Real-World Economics Review

from Dean Baker Economists and economic reporters all know that tariffs can lead to corruption. The idea is that if a government-imposed tariff raises the price of a product by 10-25 percent above the free market price, companies have a large incentive to find ways to avoid the tariff. This can mean reclassifying imports to get around the tariff or trying to curry favor with politicians to get exemptions. The New York Times and ProPublica have run several excellent pieces providing...

from Lars Syll I don’t see that we are even entitled to assume that reality accords to some model that humans are able to envisage … To say that Pandora knows what decision model she is facing can therefore be taken as meaning no more than that she is committed to proceeding as though her model were true … The price of abandoning psychology for revealed-preference theory is therefore high. We have to give up any pretension to be offering a causal explanation of Pandora’s choice behavior...

from Andri Stahel and RWER issue 93 As will be argued, a great part – and increasingly so – of the capital gains result from an inflationary increase in the monetary value of given financial assets and not from productive employment of capital, generating both capital-income and new wealth on its wake. Thus, we overlook the effect of the different kinds of capital both in fostering or not overall economic activity and the effect of that which has been termed “financialisation” on the...

from Lars Syll Why, it might be objected, should the goal of social science be mere causal explanations of particular events? Isn’t such an attitude more the province of the historian? Social science should instead be concentrating on systematic knowledge. The Prisoner’s Dilemma, this objection concludes, is a laudable example of exactly that – a piece of theory that sheds light over many different cases. In reply, we certainly agree that regularities or models that...

download whole issue Why are the rich getting richer while the poor stay poor?      2Andri W. Stahel Machina-economicus or homo-complexicus: Artificial intelligence and the future of economics?      18Gregory A. Daneke Maybe there never was a unipower      40John Benedetto Empirical rejection of mainstream economics’ core postulates – on prices, firms’ profits and markets structure      61Joaquim Vergés-Jaime Humanism or racism: pilot project Europe at the crossroads      76Hardy...

from Asad Zaman This is a sequence of posts on “New Directions in Macroeconomics“, which discusses the numerous directions of research which must be incorporated to create a viable Macroeconomics for the 21st Century. We have previously discussed “Post-Keynesian Economics“, and “Modern Monetary Theory“. This post discusses the necessity of re-incorporating politics into economics. Once we recognize the importance of history and institutions, it becomes clear that economic problems cannot...

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from Norbert Häring The President of the EU-Commission plans to give all EU citizens a European digital identity which can “be used anywhere in Europe to do anything from paying taxes to renting a bike”. She wants to implement for Europe what ID2020, the World Economic Forum, the World Bank and Homeland Security are pushing worldwide – to perfect the automated surveillance of the world’s ppopulation. In Ursula von der Leyen’s speech on the State of the Union on September 16, an important...

Follow on Twitch: https://www.twitch.tv/actdottv Julianna welcomes back recurring guest Dean Baker, macroeconomist and co-founder of the Center for Economic and Policy Research, to discuss how last week an official with China’s Center for Disease Control and Prevention announced it may have a vaccine available for widespread distribution by November or December. But here in the United States, we’d have to wait at least a few months-- probably a lot longer-- to benefit. And that...

from Lars Syll One can generally develop a theoretical model to produce any result within a wide range. Do you want a model that produces the result that banks should be 100% funded by deposits? Here is a set of assumptions and an argument that will give you that result. That such a model exists tells us very little … Being logically correct may earn a place for a theoretical model on the bookshelf, but when a theoretical model is taken off the shelf and applied to the real world, it is...