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from Lars Syll Randomised experiments require much more than just randomising an experiment to identify a treatment’s effectiveness. They involve many decisions and complex steps that bring their own assumptions and degree of bias before, during and after randomisation … Some researchers may respond, “are RCTs not still more credible than these other methods even if they may have biases?” For most questions we are interested in, RCTs cannot be more credible because they cannot be applied...

from Asad Zaman I was professionally trained as an economist, and learned how to build models with the best. As described in detail in a previous post on “The Education of An Economist“, it was only by accident that, a long time after graduate school, I learned of glaring conflicts between the theory I had been taught, and the historical evidence about effects of free trade and trade barriers. Further exploration along this direction dramatically widened the chasm between the economic...

by New Deal democrat Weekly Indicators for January 13 – 17 at Seeking Alpha My Weekly Indicators post is up at Seeking Alpha. The short term forecast has been volatile recently – and was again this week. As usual, clicking over and reading rewards me a little bit for the effort I put in

from Jared Bernstein and Dean Baker One of most enduring, economically and socially damaging, downright frustrating facts about life in the United States is how expensive health care is here. Not only does U.S. health care cost far more than in other advanced economies, but compared with the nations that spend less, we have worse or equivalent health outcomes. In fact, U.S. life expectancy now lags behind that of all the advanced economies. An MRI scan that cost $1,400 here went for...

from Lars Syll If I ask myself what I could legitimately assume a person to have rational expectations about, the technical answer would be, I think, about the realization of a stationary stochastic process, such as the outcome of the toss of a coin or anything that can be modeled as the outcome of a random process that is stationary. I don’t think that the economic implications of the outbreak of World war II were regarded by most people as the realization of a stationary stochastic...

NPR’s Planet Money went to the 2020 American Economic Association conference in San Diego where they asked economists, “what is the most useful idea in economics?” David Autor appears near the end of the episode (minute 16:00) to talk about the lump-of-labor fallacy. Almost exactly 87 years earlier, on January 18, 1933, Arthur Dahlberg appeared before a Senate subcommittee to give testimony on the thirty-hour work week bill. The lump-of-labor fallacy...

There is no better way to honor Dr. King than to read his Letter From a Birmingham Jail.  It is full of moral insight, deeply moving, and an astonishing piece of political advocacy.  Here are the opening paragraphs: While confined here in the Birmingham city jail, I came across your recent statement calling my present activities “unwise and untimely.” Seldom do I pause to answer criticism of my work and ideas. If I sought to answer all the criticisms that...

from Asad Zaman Statistics and Econometrics today are done without any essential reference to causality – this is much like try to figure out how birds fly without taking into account their wings. Judea Pearl “The Book of Why” Chapter 2 tells the bizarre story of how the discipline of statistics inflicted causal blindness on itself, with far-reaching effects for all sciences that depend on data. These notes are planned as an accompaniment and detailed explanation of the Pearl, Glymour,...

One of the more tenacious beliefs on the political right is that their support for nuclear power demonstrates superior rationality and openness to evidence. But the evidence is that, no matter what the structure of energy markets no one is willing to choose (new) nuclear power over any of the alternatives: gas, renewables and coal. That’s bad in the sense that the true costs of new and existing coal far exceed those of even new nuclear. But where those costs are factored in to...