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description= 15 posts published by Lars Syll during June 2023;
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re that kind of knowledge comes from beyond referring to the economic theory that one is supposed to test that leaves us in the awkward position of admitting that if the assumptions made do not hold the inferences conclusions and testing outcomes econometricians come up with simply do not follow the data and statistics they use the central question is how do we learn from empirical data but we have to remember that the value of testing hinges on our ability to validate the often unarticulated assumptions on which the testing models build if the model is wrong the test apparatus simply gives us fictional values there is always a risk that one puts a blind eye to some of those non fulfilled technical assumptions that actually make the testing results and the inferences we build on them unwarranted econometric testing builds on the assumption that the hypotheses can be treated as hypotheses about joint probability distributions and that economic variables can be treated as if pulled out of an urn as a random sample most economic phenomena are nothing of the kind most users of the econometric toolbox seem to have a built in blindness to the fact that mathematical statistical modelling in social sciences is inherently incomplete since it builds on the presupposition that the model properties are without serious argumentation or warrant assumed to also apply to the intended real world target systems studied many of the processes and structures that we know play essential roles in the target systems do not show up often for mathematical statistical tractability reasons in the models the bridge between model and reality is failing valid and relevant information is unrecognized and lost making the models harmfully misleading and largely irrelevant if our goal is to learn explain or understand anything about actual economies and societies without giving strong evidence for an essential compatibility between model and reality the analysis becomes nothing but a fictitious storytelling of questionable scientific value it is difficult to find any hard evidence that econometric testing has been able to exclude any economic theory if we are to judge econometrics based on its capacity of eliminating invalid theories it has not been a very successful business share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky the façade of precision in mainstream economics 29 jun 2023 at 11 11 posted in economics 1 comment jevons is a man of some ability but he seems to me to have a mania for encumbering questions with useless complications and with a notation implying the existence of greater precision in the data than the questions admit of john stuart mill fixation on constructing models implying the existence of greater precision in the data than the questions admit of showing the certainty of logical entailment realite r simply collapsing the necessary ontological gap between model and reality has since the days of jevons and the marginalist revolution been detrimental to the development of a relevant and realist economics insisting on formalistic mathematical modelling forces the economist to give up on realism and substitute axiomatics for real world relevance the price for rigour and precision is far too high for anyone who is ultimately interested in using economics to pose and hopefully answer real world questions and problems this deductivist orientation is the main reason behind the difficulty that mainstream economics has in terms of understanding explaining and predicting what takes place in our societies but it has also given mainstream economics much of its discursive power at least as long as no one starts asking tough questions on the veracity of and justification for the assumptions on which the deductivist foundation is erected asking these questions is an important ingredient in a sustained critical effort at showing how nonsensical the embellishing of a smorgasbord of models is founded on wanting and often hidden methodological foundations the mathematical deductivist straitjacket used in mainstream economics presupposes atomistic closed systems i e something that we find very little of in the real world a world significantly at odds with an implicitly assumed logic world where deductive entailment rules the roost ultimately then the failings of modern mainstream economics have its root in a deficient ontology the kind of formal analytical and axiomatic deductive mathematical modelling that makes up the core of mainstream economics is hard to make compatible with a real world ontology it is also the reason why so many critics find mainstream economic analysis patently and utterly unrealistic and irrelevant if we want theories and models to confront reality there are obvious limits to what can be said rigorously in economics in the deductivist approach model consistency trumps coherence with the real world that is surely getting the priorities wrong creating models for their own sake is not an acceptable scientific aspiration impressive looking formal deductive mathematical models should never be mistaken for truth to construct and use an economic model you have to start by establishing that the phenomena modeled are ontologically compatible with the model the rigour and precision in models have a devastatingly important trade off the higher the level of rigour and precision the smaller the range of real world applications so the more mainstream economists insist on formal logic validity the less they have to say about the real world and to think we solve the problem by reforms to mathematical modelling is like looking for a spoon when what is needed is a knife share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky håll mitt hjärta 29 jun 2023 at 01 07 posted in varia comments off on håll mitt hjärta share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky california sun 28 jun 2023 at 17 52 posted in varia 2 comments although it s forty years now since i was a research student at the university of california on a day like this i sure wish i was back in redondo beach ocean park venice beach share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky the lack of theory in social experiments 28 jun 2023 at 17 40 posted in economics comments off on the lack of theory in social experiments jason collins discusses a paper by milkman et al that presented a megastudy testing 54 interventions to increase the gym visits of 61 000 experimental participants collins s discussion seems reasonable to me in particular i agree with his big problem about the design of this mega study which is that there s all sorts of rigor in the randomization and analysis plan but no rigor at all when it comes to deciding what interventions to test unfortunately this is standard practice in policy analysis indeed if you look at a statistics book including mine you ll see lots and lots on causal inference and estimation but nothing on how to come up with the interventions to study in the first place what are those 54 interventions anyway just some things that a bunch of well connected economists wanted to try out well connected economists know lots of things but maybe not so much about motivating people to go to the gym a related problem is variation these treatments even when effective are not simply push button x and then you get outcome y effects will be zero for most people and will be highly variable among the people for whom effects are nonzero the result is that the average treatment effect will be much smaller than you expect this is not just a problem of statistical power it s also a conceptual problem with this whole reduced form way of looking at the world to put it another way lack of good theory has practical consequences andrew gelman share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky hans jürgen krahl and the frankfurt school 27 jun 2023 at 16 04 posted in politics society comments off on hans jürgen krahl and the frankfurt school share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky my favourite french teacher 27 jun 2023 at 13 22 posted in varia comments off on my favourite french teacher share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky sraffa on ricardo s corn model wonkish 26 jun 2023 at 17 29 posted in economics comments off on sraffa on ricardo s corn model wonkish after being tasked with editing david ricardo s collected works in 1930 sraffa with the assistance of maurice dobb published them between 1951 and 1973 this work earned him the 1961 söderström gold medal from the royal swedish academy of sciences for the edition sraffa wrote an interesting and thought provoking introduction its purpose was to demonstrate that the classical economists based their theory on the concept of surplus defined as the remainder of the product after deducting the necessary production costs ricardo s contribution to the classical tradition was primarily to specify in more detail the relationship between the shares of the various social classes in this surplus the social net product and its development and changes over time sraffa shows how ricardo wrestled with the problem of how to define the surplus in a way that allows for an unambiguous determination throughout his adult life what has been fiercely debated among historians of economic thought is sraffa s thesis that ricardo up until 1815 and essay on profits solved this problem by constructing a corn model according to sraffa ricardo reasoned as follows in agriculture only labour and corn seed is used to produce more corn the real wage is assumed to be given at a certain level and defined as a specific quantity of corn this means that inputs and outputs are homogeneous and can therefore be measured in physical terms the rate of profit can then be defined as the quantity of output expressed in corn minus the quantity of input expressed in corn divided by the quantity of input expressed in corn this can be reconciled without taking into account the other sectors in society since according to the equality assumption there can only exist one rate of profit the individual rates of profit in the other sectors must adjust to that of agriculture which thereby determines the general rate of profit in the economy the way in which ricardo according to sraffa determines the rate of profit in essay on profits implies that there is no need for a theory of value to determine the distribution of the net product between profit rent and wages however as soon as ricardo departs from the assumption that the economy is fundamentally single sectorial it becomes necessary to determine the profit on capital as it is determined in the market through commodity prices when attempting to extend a corn model to include other production sectors that are mutually interdependent problems arise these force one onto partially new paths one reaches a crossroads where the choice lies between divisible and indivisible production systems it involves a possible conception of production as natural on the one hand and a necessary concept of the social character of production on the other in a single sector model distribution and production can be reduced from social entities to natural ones but the idea of production confined to one sector contradicts the very concept of capitalist production which is the production of value without physical boundaries therefore it becomes necessary to go beyond the corn model to achieve a more accurate understanding of distribution and value within the framework of the capitalist society in doing so one will also partially break with the views of some earlier classical economists on the nature of the economy and instead see production as socially determined the importance of a theory of value becomes clear to ricardo through the contradictions that this creates within the theory of distribution according to sraffa what ricardo is attempting to demonstrate in principles is that the conclusions he has reached regarding distribution within the single sector model are also generally valid in an interdependent multisectional economy in the corn model labour functions merely as a mediating link in the natural production process where corn is transformed into more corn there is no conception of labour as socially equivalent by having all production occur in the corn sector all labour is transformed into corn labour this is to use marx s terminology to reduce abstract labour to concrete labour and therefore to reduce the social character of labour to labour as nature the root of the confusion between labour and labour power which will complicate much of the subsequent work on the theory of value can be found here the perception of production as a natural process essentially means that production loses its economic character and instead takes the form of general metabolism it becomes a logical category with the meaning of transforming inputs into outputs however production in this general form cannot serve as the basis for economic relations because it is indifferent to the specificity of these relations in the distribution theory attributed to ricardo by sraffa the starting point is the corn model because only through it can ricardo separate the determination of the value of goods from their distribution capital in this model takes the form of circulating capital specifically a wage fund of labour advanced which is also the share of the previous production period that accrues to labour in an economy of this kind the simplicity of the distribution problem is a function of its character as the distribution of material entities to measure the net product we only need access to the natural unit of corn it is worth noting further that the distribution of the good has nothing to do with the exchange of the product and the secret of the corn model actually lies in this assumption of the absence of commodity exchange since there is only one product there is of course no reason for the exchange of this universal product among the different actors ricardo s solution to the distribution problem in essay on profits is to dissolve the distributive parts into their natural class components in order to present these shares as natural the distribution must be separated from the value form of the product even in his later works ricardo according to sraffa would attempt to reduce his theory of value to the only thing he assumes it is based on namely the distribution of material products wages and rent acquire the character of natural distribu...
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