Real-World Economics Review

WEA Commentaries Co-editor required Are you an early- or mid-career economist? Do you have, or wish to develop, links with pluralist economists from around the world? Are you self-motivated, capable of showing initiative, and interested in a wide range of perspectives? If so, we would like to hear from you. Please email [email protected]

from Dean Baker In the United States, proposals for a Green New Deal have been getting considerable attention in recent months as activists have pressed both members of Congress and Democratic presidential candidates to support aggressive measures to combat global warming. There clearly is much more that we can and must do in the immediate future to prevent enormous damage to the planet. However, major initiatives in the United States to combat global warming will almost certainly require...

from Lars Syll The quasi-peaceable gentleman of leisure, then, not only consumes of the staff of life beyond the minimum required for subsistence and physical efficiency, but his consumption also undergoes a specialisation as regards the quality of the goods consumed. He consumes freely and of the best, in food, drink, narcotics, shelter, services, ornaments, apparel, weapons and accoutrements, amusements, amulets, and idols or divinities. Thorstein Veblen

from Dean Baker Most of the leading Democratic presidential contenders have put forward a plan to reduce drug prices. But for some reason, none of them have embraced the simple idea of not making drugs expensive in the first place. Specifically, none of the contenders have proposed moving away from the current system of financing the research and development of new drugs through government-granted patent monopolies. The point is a simple one that should be obvious to people in policy...

from Lars Syll What does concern me about my discipline … is that its current core — by which I mainly mean the so-called dynamic stochastic general equilibrium approach — has become so mesmerized with its own internal logic that it has begun to confuse the precision it has achieved about its own world with the precision that it has about the real one … While it often makes sense to assume rational expectations for a limited application to isolate a particular mechanism that is distinct...

from Asad Zaman The following is a slightly revised excerpt of Section 1.2 from my paper on “Empirical Evidence Against Utility Theory“ – Game theorists rule out Humans with hearts by assumption. The excerpt provides some empirical evidence (not needed by anyone except economists) that human actually do have hearts, and this actually affects their behavior! surprise, surprise! The “Goeree-Holt Humans with Hearts” (GHHwH) Game: Conventional game theory operates under the assumption that...

from Lars Syll 1. Thou shalt use common sense and economic theory. 2. Thou shalt ask the right question. 3. Thou shalt know the context. 4. Thou shalt inspect the data. 5. Thou shalt not worship complexity. 6. Thou shalt look long and hard at thy results. 7. Thou shalt beware the costs of data mining. 8. Thou shalt be willing to compromise. 9. Thou shalt not confuse statistical significance with substance. 10. Thou shalt confess in the presence of sensitivity.

from Ken Zimmerman Greed is a personality disorder. While it is sometimes correct that without greed humans would still be living in caves, it is also correct that left unchecked, the insatiable desire for more and better material things can be destructive. These are the warning signs of uncontrolled greed. The first sign of the greed syndrome is overly self-centered behavior. Greedy people are always saying “me, me, me” with very little regard for the needs and feelings of others. Envy...

from Lars Syll I believe that as an economic theorist, I have very little to say about the real world and that there are very few models in economic theory that can be used to provide serious advice. However, economic theory has real effects. I cannot ignore the fact that our work as teachers and researchers influences students’ minds and does so in a way with which I am not comfortable. Can we find a way to be relevant without being charlatans? As economic theorists, we organize our...

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