Naked Keynesianism

A debate between Tom Palley and Adam Posen. From Tom's argument: A negative interest rate policy (NIRP) appears revolutionary, but its justification rests on failed, pre-Keynesian “clas- sical” economics. This claims that lower interest rates can al- ways solve aggregate demand shortages and lead to full employment. Keynes discredited classical economics by showing that saving and investment might not respond, as assumed, to lower interest rates. Read the debate here.

New book edited by Matías Margulis. We have a chapter with Esteban Pérez, a new updated version of this paper really. Many interesting contributions from Eric Helleiner, Peter Ho and Robert Wade to cite three well-known scholars of development. From the blurb: The Global Political Economy of Raúl Prebisch offers an original analysis of global political economy by examining it through the ideas, agency and influence of one of its most important thinkers, leaders and personalities....

By Denis Melnik and Andrés Lazzarini (Guest bloggers) As the first days of Donald Trump’s presidency unfold, the prevalent attitude to his surprising victory among the various breed of the liberal intelligentsia all over the globe is pretty much the same as it was on the morning of November 9, 2016 — that of a profound shock. Apart of purely emotional reactions (ranging from desperate ‘Bernie could have won’ to hopeful ‘Trump will be impeached almost immediately’), this shock reveals...

So Bucknell is on that list, according to Chen Qian, Steven B. Caudill and Franklin G. Mixon, Jr. (2016) “Engaged in teaching, and scholarship too: economics faculty productivity at national liberal arts colleges,” International Journal of Pluralism and Economics Education, 7, 360-372 (subscription required). Not sure how useful this kind of data is. Very much like the data on journal rankings discussed before, this should be taken with a grain of salt. But the schools with heterodox, or...

I can already see some of the cuts ;) The Hill suggests that we should expect a huge decrease in government spending. According to them: Overall, the blueprint being used by Trump’s team would reduce federal spending by $10.5 trillion over 10 years. The proposed cuts hew closely to a blueprint published last year by the conservative Heritage Foundation, a think tank that has helped staff the Trump transition. In all fairness, I am not, or at least was not until now, expecting big...

New paper by Lance Taylor in Challenge Magazine. From the blurb: Can America recover ideal rates of growth through interest-rate policies? This important analysis suggests that most economists misunderstand the issue. Updating Keynes, the analysis suggests that fiscal stimulus, labor union bargaining power, and more progressive income taxes are needed to support growth. (The article includes some algebra, which some readers may choose to skip.) Read full paper here.

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Tyler Durden at ZeroHedge, and others, are discussing Bill Gross's recent rant on his monthly letter to investors about the yield curve and the possibility of a Trump recession. Bill Gross sees in the decline of the 10-year bond rate since the early 1980s a secular (like Summers and his secular stagnation, it seems everything is secular now) trend, and concludes that the long term rate cannot go above 2.6% or so. In his words: "So for 10-year Treasuries, a multiple of influences obscure a...

New paper by Steve Keen. After Paul Romer accused mainstream colleagues of using phlogiston to explain phenomena they don't understand, now we have a better working hypothesis about what is happening with the mainstream. From the abstract: A new virus, known as ‘Reality’, has started to afflict Mainstream Economists, causing them to reject the ‘as if’ arguments they used to use to justify their models. There is no known cure for the virus, and complete avoidance of ‘Reality’ is the...

McCloskey, Lazonick, Despin, and Shaikh (I'm covered) The joint AEA/URPE session was very lively, but suffered from the last minute absence of Brad DeLong. He did send the notes of what he was going to discuss here. On the topic of stagnation per se only Hans Despin suggested that it was an important phenomenon, but not necessarily for the same reasons Larry Summers and Brad De Long. It was unclear to me, however, that his views were based on a demand side story, and, hence, that this...