Daron Acemoglu et consortes – GIGO

6 October, 2012 at 17:36 | Posted in Economics, Theory of Science & Methodology | 4 Comments

Daron Acemoglu, James Robinson and Thierry Verdier recently made public a paper – Can’t We All Be More Like Scandinavians?  – comparing the effects on innovation of Europe’s “cuddly” capitalism to the “cutthroat” capitalism of U.S.

True to the standard modelling endeavours of neoclassical economics they among a lot of other handy assumptions made this one:

We assume that workers can simultaneously work as entrepreneurs (so that there is no occupational choice). This implies that each individual receives wage income in addition to income from entrepreneurship

Hmm, and I – a Scandinavian economist – who thought that including those occupational choices and the effects of social safety nets in the form of social insurance would be essential to get at the core of entrepreneurial risk and innovative aspirations…

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4 Comments »

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  1. By bringing them up you touched a nerve. I’ve become convinced that much of what they, Acemolu and Robinson, are doing is just “garbage.” A lot of stylized nonsense passing for profundity.

    • “Though this be madness, yet there’s method in it” (Shakespeare)

  2. By the way, I know you liked Mary Morgan’s book but you had some criticisms of it. I am finding it to be a “gem” of a read. I’m glad I discovered it on your site.

  3. Apparently, you are not alone in thinking the paper is dumb. Check out the dust up on Noah’s blog. http://noahpinionblog.blogspot.com/


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