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Real-World Economics Review

The social environment as a cause in economics

from Blair Fix Have you noticed that economists are missing a word in their vocabulary? In microeconomics you’ll see words like ‘individual’, ‘utility’ and ‘maximize’. But you won’t see the word ‘environment’ anywhere. It seems that in microeconomics, individuals maximize their utility in a void. [1] This lobotomy of the environment has led economists astray. By focusing only on differences between individuals, economists ignore a major part of human behavior. Individual differences are...

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2019 ‘Nobel prize’ reveals the poverty of economics

from Lars Syll RCTs have delivered intriguing insights into how poor people think and act, but also into how behavioural economists do. For example, when a slew of high-profile RCTs failed to deliver the evidence that researchers expected on the ‘miracle of microfinance’, the researchers paid little heed to the implications of their insignificant and sometimes even negative findings. Instead, they focused attention onto some small (but statistically) significant behavioural changes in...

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General Trump’s strange offensive in his trade war

from Dean Baker Just when many policy types thought that Donald Trump was about to wind down his trade war with China and work out a deal, he announced that he was in no rush to reach an agreement. He said that he might wait until after the election next year, boasting about the “massive” amount of money he was pulling in from his tariffs. In addition to his China attack, Trump also imposed tariffs on steel and aluminum from Argentina and Brazil, complaining that they were manipulating...

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The “Nobel Prize” for Economics 2019… illustrates the nature and inadequacy of conventional economics

from Ted Trainer The 720,000 pound Prize has been awarded for studies carried out in “developing” countries over several decades, applying randomised trials to determine the effects of interventions like school meals, small monetary incentives for school attendance and work motivation (Nobel Media, 2019.) Especially noteworthy are devices for reducing “…purchasing of temptation goods”, (…conceivably also of use in rich countries.) These are identified as “nudges”, only likely to make...

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Public trust in economists

from Lars Syll People are obviously not so impressed by the “queen of the social sciences”. And rightly so. Mainstream economics today is more like an ideological-religious conviction than a realist and relevant social science that people can trust for making their lives or societies better.

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Financialization, home ownership edition

Recent research has emphasized the negative effects of finance on macroeconomic performance and even cautioned of a “finance curse.” As one of the main drivers of financial sector growth, mortgages have traditionally been hailed as increasing the number of homeowners in a country. This article uses long-run panel data for seventeen countries between 1920 (1950) and 2013 to show that the effect of the “great mortgaging” on homeownership rates is not universally positive. Increasing...

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New issue of the Real World Economics Review – #90

download whole issue Making America great againShimshon Bichler and Jonathan Nitzan 2 American trade deficits and the unidirectionality errorKenneth Austin 13 The “Nobel Prize” for Economics 2019… illustrates the nature and inadequacy of conventional economicsTed Trainer 41 Greenwish: the wishful thinking undermining the ambition of sustainable businessDuncan Austin 47 An evolutionary theory of resource distributionBlair Fix 65 The case for the ontology of money as credit: money as bearer...

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Economics is still in the pre-scientific age

from Michael Joffe If you are interested in “creating greater economic equality, reducing the power of corporations” and so on, you have to understand how economic power works. I am using “power” here not as an ideological category, but in the sense of causation, the degree of one’s ability to bring something about. It is obvious that in the economy, some people and some organisations (e.g. firms) have more influence than others. What they want to happen is more likely to happen. This is...

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Going Digital Discussion Forum

Going Digital: What is the Future of Business and Labour? Discussion Forum extended to December 16th by Malgorzata Dereniowska We are delighted to inform that the Discussion Forum for the WEA Conference Going Digital: What is the Future of Business and Labour? has been extended to 16th December, 2019.  Join us to discuss recent contributions to the understanding of digital economy and its consequences for business trends and labour challenges! All papers are available HERE. You...

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