Real-World Economics Review

from Lars Syll Whether it’s more nurses, frozen tax promises, free broadband internet or more social housing in the UK; or tax cuts and green energy investments in America, public spending is set to surge. This sudden abandonment of fiscal rectitude comes amid the rise in prominence of a way of thinking about money, spending and the economy – Modern Monetary Theory (MMT). According to its key architect, US businessman Warren Mosler, it is based on a simple idea – that countries that...

from Merijn Knibbe The EU has announced a ‘Green Deal‘.  Good. But at this moment, this only a plan for a plan. But there’s no time to waste. So, what to do while we wait? Let’s unleash the economists’ neurotic obsession with efficiency! Identify ‘fallen fruit’, energy gobbling activities which shouldn’t have been there in the first place. And get rid of it. Three examples, non of which requries massive investment or path breaking research: Media boxes. Problem: extreme stand by use....

from Blair Fix Have you noticed that economists are missing a word in their vocabulary? In microeconomics you’ll see words like ‘individual’, ‘utility’ and ‘maximize’. But you won’t see the word ‘environment’ anywhere. It seems that in microeconomics, individuals maximize their utility in a void. [1] This lobotomy of the environment has led economists astray. By focusing only on differences between individuals, economists ignore a major part of human behavior. Individual differences are...

from Lars Syll RCTs have delivered intriguing insights into how poor people think and act, but also into how behavioural economists do. For example, when a slew of high-profile RCTs failed to deliver the evidence that researchers expected on the ‘miracle of microfinance’, the researchers paid little heed to the implications of their insignificant and sometimes even negative findings. Instead, they focused attention onto some small (but statistically) significant behavioural changes in...

from Dean Baker Just when many policy types thought that Donald Trump was about to wind down his trade war with China and work out a deal, he announced that he was in no rush to reach an agreement. He said that he might wait until after the election next year, boasting about the “massive” amount of money he was pulling in from his tariffs. In addition to his China attack, Trump also imposed tariffs on steel and aluminum from Argentina and Brazil, complaining that they were manipulating...

from Ted Trainer The 720,000 pound Prize has been awarded for studies carried out in “developing” countries over several decades, applying randomised trials to determine the effects of interventions like school meals, small monetary incentives for school attendance and work motivation (Nobel Media, 2019.) Especially noteworthy are devices for reducing “…purchasing of temptation goods”, (…conceivably also of use in rich countries.) These are identified as “nudges”, only likely to make...

from Lars Syll People are obviously not so impressed by the “queen of the social sciences”. And rightly so. Mainstream economics today is more like an ideological-religious conviction than a realist and relevant social science that people can trust for making their lives or societies better.

Recent research has emphasized the negative effects of finance on macroeconomic performance and even cautioned of a “finance curse.” As one of the main drivers of financial sector growth, mortgages have traditionally been hailed as increasing the number of homeowners in a country. This article uses long-run panel data for seventeen countries between 1920 (1950) and 2013 to show that the effect of the “great mortgaging” on homeownership rates is not universally positive. Increasing...

from Asad Zaman 4. Blinders of Empiricism 5. Fallacies of Frequentism and Subjectivism 6. Forcing People to Believe

download whole issue Making America great againShimshon Bichler and Jonathan Nitzan 2 American trade deficits and the unidirectionality errorKenneth Austin 13 The “Nobel Prize” for Economics 2019… illustrates the nature and inadequacy of conventional economicsTed Trainer 41 Greenwish: the wishful thinking undermining the ambition of sustainable businessDuncan Austin 47 An evolutionary theory of resource distributionBlair Fix 65 The case for the ontology of money as credit: money as bearer...