Yesterday we talked about AI: how business has been adopting it wholesale even though so far most of the evidence is that it performs worse than humans on almost all tasks. They do this because bosses don’t want to deal with employees: they want drones that just do what they’re told, and hope that AI […]
economics
Most people have a very personal view of the nature of debt. We know that high levels of debt and deficit spending at the household level are not sustainable. At some point, household debt has to be paid back. If a household is unable to do so, its debt will have to be renegotiated. It […]
Economic models are not expected to be even approximately true, and Hausman’s idea that even the ceteris paribus laws in economics are vague as to what exactly has to be equal makes it clear that economic laws must be abstract rather than idealized. This leads us to the question: What are the criteria of, if […]
The object of our analysis is, not to provide a machine, or method of blind manipulation, which will furnish an infallible answer, but to provide ourselves with an organized and orderly method of thinking out particular problems; and, after we have reached a provisional conclusion by isolating the complicating factors one by one, we then […]
The rational expectations hypothesis assumes—primarily for reasons of internal consistency—that agents possess complete knowledge of all relevant probability distribution functions. When attempts are made to incorporate learning into these models, often in response to longstanding criticism, it is invariably a highly constrained form of learning. This type of learning excludes the truly unexpected or surprising. […]
Die Koalition gefährdet mit ihrem Haushalt die finanzielle Stabilität, sagt der Wirtschaftsprofessor Lars Feld, der Christian Lindner beraten hat. Jens Südekum, der Berater von Lars Klingbeil, entgegnet: Deutschland muss ins Risiko gehen. ZEIT: Das Institut für Weltwirtschaft in Kiel hat errechnet, dass die Schuldenquote bis zum Jahr 2040 auf bis zu 118 Prozent des Brutto-inlandsprodukts […]
Mill provides a good illustration of the tension between fallibilism and anti-foundationalism. Mill’s first principles are supposed to be empirical and not necessary truths, but for economics to be an empirical subject at all, they have to be beyond genuine doubt, since they provide the only empirical element in an otherwise deductive system. The certainty […]
. One of the most valuable contributions of Modern Monetary Theory (MMT)—particularly from a European perspective—is how clearly it exposes the fundamental flaws of the euro experiment. The neoliberal dream of a supranational currency detached from national fiscal sovereignty simply does not align with economic or political reality. In times of crisis, a state must […]
The more I learned about economics, the more I discovered a landscape that is surpassingly strange. Like the land of Mordor, it is dominated by a single theoretical edifice that arose like a volcano early in the 20th century and still dominates the landscape. The edifice is based upon a conception of human nature that […]