Real-World Economics Review

from Lars Syll DSGE models seem to take it as a religious tenet that consumption should be explained by a model of a representative agent maximizing his utility over an infinite lifetime without borrowing constraints. Doing so is called micro-founding the model. But economics is a behavioral science. If Keynes was right that individuals saved a constant fraction of their income, an aggregate model based on that assumption is micro-founded.Of course, the economy consists of individuals who...

from Dean Baker As it increasingly looks like Joe Biden has won the election, I see many people around me appalled that so many of their fellow citizens can vote for someone as racist, sexist, and otherwise offensive as Donald Trump. Given what we know about the guy, and think everyone else should know about him as well, it is hard not to be appalled. But we will not get anywhere politically by looking at half the country with disgust. Trying to win over some of Trump’s voters doesn’t...

from C. P Chandrasekhar and Jayati Ghosh The past year has brought into sharp relief the significant differences between China and the rest of the world. The experience of the pandemic is probably the most extreme and definitive expression of that: the ability of China to contain the spread of the virus and prevent a renewed outbreak of any substantive nature is unmatched by almost all other countries, with the exception of a few outliers. The reasons for this certainly deserve separate...

Donald Trump’s messaging on jobs and the economy have resonated with voters, says Dean Baker, American economist and co-founder of the Center for Economic and Policy Research. Baker says the president successfully skirted responsibility for the country’s response to coronavirus, which has killed in excess of 230,000. Subscribe to France 24 now: http://f24.my/youtubeEN FRANCE 24 live news stream: all the latest news 24/7 http://f24.my/YTliveEN Visit our website:...

Dean Baker is a senior economist at the Center for Economic and Policy Research in Washington, DC. He was the co-founder and co-director of the Center, until he stepped down in 2018. Previously he had been a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He has written numerous books and articles. His most recent is Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Ecoholics is a...

from Lars Syll I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole. David Card Back in 1992, New Jersey raised the minimum wage by 18 per cent while its...

from David Westbrook and The Inequality Crisis Suppose we understand markets in fairly simple-minded fashion, as social contexts in which folks buy, sell, and invest. Markets have often been understood individualistically – homo economicus is not a friendly guy – and orthodox economics even proposed “methodological individualism” to be a cardinal intellectual virtue. But the social simply must be stressed at the present juncture. As digital enterprises make inescapably clear, markets are...

from Asad Zaman Somebody aptly quipped that ‘Trying to understand the economy without understanding money and finance is like trying to understand how birds fly, without taking the wings into account”. The Hegelian anti-thesis of the orthodox economic position that money is neutral, is the idea that “money is everything”. Economics is just the analysis of monetary flows, both within a society, and globally. Karl Marx describes the change in perspective via the formulae C-M-C’ versus...

from David Westbrook and The Inequality Crisis While we may find many sorts of inequality in the United States and elsewhere, this essay is about the specific form of inequality exemplified by Jeff Bezos or Bill Gates, that is, the Himalayan summits of contemporary wealth, mostly in the United States. I would like to suggest that such wealth results from the confluence of three historical developments. First, the social processes referred to under the rubric of “globalization” have...

from Yoshinori Shiozawa  (originally a comment) This is a part of my essay “Between Math and the Occult” written in 2002 for a journal named “The pleasures of mathematics” (in Japanese) No. 30. There is an interesting parable that points out this. Originally of Arab origin, it was introduced and disseminated in economics by writers like Martin Shubik and Thierry de Montbrial. At midnight, a drunken person was wandering under a lonely streetlight. He seemed to be looking for something....