Lars P. Syll

Why do women still earn less than men? Spending the morning going through Francine Blau’s and Lawrence Kahn’s JEL survey of modern research on the gender wage gap, yours truly was struck almost immediately how little that research really has accomplished in terms of explaining gender wage discrimination. With all the heavy regression and econometric alchemy used, wage discrimination is somehow more or less conjured away … Trying to reduce the risk of having...

Progressive capitalism? Is that even possible!?  [embedded content]

For-profit​ private schools — a total disaster Neo-liberals and libertarians have always provided a lot of ideologically founded ideas and ‘theories’ to underpin their Panglossian view on markets. But when they are tested against reality they usually turn out to be wrong. The promised results are simply not to be found. And that goes for for-profit private schools too. To make education more like a private good, [voucher advocates] tried to change the...

What we do in life echoes in eternity In science, courage is to follow the motto of enlightenment and Kant’s dictum — Sapere Aude!  To use your own understanding, having the ​courage to think for yourself and question ‘received opinion’, authority or orthodoxy. In our daily lives, courage is a capability to confront fear, as when in front of the powerful and mighty, not to step back, but stand up for one’s rights not to be humiliated or abused. Courage is...

The interest rate fallacy While currency-issuing governments do not need to sell bonds, the fact that they do creates no competition for finite savings between public and private borrowers. First, government deficits stimulate growth and private savings as national income grows … Moreover, deficits place downward pressure on interest rates. Debt issuance serves to allow the central bank to maintain​ a positive target interest rate by providing investors...

Do government deficits necessarily cause inflation? It may be objected that government expenditure financed by borrowing will cause inflation. To this it may be replied that the effective demand created by the government acts like any other increase in demand. If labour​, plants, and foreign raw materials are in ample supply, the increase in demand is met by an increase in production. But if the point of full employment of resources is reached and effective...

On the use of logic and mathematics in economics Logic, n. The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding. The basic of logic is the syllogism, consisting of a major and a minor premise and a conclusion – thus: Major Premise: Sixty men can do a piece of work sixty times as quickly as one man. Minor Premise: One man can dig a post-hole in sixty seconds; Therefore- Conclusion: Sixty...

Banks are NOT intermediaries of loanable funds The loanable funds theory is in many regards nothing but an approach where the ruling rate of interest in society is — pure and simple — conceived as nothing else than the price of loans or credit, determined by supply and demand — as Bertil Ohlin put it — “in the same way as the price of eggs and strawberries on a village market.” In the traditional loanable funds theory — as presented in mainstream...

Krugman to Lietaer: “Never touch the money​ system” [embedded content]Bernard Lietaer (1942-2019) was a former professor of international finance and president at the Central Bank of Belgium. One of our greatest monetary thinkers, and contrary to Krugman et consortes he dared to talk about — and question — our monetary system!

[embedded content] We are not going to get out of the present economic doldrums as long as we continue to be obsessed with the insane idea that austerity is the universal medicine. When an economy is already hanging on the ropes, you can’t just cut government spendings.Cutting government expenditures reduces aggregate demand. Lower aggregate demand means lower tax revenues. Lower tax revenues mean increased deficits — and calls for even more austerity. And so on, and so on. To...