Wednesday, June 18, 2014

Lars P. Syll — Hendry and Mizon on the limited value of DSGE models


Lars comments approvingly on H&M.
A great article, confirming much of Keynes’s critique of econometrics and underlining that to understand real world ”non-routine” decisions and unforeseeable changes in behaviour, stationary probability distributions are of no avail. In a world full of genuine uncertainty – where real historical time rules the roost – the probabilities that ruled the past are not those that will rule the future.
Hendry and Mizon on the limited value of DSGE models
Lars P. Syll | Professor, Malmo University

Related: Ricardian equivalence — total horseshit


Take that, Robert Barro.

No comments: