Real-World Economics Review

from Dean Baker Brazil has gotten a huge amount of bad press with the fires in the Amazon with the emphasis on the harm its development policies are doing to efforts to limit global warming. While the policies of Brazil’s right-wing president, Jair Bolsonaro, are disastrous, there is an important part of the story that is being left out of most discussions. The reason that we are worried about global warming is because rich countries, most importantly the United States, have been spewing...

Mr Eddie Dean Baker

Mr Eddie Dean Baker

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from Lars Syll There seems to be a pervasive human aversion to uncertainty, and one way to reduce feelings of uncertainty is to invest faith in deduction as a sufficient guide to truth. Unfortunately, such faith is as logically unjustified as any religious creed, since a deduction produces certainty about the real world only when its assumptions about the real world are certain … Unfortunately, assumption uncertainty reduces the status of deductions and statistical computations to...

from Dean Baker I know that reality often has little place in our political debates, but is there any way we can the New York Times and other news outlets to stop saying that the U.S. economy is the world’s largest? It happens not to be true. According to the I.M.F., using purchasing power parity measures, which most economists view as the best measure, China passed the United States in 2015 and is now more than 25 percent larger. Maybe reporters and editors get a kick out of saying that...

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from Lars Syll The marginal productivity theory of income distribution was born a little over a century ago. Its principle creator, John Bates Clark, was explicit that his theory was about ideology and not science. Clark wanted show that in capitalist societies, everyone got what they produced, and hence all was fair: “It is the purpose of this work to show that the distribution of the income of society is controlled by a natural law, and that this law, if it worked without friction,...

from Dean Baker The New York Times ran an article last week with a headline saying that the 2020 Democratic presidential contenders faced a serious problem: “how to be tougher on trade than Trump.” Serious readers might have struggled with the idea of getting “tough on trade.” After all, trade is a tool, like a screwdriver. Is it possible to get tough on a screwdriver? While the Times’s headline may be especially egregious, it is characteristic of trade coverage which takes an almost...