Less wonkishly, the basic problem here can be viewed in terms of the logical fallacy of hasty generalization. Hasty generalization involves extending one's one's position, or that held by one's group, universally. In philosophy this result in claims of naturalism to humanity as a whole. For example, natural law is often reducible to a particular set of Western values that is generalized. The "laws" of economics are largely of this sort, and homo economicus as a rational agent that carries...
Read More »Daniel Little — Modeling the social
Brief review of Scott Page, The Model Thinker: What You Need to Know to Make Data Work for You.Understanding SocietyModeling the socialDaniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor
Read More »Andrew Gelman — The fallacy of the excluded middle — statistical philosophy edition
Some philosophy of statistics. Short read. Not wonkish.Statistical Modeling, Causal Inference, and Social ScienceThe fallacy of the excluded middle — statistical philosophy editionAndrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University
Read More »Lars P. Syll — The main reason why almost all econometric models are wrong
Since econometrics doesn’t content itself with only making optimal predictions, but also aspires to explain things in terms of causes and effects, econometricians need loads of assumptions — most important of these are additivity and linearity. Important, simply because if they are not true, your model is invalid and descriptively incorrect. And when the model is wrong — well, then it’s wrong.... Simplifying assumptions versus oversimplification.Lars P. Syll’s BlogThe main reason why almost...
Read More »Jason Smith — A list of macro meta-narratives
In my macro critique, I mentioned "meta-narratives" — what did I mean by that? Noah Smith has a nice concise description of one of them today in Bloomberg that helps illustrate what I mean: the wage-price spiral. The narrative of the 1960s and 70s was that the government fiscal and monetary policy started pushing unemployment below the "Non-Accelerating Inflation Rate of Unemployment" (NAIRU), causing inflation to explode. The meta-narrative is the wage-price spiral: unemployment that is...
Read More »Lars P. Syll — On the non-applicability of statistical models
Math is purely formal, involving the relation of signs based on formation and transformation rules. Signs are given significance based on definitions. Math is applicable to the world through science to the degree that the definitions are amenable to measurement and the model assumptions approximate real world conditions (objects in relation to others) and events (patterned changes in these relations). Methodological choices determine the scope and scale of the model, which in turn...
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