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description= 15 posts published by Lars Syll during February 2018;
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Text of the page (random words):
o determine how the future state the one that will prevail will be it would make then sense to apply a strategy for gathering empirical evidence a sequence of actions to collect new data but if the world is not repetitive what makes me think that the new information may be at all useful regarding future events conceiving economic processes like sequences of events in which uncertainty reigns where consequently there are no laws nor invariants or mechanisms to discover the kind of learning that experiments or last experience provide is of no use for the future because it eliminates innovation and creativity and does not take into account the arboreal character and the open ended nature of the economic process however as said before we can gather precise information restricted in space and time data but what is the purpose of obtaining this sort of information if uncertainty about future events prevails the problem is that taking uncertainty seriously puts in question the relevance the data obtained by means of testing or experimentation has for future situations marqués book is a serious challenge to much of mainstream economic thinking and its methodological and philosophical underpinnings a must read for anyone interested in the foundations of economic theory to yours truly marqués book is especially important since it shows how far reaching the effects of taking keynes concept of genuine uncertainty really are almost a hundred years after john maynard keynes wrote his seminal a treatise on probability 1921 it is still very difficult to find economics textbooks that seriously try to incorporate his far reaching and incisive analysis of uncertainty inductive inference and evidential weight the standard view in economics and statistics and the axiomatic probability theory underlying it is to a large extent based on the rather simplistic idea that more is better but as keynes argues more of the same is not what is important when making inductive inferences it s rather a question of more but different variation not replication is at the core of induction finding that p x y p x y w doesn t make w irrelevant knowing that the probability is unchanged when w is present gives p x y w another evidential weight weight of argument running 10 replicative experiments do not make you as sure of your inductions as when running 10 000 varied experiments even if the probability values happen to be the same according to keynes we live in a world permeated by unmeasurable uncertainty not quantifiable stochastic risk which often forces us to make decisions based on anything but rational expectations keynes rather thinks that we base our expectations on the confidence or weight we put on different events and alternatives to keynes expectations are a question of weighing probabilities by degrees of belief beliefs that often have preciously little to do with the kind of stochastic probabilistic calculations made by the rational agents as modelled by modern social sciences and often we simply do not know as keynes writes in treatise if different wholes were subject to different laws qua wholes and not simply on account of and in proportion to the differences of their parts knowledge of a part could not lead it would seem even to presumptive or probable knowledge as to its association with other parts in my judgment the practical usefulness of those modes of inference on which the boasted knowledge of modern science depends can only exist if the universe of phenomena does in fact present those peculiar characteristics of atomism and limited variety which appears more and more clearly as the ultimate result to which material science is tending science according to keynes should help us penetrate to the true process of causation lying behind current events and disclose the causal forces behind the apparent facts models can never be more than a starting point in that endeavour he further argued that it was inadmissible to project history on the future consequently we cannot presuppose that what has worked before will continue to do so in the future that statistical models can get hold of correlations between different variables is not enough if they cannot get at the causal structure that generated the data they are not really identified how strange that writers of economics textbooks do not even touch upon these aspects of scientific methodology that seems to be so fundamental and important for anyone trying to understand how we learn and orient ourselves in an uncertain world an educated guess on why this is a fact would be that keynes concepts are not possible to squeeze into a single calculable numerical probability in the quest for quantities one puts a blind eye to qualities and looks the other way but keynes ideas keep creeping out from under the carpet robert lucas once wrote in studies in business cycle theory that in cases of uncertainty economic reasoning will be of no value now if that was true it would put us in a tough dilemma if we have to consider as lucas uncertainty incompatible with economics being a science and we actually know for sure that there are several and deeply important situations in real world contexts where we both epistemologically and ontologically face genuine uncertainty well then we actually would have to choose between reality and science that can t be right we all know we do not know very much about the future we all know the future harbours lots of unknown unknowns those are ontological facts we just have to accept but i still think it possible we can go for both reality and science and develop a realist relevant non ergodic economic science var tog jämlikheten vägen 28 feb 2018 at 10 48 posted in politics society 1 comment nya data från scb visar att inkomstskillnaderna i sverige har fortsatt öka gini koefficienten som år 2005 låg på 0 27 har ökat till 0 32 år 2016 det är den högsta noteringen sedan mätningarna startade även andelen personer med låg ekonomisk standard har stigit från 10 procent år 2005 till 14 procent år 2016 idag har de 10 procent av befolkningen som har högst inkomster lika stor andel av den totala disponibla inkomsten som de 50 procent av befolkningen som har lägst inkomster denna dystra bild av jämlikheten i ett land som en gång i tiden var ett föredöme och det mest jämlika landet i världen späs på ytterligare av data presenterade i en ny rapport från lo i rapporten kan man visa på att den ekonomiska eliten i lo s datamaterial omfattande 50 verkställande direktörer på svenska storföretag har en högre relativinkomst än någonsin tidigare i genomsnitt ligger direktörernas inkomster på en nivå motsvarande 55 industriarbetarlöner vilken tur då att vi har en socialdemokratisk arbetarrörelseregering vid makten som gör allt vad den kan för att minska den accelererande ojämlikheten share on facebook opens in new window facebook share on x opens in new window x share on bluesky opens in new window bluesky that don t impress me much 26 feb 2018 at 17 20 posted in varia 7 comments the biggest trouble with modern macroeconomics 26 feb 2018 at 09 07 posted in economics comments off on the biggest trouble with modern macroeconomics the trouble is not so much that macroeconomists say things that are inconsistent with the facts the real trouble is that other economists do not care that the macroeconomists do not care about the facts an indifferent tolerance of obvious error is even more corrosive to science than committed advocacy of error paul romer new classical real business cycles dsge new keynesian microfounded macromodels try to describe and analyze complex and heterogeneous real economies with a single rational expectations robot imitation representative agent that is with something that has absolutely nothing to do with reality opting for cloned representative agents that are all identical is of course not a real solution for analyzing macroeconomic issues representative agent models are as i have argued at length here rather an evasion whereby issues of distribution coordination heterogeneity everything that really defines macroeconomics are swept under the rug of course most macroeconomists know that to use a representative agent is a flagrantly illegitimate method of ignoring real aggregation issues they keep on with their business nevertheless just because it significantly simplifies what they are doing continuing to model a world full of agents behaving as economists often wrong but never uncertain is a gross misallocation of intellectual resources and time keynes en sällsynt fågel 25 feb 2018 at 18 04 posted in economics comments off on keynes en sällsynt fågel alfred marshall skrev en gång att bra ekonomer är sällsynta fåglar det stämmer verkligen en av dessa sällsynta fåglar var definitivt john maynard keynes och nu har den norske ekonomiprofessorn björn ivar davidsen skrivit en bok om denne sällsynt kompetente ekonom filosof statstjänsteman spekulant utopist universitetsmecenat konstsamlare med mera med mera i boken får vi följa med på en resa i keynes biografiska fotspår och får på så vis ta del av denne mångsidige intellektuelle gigants liv och leverne även om boken främst är biografiskt hållen finns det inte minst i de avslutande kapitlen intressanta och välargumenterade resonemang kring vad som är kärnan i keynes ekonomiska tänkande nyttig läsning inte minst för de som kanske läst lite nationalekonomi på något av våra universitet och därför tyvärr fått en fullständigt förvrängd bild av vad som var det omvälvande och revolutionerande i keynes ekonomiska tänkande med den här boken visar författaren att han själv också är en sällsynt fågel skrivkunniga akademiska ekonomer är en utrotningshotad art vilken tur att vi då kan läsa denna välskrivna och intressanta bok skriven av en ekonom som uppenbart klarar av att skriva skön prosa tag och läs vingar 25 feb 2018 at 17 13 posted in varia comments off on vingar models and economics 23 feb 2018 at 23 10 posted in economics 4 comments economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world it is compelled to be this because unlike the typical natural science the material to which it is applied is in too many respects not homogeneous through time the object of a model is to segregate the semi permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the latter and of understanding the time sequences to which they give rise in particular cases good economists are scarce because the gift for using vigilant observation to choose good models although it does not require a highly specialised intellectual technique appears to be a very rare one john maynard keynes letter to harrod 1938 hit and run 23 feb 2018 at 21 08 posted in varia comments off on hit and run keeping the dream alive 23 feb 2018 at 16 25 posted in economics 1 comment for me the study of asymmetric information was a very first step toward the realization of a dream that dream was the development of a behavioral macroeconomics in the original spirit of keynes general theory macroeconomics would then no longer suffer from the ad hockery of the neoclassical synthesis which had over ridden the emphasis in the general theory on the role of psychological and sociological factors such as cognitive bias reciprocity fairness herding and social status my dream was to strengthen macroeconomic theory by incorporating assumptions honed to the observation of such behavior keynes general theory was the greatest contribution to behavioral economics before the present era almost everywhere keynes blamed market failures on psychological propensities as in consumption and irrationalities as in stock market speculation immediately after its publication the economics profession tamed keynesian economics they domesticated it as they translated it into the smooth mathematics of classical economics but economies like lions are wild and dangerous modern behavioral economics has rediscovered the wild side of macroeconomic behavior behavioral economists are becoming lion tamers the task is as intellectually exciting as it is difficult george akerlof keynes core in sight 23 feb 2018 at 11 15 posted in economics comments off on keynes core in sight but these more recent writers like their predecessors were still dealing with a system in which the amount of the factors employed was given and the other relevant facts were known more or less for certain at any given time facts and expectations were assumed to be given in a definite and calculable form the calculus of probability tho mention of it was kept in the background was supposed to be capable of reducing uncertainty to the same calculable status as that of certainty itself the fact that our knowledge of the future is fluctuating vague and uncertain renders wealth a peculiarly unsuitable subject for the methods of the classical economic theory by uncertain knowledge let me explain i do not mean merely to distinguish what is known for certain from what is only probable the sense in which i am using the term is that in which the prospect of a european war is uncertain or the price of copper and the rate of interest twenty years hence about these matters there is no scientific basis on which to form any calculable probability whatever we simply do not know john maynard keynes to understand real world non routine decisions and unforeseeable changes in behaviour ergodic probability distributions are of no avail in a world full of genuine uncertainty where real historical time rules the roost the probabilities that ruled the past cannot simply be assumed to be those that will rule the future time is what prevents everything from happening at once to assume that economic processes are ergodic and concentrate on ensemble averages is not a sensible way for dealing with the kind of genuine uncertainty that permeates real world economies what is important with the fact that real social and economic processes are nonergodic is the fact that uncertainty not risk rules the roost thinking about uncertainty in terms of rational expectations and ensemble averages has had seriously bad repercussions on the financial system keynes uncertainty concept has an ontological founding of course this also has repercussions on the issue of ergodicity in a strict methodological and mathematical statistical sense the most interesting and far reaching difference between an epistemological and an ontological view on uncertainty is that if one subscribes to the former you open up for the mistaken belief that with better information and greater computer power we somehow should always be able to calculate probabilities and describe the world as an ergodic universe as keynes convincingly argued that is ontologically just not possible to keynes the source of uncertainty is in the nature of the real nonergodic world it has to do n...
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