Real-World Economics Review

from Lars Syll As every mainstream textbook on growth theory, most mainstream economists choose to turn a blind eye to the concept of capital and the Cambridge controversy over it and pretend it’s much fuss about nothing. But they are wrong! The production function has been a powerful instrument of miseducation. The student of economic theory is taught to write Q = f(L, K) where L is a quantity of labor, K a quantity of capital and Q a rate of output of commodities. He is instructed to...

WEA CommentariesVolume 10, Issue 3  –    August 2020download the whole issue Human rights and fiscal policy: a necessary link           – Grazielle David, Pedro Rossi, Sergio ChaparroMitja Stefancic interviews Guy Standing Pandemic Musings           – Peter RadfordIs this the end of globalisation (as we know it)?            – Karim Errouaki WEA Conference: Trade Wars After Coronavirus

from Ikonoclast – Origianlly a comment on Are corporate CEOs worth $20 million? The time for nice debates alone is over. The time for voting and direct action to radically change our entire political economy has arrived. Debates, voting and direct action all have to operate in concert. Any one or two are powerless on their own. In a two-party, one-ideology state, where the wealth and power elites have captured the parties, voting on its own is useless. No matter who you vote for you still...

from Dean Baker This simple and important question does not get anywhere near the attention it deserves. And, just to be clear, I don’t mean are they worth $20 million in any moral sense. I am asking a simple economics question; does the typical CEO of a major company add $20 million of value to the company that employs them or could they hire someone at, say one-tenth of this price ($2 million a year) who would do just as much for the company’s bottom line? This matters not only because...

from David Ruccio Right now, the United States is mired in an economic depression, the Pandemic Depression, not dissimilar to what happened in the 1930s and again after the crash of 2007-08. Real (inflation-adjusted) gross domestic product contracted by an annual rate of 31.7 percent in the second quarter of 2020 (according to the Bureau of Economic Analysis) and at least 27 million American workers are currently unemployed (counting workers continuing to receive some kind of unemployment...

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 starting this week, the oil giant ExxonMobil will no longer have a home on the Dow Jones Industrial Average. And it’s about time. Not only are Big Oil companies like Exxon destroying the planet, but they’re no longer sound investments. Dean Baker co-founded The Center for Economic and...

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 starting this week, the oil giant ExxonMobil will no longer have a home on the Dow Jones Industrial Average. And it’s about time. Not only are Big Oil companies like Exxon destroying the planet, but they’re no longer sound investments. Dean Baker co-founded The Center for Economic and Policy Research...

from Lars Syll Public debt is normally — as emphasized again and again by MMT economists — 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 net burden for society as a whole since the debt ‘cancels’ itself out between the two...

from David Ruccio The number of initial unemployment claims for unemployment compensation in the United States once again surpassed one million—for the 21st time in the past 22 weeks—signaling a continuation of the Pandemic Depression. This morning, the U.S. Department of Labor (pdf) reported that, during the week ending last Saturday, another 1 million American workers filed initial claims for unemployment compensation. While initial unemployment claims remain well below the recent peak...

from Lars Syll The rational expectations hypothesis presupposes — basically for reasons of consistency — that agents have complete knowledge of all of the relevant probability distribution functions. And when trying to incorporate learning in these models — trying to take the heat of some off the criticism launched against it up to date — it is always a very restricted kind of learning that is considered. A learning where truly unanticipated, surprising, new things never take place, but...