2. Applicera den numera populära metoden “ständiga kvantitativa förbättringar” tills du fått en bättre lögn.

3. Hoppas att ingen märker skillnaden.

4. Förbered ditt tal inför den 10:de december. ]]>

The risk of deficit spending for growth is to burst a bubble economy into a recession with downward spirals of price level ratios. ]]>

(a) Real GDP/P

(b) Real Households Net Worth/P

https://fred.stlouisfed.org/graph/fredgraph.png?g=dQb9 ]]>

(a) Real Households Net worth/P,

(b)(Real Households Financial Assets – Liabilities)/P

(c) Real GDP/P ]]>

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I presume you meant to write, “efficient” market hypothesis

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The efficient market hypothesis makes some sense as a technical point in the context of constructing a null hypothesis for research using data on historic financial market prices.

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It makes absolutely no sense as an assertion about a quality supposedly possessed by financial markets.

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How the efficient market hypothesis went from being a perfectly sensible technical point to being a right-wing dogma, with no effective objection being offered within the profession can tell us a great deal about what has gone wrong in economics.

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What in the mechanism design of a financial market contributes to the informational efficiency of a financial market would seem like a reasonable topic for empirical inquiry by economists. Analytic theory would have a part to play, but in a sensible profession, there would be no dispute concerning the need to go and look at institutions in detail and to measure performance, quantitatively. Pontification would never be regarded as sufficient from anyone.

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I do not know what your sneering rhetoric concerning “real world smell-test” is meant to accomplish and I would not be so ready to discard every result from financial economics related to the random-walk of financial market prices. I do think economists should acknowledge the simple epistemic point that analysis is not descriptive; analytic models, no matter how elaborate, can never serve as maps or isomorphic models. There is an institutionalized economy which is never “perfectly” anything; economists need to go out and learn about it, before pronouncing confidently on policy. ]]>

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In general, economic accounting data are based on valid-time interpretation on time-series objects as logical assertions about real economies. They are not based on transaction-time interpretation as stochastic processes. ]]>

I enjoy reading about physics and some of the great breakthroughs have come from trying to come up with a mathmatical model and then realising the consequences of that model being true – for example the constant which appears in electromagnetic equations implying that light travels at a constant speed, which implies that time taken and distance travelled can vary.

But this only works by coming up with a mathematical model which works. If it does not work perfectly, then physicists treat it as “useful” or “useless” depending on how closely it corresponds to reality (what can be observed). Advances in quantum theory show how physicists manage to come up with better models which explain what happens (with tiny particles) even when they bear no relationship to the world we live in (of large conglomerations of particles).

The statement that “The economic system is something objective that follows its own structural laws” is only true if you can show what those laws are and that the system actually follows them. The failure of economic models in recent years suggests that the statement may not be true or that our mathematical models of it are so imprecise as to be useless.

So I would go further than you. I don’t think worrying about “utility” is the whole problem. How do we know that there is even an objective system?

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It is a statement that Paul Davidson has popularized. ]]>