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Models of uncertainty | LARS P. SYLL
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…
What is wrong with game theory | LARS P. SYLL
Back in 1991, when yours truly earned his first PhD with a dissertation on decision making and rationality in social choice theory and game theory, I concluded that "repeatedly it seems as though mathematical tractability and elegance -- rather than realism and relevance -- have been the most applied guidelines for the behavioural assumptions being…
Knapsack problem (student stuff) | LARS P. SYLL
. And, yes, there is a strong connection between the knapsack problem and Bellman's principle of optimality through dynamic programming, which leverages the principle of optimality to break the problem into smaller subproblems and build up the solution ...
Daniel Waldenström — Sveriges egen Dr Pangloss | LARS P. SYLL
Idag presenterades LO:s årliga rapport om inkomstskillnader i vårt land -- Makteliten: i raketfart från verkligheten. Den visar att näringslivets direktörslöner fortsätter att dra ifrån rejält och idag ligger på en historiskt hög nivå. Den genomsnittliga inkomsten för vd:arna vid de 50 största svenska företagen motsvarade år 2023 mer än 70 industriarbetarlöner. Men för vår…
Keynes’ critique of econometrics is still valid | LARS P. SYLL
Mainstream economists often hold the view that Keynes' criticism of econometrics resulted from a sadly misinformed and misguided person who disliked and did not understand much of it. This is, however, nothing but a gross misapprehension. To be careful and cautious is not the same as to dislike. Keynes did not misunderstand the crucial issues…
The Pygmalion syndrome and the failings of modern economics | LARS P. SYLL
As Lars Syll wrote here last month, too much of the profession “has since long given up on the real world” and is happy to investigate the “thought-up worlds” of unrealistic economic models. Too much attention is focused on how the parts of the model fit together, rather than on how well the models fit …
Dynamic Programming for Dummies (student stuff) | LARS P. SYLL
. Dynamic programming is a cornerstone of optimal control theory. By recursively breaking down complex problems into smaller, more manageable subproblems, it serves as a powerful tool in economics. Economic analysis often involves decisions with long-term consequences, and dynamic programming helps model how different agents make optimal choices when each decision depends on the current…
Open letter to my students | LARS P. SYLL
Yours truly has a reputation for being tough on grading students. It is true. I am tough. And for a reason. Social science is hard. Getting a grade in it is not something you have a right to. You have to show that you master the material. You have to earn it! One of the…
Om ‘statsbudgetpolis’ och otillräckliga räntesänkningar | LARS P. SYLL
Sällan eller aldrig har man anledning vara nöjd med ekonomijournalistiken i press, radio och television. Ytterst få ekonomijournalister och börsanalytiker tar sitt jobb på allvar och bedriver ekonomisk journalistik värd namnet. De flesta av oss har därför sedan länge gett upp. Synd bara att allmänheten ska behöva nöja sig med det tyckmyckentrutade nonsens näringsliv och…
What is a good economic model? | LARS P. SYLL
Whereas increasing the difference between a model and its target system may have the advantage that the model becomes easier to study, studying a model is ultimately aimed at learning something about the target system. Therefore, additional approximations come with the cost of making the correspondence between model and target system less straight- forward. Ultimately,…
Econometrics — a ‘realist’ critique | LARS P. SYLL
A popular idea in quantitative social sciences is to think of a cause (C) as something that increases the probability of its effect or outcome (O). That is: P(O|C) > P(O|-C) However, as is also well known, a correlation between two variables, say A and B, does not necessarily imply that one is a cause…
John Nash and the limits of game theory | LARS P. SYLL
. John Nash made groundbreaking contributions to game theory, particularly through his development of the concept of the Nash Equilibrium, which became a cornerstone of the analysis of strategic interactions in economics. Late in his life Nash, however, also came to be aware of a fundamental methodological weakness of game theory. Overemphasizing the reach of…
Om detta må vi berätta | LARS P. SYLL
Vi talar ofta i dag om tilltagande kriminalitet, sämre hälsa och ökade psykiska problem. Men nästan aldrig om vad dessa symptom i hög grad är orsakade av -- arbetslösheten. 8,5% arbetslöshet är den högsta på ett decennium och sysselsättningsgraden har successivt sjunkit sedan 80-talet. Detta har lett till en ökning av främst otrygga jobb och…
How evidence is treated in mainstream macroeconomics | LARS P. SYLL
'New Keynesian' macroeconomist Simon Wren-Lewis has a post on his blog discussing how evidence is treated in modern macroeconomics (emphasis added): It is hard to get academic macroeconomists trained since the 1980s to address this question, because they have been taught that these models and techniques are fatally flawed because of the Lucas critique and…
‘Autonomy’ in econometrics | LARS P. SYLL
The point of the discussion, of course, has to do with where Koopmans thinks we should look for "autonomous behaviour relations". He appeals to experience but in a somewhat oblique manner. He refers to the Harvard barometer "to show that relationships between economic variables ... not traced to underlying behaviour equations are unreliable as instruments…
Social sciences — a plaidoyer | LARS P. SYLL
One of the most important tasks of social sciences is to explain the events, processes, and structures that take place and act in society. However, the researcher cannot stop at this. As a consequence of the relations and connections that the researcher finds, a will and demand arise for critical reflection on the findings. To…
Ofrivillig arbetslöshet — ett politiskt val | LARS P. SYLL
Trots sin 30-åriga frånvaro i praktiken lever målet om full sysselsättning kvar i retoriken. Social-demokraternas nya partiprogram anger till exempel att full sysselsättning bör vara det övergripande målet för den ekonomiska politiken. För att det ska bli mer än tomma ord behöver den ekonomiska politiken läggas om. Vi föreslår följande. 1. Låna till investeringar Det enklaste…
Starta Pressarna om MMT | LARS P. SYLL
. I veckans avsnitt av Starta Pressarna försöker Daniel Suhonen och Max Jerneck att -- tillsammans med Peo Hansen och yours truly -- reda ut vad MMT (Modern Monetär Teori) är för något och varför så många nationalekonomer ännu idag fortfarande håller fast vid teorier och modelller om pengar som verkligheten sedan länge sprungit förbi.…
Ett samtal med James Galbraith | LARS P. SYLL
I veckans utgåva av Langsomme Samtaler pratar Rune Lykkeberg med den amerikanske ekonomen och professorn James Galbraith om prisreglering, pengarnas betydelse för den amerikanska demokratin och behovet av att göra upp med marknaden som den dominerande dogmen inom ekonomiskt tänkande. Väl värt att lyssna på!
Elon Musk’s nonsense about government deficits | LARS P. SYLL
. The balanced budget paradox is probably one of the most devastating phenomena haunting our modern economies. The harder politicians — usually on the advice of establishment economists — try to achieve balanced budgets for the public sector, the less likely they are to succeed in their endeavour. And the more the citizens have to…
MMT and ‘monetary crankery’ | LARS P. SYLL
MMTists often like to position themselves as the only ones to properly understand the ‘operational realities’ of modern monetary systems. Ironically, many of the claims made by MMTists on this topic are misleading at best. One common rhetorical tactic that I’ve noticed they employ, which often catches their critics out, is to use the term…
Microfoundations — the art of assuming away problems rather than solving them | LARS P. SYLL
Simon Wren-Lewis is one of many mainstream economists who staunchly defend the idea that having microfoundations for macroeconomics moves macroeconomics forward. A couple of years ago he wrote this: I think the two most important microfoundation led innovations in macro have been intertemporal consumption and rational expectations ... [T]he adoption of rational expectations was not…
Holiday activities | LARS P. SYLL
Long holidays are nice. But sometimes, amid all the relaxation, you can feel your brain getting a bit mushy. What do you do then? Personally, yours truly usually solves crosswords, chess problems, and the occasional mathematical puzzle to keep the grey brain cells active over Christmas and New Year...
Hymn of the Cherubim | LARS P. SYLL
. A picture is worth a thousand words, but music paints a thousand pictures in your mind ... Like so much of Arvo Pärt’s music, this masterpiece gives a sense of connecting with a world beyond the world. Breathtakingly beautiful and emotionally overwhelming, it manages to convey the profound serene beauty and mystery of our…
20 Best Economics Blogs For Students | LARS P. SYLL
. 2.Macro Musings Blog 7.Naked Capitalism 16.The Undercover Economist 20.Lars Pålsson Syll Lars Pålsson Syll’s blog illustrates his critique of the conventional economics paradigm together with other heterodox economic views. Engaged with the issues of economic methodology, monetary theory and the shortcomings of neoclassical economics, Syll seeks to overturn orthodoxy and calls for more profound…