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Real-World Economics Review

War in Ukraine and global finance

from Marcello Spanò and RWER issue 104 Let us now turn to the signals of changes that are emerging with the war in Ukraine. The field of analysis regarding the relation of the war with the breakdown of unipolarism and its transformation into a multipolar world is certainly vast and complex. Here we limit the analysis some relevant aspects connected to the centrality of the dollar in the international monetary system. If we examine the 25-year period prior to 2014, we can...

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US Government to consider alternatives to patent monopoly financing of drug development

from Dean Baker In some really big news that is likely to get almost no media attention, Senator Bernie Sanders, the chair of the Senate HELP Committee, negotiated a deal with Bill Cassidy, the ranking Republican, on a package of amendments to the reauthorization of the nation’s pandemic preparedness law. While there are a number of items in the deal, a really big one is funding for a study to be done by the National Academies of Sciences, Engineering, and Medicine (NASEM) to consider...

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new issue of WEA Commentaries

Volume 13, Issue 1download the whole issue Summary of the Great Transformation by PolanyiAsad Zaman Economics, Anthropology and the Origin of Money as a Bargaining CounterPatrick Spread “Capitalism is the most successful, but also the most destructive ideological-economic system.”An interview withLaibachMitja Stefancic Brainstorming: Negative Impact of EconomicsAsad Zaman Closing RemarksStuart Birks Please click here to support the World Economics Association

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The dangers of using ontologically ungrounded idealizations

from Lars Syll Using ‘simplifying’ tractability or ‘heuristic’ assumptions — rational expectations, common knowledge, representative agents, linearity, additivity, ergodicity, etc — because otherwise they cannot ‘manipulate’ their models or come up with ‘rigorous ‘ and ‘precise’ predictions and explanations, does not exempt economists from having to justify their modelling choices. Being able to ‘manipulate’ things in models cannot per se be enough to warrant a methodological choice. If...

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Weekend read – Mixed progress in the fight against inequality and for democracy

from Dean Baker I have a birthday coming up, so it seems a good time to assess progress, or lack thereof, on the various issues that I have worked on over the decades. There is some big progress in at least a couple of areas, but not much to boast about in the others. I’ll start with the success stories. The Benefits of a Tight Labor Market The big one, where I feel we really have made huge progress, is the battle for full employment. It might seem like ancient history, but a quarter...

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The Money Multiplier Fairy Story

from Steve Keen and RWER issue 104 The 6th edition of Mankiw’s Macroeconomics textbook (there’s now a 9th edition, but I’m not about to waste money buying a dead parrot) passes on the Money Multiplier Fairy Story by telling students to consider “an imaginary economy” in which the money supply is initially $100 in cash. Then, the population deposits all that cash in “First National Bank”. The money supply now consists of $100 in bank deposits, while all the cash is in the vault of First...

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Ideology maintained the system that produced the inequality

from John Komlos and RWER issue 104 . . . for the first 97 percent of our species’ history, humans did not compete for status by amassing economic and political power and thus such inequality cannot be viewed as socially necessary. Such competition was proscribed because it would be destructive of these societies’ collective well-being. Instead, their rules of the game compelled them to compete in other manners beneficial to the community, such as by being good warriors, good hunters and...

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Keynes and the casino

from Lars Syll According to Keynes, financial crises are a recurring feature of our economy and are linked to its fundamental financial instability: It is of the nature of organised investment markets, under the influence of purchasers largely ignorant of what they are buying and of speculators who are more concerned with forecasting the next shift of market sentiment than with a reasonable estimate of the future yield of capital-assets, that, when disillusion falls upon an...

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Annual league table of top hedge fund managers’ earnings

from http://www.paecon.net/PAEReview/issue104/Fichtner_Morgan104.pdf The Institutional Investor publishes an annual league table of top hedge fund managers earnings. The latest data at time of interview was from March 2022 and reported that “Altogether, the 25 highest-earning hedge fund managers earned a combined $26.64 billion last year, the second-highest amount in the history of the Rich List… Over the past two years, the members of the Rich List’s First Team have made more than $58...

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