[unable to retrieve full-text content]There is an approach to cognitive psychology and modelling beliefs and forecasts which is natural for economists and very misleading. The assumptions are that we have a complete set of subjective probabilities updated with Bayes’ formula, that  for any possible combination of events we have a belief about the probability that they will occur and […] The post A Complete Set of Subjective Probabilities, Bayes’ Formula, Overconfidence...

The ´natural rate of unemployment´, also called ´Non-Accelerating Inflation Rate of Unemployment´ (NAIRU) or ´Non-Accelerating Wage Rate of Unemployment´ (NAWRU), is as, on this blog, Lars Syll states (here and here), a dangerous tool. According to NAIRU/NAWRU theory, a) When unemployment falls below a certain threshold, an inexorable increase in inflation will start. This is simply not true, considering the facts. b) As NAIRU/NAWRU theory is untrue, it can´t be measured by...

[unable to retrieve full-text content]Today, I chose to put up a few stories about Thanksgiving Days in the past. This instead of the usual commentaries we would write at Angry Bear. I believe they are good reads. I hope you enjoy your Thanksgiving Day. There is much to enjoy with family and friends. I spent time out of country […] The post Angry Bear Commenters and Readers appeared first on Angry Bear.

Economists have sometimes misled us with their belief that it is their job to tell “white lies” to scare the population into “behaving themselves.” We think that is the wrong approach. This book trusts you, the reader, with that truth. We trust you to do what you can to spread the truth and to hold policymakers accountable. The truth is that government faces political constraints. It faces resource constraints. It faces technological constraints. But it does not, cannot, face...

[unable to retrieve full-text content]– by Sarah Laskow Atlas Obscura November 23, 2016 By the time she started pitching Thanksgiving to America, Sarah Josepha Hale knew her power. She was edging towards 60, and for a decade she had been the editress (her preferred term) of Godey’s Lady’s Book, one of the most widely read publications in the United States. Women followed […] The post Sarah Josepha Hale imagined a day of Christian Celebration. appeared...

[unable to retrieve full-text content]– by Annie Lowrey The Atlantic, November 20, 2018 A Thanksgiving story about the limits of human empathy . . . YELLVILLE, Ark.—It is October in the Ozarks. The grass has dried out and the trees have bronzed and browned. Deer lie glaze-eyed in the back of camouflaged pickup trucks. High-school football helmets crack every […] The post Yellville – Tossing a Turkey Out of a Plane appeared first on Angry Bear.

[unable to retrieve full-text content]Mexico buys about $300 billion worth of goods from us every year, mostly machinery, oil, autos, food and office equipment. If Trump imposes a 25% tariff on Mexican imports, you can be sure that Mexico will retaliate, at the expense of American jobs. Meanwhile, Mexico will certainly be looking to source these goods from China […] The post The Trump tariffs won’t actually happen appeared first on Angry Bear.

[unable to retrieve full-text content]but not for the reasons we generally remember. – by Prof. Heather Cox – Richardson, Letters from an American The Pilgrims and the Wampanoags did indeed share a harvest celebration together at Plymouth in fall 1621, but that moment got forgotten almost immediately, overwritten by the long history of the settlers’ attacks on their Indigenous […] The post Thanksgiving is the quintessential American holiday . . . appeared first on...

from Lars Syll Sixty years ago Milton Friedman wrote an (in)famous article arguing that (1) the natural rate of unemployment was independent of monetary policy and that (2) trying to keep the unemployment rate below the natural rate would only give rise to higher and higher inflation. The hypothesis has always been controversial, and much theoretical and empirical work has questioned the real-world relevance of the idea that unemployment really is independent of monetary policy and that...

[unable to retrieve full-text content]One of the first observed and best known errors people make when told probabilities is the Allais paradox.  People put too much weight on rare extreme outcomes.  This means that choices people make different choices when asked to choose between two  lotteries with the same probabilities of the same outcomes depending on how they are […] The post The Allais Paradox appeared first on Angry Bear.