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Thursday, November 8, 2018
Lars P. Syll — Econometrics: The Keynes-Tinbergen controversy
Summary of the issues and argument.
Interestingly, Tinbergen was award a "Nobel" (1969), while Keynes was never so honored in spite of being one of the most significant contributors to economics and economic policy in the 20th century, if not the most significant. Now, "Keynes" and "Keynesianism" are household words, while few remember Tinbergen other than related to Keynes-Tinbergen controversy.
Lars P. Syll’s Blog
Econometrics: The Keynes-Tinbergen controversy
Lars P. Syll | Professor, Malmo University
It is incredible what is going on in the UK at the moment.
ReplyDeleteAll out war between UK left leaning economists and MMT'rs.
Then this morning on UK tv with a great fan fare this was announced.
https://www.moneysavingexpert.com/news/2018/11/financial-education-textbooks-funded-by-martin-land-in-english-s/
Martin Lewis is followed by millions has his own TV show and has spent £300k of his own money to produce a book about money to get taught in English schools to 15 and 16 year olds.
In other words the next generation is going to be brainwashed.
Not a word from the left wing economists who have been fighting with MMT'rs for nearly 2 months. Not a word not a challenge nothing.
It's surreal it is as if they say nothing allow US and Australian economists to do their dirty work for them and challenge those very same economists for doing so.
If they callenged Martin lewis book with the same vigour as they've been attacking MMT'rs we actually might be getting somewhere.
https://twitter.com/YoungMoneyEdu
ReplyDeleteNothing you can hear a pin drop
Economics should never be a substitute for thinking
ReplyDeleteComment on Lars Syll on ‘Econometrics: The Keynes―Tinbergen controversy’
Lars Syll’s fatal blunder consists of maintaining that economics is a social science while, in fact, it is a system science.#1 And while there is, of course, no such things as a behavioral law there are systemic laws.
Walrasian economics is based on behavioral axioms.#2 Because these axioms are provably false the whole theoretical superstructure of mainstream economics is false. Therefore, it comes as no surprise that econometrics does not yield valid results. This, though, does not support the conclusion that the statistical methods/tools of econometrics are worthless but confirms the long-known fact that economic theory in all variants from Walrasianism, Keynesianism, Marxianism, to Austrianism is worthless.
Economists did not figure out the systemic laws to this day. In fact, they are too stupid for the elementary mathematics that underlies macroeconomics.
Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)
Keynes got macroeconomic profit wrong: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
Let this sink in: the economist Keynes NEVER understood the foundational concept of his subject matter. Because profit is ill-defined the complete theoretical superstructure of Keynesianism is false. Keynesian policy guidance NEVER had valid scientific foundations.
The elementary version of the axiomatically correct Profit Law, which is measurable with the precision of two decimal places, reads Qm=I−Sm with Qm as monetary profit and Sm as monetary saving. And this means that since Keynes/Hicks ALL I=S/IS-LM models are false.#3 Macroeconomics is proto-scientific garbage. Microeconomics is even worse.
Lars Syll summarizes Keynes’ critique of Tinbergen’s econometrics in great detail. Keynes argues: “The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y) and only in special cases will it be true that f(x + y) = f(x) + f(y).”
This, of course, is pure idiocy because goodness is a NONENTITY just like utility or equilibrium. The example proves that Keynes had no idea of what economics is all about. He never understood the foundational concept of profit and he was obviously too stupid for the elementary mathematics that underlies macroeconomics.
Trivially true: “Econometric modelling should never be a substitute for thinking.” and because there is, to begin with, no substitute for thinking, this applies also to Keynesianism. Nobody, except cargo cult scientists, can take seriously what Keynes has said about probability or econometrics or, for that matter, about profit or employment theory.#4
After 80+ years of storytelling/blather, Keynesians, Post-Keynesians, Anti-Keynesians, New Keynesians, MMTers, heterodox and pluralist retards, Lars Syll and the rest of stupid/corrupt political agenda pushers together with all their peer-reviewed articles/textbooks/blog-posts have finally to be flushed down the scientific toilet.
Egmont Kakarot-Handtke
#1 Economics is NOT a social science
https://axecorg.blogspot.com/2016/08/economics-is-not-social-science.html
#2 Where economics went wrong
https://axecorg.blogspot.com/2018/10/where-economics-went-wrong.html
#3 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2392856
#4 Go! ― test the Profit and Employment Law
https://axecorg.blogspot.com/2018/09/go-test-profit-and-employment-law.html