Any fool can reduce debt in the short-term by selling their house, paying off the mortgage and renting a place. Whether you should do that depends upon whether the cost of renting is cheaper than that of borrowing, all things considered. That’s a tricky calculation. But it’s one that households wouldn’t make if they were […]
economics
There are other sleights of hand that cause economists problems. In their quest for statistical “identification” of a causal effect, economists often have to resort to techniques that answer either a narrower or a somewhat different version of the question that motivated the research. Results from randomized social experiments carried out in particular regions of, […]
Let us not submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income … Why should we not add in every substantial city the dignity of an ancient university or a European capital … an ample theater, a concert hall, a dance […]
. Einer der grundlegenden Denkfehler in der heutigen Diskussion über Staatsverschuldung und Haushaltsdefizite ist, dass man nicht zwischen verschiedenen Arten von Schulden unterscheidet. Auch wenn es auf makroökonomischer Ebene zwangsläufig so ist, dass Schulden und Vermögen einander ausgleichen, ist es keineswegs unerheblich, wer die Vermögen besitzt und wer die Schulden trägt. Lange Zeit war man […]
As a subject, economics seems to have a fear and disgust of thinking about philosophy and methodology that might be described as Freudian. While other social scientists’ obsession with minute discussions of their methods and rhetoric, standards of proof and what they hope to achieve might be thought of as pathological in another way, the […]
Two hot air balloonists were blown off course. They descended, floating over a person walking on the street.One of the balloonists leaned out and yelled down: “Where are we?”The man looked up, thought for a moment, then earnestly replied: “You’re in a balloon!”The other balloonist grinned and said: “That person must be a microeconomist…”“How do […]
To be fair to academia, it has realized that the pure DSGE model is incapable of explaining observable phenomena so they have introduced numerous amendments, known, oddly, as “imperfections” in the model. Long-term nominal contracts, other labour market frictions, imperfection in credit markets, all these and more are prayed in aid and, either rigorously or […]
At a first glance, DSGE models seem to imply total ignorance because representative agents (or representative groups of agents with limited heterogeneity) featuring objective utility functions populate the literature. At a second glance, however, it becomes obvious that “methodological individualism” prevails and even dominates. To understand this dominance one only has to once again note […]
This is not new to most of you of course. You are already steeped in McCloskey’s Rhetoric. Or you ought to be. After all economists are simply telling stories about the economy. Sometimes we are taken in. Sometimes we are not. Unfortunately McCloskey herself gets a little too caught up in her stories. As in […]
Nedanstående är en gästpost signerad Mats Bladh Lars Syll skriver att felet med den neoklassiska teorin är dess deduktiva karaktär. Han tar Paul Krugman som exempel på att kritiska nationalekonomer själva faller tillbaka på sådana slutna modeller, och därför kan man inte ta slutenheten som det avgörande inslaget. Syll kunde ha tagit Joseph Stigler som exempel, […]