Real-World Economics Review

from Lars Syll MMT is about identifying the untapped potential in our economy, what we call our fiscal space … How we choose to utilize that fiscal space is a political matter … The point is that we run our economy like a six-foot-tall guy who wanders around perpetually hunched over in a house with eight-foot ceilings because someone convinced him that if he tries to stand up tall he’ll suffer a massive head trauma. For too many years, we’ve been crouching down when we could have been...

from Geoff Davies Neoclassical economics is without scholarly integrity. It does not belong in universities. It certainly should not be the dominant source of policy advice to governments. Most scholarly disciplines, be they history, physics or ecology, have a conception of appropriate standards by which the evidential basis of an argument is presented and the reasoning leading to conclusions is explained. The goal is to shed light on the workings of the world, and a criterion for a...

from Andri Stahel . . . economists seem to be undeterred by these new understandings brought to physics or even by the blow brought to Newton’s mechanics by 20th-century quantum physics and Einstein’s relativity. They continue to stick to classical mechanics as if nothing had changed in the way physician understand the physical world. Nor are they bothered by the way other social and political sciences came to understand the social world; or how in neurosciences and psychology, the...

from Lars Syll Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time … I also want to emphasise strongly the point about economics being a moral science. I mentioned before that it deals with introspection and with values. I might have added that...

from Geoff Davies Analyses of the economic effects of global warming by prominent economists are based on patently invalid arguments, profound ignorance of the global response to solar energy and basic misrepresentation of scientific sources. Their conclusion that the effects are minor is egregiously in error and use of their analyses to advise governments has placed the world in peril. Economist Steve Keen has published a critique (and summary) of analyses by William Nordhaus and others...

from Lars Syll Vielleicht ist diese Grundperspektive der radikalen Trennung von Form und Gehalt hilfreich, einige zunächst überaus paradoxe Äußerungen von Lucas etwas zu erhellen. Erinnert man sich der Forderungen von Lucas, die Makroökonomik zwingend auf Basis der klassischen Postulate, die Lucas und Sargent (1978) als (a) „Markträumung“ und (b) „Eigennutz“ umrissen hatten, zu errichten, so erstaunt man doch angesichts Passagen wie der folgenden: “In recent years, the meaning of the...

from Dean Baker As the vaccination campaign picks up steam, we have many public health experts warning us about a possible resurgence of the pandemic due to the spread of new vaccine-resistant strains. The logic is that, as more people are protected against the predominant strain for which the vaccines were designed, it will allow room for mutations to spread, for which the current vaccines may not be effective. This can leave us in a whack-a-mole situation, where we have to constantly...

from Peter Radford There is something truly odd about any economist who lives wholly in the world of equilibrium.  Truly odd.  Just think of what they have to assume to get there: The first step is to make sure the problem they are tackling is well defined.  Really well defined.  Without ambiguous objects lurking in dark corners.  The problem must be well lit and sanitized of any potential taint.  And it mustn’t be connected to anything that might, under some circumstance or another,...

from Lars Syll Statistician Andrew Gelman has an interesting blogpost up on what inference in science really means: I like Don Rubin’s take on this, which is that if you want to go from association to causation, state very clearly what the assumptions are for this step to work. The clear statement of these assumptions can be helpful in moving forward … Another way to say this is that all inference is about generalizing from sample to population, to predicting the outcomes of hypothetical...

This conference is open for submissions SUBMIT YOUR PAPER Aims of the conference The advent of the global Covid-19 crisis created new challenges for businesses, workers, and policymakers. Their outcomes have transforming implications for all countries, industries, businesses of all sizes, and societies. The Covid-19 twin economic and health crises call for a deep reflection on the forces that will shape the future of the global economy. In fact the outbreak of Covid-19 and the...