believe in heterodox economics and “new methodologies [that] are poised to topple mainstream economics.”  He then goes on to say:  “My typical response is to ask...