Lars P. Syll

So much for value-free economics Back in 1992, New Jersey raised the minimum wage by 18 per cent while its neighbour state, Pennsylvania, left its minimum wage unchanged. Unemployment in New Jersey should — according to mainstream economics textbooks — have increased relative to Pennsylvania. However, when economists David Card and Alan Krueger gathered information on fast food restaurants in the two states, it turned out that unemployment had actually...

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as...

Another cup of coffee At last (on Via Garibaldi, Genova) we found a cup big enough for the morning coffee needs of my better half … Being an economist, I, of course, came to think of a famous experiment involving coffee … Pros. Kahneman, Knetsch & Thaler conducted a study to see how the endowment effect influences our decision making. The scientists randomly divided participants into buyers and sellers and gave the sellers coffee mugs as a gift. They...

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Modern macro — a total waste​ of time While one can understand that some of the elements in DSGE models seem to appeal to Keynesians at first sight, after closer examination, these models are in fundamental contradiction to Post-Keynesian and even traditional Keynesian thinking. The DSGE model is a model in which output is determined in the labour market as in New Classical models and in which aggregate demand plays only a very secondary role, even in the...

 [embedded content] For Tora and David, with whom, when they were just little kids, I spent hours and hours watching this​ series back at​ the beginning of the 90’s. They were my heroes then. They still are. Advertisements

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According to Abba Lerner, the purpose of public debt is “to achieve a rate of interest which results in the most desirable level of investment.” He also maintained that an application of Functional Finance will have a tendency to balance the budget in the long run: There is no reason for assuming that, as a result of the continued application of Functional Finance to maintain full employment, the government must always be borrowing more money and increasing the national debt...

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