Real-World Economics Review

from David Ruccio How many of you read Car and Driver magazine? Not many of you, I presume. But maybe you should. At least the June 2020 issue. It’s certainly a sign of our obscenely unequal times that a magazine better known for its reviews of foreign supercars and domestic muscle cars and for an editorial policy that courts controversy only when it attacks SUVs (in favor of minivans and cars) highlights the story of Oliver, Jason M. Vaughn’s family’s 260,000-mile Subaru in a piece...

from Lars Syll Expansionary policy with a strong redistributive component is an attractive proposal … Higher output and real wages would likely stimulate productivity growth. Global warming can and should be attacked seriously. With regard to foundation myths for MMT, Chartalism adds little to the observation that a modern macro economy operates on the basis of fiat money supported by state power which transcends enforcing the mere payment of taxes. Functional finance is the heart of...

from Norbert Häring In Germany and beyond, public policy in response to the Corona crisis operates with an unspoken basic assumption: the claims of capital are sacred. This is unfair and economically unreasonable. German economists largely agreed on how not to deal with the corona crisis. Sending a cheque to all taxpayers, as the US government did, is considered an unsuitable anti-crisis measure. After all, the 1200 dollars were too little for 30 million who lost their jobs within a few...

from Alanso Kihano (originally posted as a comment) What’s the use of economics? I think Alan Kirman’s post is completely off the target. Economics is used to achieve political aims. Politics it the first and major use of economics! The major purpose of economics today is to educate (or brainwash if you prefer) specialists, who can serve, and run the current socio-economic system without understanding it. Therefore, economics is obliged to create complex, but inadequate models. That suits...

from Ikonoclast (originally posted as a comment) The key obstacle to theoretical progress is the fact that economics is both a prescriptive and a descriptive discipline. We have not developed an economic ontologly to deal with this issue. The real economy is a real system. The natural environment is a real system. The set of legal laws, legal property relations, institutional arrangements, financial rules and calculations which we innovate and use as “rules and score-keeping of the game”...

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from David Ruccio There are lies, there are outrageous lies, and there are statistics. — Robert Giffen, Economic Journal (1892) Are U.S. unemployment numbers rigged? Sure, they are! They’re not rigged in the way Paul Krugman implied last Friday (“This being the Trump era, you can’t completely discount the possibility that they’ve gotten to the BLS”). Or in the way former General Electric CEO Jack Welch suggested back in 2012 (when he asserted that the Obama White House had manipulated the...

from Lars Syll The simple question that was raised during a recent conference … was to what extent has — or should — the teaching of economics be modified in the light of the current economic crisis? The simple answer is that the economics profession is unlikely to change. Why would economists be willing to give up much of their human capital, painstakingly nurtured for over two centuries? For macroeconomists in particular, the reaction has been to suggest that modifications of existing...

from Peter Radford I don’t often comment on politics here, but I want to record my thoughts as I watch the extraordinary convulsions running through America at the moment. First: racism is a basic fact of American life.  It has been apparent to me since I moved here.  White America simply doesn’t want to be forced to engage with it, so it ignores all the plentiful evidence that it exists.  It is too painful and too difficult to deal with, no matter how sympathetic people are, so they want...

from Lars Syll Voltaire once said of the Holy Roman Empire that it was “Neither Holy, nor Roman, nor an Empire”. Something similar might be said of Modern Monetary Theory … It is neither modern, nor genuinely monetary, and it is at least as much a set of policy proposals as a theory. It might be thought that “modern” refers to the fiat money world in which we have lived since major currencies broke with gold convertibility in the 1930s … In fact, however, it is a kind of inside joke,...