If It’s August, This Must Be Spain

Finally the organisers sent us the first information e-mail with regard to INEM’s 2017 conference. I could hardly wait for these instructions. This is going to be an exciting event and I am eager for August to come. The registration is now open – everything is carried out on-line. This is very modern, I must say. According to the Preliminary Programme, we have lots thought-provoking lectures and interesting panelists – lots of the faces familiar from Rotterdam. We are going to have a very heavy schedule: all the days start early in the morning and last until the evening. Yes, even 10-hour-long, busy workdays. 5930761917_233493219c_b

The conference is held at the beautiful Palacio Miramar, a palace built for the Spanish Royal Family at the end of the 19th century. We have the opportunity to continue the discussions even during the lunches, as the conference lunches are served right at the palace. This is not the only option, as there is a refectory in the building itself and there are a couple of restaurants within walking distance – however, I will opt for the official conference lunches in order to spend lunchtime in a good company. Moreover, my temporary residence is also within walking distance from the Palace. I think I will fly Iberia through Madrid. This is going to be a nice journey and an exciting intellectual adventure, of course.

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INEM 2017 Conference at San Sebastian

“Dear Peter,

On behalf of the INEM executive board, we are pleased to let you know that your abstract has been accepted for presentation at INEM 2017 in San Sebastián, from August 28-30, 2017.”

International Network for Economic Method (INEM) is the leading international organisation and platform for economic methodologists. It has a bi-annual conference (the next event of this series is exactly the San Sebastian conference in August), a quarterly journal (Journal of Economic Methodology) and a book series (Routledge INEM Advances in Economic Methodology). These are the facts. INEM was called into existence by some leading US and European methodologists (some of them are closely tied to the Erasmus Institute at Rotterdam), so the collaboration between the European and overseas colleagues is extremely strong, vivid and fruitful here. This is the reason why INEM is so outstanding.

I am over the initial registration process as I confirmed my taking part. Now I have no detailed information about the venue, so I have no idea about either the sessions or the panelists. My lecture “Lucas on Method” is in the making. To be perfectly honest, I can hardly wait to arrive at San Sebastian, to attend as many lectures as possible and to write a detailed diary on a daily basis whit photos and short summaries. I hope I can meet some of my colleagues there again.  It is going to be a great fun.

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EIPE 20 Anniversary Conference, Day 3

Some of you might cry of shame because today I skipped the plenary session. However, in the last few days I’ve had so heavy a schedule that I needed to make some time for taking some photos of the city (at least the neighbouring parts) and the campus. Success, I managed to take all the pictures I wanted.

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Then I joined the parallel sessions. I could catch some interesting pieces. For example, Melissa Vergara Fernández devoted her speech the problem of what are philosophical theories of models good for. A lively debate was triggered by the speech, even Marcel Boumans gave his thoughts, but for me personally the most interesting point was this figure, below:

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It clearly reveals how the structure of economic research has changed during the last few decades. This dynamics can really underpin the point that the balance between “theory and measurement” is radically moved towards the position of measurement without theories. I am afraid, the era of grand theories is over. Once and for all…?

Ahmet Dincer Cevik’s talk also triggered serious debates, even though his fundamental thought was right. Economic laws hold for a while, but later some laws may cease to exist, at least in a particular spatio-temporal environment. The conclusion he drew also seemed to be grounded: such a failure doesn’t corrupt the initial validity. But this is simple. This is how social world works. Physical reality is one and timeless-at least in human terms. But our social environment keeps changing, so it is not surprising if a law-like tendency happens to break down.

Lukasz Hardt noted an interesting feuture of scientific explanation. Sometimes even simple algebra proves to be useful in explaining social phenomena. For example, the fact that 33 cannot be devided by 2 with no remainder can explain the event that a mother is not able to divide 33 cherries between her two daughters without cutting. Cutting a cherry, of course.

The day and the conference was closed by an informal event when the founders of EIPE accompanied by some of their earlier students talked about the past, the present, and the future of EIPE.

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It was really a fascinating three-day intellectual adventure. The conference has brought some new acquaintances or even friends-time will tell. There was a heavy load on me to take in so many new insights… but in the end I am happy but tired. It is about time for me to leave Rotterdam for my home that I am missing so much now. Now only a few things remained. I need to pack my suitcase, set my alarm clock and then get to the airport early in the morning. But I am doing so in the hope of coming back here once.

EIPE20 Anniversary Conference, Day 2

It is a tough day, and it is not over at all. Today’s plenary session was presented by Johanna Thoma and Francois Claveau at the Pavilion of the university. This is an iconic place of the campus. Johanna talked about preference-based instrumental rationality. I have got some new insights on rational choice theory. The outlines have always been clear, but I was curious about the details… how economists use this framework in practical terms. Now I see what the problem is. This theory helps us to explain human decisions on the basis of preferences and the rationality postulate. There are some extraordinary patterns in human decisions and some extraordinary sets of preferences, so the task to complete is to give a rational account of them within this theoretical framework. How can this model be modified so that phenomena out of the ordinary can be explained or understood as well?

Francois gave a speech on an interesting topic: Central banks as experts. It is rather personal, but this guy moved and acted (and actually looked) on the stage like Mark Zuckerberg. Funny. He walked up and down in a really cool style… but for me… this is strange. It is not good or wrong… just strange. For me the great economists of the 70’s and the 80’s have always been the models. To step up the stage, to walk to the desk, to put on the glasses and to read the lecture. In a calm and elegant way. This new thing… is just a show. But admittedly, the world has really changed. If you are a scientist… you need to be a showman as well. All in all, Francois’ lecture was interesting. He talked about central bank communication in a context where central banks are surrounded by the public as an epistemic community. His theory is called applied social epistemology. His work seems to be interesting as for revealing the hidden structures of the communication between central banks and the public.

Let’s see some interesting lessons from today’s panel sessions. Michael Joffe expressed his strong interest in biology. He always turns to biology in order to find a discipline that is used for scrutinizing some complex, heterogeneous and open-ended processes of reality. For him biology is an empirically-based causal theory. This is the method of natural sciences. That is, such disciplines start from reality itself-and this is the big picture to which economics makes a difference. It was nice to hear that he referred to F53 as a meta-theory directed to highlighting false causal mechanisms… but I am still dissatisfied because Michael depicted economics (as such) as the enterprise of missing the point. Models should capture a causal mechanism-but is it serious that ALL of our models fail to capture actual-plausible mechaisms…? I don’t think so…

Actually, Michael’s account seems to be a further item in the institutionalist critique. For example, the theory of money creation should be based on real/actual behaviour of real/actual agents, according to him. But for me this is clear that we have more options than capturing all the mechanisms vs. capturing nothing. Modern economics is about highlighting only one mechanism-meaning… one at a time. So we can be realists by setting up extremely abstract models. Michael wanted to call attention to the fact that some mechanisms are left out of our models. But I think this has always been on purpose!

Virginia Ghiara talked about Process Tracing as a means of testing and creating hypotheses. Now I am under the slight impression that Process Tracing is the macro-version of experimental economics. In both cases we are interested in collecting data on elementary human actions-it is the volume that makes the only difference. But these are only impressions…

Then there came my lecture. I was shocked at the very beginning because in the first minutes of the session Mäki Uskali joined us in the room. He is the leading international figure of the realist interpretation of modern economics, so it was my great pleasure to see him in the audience. I talked about the Friedman-Lucas-RBC line, on which Lucas performed a realist break, while Friedman and RBC were instrumentalists. Actually, I could surprise the colleagues. To my shock, Lucas is often labelled as an instrumentalist or anti-realist, but this view seems to be ungrounded. It all is about the methodology of creating unrealistic assumptions in order to set a realist theory-a theory that is directed at revealing the consequences of some plausible causal mechanisms. I don’t need to be an anti-realist just because I use unrealistic assumptions. By using appropriate assumptions I can tie my models to reality, no matter how unrealistic they are, provided they are set up from real constituents of reality.

This has been the day so far. Soon I need to leave for the anniversary party at Hotel Bazar.

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EIPE20 Anniversary Conference, Day 1

This morning I had a very interesting conversation with Andrew Bryce from Sheffield University. We are staying at the same hotel, we are attending the same conference-so it was natural. Today’s topic was the economics of well-being, naturally expressed by the main plank of today’s sessions “The Good Economy”. Andrew is engaged in the economics of happiness and well-being (these are interrelated concepts as I realized today, but not interchangeable at all). There were loads of new things for me to learn today. Andrew explained that the economic man conceptualized as the homo oeconomicus in the neoclassical orthodoxy is not happy at all. Robinson spends his whole life consuming, he is lonely, and he is particularly unfamiliar with the the concept of altruism, for example. By the way, the concept of happiness and the measurement of that are extremely complicated, since the happiness we feel, our own, personal happiness depends on a lot of factors. Andrew’s current research is about the impact of weekend working on well-being. People who need to work at the weekends may work according to schedules very different from their family’s, relatives’ and friend’s timetable. This may raise personal problems. Another problematic area is measurement. For example, one needs to say how much happy he is on a scale from 1 to 10. If I happen to label my perceived momentary happiness as 7 while you give it a 6, is it sure that I am happier than you…?

Today’s plenary sessions was opened by Jan Peter Balkenende. He was the Prime Minister of the Netherlands from 2002 to 2010. A couple of years ago he retired from professional politics and became a partner at E&Y and a professor of Governance, Institutions and Internationalisation at the Erasmus University Rotterdam. Actually, he lost an election so he chose to quit. Very sympathetic.

His lecture was an interesting piece. He believes in freedom, not in chaos. So unbound capitalism is something to avoid. For him, social market economy is the best example, it should be the model for every nation. This is the reason why the German model is so appealing to him. But these are rather commonplaces. What is the point?

He excessively reacted to the very recent phenomenon of populism. This is an effect-the effect of nations’ not having concrete and positive visions of their future. The middle-classes failed to form such visions. Consequently, European societies cannot avoid facing the problem that nowadays Europe is mentioned rather in negative contexts. Instead, people need to restart talking about values. And this is related to European identity as well. What makes us European? What is the ultimate source of our European identity at all? The values are. Even private companies ask themselves from time to time: what and why they do? This is also a question of values. Of values, legacy and purpose. What is the conclusion? We need values and we need to talk about them.

There is an age-old manifesto in traditional money-making: the business of business is business. This manifesto is believed to be related to mainstream economics (it was Milton Friedman who kept repeating it for a while), so in some scientific circles the position of mainstream economics is not that favourable. We cannot defend mainstream economics till the end of time by saying that this is an abstract theory, so you cannot blame us for not having answers to particular questions we never ask. Yes, we don’t have answers to institutionalist issues on purpose. However, a lot of people are interested in problems which we are aware of at best, so if we cannot offer them answers, they are going to drop us. This is the reason why it is urgent to place mainstream economics in a context. In an institutionalist context.

In the afternoon Erik Angner opened the sessions with his talk on the phiosophy of happiness. Actually, his lecture can be easily put in a broader context. Why does science need philosophy…? And what does this need stand in at all? Those professionals having a sceptical attitude got a serious impression on the importance of getting involved in doing philosophy. I do believe that no professional can keep ignoring philosophy in the long-run. If he attempts, if he insists on doing no philosopy… he can only pay lip-service to his own ignorance, but at the same time he must do philosophy, even if implicitely. Not making philosophy an explicit background is a mistake, since doing so we can deprive ourselves of the possibility of addressing problems that require an explicit philosophical approach. Even my intellectual home country, the mainstream-institutionalism controversy is of philosophical character-no matter how strongly some try to deny this fact…

All in all, this is an outstanding, inspiring and thought-provoking event. And lots of interesting conversations during the coffee-breaks.

Tomorrow the program continues… and tomorrow is my day. From 13:30 I am giving my lecture on the problem of realism and instrumentalism in the context of modern macroeconomics.

EIPE20 Anniversary Conference, Day 0

Dutch people seem to love building from regular geometrical shapes. This was Day Zero of EIPE20 Anniversary Conference. My hotel is situated in the middle of everything, all the places worth visiting are within walking distance. I could find the main attraction of the city: the Erasmus Bridge. It arcs over river Rhine, where a bunch of irregular high-rise buildings await the visitor. Dutch people are enthusiastic cyclists. Anywhere you turn your head to, you cannot but see bikes and bikelanes. Or joggers. Most bikes are casual wrecks only, local people, however, are happy to push hard while having the wind in the teeth. Of course, when they get back-wind, breaking is the best option.

The conference starts tomorrow at 9 A.M. Just to keep at cycling, I am the only Hungarian guy in the peloton.

 

EIPE20 Anniversary Conference Program

The detailed program of EIPE20 anniversary connference has just been announced: EIPE_Programme. According to the heavy schedule I am going to give my lecture on Thursday afternoon. Now I need to go over the program in order to prepare my own schedule on what to see. Lots of  interesting presentations to pay attention to and lots of interesting people to meet.

As far as I can see now, my panel consists of three presentations which are worked out on closely related topics. It is worthwhile to focus on the colleagues here so as to get new insights and inspirations on my topic. To be perfectly honest, I can hardly wait to arrive.

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Mini-Conference on the Nobel-Laureates of 2016

Economic Committee of the Hungarian Academy of Sciences led by Prof. Laszlo Muraközy are organizing a mini-conference in honour of the Nobel-laureates of 2016, Prof. Oliver Hart and Prof. Bengt Holmström. Since insitutional economics is a particularly strong movement in Hungary, presentations are going to be full of laudatory remarks and give a supportive account of the developments in contract theory. Special attention is going to be paid to the broader context, i.e. the interplay between contract theory and other currents in the institutional movement on the one hand and to the relationship between the main stream and institutional economics on the other hand. Because of the latter I am keenly interested in the event. I will get back with a short summary in time.

Here is the Facebook event.

Here is some additional information about the Nobel-prize in economics, 2016.

To my students attending the event is warmly recommended.

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