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description= 15 posts published by Lars Syll during May 2015;
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le ha utvecklat om den offentliga sektorn inte hade accepterat att utgöra en förhoppningsvis tillfällig parkeringsplats för den privata sektorns alltför stora skulder de stora budgetunderskotten kan ses som ett resultat av en omfattande socialisering där den offentliga sektorn kortsiktigt bidrar till att lyfta av den privata en alltför stor skuldbörda statsskuldsutvecklingen spelar idag en viktig pedagogisk roll som indikator på den fara som ligger i dröjsmål med det ekonomisk politiska reformarbetet endast under hotet om statsbankrutt förefaller sveriges riksdag förmögen att fatta beslut om begränsningar av statens utgiftsåtaganden hans tson söderström tyvärr lika sant idag som för 20 år sedan och det säger en hel del om kvalitén på den svenska statsskuldsdebatten bland politiker och ekonomer share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky doctor it hurts when i p 24 may 2015 at 16 34 posted in economics comments off on doctor it hurts when i p a low powered study is only going to be able to see a pretty big effect but sometimes you know that the effect if it exists is small in other words a study that accurately measures the effect is likely to be rejected as statistically insignificant while any result that passes the p 05 test is either a false positive or a true positive that massively overstates the effect a conventional boundary obeyed long enough can be easily mistaken for an actual thing in the world imagine if we talked about the state of the economy this way economists have a formal definition of a recession which depends on arbitrary thresholds just as statistical significance does one doesn t say i don t care about the unemployment rate or housing starts or the aggregate burden of student loans or the federal deficit if it s not a recession we re not going to talk about it one would be nuts to say so the critics and there are more of them and they are louder each year say that a great deal of scientific practice is nuts in just this way if anything this underlines how important it is not to equate science with statistical calculation all science entail human judgement and using statistical models doesn t relieve us of that necessity working with misspecified models the scientific value of significance testing is actually zero even though you re making valid statistical inferences statistical models and concomitant significance tests are no substitutes for doing real science or as a noted german philosopher once famously wrote there is no royal road to science and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits statistical significance doesn t say that something is important or true since there already are far better and more relevant testing that can be done see e g here and here it is high time to consider what should be the proper function of what has now really become a statistical fetish given that it anyway is very unlikely than any population parameter is exactly zero and that contrary to assumption most samples in social science and economics are not random or having the right distributional shape why continue to press students and researchers to do null hypothesis significance testing testing that relies on a weird backward logic that students and researchers usually don t understand in its standard form a significance test is not the kind of severe test that we are looking for in our search for being able to confirm or disconfirm empirical scientific hypothesis this is problematic for many reasons one being that there is a strong tendency to accept the null hypothesis since it can t be rejected at the standard 5 significance level in their standard form significance tests bias against new hypotheses by making it hard to disconfirm the null hypothesis as shown over and over again when it is applied people have a tendency to read not disconfirmed as probably confirmed and most importantly we should of course never forget that the underlying parameters we use when performing significance tests are model constructions our p values mean next to nothing if the model is wrong as david freedman writes in statistical models and causal inference i believe model validation to be a central issue of course many of my colleagues will be found to disagree for them fitting models to data computing standard errors and performing significance tests is informative even though the basic statistical assumptions linearity independence of errors etc cannot be validated this position seems indefensible nor are the consequences trivial perhaps it is time to reconsider share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky solow and krugman on inequality 24 may 2015 at 11 06 posted in economics comments off on solow and krugman on inequality are you tired of people like walked out harvard economist greg mankiw and their repeated attempts at defending the 1 by invoking adam smith s invisible hand and arguing that a market economy is some kind of moral free zone where if left undisturbed people get what they deserve then i suggest you listen to this great conversation on inequality listening to solow and krugman is a healthy antidote to unashamed neoliberal inequality apologetics the outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes i believe that there is social and psychological justification for significant inequalities of income and wealth but not for such large disparities as exist to day john maynard keynes general theory 1936 a society where we allow the inequality of incomes and wealth to increase without bounds sooner or later implodes the cement that keeps us together erodes and in the end we are only left with people dipped in the ice cold water of egoism and greed share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky on tour 20 may 2015 at 21 07 posted in varia comments off on on tour touring again conference in stockholm and guest appearence in the swedish parliament and the national institute of economic research regular blogging to be resumed during the weekend consistency and validity is not enough 20 may 2015 at 19 01 posted in economics comments off on consistency and validity is not enough neoclassical economic theory today is in the story telling business whereby economic theorists create make believe analogue models of the target system usually conceived as the real economic system this modeling activity is considered useful and essential since fully fledged experiments on a societal scale as a rule are prohibitively expensive ethically indefensible or unmanageable economic theorists have to substitute experimenting with something else to understand and explain relations between different entities in the real economy the predominant strategy is to build models and make things happen in these analogue economy models rather than engineering things happening in real economies formalistic deductive glasperlenspiel can be very impressive and seductive but in the realm of science it ought to be considered of little or no value to simply make claims about the model and lose sight of reality as julian reiss writes there is a difference between having evidence for some hypothesis and having evidence for the hypothesis relevant for a given purpose the difference is important because scientific methods tend to be good at addressing hypotheses of a certain kind and not others scientific methods come with particular applications built into them the advantage of mathematical modelling is that its method of deriving a result is that of mathemtical prof the conclusion is guaranteed to hold given the assumptions however the evidence generated in this way is valid only in abstract model worlds while we would like to evaluate hypotheses about what happens in economies in the real world the upshot is that valid evidence does not seem to be enough what we also need is to evaluate the relevance of the evidence in the context of a given purpose neoclassical economics has since long given up on the real world and contents itself with proving things about thought up worlds empirical evidence only plays a minor role in economic theory where models largely function as a substitute for empirical evidence hopefully humbled by the manifest failure of its theoretical pretences the one sided almost religious insistence on axiomatic deductivist modeling as the only scientific activity worthy of pursuing in economics will give way to methodological pluralism based on ontological considerations rather than formalistic tractability to have valid evidence is not enough what economics needs is sound evidence discussing paul romer s mathiness concept peter dorman yesterday criticized economists belief that theories and models being consistent with data somehow make the theories and models a success story and chris dillow elaborates on the weakness of this consistent with error in a post today if a man has no money this is consistent with the theory that he has given it away but if in fact he has been robbed that theory is grievously wrong mere consistency with the facts is not sufficient this is a point which some defenders of inequality miss of course you can devise theories which are consistent with inequality arising from reasonable differences in choices and marginal products such theories though beg the question is that how inequality really emerged and the answer to put it mildly is only partially it also arose from luck inefficient selection rigged markets rent seeking and outright theft the duhem quine thesis warns us that facts under determine theory they are consistent with multiple theories this is perhaps especially true when those facts are snapshots for example a gini coefficient being a mere snapshot of inequality tells us nothing about how the inequality emerged so how can we guard against the consistent with error one thing we need is history this helps tell us how things actually happened and horrific as it might seem to some economists we also need sociology we need to know how people actually behave and not merely that their behaviour is consistent with some theory economics then cannot be a stand alone discipline but part of the social sciences and humanities a point which is lost in the discipline s mathiness yes indeed history helps and if we re not to busy doing the things we do but once in a while take a brake and do some methodological reflection on why we do what we do well that takes us a long way too share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky paul romer is busy 19 may 2015 at 14 21 posted in economics 9 comments about math i have an undergraduate degree in physics i ve seen clear evidence that math can facilitate scientific progress toward the truth if you think that math is worthless or dangerous i m sure that there are people who will be happy to discuss this with you i m not interested i m busy about truth and science my fundamental premise is that there is an objective notion of truth and that science can help us make progress toward truth if you do not accept this premise i m sure that there are people who would be happy to debate it with you i m not interested i m busy paul romer hmm to me this sounds more like a person afraid of methodological self reflection rather than an open minded and pluralist person where does this methodology aversion come from as far as yours truly can see it all grinds down to a misplaced belief in deductivist mathematical reasoning being the only kind of scientific economics around if economics isn t performed as a mathematical modeling it s not really science in romer s world view there is no problem with that view as long as you have done some ontological and methodological reflection and presented arguments for the appropriateness of insisting on deductivist mathematical modeling being the preferred scientific procedure in economics no such argumentation is presented when applying deductivist thinking to economics romer and other mainstream economists usually set up as if models based on a set of tight axiomatic assumptions from which consistent and precise inferences are made the beauty of this procedure is of course that if the axiomatic premises are true the conclusions necessarily follow the snag is that if the models are to be relevant we also have to argue that their precision and rigour still holds when they are applied to real world situations they often don t when addressing real economies the idealizations necessary for the deductivist machinery to work simply don t hold so how should we evaluate the search for ever greater precision and the concomitant arsenal of mathematical and formalist models to a large extent the answer hinges on what we want our models to perform and how we basically understand the world the world in which we live is inherently uncertain and quantifiable probabilities are the exception rather than the rule to every statement about it is attached a weight of argument that makes it impossible to reduce our beliefs and expectations to a one dimensional stochastic probability distribution if god does not play dice as einstein maintained i would add nor do people the world as we know it has limited scope for certainty and perfect knowledge its intrinsic and almost unlimited complexity and the interrelatedness of its organic parts prevent the possibility of treating it as constituted by legal atoms with discretely distinct separable and stable causal relations our knowledge accordingly has to be of a rather fallible kind to search for precision and rigour in such a world is self defeating at least if precision and rigour are supposed to assure external validity the only way to defend such an endeavour is to take a blind eye to ontology and restrict oneself to prove things in closed model worlds why we should care about these and not ask questions of relevance is hard to see we have to at least justify our disregard for the gap between the nature of the real world and our theories and models of it now if the real world is fuzzy vague and indeterminate then why should our models build upon a desire to describe it as precise and predictable even if there always has to be a trade off between theory internal validity and external validity we have to ask ourselves if our models are relevant models preferably ought to somehow reflect express correspond to reality i m not saying that the answers are self evident but at least you have to do some methodological and philosophical under labouring to rest your case too often that is wanting in modern economics where method...
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