Monthly Archives: August 2014

Financial Times Contributors Understand ‘Liquidity Trap’ Better Than Neo-Keynesians Like Krugman

I have long complained that the likes of Paul Krugman have grossly misinterpreted the meaning of the term ‘liquidity trap’. These economists seem to think that we are currently in a liquidity trap despite the fact that yields on bonds are … Continue reading

Posted in Economic Theory | 6 Comments

On Meta-Analysis in Economics

Did you know that if you are male and eat beans every Tuesday morning at exactly 8.30am you are more likely to marry a supermodel? No. That’s not true. I just made that up. But I hear of statistical studies … Continue reading

Posted in Statistics and Probability | 6 Comments

Is There Such Thing as an ‘Economics-Based Psychotic Delusion’?

There is a somewhat well-known phenomenon called Jerusalem Syndrome that has gained some currency in popular culture (you can see some TV clips from the 1990s here). The folk legend goes something like this: people who are perfectly well-balanced psychologically … Continue reading

Posted in Psychology | 14 Comments

INET YSI Discussion of a Chapter of My Forthcoming Book

Earlier this week Amogh Sahu set up a INET YSI discussion group to deal with the 4th chapter of my forthcoming book which is entitled ‘Schemata: Abstraction and Modelling’. This is not available yet but I shared a draft with … Continue reading

Posted in Economic Theory, Philosophy | Leave a comment

So-Called ‘Long-Run’ Monetarist Correlations and Non-Ergodicity

Just doing some quick house-cleaning on some previous posts. When I ran regressions plotting the money supply against the CPI I was told that I should average them over 5 year periods because this would supposedly iron out ‘volatility’ and … Continue reading

Posted in Economic Theory, Statistics and Probability | 15 Comments

The Backward World of ‘Arguments From Authority’ in Economics

Unlike almost all the other human sciences economics suffers from chronically poor scholarship. Bad habits of citation and scholarship have become so ingrained in the discipline that to not adhere to them is often considered to be poor form or … Continue reading

Posted in Economic Theory, Philosophy | 6 Comments

What is a ‘Long-Run Trend’?

Everyone complains about his memory, and no one complains about his judgment. — François de La Rochefoucauld In the comments to my post yesterday on monetarism the notion of the ‘long-run trend’ came up. A regular commenter ivansml insisted that … Continue reading

Posted in Statistics and Probability | 6 Comments

Inflation is NOT Always and Everywhere a Monetary Phenomenon

Monetarism is a hoary old myth that does its damage in two distinct ways. The first is that, piggybacking on Milton Friedman’s personality, basically an entire generation of economists are actually monetarist in their practical thinking. Greg Mankiw once remarked … Continue reading

Posted in Economic History, Economic Theory | 57 Comments

The ‘Information Asymmetry’ Paradigm is Vacuous

Sympathetic Post-Keynesian types often ask me what I think of the whole ‘asymmetric information’ paradigm. They’re often struck when I say that I think that its vacuous. After all doesn’t this paradigm undermine the dreaded General Equilibrium theory? Well yes … Continue reading

Posted in Economic Theory, Psychology | 10 Comments