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As GDPs crumble… 

1 day ago

As GDPs crumble… 
With the pause button pressed on nearly half of economic activity in the US and the EU for what is likely to be at least a period of three months, consumption, investment and trade have all collapsed. A contraction of as much as 10-20% of GDP or worse is possible. Pervasive uncertainty about the timing of the development of a viable treatment and/or vaccine means there is no light at the end of the tunnel yet. Even when we get there, the trauma of the COVID-19 meltdown will keep investors and consumers on the sidelines.
…tax revenues will collapse…
This will blow a massive hole through tax revenues. Corporate taxes that derive from profits will collapse first. Sales and value-added taxes will register a dramatic fall in line with the collapse in economic activity. The

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Health care MUST be in public provision and accessible to all in order to . . .

2 days ago

From Grazia Ietto Gillies
The expenditure given [in the chart] include both private and public expenditure as far as I know. That the US have a VERY inefficient health care system is well known but it can only be made clear by looking also at outcomes such as Infant mortality rate or life expectancy alla available from OECD health statistics.
Why such inefficiency. Well then you have to look at the organization of health systems not just the stats. In countries with high private provision a lot of the expenditure goes to insurance companies, lawyers for litigation, profits of health care companies and of insurance companies and pharmaceuticals etc.
Apart from these GROSS inefficiencies, systems that rely heavily on private provision and insurance cannot be expected to cope with PUBLIC

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Unemployment in US and UK ‘may be worse than in Great Depression’

5 days ago

From today’s Guardian
Unemployment in Britain and the US could surpass the levels reached during the 1930s Great Depression within months as the coronavirus crisis crushes the global economy, a former Bank of England official has warned.
In a stark forecast as job losses mount around the world, David Blanchflower, professor of economics at Dartmouth College in the US and a member of the Bank’s interest rate-setting monetary policy committee during the 2008 financial crisis, said unemployment was rising at the fastest rate in living memory.
Writing in the Guardian, the economist said UK unemployment could rapidly rise to more than 6 million people, around 21% of the entire workforce, based on analysis of US job market figures that suggest unemployment across the Atlantic could reach

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Coronavirus and the “replication crisis” in social science

9 days ago

From an article by Nassim Nicholas Taleb and Yaneer Bar-Yam in yesterday’s Guardian
Dominic Cummings [Chief Adviser to UK Prime Minister Boris Johnson] loves to
theorise about complexity, but he’s getting it all wrong.
. . . The error in the UK is on two levels. Modelling and policymaking.
First, at the modelling level, the government relied at all stages on epidemiological models that were designed to show us roughly what happens when a preselected set of actions are made, and not what we should make happen, and how.
The modellers use hypotheses/assumptions, which they then feed into models, and use to draw conclusions and make policy recommendations. Critically, they do not produce an error rate. What if these assumptions are wrong? Have they been tested? The answer is often no. For

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Tackle climate crisis and poverty with zeal of Covid-19 fight, scientists urge

11 days ago

From today’s Guardian
The Covid-19 crisis has revealed what governments are capable of doing and shone a new light on the motivation for past policies and their outcomes, said Sir Michael Marmot, professor of epidemiology and public health at University College London, and chair of the commission of the social determinants of health at the World Health Organisation.
“The overriding objective [of governments for the last decade] has been austerity, and life expectancy for the worst-off has declined,” he told journalists at a virtual meeting organised by Plan B and Extinction Rebellion. “Health tells us something fundamental about the nature of our society. What the government was pursuing was a worse society – that may not have been the objective, but it was what came out.”
But what had

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WEA online conference: Trade Wars after Coronavirus

13 days ago

From Maria Alejandra Madi
The  United States declared an economic war on China in early 2018. Economic warfare is a unilateral action that questions the existence of multilateralism and places the question of what regime we are about to enter after the weakening of the existing multilateral trade agencies. US trade policy opens the door for new relationships between emerging market economies and international financial institutions on issues of liberalisation but mostly it ends a period started in the 1980’s of unregulated international trade and opens a new one. The solution to the structural economic problems of the US, similar to those of Britain in the 1960’s is not tariffs and trade restrictions. The trade war is above all a war that will be won by one side at some point.
The

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Informal workers in the time of Coronavirus

13 days ago

From C. P. Chandrasekhar and Jayati Ghosh
The global devastation caused by Covid-19 is only just beginning, with the severe threat to public health worsened by the evident inability to cope of most health systems across developing and developed countries. Many states across the world appear to have realised the serious potential of this pandemic and have declared lockdowns, closures, partial curfews and curtailment of all but essential activities in efforts to contain the contagion.
The economic impacts of such lockdown are also just beginning to be felt, and will escalate in the coming months. The discussion on the economics of this pandemic has tended to focus on supply disruptions and the likely financial losses of companies, especially those in travel, transport and other services

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Differences in theoretical methodology: equilibrium vs. complexity vision

16 days ago

From David Colander and RWER no. 91
The two visions draw lessons from theory differently, and are associated with quite different research programs, especially as they relate to policy. The equilibrium vision sees formal theory as providing a necessary blueprint for policy. Franklin Fisher (2011) nicely captures this view. He writes,
“It is not an overstatement to say that they (the general equilibrium welfare theorems) are the underpinnings of Western capitalism… So elegant and powerful are these results (G.E.’s exploration and proofs of existence, uniqueness, and optimality) that most economists base their conclusions upon them and work in an equilibrium framework.”
In the equilibrium vision, without formal theory, policy has no scientific foundation. It takes the position: Better to

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The problem of weak first principles

19 days ago

From Bernard Beaudreau and RWER #91
Economics is both a social and non-social (pure and applied) science, social in its quest to understand human behavior in the realm of goods and services, and non-social in its understanding of material processes – that is, the way in which goods and services (our bread and butter) are produced. It therefore stands to reason that for it to be successful, it must decipher how human beings think, and second, how inanimate material processes behave. It must understand the mechanical and physical laws that underlie production processes. In short, before it can begin to say anything of value, it must understand its subject(s). Has it?
In this section, we argue that it hasn’t on both counts, namely consumption and production.[1] In short, modern consumer

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Issue 91 of real-world economics review

20 days ago

Real-world economics review
Please click here to support this journal and the WEA
– Subscribers: 26,420 subscribe RWER Blog ISSN 1755-9472– A journal of the World Economics Association (WEA) 14,468 members, join – Sister open access journals: Economic Thought and WEA Commentaries– WEA Online Conferences back issues
issue no. 91
16 March 2020download whole issue
Complexity, the evolution of macroeconomic thought, and micro foundationsDavid Colander

2

Models and reality: How did models divorced from reality become epistemologically acceptable?Asad Zaman

20

ECONOMICS 101 (editors invite more papers on Economics 101)
The value of “thinking like an economist”Bernard C. Beaudreau

45

An essay on the putative knowledge of textbook economicsLukas Bäuerle

53

World population: the

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Pandemics: lessons looking back from 2050

22 days ago

From Fritjof Capra and Hazel Henderson
Imagine, it is the year 2050 and we are looking back to the origin and evolution of the coronavirus pandemic over the last three decades.  Extrapolating from recent events, we offer the following scenario for such a view from the future.
As we move into the second half of our twenty-first century, we can finally make sense of the origin and impact of the coronavirus that struck the world in 2020 from an evolutionary systemic perspective. Today, in 2050, looking back on the past 40 turbulent years on our home planet, it seems obvious that the Earth had taken charge of teaching our human family. Our planet taught us the primacy of understanding of our situation in terms of whole systems, identified by some far-sighted thinkers as far back as the

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