Tag Archives: Economics

Economic modeling — a constructive critique If we have independent reasons to believe that the phenomena under investigation are mechanical in Mill’s sense, well and good: mathematical modeling will prove an apt mode of representation … But if we have independent reasons to believe that there is more going on in the phenomena under investigation than a mathematical model can suggest – that is, that the phenomena in question are not in fact mechanical in...

My philosophy of economics A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative to the failing mainstream theory, I shouldn’t expect people to pay attention. This is however to misunderstand the role of philosophy and methodology of economics! As John Locke wrote in An Essay Concerning Human Understanding: The Commonwealth of Learning is not at this time without Master-Builders, whose mighty Designs, in...

How to ensure that models serve society • Mind the assumptions — assess uncertainty and sensitivity. • Mind the hubris — complexity can be the enemy of relevance. • Mind the framing — match purpose and context. • Mind the consequences — quantification may backfire. • Mind the unknowns — acknowledge ignorance. Andrea Saltelli, John Kay, Deborah Mayo, Philip B. Stark, et al. Five principles I think modern times “the model is the message” economists...

Economics beyond Krugman, Mankiw, and Rodrik Economics students today are complaining more and more about the way economics is taught. The lack of fundamental diversity — not just path-dependent elaborations of the mainstream canon — and narrowing of the curriculum, dissatisfy econ students all over the world. The frustrating lack of real-world relevance has led many of them to demand the discipline to start developing a more open and pluralistic...

Most of the time I write dense blogs & research papers. I sent the e-mail below to someone close to me. Afterward, I realized it tacitly says a lot about the state of our society (liberals included). Sometimes, mixing things and writing about them in a different way can be revealing. Sent: Saturday, December 17, […]

Mathematical modeling in economics If scientific progress in economics lies in our ability to tell ‘better and better stories’ one would, of course, expect economics journals to be filled with articles supporting the stories with empirical evidence confirming the predictions. However, the journals still show a striking and embarrassing paucity of empirical studies that (try to) substantiate these predictive claims. Equally amazing is how little one has...

Because of the seriousness of the world situation, I have decided to get back in the business of doing interviews (which I do not enjoy doing). Here is a link to my interview (13/12/2022) on RT CrossTalk discussing “New Globalization?” In that connection, here is a link to a paper (written in 2018) titled “The […]

Model uncertainty and ergodicity Post Keynesian authors have offered various classifications of uncertainty … A common distinction is that of epistemological versus ontological uncertainty, with the former depending on the limitations of human reasoning and the latter on the actual nature of social systems … Models of ontological uncertainty tend to hinge on the existence of information that is critical to the decision-making task. Fundamental...

Nyligen höjde Riksbanken återigen styrräntan. Förhoppningen är att de ökade räntekostnaderna ska dämpa efterfrågan och inflationsförväntningarna och därmed leda till en lägre inflation. Men räntehöjningar kommer sannolikt inte lösa inflations­problemen. Däremot riskerar de att allvarligt skada den ­svenska samhällsekonomin. De ökade konsumentpriserna beror inte på låga räntor utan primärt på flaskhalsar från pandemin, ökade energi- och matpriser från kriget i Ukraina, att...

The misuse of mathematics in economics Many American undergraduates in Economics interested in doing a Ph.D. are surprised to learn that the first year of an Econ Ph.D. feels much more like entering a Ph.D. in solving mathematical models by hand than it does with learning economics. Typically, there is very little reading or writing involved, but loads and loads of fast algebra is required. Why is it like this? … One reason to use math is that it is...