Project Syndicate 18th of September, 2024 “Shortly after taking office, the United Kingdom’s new Labour government announced the discovery of a massive shortfall in public finances. While much of the political debate has centered on the size of this fiscal hole, the real culprit is the set of arbitrary rules that British governments have imposed on themselves … Continue reading Britain’s Illusory Fiscal Black Hole
economics
The Spectator, 13 January 2024 Monetarism, with which his name is associated, has long defined economic policy. But what would Friedman have made of the banking collapse, so soon after his death in 2006? The Keynesian economist Nicholas Kaldor called Milton Friedman one of the two most evil men of the 20th century. (Friedman was … Continue reading Milton Friedman – economic visionary or scourge of the world?
In mainstream economics nowadays there seems to be a broad consensus that one somehow can establish general truths about things by simply generalizing from lots of individual RCTs. But as is well-known among philosophers of science, this kind of inference, based on induction by simple enumeration, is highly flawed. And there are alternatives: The striking […]
While neoclassical economists cannot consistently incorporate behavioral factors into their models, there is nothing in behavioral economics that makes the use of neoclassical theory illegitimate. To the contrary … behavioral economists have consistently advocated using neoclassical theory for all sorts of purposes. By and large, they treat neoclassical models and theories as heuristic devices or […]
Lindbeck’s interactions with the New Left and Neo-Malthusians, focusing on issues like environmental sustainability and social justice, exemplify how his authorship developed in an antagonistic context against his interlocutors. He used Hayekian epistemology to counter the grievances of his adversaries, arguing that market mechanisms were superior in addressing environmental and social challenges that he simultaneously […]
When no formal theory is available, as is often the case, then the analyst needs to justify statistical specifications by showing that they fit the data. That means more than just “running things.” It means careful graphical and crosstabular analysis … When I present this argument … one or more scholars say, “But shouldn’t I […]
‘Ideally controlled experiments’ tell us with certainty what causes what effects — but only given the right closures. Making appropriate extrapolations from (ideal, accidental, natural or quasi) experiments to different settings, populations or target systems, is not easy. ‘It works there’ is no evidence for ‘it will work here.’ Causes deduced in an experimental setting […]
. Steve Keen gives a truthful view of the state of economics today. Modern economics has become increasingly irrelevant to the understanding of the real world. This irrelevance comes to a large extent from the failure of economists to match their deductive-axiomatic methods with their subject. Within mainstream economics, internal validity is everything and external […]
Inequality continues to grow all over the world — so don’t even for a second think that this is only a US problem! In case you think that it’s different in yours truly’s own country — Sweden — you should take a look at some recent data from Statistics Sweden The Gini coefficient is a […]
. Arrow’s impossibility theorem is correct given its ‘rationality assumptions.’ To ‘escape’ this, we must therefore abandon some of these assumptions. The non-dictatorship, independence, and Pareto conditions remain quite unassailable. Arrow himself believed that the independence of irrelevant alternatives condition was the most likely to be modified. One way to do this, without compromising the […]