Real-World Economics Review

from Lars Syll The economic toll tied to the coronavirus pandemic intensifies. Over the last three weeks, more than 16 million Americans have made unemployment claims. The unemployment rate is now over 10%. In the coming weeks, more people will face income and job losses. So how do we get out of this unprecedented crisis? To both Keynes and Lerner, it was evident that the state has the ability to promote full employment and a stable price level — and that it should use its powers to do...

from Thomas Palley On a cold day in January 1969, The Beatles, who hadn’t played live since 1966, took to the rooftop of the headquarters of Apple Records, located at 3 Savile Row, in central London. And there they played an impromptu last gig, much to the delight of Londoners on nearby rooftops … and to the chagrin of the police. [embedded content]

from David Ruccio This morning, the U.S. Department of Labor (pdf) reported that, during the week ending last Saturday, another 6.61 million American workers filed initial claims for unemployment compensation. That’s on top of 6.65 million workers who were laid off during the week ending 28 March and another 3.31 million in the previous week. All told, more than 16 million American workers have filed initial claims during the past three weeks. To put that into some kind of...

from Ken Zimmerman According to the UN (and many others) the world was a mess before anyone ever uttered the word coronavirus. These problems remain waiting for us after the current crisis fades. 1. We have a decade to significantly curb carbon emissions and avoid catastrophe. Because of years of delayed action, we face an even more pressing mandate. We need to halve global emissions by 2030 but the emissions gap between what is needed and our current commitments is significant. Starting...

from Dean Baker It seems more than a bit bizarre, but in a discussion of alternative to patents for financing the development of new drugs and vaccines, publicly funded open-source research is not mentioned.  This is peculiar since so much of the research into treatments and vaccines for the coronavirus are in effect being open-sourced, with researchers posting results as soon as they are available. Advance, open-sourced funding would mean that any new drugs or vaccines that are developed...

from Lars Syll Some critics of economics appear to believe that the root of the alleged problems lies in models, or the method of modelling in general. On this view, modelling just is not an appropriate way of acquiring knowledge about the social world. No (simple) model can do epistemic justice to the (complex) world, so there cannot be a proper use of models that would make the method of modelling justified. Models are the problem. Models distort the world, not people using them. This...

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...