Real-World Economics Review

from Dean Baker Maybe this is too obvious a point, but I don’t see it mentioned in news coverage of the company’s settlement. If we could ever have a serious debate on the relative merits of government-granted patent monopolies compared with direct upfront funding, as we did with Moderna’s research on a coronavirus vaccine, the incentive that patents give to lie about the safety and effectiveness of drugs would be an important factor. Unfortunately, we may never have this debate because...

from Lars Syll Economists of all shades have generally misunderstood the theoretical structure of Keynes’s The General Theory. Quite often this is a result of misunderstanding the concept of ‘effective demand’ — one of the key theoretical innovations of The General Theory. Jesper Jespersen untangles the concept and shows how Keynes, by taking uncertainty seriously, contributed to forming an analytical alternative to the prevailing mainstream general equilibrium framework: Effective demand...

from Gregory Danake and RWER issue 93 The nexus of mainstream (or neoclassical) economic theory is “homo-economicus” (or economic person). It is a super being who dwells in a fairy tale land with complete information and is obligated to act hedonistically (maximizing their individual utility at the margin). Neoclassic economists merely stamp out this little cookie person, and then chuck out all the inconvenient dough, including: altruism, reciprocation, and “moral sentiments” (as Adam...

from Lars Syll.                                                                                                                              [embedded content] Public debt is normally nothing to fear, especially if it is financed within the country itself (but even foreign loans can be beneficent for the economy if invested in the right way). Some members of society hold bonds and earn interest on them, while others pay taxes that ultimately pay the interest on the debt. The debt is not a...

TRADE WARS AFTER CORONAVIRUS Economic, political and theoretical implications An online conference from the WEA, 19th October to 5th December, 2020 The current correlation of forces in the struggle for global economic hegemony Juan Vázquez Rojo The objective of this paper is to analyze the current correlation of forces between China and the United States to verify whether this distribution of power corresponds to the current hegemonic order. Starting from the concept of interstate...

from Hardy Hanappi and issue 93 of RWER The state of the global political economy is producing an extremely dangerous dynamic. The human species has conquered the planet, its productive forces are reaching ever more sophisticated levels and are arranged in a global network that would be able to transform growth of profits into growth of general welfare. But such a transformation needs a political agent, which is powerful enough to defeat the forces, which currently exploit large parts of...

from Dean Baker It seems increasingly likely that China will begin providing vaccines to its own people, as well as those in some other countries, by December, and possibly as early as next month. The prospect of a vaccine being available that soon has to look good to people here, now that the Trump administration’s pandemic control efforts have completely failed. The whole country would like to get back to normal, but that doesn’t seem like a serious possibility until we have an...

from Lars Syll  In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner. Robert Aumann What a handy view of science. How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to kids’ teeth. Now a ‘Nobel prize’ winning...

from David Ruccio U.S. billionaires have recouped all of their wealth—and more—during the Pandemic Depression. Meanwhile, since May, the number of poor Americans has grown by about 8 million. And the number of American workers applying for and receiving unemployment benefits continues at record levels. According to Forbes, Pandemic be damned: America’s 400 richest are worth a record $3.2 trillion, up $240 billion from a year ago, aided by a stock market that has defied the virus. When...

Source Measuring the labor market and understanding labormarket data has recently been more of a challenge than usual. An large number of people seem to leave the official labor market, rendering unemployment data less useful. Also, a large number of new arrangements influence who are counted as unemployed or as workers. The best and at this point of time the most useful data we have might be data on total hours worked. Which, for the EU and the UK, show a pitiful sight. It resembles...