Real-World Economics Review

from David Ruccio We’re back at it again: “the economy” has broken down and we’re all being enlisted into the effort to get it back up and working again. As soon as possible. The Congressional Budget Office has announced that it expects the U.S. economy will contract sharply during the second quarter of 2020: Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of...

from Asad Zaman Mäki, Uskali. “Rights and wrongs of economic modelling: refining Rodrik.” Journal of Economic Methodology 25.3 (2018): 218-236. Introduction: I must confess to having admired Dani Rodrik. His research was iconoclastic, fearlessly going after many sacred cows of economics. So, I was saddened and disappointed by his defense of Economics: Rodrik, Dani (2015) Economics Rules. Why Economics Works, When It Fails, and How to Tell the Difference. Oxford UP. Rodrik uses “rules” in...

from Maria Alejandra Madi The  United States declared an economic war on China in early 2018. Economic warfare is a unilateral action that questions the existence of multilateralism and places the question of what regime we are about to enter after the weakening of the existing multilateral trade agencies. US trade policy opens the door for new relationships between emerging market economies and international financial institutions on issues of liberalisation but mostly it ends a period...

As GDPs crumble…  With the pause button pressed on nearly half of economic activity in the US and the EU for what is likely to be at least a period of three months, consumption, investment and trade have all collapsed. A contraction of as much as 10-20% of GDP or worse is possible. Pervasive uncertainty about the timing of the development of a viable treatment and/or vaccine means there is no light at the end of the tunnel yet. Even when we get there, the trauma of the COVID-19 meltdown...

from The Guardian Move over Mozart, here comes Stelios Kerasidis. A seven-year-old Greek prodigy has penned an “isolation waltz” inspired by the pandemic. The hypnotic, fugue-like melody has picked up more than 43,000 hits on YouTube since its launch last week. “Hi guys! I’m Stelios. Let’s be just a teeny bit more patient and we will soon be out swimming in the sea,” he beams, perched on his piano stool, feet barely touching the floor. “I’m dedicating to you a piece of my own.” The work,...

from Grazia Ietto Gillies The expenditure given [in the chart] include both private and public expenditure as far as I know. That the US have a VERY inefficient health care system is well known but it can only be made clear by looking also at outcomes such as Infant mortality rate or life expectancy alla available from OECD health statistics. Why such inefficiency. Well then you have to look at the organization of health systems not just the stats. In countries with high private provision...

from Lars Syll A couple of years ago, in a lecture on the US recession, Robert Lucas gave an outline of what the New Classical school of macroeconomics today thinks on the latest downturns in the US economy and its future prospects. Lucas starts by showing that real US GDP has grown at an average yearly rate of 3 per cent since 1870, with one big dip during the Depression of the 1930s and a big – but smaller – dip in the recent recession. After stating his view that the US recession that...

from David Ruccio source Evidence thus far suggests that low-wage workers, most of whom can’t perform their labor remotely, are more likely to either lose their jobs (because of shutdowns, especially in leisure and hospitality) or be forced to continue to work in close proximity to others (either coworkers or customers), and therefore are more likely to contract coronavirus. Moreover, if and when the economy recovers, employers are likely to adopt labor-saving technologies and other...