Real-World Economics Review

Will lower central bank interest rates at this moment lead to lower consumer rates? No, they won’t. The, at this moment, low rates on existing debt will continue to increase for years on end, cutting in household spending and hampering the possibility of households to pay down their debt. Figure 1. Interest rates for new mortgage contracts, the Netherlands. At this moment, Central Banks seem to take a break when it comes to increasing their interest rates. Maybe they will even...

from Maria Alejandra Madi and RWEA pedagogy Blog 2021 marked the 50th anniversary of the “weekend that changed the world”, when US President Richard Nixon suspended the convertibility of the dollar into gold. From a monetary point of view, since then there has been continued dominance of the dollar as a vehicle for international transactions. However, Is the dollar as the world’s reserve currency under attack? The dollar’s dominance in global markets is still significant, with its role in...

from Shimshon Bichler and Jonathan Nitzan [1] The Hamas-Israel War The 2023 war between Hamas and Israel elicits many different explanations. As with previous regional hostilities, here too, the pundits and commentators have numerous overlapping processes to draw on – from the struggle between the Zionist and Palestinian national movements, to the deep hostility between the Rabbinate and Islamic churches, to the many conflicts between Israel and Arab/Muslim states, the contentions between...

from Dean Baker The New York Times seems to really love telling readers that China is facing a demographic crisis because its population is falling. It is not clear why the NYT thinks this amounts to a crisis for China, since many other countries have declining populations without experiencing any obvious crisis. The most obvious examples are two of China’s neighbors, Japan and Korea, both of which are seeing modest drops in population. In both countries, per capita income is continuing...

Please click here to support this open-access journal and the WEA RWER issue no. 105 download whole issue In Praise of Rebellion?Peter Radford2   Professor Stiglitz’s contributions to debates on intellectual propertyDean Baker 12   America’s trade deficits: blame U.S. policies – starting with tax lawsKenneth E. Austin 25   Extending the concept of inflation beyond consumer pricesMerijn Knibbe 46   History and origin of money in MMT and Austrian Economics:The difference methodology...

from Lars Syll Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the discipline, characterizing economists and their views as objective, unbiased, and non-ideological … Acknowledging that ideology resides quite comfortably in our economics departments would have huge intellectual implications, both theoretical and practical. In spite (or because?) of that, the matter has never been directly subjected to empirical scrutiny. In a recent...

from Peter Radford The machine makers are restless! There’s quite a debate going on about something called “techno-optimism” which roughly translates as anything technological is good and will, inevitably, make us all much better off.  That it makes fortunes for its owners is of secondary importance. The debate has emerged as a result of the publication of Marc Andreesen’s ‘Techno-Optimist Manifesto’, a strange and rather long paean to the many virtues of technology and the much more...

from Dean Baker Mark Twain famously quipped that everyone always talks about the weather, but no one ever does anything about it. (This was before global warming.) In the same vein, it is common for people to rant about billionaires, like Rupert Murdoch and Elon Musk, controlling major media outlets and using them to advance their political whims. But, no one seems to do anything about it. There is a reason for inaction. For the foreseeable future, it is hard to envision a political...

Jamie Morgan: To a member of the public it must seem weird that it is possible to state, as you do, such fundamental criticism of an entire field of study. The perplexing issue from a third party point of view is how do we reconcile good intention (or at least legitimate sense of self as a scholar), and power and influence in the world with error, failure and falsity in some primary sense; given that the primary problem is methodological, the issues seem to extend in different ways from...

from Blair Fix Economists are not known for their literary imaginations. Flip through any economics textbook and you’ll find a barrage of terms like the ‘Philips curve’ and the ‘Fisher effect’. The jargon is simple enough — empirical relations are usually named after the person who discovered them. But this convention is neither descriptive nor fun. The exception to this vanilla naming practice is a pattern called the ‘Great Gatsby curve’.1 It’s named after F. Scott Fitzgerald’s famous...