Real-World Economics Review

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...

from Michael Joffe If you are interested in “creating greater economic equality, reducing the power of corporations” and so on, you have to understand how economic power works. I am using “power” here not as an ideological category, but in the sense of causation, the degree of one’s ability to bring something about. It is obvious that in the economy, some people and some organisations (e.g. firms) have more influence than others. What they want to happen is more likely to happen. This is...

Going Digital: What is the Future of Business and Labour? Discussion Forum extended to December 16th by Malgorzata Dereniowska We are delighted to inform that the Discussion Forum for the WEA Conference Going Digital: What is the Future of Business and Labour? has been extended to 16th December, 2019.  Join us to discuss recent contributions to the understanding of digital economy and its consequences for business trends and labour challenges! All papers are available HERE. You...

from Lars Syll Uber has conducted a study of internal pay differentials between men and women, which they describe as “gender blind” … The study found a 7% pay gap in favor of men. They present their findings as proof that there are issues unrelated to gender that impact driver pay. They quantify the reasons for the gap as follows: Where: 20% is due to where people choose to drive (routes/neighborhoods). Experience: 30% is due to experience … Speed: 50% was due to speed, they claim that...

from Lars Syll Axioms of ‘internal consistency’ of choice, such as the weak and the strong axioms of revealed preference … are often used in decision theory, micro-economics, game theory, social choice theory, and in related disciplines … Can a set of choices really be seen as consistent or inconsistent on purely internal grounds, without bringing in something external to choice, such as the underlying objectives or values that are pursued or acknowledged by choice? … The presumption of...

from Asad Zaman In this sequence of posts, I will go through a recent paper of mine, which explains that BOTH of the currently dominant approaches to probability are deeply, fundamentally, and irreparably flawed. The reason for this is that probability is a real-world phenomenon which is unobservable and unmeasurable. The early 20th Century foundations for probability were built at a time when logical positivism was dominant as the philosophy of science. Furthermore, despite its...

from Dean Baker Economists are continually developing new statistical techniques, at least some of which are useful for analyzing data in ways that allow us to learn new things about the world. While developing these new techniques can often be complicated, there are many simple things about the world that economists tend to overlook. The most important example here is the housing bubble in the last decade. It didn’t require any complicated statistical techniques to recognize that house...