Real-World Economics Review

from C. P. Chandrasekhar With President Joe Biden having put through Congress and signed a $1.9 trillion American Rescue Plan, the world is set to experience one of the biggest fiscal boosts of recent times, larger than that resorted to in response to the 2008 Global Financial Crisis. Together with the $900 billion short term stimulus announced by the earlier administration end-December 2020, the level of pandemic induced Federal spending in the US is estimated at 13 per cent of GDP this...

On March 19th, I asked the economist Dean Baker of the Center for Economic and Policy Research whether Larry Summers' argument concerning the relief payment amounted to class warfare in disguise. https://cepr.net/ https://cepr.net/staff-member/dean-baker/ Washington Post. Lawrence H. Summers. The Biden stimulus is admirably ambitious. But it brings some big risks, too. February 4, 2021. https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/ CEPR. Excessive...

On March 19th, I asked the economist Dean Baker of the Center for Economic and Policy Research about his proposal for supporting an alternative to corporate media. https://cepr.net/ https://cepr.net/staff-member/dean-baker/ Bio Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the...

On March 19th, I interviewed the economist Dean Baker of the Center for Economic and Policy Research. https://cepr.net/ https://cepr.net/staff-member/dean-baker/ Bio Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. His blog,...

from Lars Syll Mainstream macroeconomics can only progress if it gets rid of the DSGE albatross around its neck. It is better to do it now than to wait for another 20 years because the question is not whether but when DSGE modeling will be discarded. DSGE modeling is a story of a death foretold … Getting rid of DSGE models is critical because the hegemonic DSGE program is crowding out alternative macro methodologies that do work … DSGE practitioners, who with a mixture of bluff and...

from Asad Zaman While the car is functioning well, one does not usually open up the engine. But when the car breaks down, it becomes necessary to open it up to see what is wrong. This is the situation today, as the failure of econometric models manifested itself in the global financial crisis, as well as many other occasions. The tragedy is that these same failed models continue to be used today; no serious alternatives have been developed. The reason for this is that the methodology used...

from Lars Syll Mainstream economics nowadays usually assumes that agents that have to make choices under conditions of uncertainty behave according to Bayesian rules (preferably the ones axiomatised by Ramsey (1931), de Finetti (1937) or Savage (1954)) — that is, they maximise expected utility with respect to some subjective probability measure that is continually updated according to Bayes theorem. If not, they are supposed to be irrational, and ultimately — via some “Dutch book” or...

from Blair Fix Today a rant about textbooks. Every year governments spend billions of dollars on public education, teaching students knowledge that was itself created by publicly funded research. Yet each year, university students must pay anew for this information by purchasing high-priced textbooks. It needn’t be this way. Most university textbooks are written by tenured (or tenure-track) professors. These are people who are paid by the public to generate and disseminate knowledge....

from Lars Syll I claim that Sraffian economics, however rigorous in its use of the simultaneous equations method … is irrelevant to our understanding of the real world and, judging by its failure to draw any policy implications, is largely irrelevant to the major concerns of modern economists … This is not a judgment based simply on my opinion, which is ultimately no better than yours. Relevance is not a matter for individual opinion but a social judgment of the community of professional...