Assorted links


Cass Sunstein is a good guy. He is only seeking to use libertarian ideas to destroy the First amendment and create a highly efficient system of bribes to control the media...what could be wrong with that?

Regarding # 8, this is a new version of my comment to a post by R. Roberts on S. Sumner's post on the EMH (efficiency market hypothesis):

The FUNDAMENTAL issue with EMH as well as with ALL theories is that they rely on concepts that to say the least are vague--they do not refer clearly and directly to anything that can be easily identified and agreed upon by most people.
EMH implies that the pricing of assets is based on "fundamentals", but when we want to apply the idea to a particular situation, ex ante we don't know enough about the fundamentals (thus why we have other theories to explain some fundamentals) and more important even ex post we cannot know the fundamentals with certainty. Or take the case of the quantitative theory of money that implies that an increase in the supply of money, with no change in the demand for money, will bring about an increase in the general price level. Well, we don't have a good definition of money--actually it's impossible to have one (ask anyone that has done research on the demand for money; ask in particular to Eugene Fama who argued about the critical distinction between "monetary" systems of payments and accounting systems of payments). In addition, we don't have a good measure of the general price level (read the reports of the several commissions responsible for assessing the CPI and other price indexes).
The problem with many economists devoted to expand and apply theories is that they don't want to accept the limits of their knowledge. How can someone claim that he can predict anything on the basis of these theories? How can he ignore all the conditions necessary for his prediction to be reasonable? At best, economic theories are useful to understand how the regularities of economic life, such as the law of demand, have emerged and what they have implied in some general situations. Sorry Milton, I don't agree with you about the purpose of economics.

Cosmotarian Economist,
You're wrong about my math. When I got my Ph.D. in U. of Minnesota I studied a lot of math, statistics and econometrics. Remember that in the late 1960s, the D. of Econ of U. Minnesota's faculty were top in math econ --among others, there I took courses and seminars with Leo Hurwicz and H. Uzawa (at that time HU was professor at U. Chicago but he visited the Twin Cities regularly). Also, I got three straight A+ in Advanced Econometrics with John Chipman and T. Muench, and our textbook was Malinvaud's Statistical Methods in Econometrics, by far the most advanced one at that time.

I must say, however, that in the past 40 years I've been reluctant to use math in my economic analysis, although some times I provide comments to authors that know advanced math methods and apply them to econ and finance problems. For a recent example, in the Journal of Finance (vol. 61, issue 6) you can read

Optimal Security Design and Dynamic Capital Structure in a Continuous-Time Agency Model
Correspondence to *Peter M. DeMarzo is from Stanford University and Yuliy Sannikov is from U.C. Berkeley. We thank Mike Fishman for many helpful comments, as well as Edgardo Barandiaran, Zhiguo He, Han Lee, Gustavo Manso, Robert Merton, Nelli Oster, Ricardo Reis, Raghu Sundaram, Alexei Tchistyi, Jun Yan, Baozhong Yang, and seminar participants at the Universitat Automata de Barcelona, U.C. Berkeley, Chicago, LBS, LSE, Michigan, Northwestern, NYU, Oxford, Stanford, Washington University, and Wharton. This research is based on work supported in part by the NBER and the National Science Foundation under grant No. 0452686.

Regarding your scientific way of doing things, I don't know what you're talking about but I'm familiar with most of the literature on the philosophy of science and years ago I consider myself an expert on Karl Popper, and now I'm trying to develop some of the ideas of F. Hayek in the last chapter of the last volume of Law, Legislation, and Liberty. Anyway, I used to believe that Milton Friedman was right about the purpose of economics, but that was before I read J. Buchanan's "What Should Economists Do?" and the struggle of other economists (including Ken Boulding) to go beyond what I had learnt in Minnesota.

5. The typecasting of professors.

You might want to read Louis Menand's book The Marketplace of Ideas on this problem: he suggests a variety of explanations for professors' liberalism, but also points out that the most extreme cohort is mostly older and passing away; younger professors tend to be more middle-of-the-road centrist-liberal. And the book is interesting regardless, as a study of institutional structure.

BKarn, why is it notable to mention that someone who writes an article that takes a point of view is a proponent of that point of view?

"These fine young Haitian men are carrying food they found from the grocery store looking for needy recipients to donate it to and are sporting machetes in case they need to hack away thick brush in order to reach them"

How's that?

On professors , Nosick was right

Lionel Jospin support the USA in Haiti and also this left wing newspaper

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