Lars P. Syll — The non-existence of Paul Krugman’s ‘Keynes/Hicks macroeconomic theory’

Paul Krugman = Not Keynes and Not Hicks.

Lars P. Syll’s Blog
The non-existence of Paul Krugman’s ‘Keynes/Hicks macroeconomic theory’
Lars P. Syll | Professor, Malmo University

Lord Keynes — Davidson on Nominal Contracts and Uncertainty

Short and sweet explanation of why capital not only produces wage and price rigidity but also requires it operationally.

No, it's not the unions, or inflexible workers unwilling to accept flexible wages.

Rather, it's an attempt to introduce a modicum of predictability in a non-ergodic system through forward contracts.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Davidson on Nominal Contracts and Uncertainty
Lord Keynes

Chris Dillow — Inequality, Evolution & Complexity

Again, it's the complexity, stupid.

Using ergodic equilibrium models to model complex adaptive systems is not only a methodological mistake, it is the basis of special pleading and propaganda with respect to policy formulation. As long as we rely on neoclassical economics to inform policy, we are so screwed. It's giving the key to the treasury to the thieves.

Stumbling and Mumbling
Inequality, Evolution & Complexity

Chris Dillow | Investor's Chronicle (UK)

Joshua Wojnilower — Macro Theorizing in a Non-Ergodic World

More on the ergodicity assumption.

Bubbles and Bust
Macro Theorizing in a Non-Ergodic World
Joshua Wojnilower

Lars P. Syll — Ergodicity – the biggest mistake ever made in economics

Paul Samuelson claimed that the “ergodic hypothesis” is essential for advancing economics from the realm of history to the realm of science.

But is it really tenable to assume – as Samuelson and most other neoclassical economists – that ergodicity is essential to economics?

The answer can only be – as I have argued here, here, here, here and here – NO WAY!

Lars P. Syll's Blog
Ergodicity – the biggest mistake ever made in economics
Lars P. Syll | Professor of Economics, Malmo University

See also Mauboussin on Strategy: Shaking the Foundation: An interview with Ole Peters challenges some of the foundational assumptions in economics and finance, Legg Mason Capital Management, and Towers Watson: The Irreversibility of Time: Or Why You Should Not Listen To Financial Economists
(hat tip Rick Bookstaber)

See also Paul Davidson: Is economics a science? Should economics be rigorous?

Lars Syll — Paul Samuelson and the ergodic hypothesis

Paul Samuelson claimed that the “ergodic hypothesis” is essential for advancing economics from the realm of history to the realm of science.
But is it really tenable to assume that ergodicity is essential to economics?
The answer can only be – as I have argued
here
here
here
here
and
here – NO WAY!

Read it at Lars P. Syll's Blog
Paul Samuelson and the ergodic hypothesis
Lars P. Syll

Lars Syll — Keynes and Knight on uncertainty – ontology vs. epistemology

Report of a conversation between Lars and Paul Davidson on the philosophical underpinning of probability and its relevance in economics and finance.

Keynes and Knight both asserted uncertainty but their concept of it were different. Keynes asserted ontological non-ergodicity, whereas Knight assumed ontological ergodicity and asserted only epistemological non-ergodicity.

Lars and Paul Davidson explore the implications of this distinctions and come down on the side of Keynes.

These distinctions are key in understanding the fundamental difference between the mainstream and Post Keynesianism.

Read it at Lars P. Syll's Blog
Keynes and Knight on uncertainty – ontology vs. epistemology
Lars P. Syll