Keynes’ deadheads — still alive

22 May, 2016 at 17:46 | Posted in Economics | Comments Off on Keynes’ deadheads — still alive

I am not confident, however, that on this occasion the cheap-money phase will be sufficient by itself to bring about an adequate recovery of new investment. It may still be the case that the lender, with his confidence shattered by his experiences, will continue to ask for new enterprise rates of interest which the borrower cannot expect to earn …

deadheads-51ebdded4e11cIf this proves to be so, there will be no means of escape from prolonged and perhaps interminable depression except by direct state intervention to promote and subsidize new investment … The only way out is for us to discover some object which is admitted even by the deadheads to be a legitimate excuse for largely increasing the expenditure of someone on something!

It is not the harshness and the niggardliness of nature which are oppressing us, but our own incompetence and wrong-headedness which hinder us from making use of the bountifulness of inventive science and cause us to be overwhelmed by its generous fruits. The voices which — in such a conjuncture — tell us that the path of escape is to be found in strict economy and in refraining, wherever possible, from utilizing the world’s potential production are the voices of fools and madmen.

J M Keynes The World’s Economic Outlook


22 May, 2016 at 16:03 | Posted in Varia | Comments Off on Undómiel



21 May, 2016 at 22:21 | Posted in Varia | Comments Off on Londonbeat


Vienna and me (personal)

20 May, 2016 at 23:31 | Posted in Varia | Comments Off on Vienna and me (personal)

vienna-tram-xlargeAn absolutely fabulous week in Vienna with visits to Café Central, Hofburg, Vienna State Opera, Belvedere, Pratern, etc., etc., but also giving a couple of lectures.
egowienMany thanks to University of Vienna, Rote Börsenkrach, Vienna University of Economics and Business Administration, Society for Pluralism in Economics, and Austrian Chamber of Labour.

Krugman and ‘what Keynes really meant’

19 May, 2016 at 09:34 | Posted in Economics | 6 Comments

krugmanPaul Krugman has often been criticized by people like yours truly for getting things pretty wrong on  the economics of  John Maynard Keynes.
When Krugman has responded to the critique, by himself rather gratuitously portrayed as about ‘what Keynes really meant,’ the overall conclusion is — ‘Krugman doesn’t care.’

Responding to a post up here on the blog, Krugman writes:

Surely we don’t want to do economics via textual analysis of the masters. The questions one should ask about any economic approach are whether it helps us understand what’s going on, and whether it provides useful guidance for decisions.

So I don’t care whether Hicksian IS-LM is Keynesian in the sense that Keynes himself would have approved of it, and neither should you.

The reason for this rather debonair attitude seems to be that history of economic thought may be OK, but what really counts is if reading Keynes gives birth to new and interesting insights and ideas.

No serious economist would question that explaining and understanding ‘what’s going on’ in our economies is the most important task economists can set themselves — but it is not the only task.  And to compare one’s favourite economic gadget model to what ‘austerians’ and other madmen from Chicago have conjured up, well, that’s like playing tennis with the nets down, and we have to have higher aspirations as scientists.

Although I have a lot of sympathy for Krugman’s view on authority, there is also a somewhat disturbing and unbecoming coquetting in his attitude towards the great forerunners he is discussing. Krugman is a great economist, but it smacks not so little of hubris to simply say ‘if where you take the idea is very different from what the great man said somewhere else in his book, so what?’ Physicists arguing like that when discussing Newton, Einstein, Bohr or Feynman would not be taken seriously.

Krugman’s comment on this issue is interesting, however, because it sheds light on a kind of inconsistency in his own art of argumentation. Krugman has repeatedly criticized mainstream economics for using to much (bad) mathematics and axiomatics in their model-building endeavours. But when it comes to defending his own position on various issues, he usually himself ultimately falls back on the same kind of models. Models that actually, when it comes to methodology and assumptions, have a lot in common with the kind of model-building he otherwise criticizes. And although Krugman says that he is a strong believer in ‘simple models,’ those models are far from simple (at least not in any interesting meaning of the word).

But the absolute all-time low in Krugman’s response to his critics is this remarkable passage:

Has declaring uncertainty to be unquantifiable, and mathematical modeling in any form foolish, been productive? Remember, that’s what the Austrians say too.

23e17eb61f800c21ca20e84926a714a278a62f70f97c7ed404223ffa5adfbd3eI won’t comment on the shameful guilt-by-association part of the quote, but re uncertainty it’s absolutely gobsmacking how Krugman manages to mix up the ontological question — is the economy permeated by calculable risk or by genuine and often uncalculable uncertainty  — with the epistemological question — how do we manage to analyze/understand/explain/model such an economy. Here Krugman seems to say — much in the spirit of Robert Lucas — that if reality is uncertain and non-ergodic, well then let’s just pretend it’s ergodic and susceptible to standard probabilistic analysis, so that we can go on with our FORTRAN programs and mathematical models! In other areas of science that would rightfully be considered fraud, but in ‘modern’ neoclassical mainstream economics it’s obviously thought of as an unprobematical and justified procedure.

Where does all this leave us? Well, I for one, is not the least impressed by Krugman’s gadget interpretation of economics. And if labels are as uninteresting as he says — well, then I suggest Krugman and other ‘New Keynesians’ stop calling themselves Keynesians at all. I’m pretty sure Keynes would have appreciated not having his theories and thoughts being referred to by people having preciously little to do with those theories and thoughts.

Studying great forerunners like Keynes may help us to construct better and more relevant economic models – models that really help us to explain and understand reality. So when Krugman writes

Second — and this plays a surprisingly big role in my own pedagogical thinking — we do want, somewhere along the way, to get across the notion of the self-correcting economy, the notion that in the long run, we may all be dead, but that we also have a tendency to return to full employment via price flexibility

I would certainly recommend him to compare his own statement with what Keynes himself wrote:

Though we all started out in the same direction, we soon parted company into two main groups. What made the cleavage that thus divided us?

On the one side were those who believed that the existing economic system is in the long run self-adjusting, though with creaks and groans and jerks, and interrupted by time-lags, outside interference and mistakes … These economists did not, of course, believe that the system is automatic or immediately self-adjusting, but they did maintain that it has an inherent tendency towards self-adjustment, if it is not interfered with, and if the action of change and chance is not too rapid.

John Maynard KeynesThose on the other side of the gulf, however, rejected the idea that the existing economic system is, in any significant sense, self-adjusting. They believed that the failure of effective demand to reach the full potentialities of supply, in spite of human psychological demand being immensely far from satisfied for the vast majority of individuals, is due to much more fundamental causes …

The gulf between these two schools of thought is deeper, I believe, than most of those on either side of it realize. On which side does the essential truth lie?

The strength of the self-adjusting school depends on its having behind it almost the whole body of organized economic thinking and doctrine of the last hundred years. This is a formidable power. It is the product of acute minds and has persuaded and convinced the great majority of the intelligent and disinterested persons who have studied it. It has vast prestige and a more far-reaching influence than is obvious. For it lies behind the education and the habitual modes of thought, not only of economists but of bankers and business men and civil servants and politicians of all parties …

Thus, if the heretics on the other side of the gulf are to demolish the forces of nineteenth-century orthodoxy … they must attack them in their citadel … Now I range myself with the heretics. I believe their flair and their instinct move them towards the right conclusion. But I was brought up in the citadel and I recognize its power and might … For me, therefore, it is impossible to rest satisfied until I can put my finger on the flaw in the part of the orthodox reasoning that leads to the conclusions that for various reasons seem to me to be inacceptable. I believe that I am on my way to do so. There is, I am convinced, a fatal flaw in that part of the orthodox reasoning that deals with the theory of what determines the level of effective demand and the volume of aggregate employment …

John Maynard Keynes (1934)

So much for pluralism …

15 May, 2016 at 19:05 | Posted in Economics | 1 Comment

It comes as no surprise to me—but it probably does to everyone outside of economics—that a senior lecturer at the University of Glasgow, Alberto Paloni, an expert in post-Keynesian theory, has been stopped from teaching a core degree module on macroeconomics.

comic1This, after an essay in the Royal Economic Society newsletter specifically cited Paloni’s course as introducing a necessary pluralism into the teaching of economics …

All Paloni did was teach students some Post Keynesian macroeconomics. Post Keynesian theory, for those who are unfamiliar with the term, focuses on elements of the economic approach inspired by John Maynard Keynes (such as time, radical uncertainty, financial fragility, and so on) that are often domesticated by or simply removed from modern mainstream macroeconomics. Nothing too radical, then—just one among many alternatives to the theory that prevails in economics and, as we now know, the set of approaches and policies got us into the current mess.

David Ruccio

Lucas’ FORTRAN caricature of economics

14 May, 2016 at 19:33 | Posted in Economics | 3 Comments

uN7GNNaLucas … internalized the caricature he extracted from Samuelson’s Foundations: that mathematical analysis is the only legitimate way of doing economic theory, and that, in particular, the essence of macroeconomics consists in a combination of axiomatic formalism and philosophical reductionism (microfoundationalism). For Lucas, the only scientifically legitimate macroeconomic models are those that can be deduced from the axiomatized Arrow-Debreu-McKenzie general equilibrium model, with solutions that can be computed and simulated in such a way that the simulations can be matched up against the available macroeconomics time series on output, investment and consumption.

This was both bad methodology and bad science, restricting the formulation of economic problems to those for which mathematical techniques are available to be deployed in finding solutions.

David Glasner

Lucas hope of being able to mathematically model the economy as “a FORTRAN program” and “gain some confidence that the component parts of the program are in some sense reliable prior to running it” seems totally misdirected. The failure in the attempt to anchor the analysis in pure mathematics shows that if you neglect ontological considerations pertaining to the target system, ultimately reality returns with a vengeance when at last questions of bridging and exportation of mathematical model exercises are laid on the table. No matter how precise and rigorous the analysis is, and no matter how hard one tries to cast the argument in “modern mathematical form” they do not push science forwards one millimeter if they do not stand the acid test of relevance to the target. No matter how rigorous the inferences delivered inside these models are, they do not per se say anything about their external validity.

Vienna calling

13 May, 2016 at 20:12 | Posted in Economics | Comments Off on Vienna calling

thumbnail_VA_Lars Syll
Back in the 80’s yours truly had the pleasure of studying German at University of Vienna. A wonderful town full of history and Kaffeehäuser. I’m really looking forward to visiting it again.

In case you can’t be there, here’s an admittedly insufficient substitute, but still …

Life Among the Econ

13 May, 2016 at 08:44 | Posted in Economics | 1 Comment

A comparison of status relationships in the different “fields” shows a definite common pattern. The dominant feature, which makes status relations among the Econ of unique interest to the serious student, is the way that status is tied to the manufacture of certain types of implements called “modls.” RealWorld2The status of the adult male is determined by his skill at making the “modl” of his “field.” The facts (a) that the Econ are highly status-motivated, (b) that status is only to be achieved by making “modls,” and (c) that most of these “modls” seem to be of little or no practical use, probably accounts for the backwardness and abject cultural poverty of the tribe. Both the tight linkage between status in the tribe and modl making and the trend toward making modls more for ceremonial than for practical purposes appear, moreover, to be fairly recent developments, something which has led many observers to express pessimism for the viability of the Econ culture.

Axel Leijonhufvud


10 May, 2016 at 21:59 | Posted in Varia | Comments Off on Bleu


Though I speak with the tongues of angels,
If I have not love…
My words would resound with but a tinkling cymbal.
And though I have the gift of prophesy…
And understand all mysteries…
and all knowledge…
And though I have all faith
So that I could remove mountains,
If I have not love…
I am nothing.

Frank Ackerman on general equilibrium theory

9 May, 2016 at 22:24 | Posted in Economics | 1 Comment

Frank-Ackerman_0General equilibrium is fundamental to economics on a more normative level as well. A story about Adam Smith, the invisible hand, and the merits of markets pervades introductory textbooks, classroom teaching, and contemporary political discourse. The intellectual foundation of this story rests on general equilibrium, not on the latest mathematical excursions. If the foundation of everyone’s favourite economics story is now known to be unsound — and according to some, uninteresting as well — then the profession owes the world a bit of an explanation.

Frank Ackerman

Almost a century and a half after Léon Walras founded general equilibrium theory, economists still have not been able to show that markets lead economies to equilibria. We do know that — under very restrictive assumptions — equilibria do exist, are unique and are Pareto-efficient. But after reading Frank Ackerman’s article one has to ask oneself — what good does that do?

As long as we cannot show that there are convincing reasons to suppose there are forces which lead economies to equilibria — the value of general equilibrium theory is nil. As long as we cannot really demonstrate that there are forces operating — under reasonable, relevant and at least mildly realistic conditions — at moving markets to equilibria, there cannot really be any sustainable reason for anyone to pay any interest or attention to this theory.

A stability that can only be proved by assuming Santa Claus conditions is of no avail. Most people do not believe in Santa Claus anymore. And for good reasons — Santa Claus is for kids.

Continuing to model a world full of agents behaving as economists — ‘often wrong, but never uncertain’ — and still not being able to show that the system under reasonable assumptions converges to equilibrium (or simply assume the problem away), is a gross misallocation of intellectual resources and time. As Ackerman writes:

The guaranteed optimality of market outcomes and laissez-faire policies died with general equilibrium. If economic stability rests on exogenous social and political forces, then it is surely appropriate to debate the desirable extent of intervention in the market — in part, in order to rescue the market from its own instability.

Real power (personal)

9 May, 2016 at 19:39 | Posted in Varia | Comments Off on Real power (personal)


In loving memory of Kristina Syll

The biggest mistake in the history of macroeconomic thought

8 May, 2016 at 15:35 | Posted in Economics | 6 Comments

The Keynesian economics of the General Theory is static. It purports to explain how employment, GDP and the interest rate are determined at one weekly meeting, taking the price level as fixed. Modern macroeconomics is dynamic. It purports to explain how employment, GDP, the interest rate and the price level are determined in a sequence of weekly meetings. To knit together the temporary one-week Keynesian equilibria, Samuelson, in the new-classical synthesis, used the Phillips curve, which he saw as a price adjustment mechanism in which the wage adjusts in response to an excess demand or supply of labor. This was the biggest mistake in the history of macroeconomic thought and we are still suffering the consequences as central banks work with false ideas and broken models.

prosperityIn Prosperity for All I articulate the evolution of an alternative research agenda. I argue that it is beliefs that are sticky: not prices. At each weekly meeting, the auctioneer finishes his job. The demands and supplies of all goods are equal and all markets clear; including the labor market …

The differences of this theory from all of modern macro, both classical and New-Keynesian, are profound. In my view, high involuntary unemployment is an equilibrium phenomenon. A market economy can get stuck in a Pareto inefficient equilibrium with high unemployment forever. It is the job of government to design political institutions that provide the equilibrating mechanisms that are missing from laissez-faire market economies.

Roger Farmer

Farmer has always — as did e. g. Wicksell and Keynes — made a point of the fact that equilibrium and optimality are not the same thing. That also implies that the economy being in equilibrium does not have to be inconsistent with high and persistent unemployment rates. Farmer uses a search theoretical approach to underpin this view. Although yours truly do not share his faiblesse for the Mortensen-Pissarides-Diamond modeling of Keynesian ideas re labour markets and unemployment, it will sure be interesting to take part of his hopefully more fully-fledged argumentation for his view when the book is out in September.

Whatever you do for the least of these brothers and sisters of mine

8 May, 2016 at 13:27 | Posted in Politics & Society | Comments Off on Whatever you do for the least of these brothers and sisters of mine

This one is for you — all you brothers and sisters struggling to survive in civil wars or forced to flee your homes and risking your lives on your way to my country or other countries in Europe.

Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? When did we see you a stranger and invite you in, or needing clothes and clothe you? When did we see you sick or in prison and go to visit you?’

The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’

The euro — a Reaganomics wet dream

8 May, 2016 at 12:41 | Posted in Economics | 2 Comments

There are obviously still a lot of economists out there who do not accept the conventional wisdom that the euro is a bad idea.

However, there seems to be some rather basic facts about optimal currency areas that all economists would perhaps be wise to consider …

The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.

That progenitor is former University of Chicago economist Robert Mundell. The architect of “supply-side economics” is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell’s research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency.

Mundell, then, was more concerned with his bathroom arrangements. Professor Mundell, who has both a Nobel Prize and an ancient villa in Tuscany, told me, incensed:

“They won’t even let me have a toilet. They’ve got rules that tell me I can’t have a toilet in this room! Can you imagine?”

As it happens, I can’t. But I don’t have an Italian villa, so I can’t imagine the frustrations of bylaws governing commode placement.

But Mundell, a can-do Canadian-American, intended to do something about it: come up with a weapon that would blow away government rules and labor regulations. (He really hated the union plumbers who charged a bundle to move his throne.)

“It’s very hard to fire workers in Europe,” he complained. His answer: the euro.

The euro would really do its work when crises hit, Mundell explained. Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

“It puts monetary policy out of the reach of politicians,” he said. “[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”

He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as “optimum currency area”. This was a rule devised by Bob Mundell.

reaganomicsThat doesn’t bother Mundell. For him, the euro wasn’t about turning Europe into a powerful, unified economic unit. It was about Reagan and Thatcher.

“Ronald Reagan would not have been elected president without Mundell’s influence,” once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, “voodoo economics”: the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher.

Mundell explained to me that, in fact, the euro is of a piece with Reaganomics:

“Monetary discipline forces fiscal discipline on the politicians as well.”

And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.

Greg Palast/The Guardian

Why ‘Economics and Reality’ is on my top 10 list

7 May, 2016 at 17:11 | Posted in Economics | 2 Comments

For a good many years, Tony Lawson has been urging economists to pay attention to their ontological presuppositions. Economists have not paid much attention, perhaps because few of us know what “ontology” means. This branch of philosophy stresses the need to “grasp the nature of the reality” that is the object of study – and to adapt one’s methods of inquiry to it.

5112X+PoJkLEconomics, it might be argued, has gotten this backwards. We have imposed our pre-conceived methods on economic reality in such manner as to distort our understanding of it. We start from optimal choice and fashion an image of reality to fit it. We transmit this distorted picture of what the world is like to our students by insisting that they learn to perceive the subject matter trough the lenses of our method.

The central message of Lawson’s critique of modern economics is that an economy is an “open system” but economists insist on dealing with it as if it were “closed.” Controlled experiments in the natural sciences create closure and in so doing make possible the unambiguous association of “cause” and “effects”. Macroeconomists, in particular, never have the privilege of dealing with systems that are closed in this controlled experiment sense.

Our mathematical representations of both individual and system behaviour require the assumption of closure for the models to have determinate solutions. Lawson, consequently, is critical of mathematical economics and, more generally, of the role of deductivism in our field. Even those of us untutored in ontology may reflect that it is not necessarily a reasonable ambition to try to deduce the properties of very large complex systems from a small set of axioms. Our axioms are, after all, a good deal shakier than Euclid’s.

The impetus to “closure” in modern macroeconomics stems from the commitment to optimising behaviour as the “microfoundations” of the enterprise. Models of “optimal choice” render agents as automatons lacking “free will” and thus deprived of choice in any genuine sense. Macrosystems composed of such automatons exclude the possibility of solutions that could be “disequilibria” in any meaningful sense. Whatever happens, they are always in equilibrium.

Axel Leijonhufvud

Modern economics has become increasingly irrelevant to the understanding of the real world. In his seminal book Economics and Reality (1997) Tony Lawson traced this irrelevance to the failure of economists to match their deductive-axiomatic methods with their subject.

It is — sad to say — as relevant today as it was seventeen years ago.

It is still a fact that within mainstream economics internal validity is everything and external validity nothing. Why anyone should be interested in that kind of theories and models is beyond my imagination. As long as mainstream economists do not come up with any export-licenses for their theories and models to the real world in which we live, they really should not be surprised if people say that this is not science, but autism!

Studying mathematics and logics is interesting and fun. It sharpens the mind. In pure mathematics and logics we do not have to worry about external validity. But economics is not pure mathematics or logics. It’s about society. The real world. Forgetting that, economics is really in dire straits.

To many mainstream economists, Tony Lawson is synonymous with anti-mathematics. But I think reading what Tony Lawson or yours truly have written on the subject, shows how unfounded and ridiculous is the idea that many mainstream economists have that because heterodox people often criticize the application of mathematics in mainstream economics, we are critical of math per se.


No, there is nothing wrong with mathematics per se.

No, there is nothing wrong with applying mathematics to economics.

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”

“almost everything can be adequately understood and analyzed with math”

What is wrong with these beliefs is that they do not — as forcefully argued by Tony Lawson — reflect an ontological reflection on what can be rightfully expected from using mathematical methods in different context. Or as Knut Wicksell put it already a century ago:

Knut-WicksellOne must, of course, beware of expecting from this method more than it can give. Out of the crucible of calculation comes not an atom more truth than was put in. The assumptions being hypothetical, the results obviously cannot claim more than a vey limited validity. The mathematical expression ought to facilitate the argument, clarify the results, and so guard against possible faults of reasoning — that is all.

It is, by the way, evident that the economic aspects must be the determining ones everywhere: economic truth must never be sacrificed to the desire for mathematical elegance.

Economics and Reality was a great inspiration to me twenty years ago. It still is.

Mångkulturalism — ett hot mot jämställdheten

7 May, 2016 at 09:55 | Posted in Politics & Society | Comments Off on Mångkulturalism — ett hot mot jämställdheten

Är mångkulturalismen ett hot mot jämställdheten?

Det beror på hur majoritetssamhället agerar. Men om tassandet kring frågan fortsätter så är risken stor att svaret blir ja.

Med stort mod och hårt arbete har Sveriges kvinnor vunnit en sexuell frihet våra förmödrar bara kunde drömma om …

Men det här är inte en kvinnofråga. Det ingår om Sverige ska förbli en västerländsk liberal demokrati – det bästa sätt att leva ihop som människan hittills kommit på …

Repressive-Islamic-beliefs-on-women-gays-and-freedom-create-social-chasm-in-Britain-990x556I Europa ifrågasätts rätten till abort. I spåren efter den arabiska våren krymper kvinnors livssfär. I krig är våldtäkt fortfarande ett vapen. I FN har frågor om mänskliga rättigheter hamnat i händerna på några av världens mest repressiva regimer.

Kvinnors rättigheter begränsas med hänvisning till traditioner, religioner och kulturer …

Det går att välkomna flera kulturer, men då krävs att det finns tydliga spelregler – som alla förväntas följa:

Respekt för de mänskliga rättigheterna, för åsiktsfrihet, religionsfrihet, yttrandefrihet, tryckfrihet. För jämlikhet och jämställdhet och allas rätt att välja sitt liv.

Sverige behöver tydligt formulera vad som gäller. Och se till att detta efterlevs. Inte fastna i kulturrelativism …

Det handlar om att våga stå upp för vad som gäller i Sverige. Det handlar om att inte separera kvinnor och män i det offentliga, att inte svika de unga som gör uppror mot hederskulturen. Det handlar om att stå upp för att Sverige har valt en annan samhällsmodell – i demokratiskt ordning – och att den inte bara är annorlunda, utan bättre.

Heidi Avellan

Som så ofta numera väljer fler och fler viktiga opinionsbildare att bryta mot den tystnadens politik som i decennier lagt ett förödande lock över frågor om invandring och ‘multikulturalism’ i vårt land. Det är på tiden. Och nödvändigt — om vi ska kunna visa på hållbara alternativ till Sverigedemokrater och andra xenofoba populistströmningar i vårt samhälle.

Why Africa is so poor

5 May, 2016 at 19:15 | Posted in Economics, Statistics & Econometrics | 1 Comment

A few years ago, two economics professors, Quamrul Ashraf and Oded Galor, published a paper, “The ‘Out of Africa’ Hypothesis, Human Genetic Diversity, and Comparative Economic Development,” that drew inferences about poverty and genetics based on a statistical pattern …

dumb_aWhen the paper by Ashraf and Galor came out, I criticized it from a statistical perspective, questioning what I considered its overreach in making counterfactual causal claims … I argued (and continue to believe) that the problems in that paper reflect a more general issue in social science: There is an incentive to make strong and dramatic claims to get published in a top journal …

Recently, Shiping Tang sent me a paper criticizing Ashraf and Galor from a data-analysis perspective … I have not tried to evaluate the details of Tang’s re-analysis because I continue to think that Ashraf and Galor’s paper is essentially an analysis of three data points (sub-Saharan Africa, remote Andean countries and Eurasia). It offered little more than the already-known stylized fact that sub-Saharan African countries are very poor, Amerindian countries are somewhat poor, and countries with Eurasians and their descendants tend to have middle or high incomes.

Andrew Gelman

The long run fallacy

5 May, 2016 at 10:06 | Posted in Economics | 5 Comments

It appears to me that one great cause of our difference in opinion, on the subjects which we have so often discussed, is that you have always in your mind the immediate and temporary effects of particular changes—whereas I put these immediate and temporary effects quite aside, and fix my whole attention on the permanent state of things which will result from them.

Letter from Ricardo to Malthus January 1817

long run.jpgOn this issue Keynes agreed with Malthus, and it was probably the debate between Ricardo and Malthus that Keynes was thinking about when he formulated his most well-known aphorism, in A Tract on Monetary Reform (1923):

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.

Eric Schüldt — ett ljus i det musikaliska mörkret

5 May, 2016 at 09:13 | Posted in Varia | Comments Off on Eric Schüldt — ett ljus i det musikaliska mörkret

radioI dessa tider — när ljudrummet dränks i den kommersiella radions tyckmyckentrutade ordbajseri och fullständigt intetsägande pubertalflamsande tjafs — har man nästan gett upp.

Men det finns ljus i mörkret! I radions P2 går varje lördagmorgon ett vederkvickelsens och den seriösa musikens Lördagsmorgon i P2.

Och nu är även söndagarna räddade!

3270059_612_344I programmet Text och musik med Eric Schüldt — som sänds på söndagsförmiddagarna i P2 mellan klockan 11 och 12 — kan man lyssna på seriös musik och en programledare som har något att säga och inte bara låter foderluckan glappa. Vilken lisa för själen.

I söndags spelades filmmusik av Zbigniew Preisner och vår egen Stefan Nilsson. Den senares musik till Ingmar Bergmans och Bille Augusts Den goda viljan är bland det vackraste och mest suggestiva i filmmusikväg som gjorts.

Tack Eric för alla dessa fantastiska program. Du är ett ljus i mörkret!

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