Real-World Economics Review

from Lars Syll Economics is a discipline with the avowed ambition to produce theory for the real world. But it fails in this ambition, Lars Pålsson Syll asserts in Chapter 12, at least as far as the dominant mainstream neoclassical economic theory is concerned. Overly confident in deductivistic Euclidian methodology, neoclassical economic theory lines up series of mathematical models that display elaborate internal consistency but lack clear counterparts in the real world. Such models are...

from Asad Zaman What is the nature of the world in which I live? As I look around me, I see walls, windows, doors, and furniture. But these are insignificant parts of the world as constructed by my mind. I conceptualize the world through the teachings of history, according to which human history started in the remote past, with hunter-gatherers. I have a smattering of knowledge of the ancient civilizations of Sumeria and Babylon, and much more of the Roman Empire. The rise of...

from Lars Syll James Heckman, winner of the “Nobel Prize” in economics (2000), did an interview with John Cassidy in 2010. It’s an interesting read (Cassidy’s words in italics): What about the rational-expectations hypothesis, the other big theory associated with modern Chicago? How does that stack up now? I could tell you a story about my friend and colleague Milton Friedman. In the nineteen-seventies, we were sitting in the Ph.D. oral examination of a Chicago economist who has gone on...

from Dean Baker I know I have been pounding on this a lot, but it is important and there is a lot of money at stake. All we need (okay, maybe not all) is some clear thinking. The Washington Post had a good piece this week talking about how a company set up by a hedge fund, with no background or expertise in pharmacology, arranged to get rights to a drug that was developed by researchers at Emory University on a $16 million contract with the government. The drug, EIDD-2801, is thought to...

from David Ruccio They came for him in the morning, before coffee break. — Stewart O’Nan, The Odds This morning, the U.S. Department of Labor (pdf) reported that, during the week ending last Saturday, another 1.5 million American workers filed initial claims for unemployment compensation. That’s on top of the 44.2 million workers who were laid off during the preceding twelve weeks. Here is a breakdown of each week: • week ending on 21 March—3.31 million • week ending on 28...

from David Ruccio “Formal” freedom is the freedom of choice WITHIN the coordinates of the existing power relations, while “actual” freedom designates the site of an intervention which undermines these very coordinates. — Slavoj Žižek, On Belief                            The novel coronavirus pandemic has demonstrated how shallow and restricted the notion of formal freedom is in the United States. After years of pretending that private healthcare and health insurance expanded the freedom...

from  C. P. Chandrasekhar While forecasters grapple with predictions on the likely contraction in the world’s leading economies, big finance, especially in the US, seems to be prematurely preparing for its next celebration. Recall that while the post-2008 Great Recession was precipitated by the financial collapse triggered by unbridled speculation in financial markets, the subsequent ‘recovery’ from the crisis saved and rewarded finance, but left the real economy limping and workers and...

from Lars Syll One of the most important tasks of social sciences is to explain the events, processes, and structures that take place and act in society. But the researcher cannot stop at this. As a consequence of the relations and connections that the researcher finds, a will and demand arise for critical reflection on the findings. To show that unemployment depends on rigid social institutions or adaptations to European economic aspirations to integration, for instance, constitutes at...

from Asad Zaman Chapter 2 of Goodhart’s “Evolution of Central Banks” cites in detail several arguments made by Bagehot (pronounce Badge-it) in favor of a free banking system without a Central Bank. After listing them, he notes that Bagehot is “engagingly naïve”, as a gentle critique. It is astonishing that a hard-nosed practical financial analyst like Bagehot would indulge in such visionary daydreams about a “free market” system. This testifies to the power of ideology to blind one to the...

from Norbert Häring Sudan has a transitional government that depends on the goodwill of the USA. This is an opportunity to use the country for the largest field trial to date, to put an entire population on the digital leash through cash abolition and a universal basic income. For several years now, the World Bank, Better Than Cash Alliance and various UN organizations have been massively promoting and advertising the purely digital transmission of financial aid for the needy in poor...