Real-World Economics Review

from Lars Syll The fallacy of composition basically consists of the false belief that the whole is nothing but the sum of its parts.  In society and in the economy this is arguably not the case. An adequate analysis of society and economy a fortiori can’t proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts. This fact shows up when orthodox/mainstream/neoclassical economics tries to argue for the existence of The Law of Demand – when the...

from Asad Zaman and WEA Pedagogy Blog In this sequence of posts, I will present the contents of the video podcast entitled “Michael Hudson: Why the US has a unique place in the history of imperialism? ” For me, Hudson’s book Super Imperialism: The Economic Strategy of the American Empire was an amazing eye-opener, essential reading for anyone who want to understand modern real world economics. The podcast provides a summary of his ideas, and these posts break it down further to make it...

from Lars Syll ZEIT: Today, the debate focuses on the labor shortages facing many industrialized countries. Angus Deaton: I am always cautious when people talk about a scarcity of labor but don’t talk about wages. The argument always is: Americans don’t want to do these jobs, Germans don’t want to do these jobs. So we have to have migrants. But in many cases, it is not that Germans or Americans don’t want to do these jobs, but that they don’t want to do them at the wages we can pay...

from Peter Radford “Economics has become irrelevant.” PART ONE Oh my.  Apparently Brad DeLong and I have the same problem.  He, of course, is part of the elite club.  I am decidedly not.  So it is quite a shock to share something. What? He set out to write an 800 word review of Dan Davies’ new book and ended up about 5,000 words later still writing.  I set out to write 1,000 words on William Janeway’s recent article on mesoeconomics, and here I am nearly 5,000 words later, still writing. ...

from Lars Syll So, certainly, both non-theorists and some theorists have little patience for research that displays mathematical ingenuity but has no value as social science. But defining this work exactly is impossible. This sort of work is like pornography quite simple to recognize when one sees it. Jeffrey Ely As researchers, we (mostly) want to try to understand and explain reality. How we do this differs between various disciplines and thought traditions. Creating a ‘map’ at a 1:1...

from Lars Syll Beyond the significant financial expenses required to conduct RCTs … critics have raised concerns about considerable opportunity costs associated with their privileged status in programme and policy assessment. These costs result from how an over-emphasis on experimental evaluations in evidence generation systematically undermines alternative research methods potentially better equipped to answer questions about causal mechanisms (or the channels by which interventions work...

The population of Argentina is suffering. The purchasing power of people who still have a job is down (a lot), and unemployment must have doubled (it was 5,7% in the last quarter of 2023) if it has not tripled. Less government spending, less consumer spending, and, no doubt, less private investment means that Argentina is experiencing an economic disaster which will scar the country for decades. Retail sales (volume): down around 20% while, at this moment, people will still be able to...

from Dean Baker The belief in free-market fundamentalism runs very deep. When I say that, I don’t mean that support for the concept runs deep, I mean the belief that we had been pursuing free-market policies in the years before the Trump and Biden presidency runs very deep. I was reminded of this fact in a New York Times column by Farah Stockman, touting the development of a new post-free-market fundamentalist paradigm. To be...

from Lars Syll As has become abundantly clear during the last couple of years, it is obvious that most mainstream economists seem to think that Modern Monetary Theory is something new that some wild heterodox economic cranks have come up with. That is actually very telling about the total lack of knowledge of their own discipline’s history these modern mainstream guys like Summers, Rogoff and Krugman have. New? Cranks? Reading one of the founders of neoclassical economics, Knut Wicksell,...