Pourquoi un changement de direction théorique est nécessaire

20 Aug, 2019 at 23:08 | Posted in Economics | Leave a comment

Il y a une certaine tendance française à attribuer à l’utilisation des mathématiques les difficultés des modèles à expliquer les phénomènes économiques … Pour moi, le problème ne réside pas dans l’utilisation des méthodes formelles mais plutôt dans une obsession poussant à améliorer et même à perfectionner des modèles qui semblent être totalement détachés de la réalité. Comme Robert Solow l’a observé:

«Maybe there is in human nature a deep-seated perverse pleasure in adopting and defending a wholly counterintuitive doctrine that leaves the unini tiated peasant wondering what planet he or she is on.
(Solow [2007])»

kirCependant, je vais suggérer que cette tendance n’est que le reflet d’une longue histoire qui nous a amenés dans une impasse. Avec la raréfaction de nos modèles, nous avons adopté l’attitude des mathématiciens bien décrite par Bourbaki:

«Why do applications [of mathematics] ever succeed? Why is a certain amount of logi cal reasoning occasionally helpful in practical life? Why have some of the most intricate theories in mathematics become an indispensable tool to the modem physicist, to the engineer, and to the manufacturer of atom-bombs? Fortunately for us, the mathematician does not feel called upon to answer such questions. (Bourbaki Journal of Symbolic Logic [1949])»

On peut raisonnablement se demander comment nous nous sommes trouvés dans cette situation …

On peut voir, là, la racine de nos problèmes. On cherche à tout prix à imposer un modèle d’équilibre à un processus qui est fondamentalement dynamique et évolutif ; on veut fermer le modèle d’un processus qui est, presque par définition, non fermé. Comme l’expliquent des économétriciens comme Hendry et Mizon [2010], les individus qui conditionnent leurs anticipations sur l’information concernant un processus passé, quand ce processus évolue dans le temps, ne se comportent pas d’une façon rationnelle. Le poids de notre héritage d’un modèle qui correspond à une situation d’équilibre statique ou stationnaire perturbé de temps en temps par des chocs exogènes est lourd.

Alan Kirman

Hicks on the lack of scientific progress in economics

20 Aug, 2019 at 19:08 | Posted in Economics | Leave a comment

Economics, also, is prone to revolutions; but they are mostly, I believe, of a different character … They are not clear advances in the scientific sense.

This is not the fault of economists. It is a consequence of the nature of the facts which we study. Our facts are not permanent, or repeatable, like the facts of the natural sciences; they change incessantly, and change without repetition … Our practical concern is with the facts of the present world; but before we can study the present, it is already past …

Hicks2Our theories … are rays of light, which illuminate a part of the target, leaving the rest in darkness. As we use them, we avert our eyes from things which may be relevant, in order that we should see more clearly what we do see … It is obvious that a theory which is to perform this function satisfactorily must be well chosen; otherwise it will illumine the wrong things. Further, since it is a changing world that we are studying, a theory which illumines the right things at one time may illumine the wrong things at another. This may happen because of changes in the world (the things neglected may have gained in importance relatively to the things considered) or because of changes in ourselves (the things in which we are interested may have changed). There is, there can be, no economic theory which will do for us everything we want all the time …

So the ‘revolutions’ of economics are only sometimes similar to the ‘revolutions’ of science; most of them are of another character; they are changes of attention.

John Hicks

Marginal productivity theory — a dangerous thought virus

19 Aug, 2019 at 16:33 | Posted in Economics | 2 Comments

execThe marginal productivity theory of income distribution was born a little over a century ago. Its principle creator, John Bates Clark, was explicit that his theory was about ideology and not science. Clark wanted show that in capitalist societies, everyone got what they produced, and hence all was fair:

“It is the purpose of this work to show that the distribution of the income of society is controlled by a natural law, and that this law, if it worked without friction, would give to every agent of production the amount of wealth which that agent creates. (John Bates Clark in The Distribution of Wealth)”

Clark was also explicit about why his theory was needed. The stability of the capitalist order was at stake! Here’s Clark again:

“The welfare of the laboring classes depends on whether they get much or little; but their attitude toward other classes—and, therefore, the stability of the social state—depends chiefly on the question, whether the amount that they get, be it large or small, is what they produce. If they create a small amount of wealth and get the whole of it, they may not seek to revolutionize society; but if it were to appear that they produce an ample amount and get only a part of it, many of them would become revolutionists, and all would have the right to do so. (John Bates Clark in The Distribution of Wealth)”

So the neoclassical theory of income distribution was born as an ideological response to Marxism. According to Marx, capitalists extract a surplus from workers, and so workers get less than what they deserve. Clark’s marginal productivity theory aimed to show that this was not true. Both capitalists and workers, Clark claimed, got what they deserved.

The message of Clark’s theory is simple: workers need to stay in their place. They already earn what they produce, so they have no right to demand more.

Blair Fix

Although card-carrying neoclassical apologetics like Greg Mankiw wants to recall John Bates Clark’s (1899) argument that marginal productivity results in an ethically just distribution, that is not something – even if it was true – we could confirm empirically, since it is impossible to separate out what is the marginal contribution of any factor of production. The hypothetical ceteris paribus addition of only one factor in a production process is often heard of in textbooks, but never seen in reality.

Wealth and income distribution, both individual and functional, in a market society is to an overwhelmingly high degree influenced by institutionalized political and economic norms and power relations, things that have relatively little to do with marginal productivity in complete and profit-maximizing competitive market models – not to mention how extremely difficult, if not outright impossible it is to empirically disentangle and measure different individuals’ contributions in the typical teamwork production that characterize modern societies.

History has over and over again disconfirmed the close connection between productivity and remuneration postulated in mainstream income distribution theory. The theory is obviously a collapsed theory — and when a theory is impossible to reconcile with facts there is only one thing to do — scrap it!

The ‘practical’ theory of the future

19 Aug, 2019 at 13:13 | Posted in Economics | Leave a comment

KEYNES-articleLargeNow a practical theory of the future … has certain marked characteristics. In particular, being based on so flimsy a foundation, it is subject to sudden and violent changes. The practice of calmness and immobility, of certainty and security, suddenly breaks down. New fears and hopes will, without warning, take charge of human conduct. The forces of disillusion may suddenly impose a new
conventional basis of valuation. All these pretty, polite techniques, made for a well-panelled Board Room and a nicely regulated market, are liable to collapse. At all times the vague panic fears and equally vague and unreasoned hopes are not really lulled, and lie but a little way below the surface …

Tho this is how we behave in the market place, the theory we devise in the study of how we behave in the market place should not itself submit to market-place idols. I accuse the classical economic theory of being itself one of these pretty, polite techniques which tries to deal with the present by abstracting from the fact that we know very little about the future.

John Maynard Keynes

Wren-Lewis trying to cope with ideology

18 Aug, 2019 at 20:07 | Posted in Economics | 6 Comments

Simon Wren-Lewis has also commented on the study by Mohsen Javdani and Ha-Joon Chang — on economics and ideology — that I wrote about earlier today. Says Wren-Lewis:

scI also, from my own experience, want to suggest that in their formal discourse (seminars, refereeing etc) academic economists normally pretend that this ideological bias does not exist. I cannot recall anyone in any seminar saying something like ‘you only assume that because of your ideology/politics’. This has one huge advantage. It means that academic analysis is judged (on the surface at least) on its merits, and not on the basis of the ideology of those involved.

The danger of doing the opposite should be obvious. Your view on the theoretical and empirical validity of an academic paper or study may become dependent on the ideology or politics of the author or the political implications of the results rather than its scientific merits. Having said that, there are many people who argue that economics is just a form of politics and economists should stop pretending otherwise. I disagree. Economics can only be called a science because it embraces the scientific method. The moment evidence is routinely ignored by academics because it does not help some political project economics stops being the science it undoubtedly is.

Quite frankly I have to admit to being at a loss here. Of course, you never hear anyone at our seminars telling the lecturer that the assumptions on which his models are built are only made for ideological reasons. But that does not necessarily mean — wether on the surface or not — that “academic analysis is judged on its merits”. What it means is that we have a catechism that no one dares to question. And that catechism has become hegemonic for particular reasons, one of which may very well be of an ideological nature. When the neoclassical theory was developed in the late 19th century one of the reasons was that some economists — e.g. Böhm-Bawerk –thought that the Ricardian (labour value) tradition had become too radical and could be used as a dangerous weapon in the class struggle. Marginalism was explicitly seen as a way to counter that.

Wren-Lewis seems to think that ‘the facts are bound to win in the end.’

It is difficult to see why.

Take the rational expectations assumption. Rational expectations in the mainstream economists’ world imply that relevant distributions have to be time-independent. This amounts to assuming that an economy is like a closed system with known stochastic probability distributions for all different events. In reality, it is straining one’s beliefs to try to represent economies as outcomes of stochastic processes. An existing economy is a single realization tout court, and hardly conceivable as one realization out of an ensemble of economy-worlds since an economy can hardly be conceived as being completely replicated over time. It is — to say the least — very difficult to see any similarity between these modelling assumptions and the expectations of real persons. In the world of the rational expectations hypothesis, we are never disappointed in any other way than as when we lose at the roulette wheels. But real life is not an urn or a roulette wheel. And that’s also the reason why allowing for cases where agents make ‘predictable errors’ in DSGE models doesn’t take us any closer to a relevant and realist depiction of actual economic decisions and behaviours.

‘Rigorous’ and ‘precise’ DSGE models cannot be considered anything else than unsubstantiated conjectures as long as they aren’t supported by evidence from outside the theory or model. To my knowledge no in any way decisive empirical evidence has been presented.

So, given this lack of empirical evidence, why do mainstream economists still stick to using this kind of theories and models building on blatantly ridiculous assumptions? Well, one reason, I would argue, is of an ideological nature. Those models and the assumptions they build on standardly have a neoliberal or market-friendly bias. I guess that is also one of the — ideological — reasons those models and theories are so dear to many Chicago economists and ‘New Keynesian’ macroeconomists …

We need more redistribution

18 Aug, 2019 at 19:11 | Posted in Economics | 1 Comment

Income inequality as measured by the Gini coefficient rose by about 36% in the 1980s under Thatcher, but the real story is the share of income that goes to people at the very top:

According to Greg Mankiw … in the United States the 1%’s share of total income, excluding capital gains, rose from about 8 percent in 1973 to 17 percent in 2010. Between 2010 and 2015 it’s risen from 17% to 22%!!

inequalityIt’s incredibly concentrated even among the super-rich. The top 0.01%’s share of national income – this is just 16,000 people in a country of 330 million – rose from 0.5% in 1973 to 3.3% in 2010 to 5% in 2015. Their share of income quadrupled in just 35 years …

Just giving people money is fine if you don’t mind them playing video games all day – but many people themselves would tell you that they don’t have the willpower to go back to school or find new work, even if they could do so in theory.

There’s a big role for government to direct investment towards these places, using the money we’ve taken from the winners from globalisation, either to support private industry or just set up our own industries to employ people the private sector won’t …

The super-rich are eating a bigger and bigger slice of the pie, for no good reason, and there are lots of things we could use that money for to make ordinary people’s lives better.

Sam Bowman

Mainstream economics textbooks usually refer to the interrelationship between technological development and education as the main causal force behind increased inequality. If the educational system (supply) develops at the same pace as technology (demand), there should be no increase, ceteris paribus, in the ratio between high-income (highly educated) groups and low-income (low education) groups. In the race between technology and education, the proliferation of skilled-biased technological change has, however, allegedly increased the premium for the highly educated group.

Another prominent explanation is that globalization – in accordance with Ricardo’s theory of comparative advantage and the Wicksell-Heckscher-Ohlin-Stolper-Samuelson factor price theory – has benefited capital in the advanced countries and labour in the developing countries. The problem with these theories are that they explicitly assume full employment and international immobility of the factors of production. Globalization means more than anything else that capital and labour have to a large extent become mobile over country borders. These mainstream trade theories are really not applicable in the world of today, and they are certainly not able to explain the international trade pattern that has developed during the last decades. Although it seems as though capital in the developed countries has benefited from globalization, it is difficult to detect a similar positive effect on workers in the developing countries.

There are, however, also some other quite obvious problems with these kinds of inequality explanations. The World Top Incomes Database shows that the increase in incomes has been concentrated especially in the top 1%. If education was the main reason behind the increasing income gap, one would expect a much broader group of people in the upper echelons of the distribution taking part of this increase. It is dubious, to say the least, to try to explain, for example, the high wages in the finance sector with a marginal productivity argument. High-end wages seem to be more a result of pure luck or membership of the same ‘club’ as those who decide on the wages and bonuses, than of ‘marginal productivity.’

Mainstream economics, with its technologically determined marginal productivity theory, seems to be difficult to reconcile with reality. Although card-carrying neoclassical apologetics like Greg Mankiw want to recall John Bates Clark’s (1899) argument that marginal productivity results in an ethically just distribution, that is not something – even if it were true – we could confirm empirically, since it is impossible realiter to separate out what is the marginal contribution of any factor of production. The hypothetical ceteris paribus addition of only one factor in a production process is often heard of in textbooks, but never seen in reality.

When reading mainstream economists like Mankiw who argue for the ‘just desert’ of the 0.1 %, one gets a strong feeling that they are ultimately trying to argue that a market economy is some kind of moral free zone where, if left undisturbed, people get what they ‘deserve.’ To most social scientists that probably smacks more of being an evasive action trying to explain away a very disturbing structural ‘regime shift’ that has taken place in our societies. A shift that has very little to do with ‘stochastic returns to education.’ Those were in place also 30 or 40 years ago. At that time they meant that perhaps a top corporate manager earned 10–20 times more than ‘ordinary’ people earned. Today it means that they earn 100–200 times more than ‘ordinary’ people earn. A question of education? Hardly. It is probably more a question of greed and a lost sense of a common project of building a sustainable society.

Since the race between technology and education does not seem to explain the new growing income gap – and even if technological change has become more and more capital augmenting, it is also quite clear that not only the wages of low-skilled workers have fallen, but also the overall wage share – mainstream economists increasingly refer to ‘meritocratic extremism,’ ‘winners-take-all markets’ and ‘super star-theories’ for explanation. But this is also highly questionable.

Fans may want to pay extra to watch top-ranked athletes or movie stars performing on television and film, but corporate managers are hardly the stuff that people’s dreams are made of – and they seldom appear on television and in the movie theaters.

Everyone may prefer to employ the best corporate manager there is, but a corporate manager, unlike a movie star, can only provide his services to a limited number of customers. From the perspective of ‘super-star theories,’ a good corporate manager should only earn marginally better than an average corporate manager. The average earnings of corporate managers of the 50 biggest Swedish companies today, is equivalent to the wages of 46 blue-collar workers.

It is difficult to see the takeoff of the top executives as anything else but a reward for being a member of the same illustrious club. That they should be equivalent to indispensable and fair productive contributions – marginal products – is straining credulity too far. That so many corporate managers and top executives make fantastic earnings today, is strong evidence the theory is patently wrong and basically functions as a legitimizing device of indefensible and growing inequalities.

No one ought to doubt that the idea that capitalism is an expression of impartial market forces of supply and demand, bears but little resemblance to actual reality. Wealth and income distribution, both individual and functional, in a market society is to an overwhelmingly high degree influenced by institutionalized political and economic norms and power relations, things that have relatively little to do with marginal productivity in complete and profit-maximizing competitive market models – not to mention how extremely difficult, if not outright impossible it is to empirically disentangle and measure different individuals’ contributions in the typical team work production that characterize modern societies; or, especially when it comes to ‘capital,’ what it is supposed to mean and how to measure it. Remunerations do not necessarily correspond to any marginal product of different factors of production – or to ‘compensating differentials’ due to non-monetary characteristics of different jobs, natural ability, effort or chance.

Put simply – highly paid workers and corporate managers are not always highly productive workers and corporate managers, and less highly paid workers and corporate managers are not always less productive. History has over and over again disconfirmed the close connection between productivity and remuneration postulated in mainstream income distribution theory.

Neoclassical marginal productivity theory is obviously a collapsed theory from both a historical and a theoretical point of view, as shown already by Sraffa in the 1920s, and in the Cambridge capital controversy in the 1960s and 1970s.

When a theory is impossible to reconcile with facts there is only one thing to do — scrap it. And start redistributing!

Donald Trump — un poisson d’avril totalement hors-saison

18 Aug, 2019 at 10:42 | Posted in Politics & Society | 3 Comments

droleStupéfaction, haussements de sourcils inquiets, abattement. Les Danois sont passés par toutes les phases de la surprise vendredi 16 août, en découvrant l’article du quotidien américain The Wall Street Journal. Celui-ci affirmait que le président américain, Donald Trump, aurait demandé à plusieurs occasions à ses conseillers s’il serait possible d’acheter le Groenland, un territoire danois. Une information non confirmée par la Maison Blanche.

« Le Groenland n’est évidemment pas à vendre », a réagi de ­manière succincte le gouvernement groenlandais. L’ancien premier ministre libéral danois Lars Lokke Rasmussen a été plus imagé : c’est « un poisson d’avril avant l’heure » …

 

Le Monde

Economics and ideology

18 Aug, 2019 at 09:47 | Posted in Economics | 5 Comments

Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the discipline, characterizing economists and their views as objective, unbiased, and non-ideological …

Ronald_Reagan_televised_address_from_the_Oval_Office,_outlining_plan_for_Tax_Reduction_Legislation_July_1981Acknowledging that ideology resides quite comfortably in our economics departments would have huge intellectual implications, both theoretical and practical. In spite (or because?) of that, the matter has never been directly subjected to empirical scrutiny.

In a recent study, we do just that. Using a well-known experimental “deception” technique embedded in an online survey that involves just over 2400 economists from 19 countries, we fictitiously attribute the source of 15 quotations to famous economists of different leanings. In other words, all participants received identical statements to agree or disagree with, but source attribution was randomly changed without the participants’ knowledge. The experiment provides clear evidence that ideological bias strongly influences the ideas and judgements of economists. More specifically, we find that changing source attributions from mainstream to less-/non-mainstream figures significantly reduces the respondents’ reported agreement with statements. Interestingly, this contradicts the image economists have of themselves, with 82% of participants reporting that in evaluating a statement one should only pay attention to its content and not to the views of its author …

Economics education, through which economic discourses are disseminated to students and future economists, is one of these important channels. It affects the way students process information, identify problems, and approach these problems in their research. Not surprisingly, this training may also affect the policies they favor and the ideologies they adhere to. In fact, there already exists strong evidence that, compared to various other disciplines, students in economics stand out in terms of views associated with greed, corruption, selfishness, and willingness to free-ride …

We find evidence of a strong ideological bias among economists … For example, when a statement criticizing “symbolic pseudo-mathematical methods of formalizing a system of economic analysis” is attributed to its real source, John Maynard Keynes, instead of its fictitious source, Kenneth Arrow, the agreement level among economists drops by 11.6%. Similarly, when a statement criticizing intellectual monopoly (i.e. patent, copyright) is attributed to Richard Wolff, the American Marxian economist at the University of Massachusetts, Amherst, instead of its real source, David Levine, professor of economics at the Washington University in St. Louis, the agreement level drops by 6.6%.

Mohsen Javdani & Ha-Joon Chang

7ti40Mainstream economists — in many ways separated from the ​life of ordinary people — are with their ‘the model is the message’ thinking particularly inclined to confuse the things of logic with the logic of things. They have a tendency to get enthralled by their theories and models​ and forget that behind the figures and abstractions there is a real world with real people. Real people that have to pay dearly for fundamentally flawed ideological doctrines and recommendations.

Damon Runyon’s law

17 Aug, 2019 at 16:54 | Posted in Economics | Leave a comment

To get right down to it, I suspect that the attempt to construct economics as an axiomatically based hard science is doomed to fail. There are many partially overlapping reasons for believing this …

soloA modern economy is a very complicated system. Since we cannot conduct controlled on its smaller parts, or even observe them in isolation, the classical hard- science devices for discriminating between competing hypotheses are closed to us. The main alternative device is the statistical analysis of historical time-series. But then another difficulty arises. The competing hypotheses are themselves complex and subtle. We know before we start that all of them, or at least many of them, are capable of fitting the data in a gross sort of way. Then, in order to make more refined distinctions, we need long time-series observed under stationary conditions.

Unfortunately, however, economics is a social science. It is subject to Damon Runyon’s Law that nothing between human beings is more than three to one. To express the point more formally, much of what we observe cannot be treated as the realization of a stationary stochastic process without straining credulity. Moreover, all narrowly economic activity is embedded in a web of social institutions, customs, beliefs, and attitudes. Concrete outcomes are indubitably affected by these background factors, some of which change slowly and gradually, others erratically. As soon as time-series get long enough to offer hope of discriminating among complex hypotheses, the likelihood that they remain stationary dwindles away, and the noise level gets correspondingly high. Under these circumstances, a little cleverness and persistence can get you almost any result you want. I think that is why so few econometricians have ever been forced by the facts to abandon a firmly held belief …

Robert Solow

La pédophilie et l’Eglise catholique

16 Aug, 2019 at 17:33 | Posted in Politics & Society | 3 Comments

 

Axel Leijonhufvud

15 Aug, 2019 at 23:26 | Posted in Economics | 7 Comments


Trying to delineate the difference between ‘New Keynesianism’ and ‘Post Keynesianism’ — during an interview a couple of years ago — yours truly was confronted by the odd and confused view that Axel Leijonhufvud was a ‘New Keynesian.’ I wasn’t totally surprised — I had run into that misapprehension before — but still, it’s strange how wrong people sometimes get things.

The  last time I met Axel, we were both invited keynote speakers at the conference “Keynes 125 Years – What Have We Learned?” in Copenhagen. Axel’s speech was later published as Keynes and the crisis and contains the following thought provoking passages:

For many years now, the main alternative to Real Business Cycle Theory has been a somewhat loose cluster of models given the label of New Keynesian theory. New Keynesians adhere on the whole to the same DSGE modeling technology as RBC macroeconomists but differ in the extent to which they emphasise inflexibilities of prices or other contract terms as sources of shortterm adjustment problems in the economy. The “New Keynesian” label refers back to the “rigid wages” brand of Keynesian theory of 40 or 50 years ago. Except for this stress on inflexibilities this brand of contemporary macroeconomic theory has basically nothing Keynesian about it.

51BMduFh0cL._SX373_BO1,204,203,200_The obvious objection to this kind of return to an earlier way of thinking about macroeconomic problems is that the major problems that have had to be confronted in the last twenty or so years have originated in the financial markets – and prices in those markets are anything but “inflexible”. But there is also a general theoretical problem that has been festering for decades with very little in the way of attempts to tackle it. Economists talk freely about “inflexible” or “rigid” prices all the time, despite the fact that we do not have a shred of theory that could provide criteria for judging whether a particular price is more or less flexible than appropriate to the proper functioning of the larger system. More than seventy years ago, Keynes already knew that a high degree of downward price flexibility in a recession could entirely wreck the financial system and make the situation infinitely worse. But the point of his argument has never come fully to inform the way economists think about price inflexibilities …

I began by arguing that there are three things we should learn from Keynes … The third was to ask whether events provedthat existing theory needed to be revised. On that issue, I conclude that dynamic stochastic general equilibrium theory has shown itself an intellectually bankrupt enterprise. But this does not mean that we should revert to the old Keynesian theory that preceded it (or adopt the New Keynesian theory that has tried to compete with it). What we need to learn from Keynes, instead, are these three lessons about how to view our responsibilities and how to approach our subject.

Axel Leijonhufvud a ‘New Keynesian’? Forget it!

Laisse Béton

15 Aug, 2019 at 18:22 | Posted in Varia | 1 Comment

 

The atomistic fallacy explained …

15 Aug, 2019 at 14:26 | Posted in Varia | 1 Comment

 

Statistics and mathematics — not very helpful for understanding economies

15 Aug, 2019 at 09:53 | Posted in Economics | 1 Comment

Statistical science is not really very helpful for understanding or forecasting complex evolving self-healing organic ambiguous social systems – economies, in other words.

leamer1 zoomedA statistician may have done the programming, but when you press a button on a computer keyboard and ask the computer to find some good patterns, better get clear a sad fact: computers do not think. They do exactly what the programmer told them to do and nothing more. They look for the patterns that we tell them to look for, those and nothing more. When we turn to the computer for advice, we are only talking to ourselves …

Mathematical analysis works great to decide which horse wins, if we are completely confident which horses are in the race, but it breaks down when we are not sure. In experimental settings, the set of alternative models can often be well agreed on, but with nonexperimental economics data, the set of models is subject to enormous disagreements. You disagree with your model made yesterday, and I disagree with your model today. Mathematics does not help much resolve our internal intellectual disagreements.

Ed Leamer

Indeed. As social researchers we should never equate science with mathematics and statistical calculation. All science entail human judgement, and using mathematical and statistical models don’t relieve us of that necessity. They are no substitutes for doing real science. .

amathMathematics is one valuable tool among other valuable tools for understanding and explaining things in economics.

What is, however, totally wrong, are the utterly simplistic beliefs that

• “math is the only valid tool”

• “math is always and everywhere self-evidently applicable”

• “math is all that really counts”

• “if it’s not in math, it’s not really economics”

And in case you think this critique is some odd outcome of heterodox idiosyncrasy, well, maybe you should think twice …

einstein

Les Bobos

15 Aug, 2019 at 09:28 | Posted in Varia | Leave a comment

 

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