Real-World Economics Review

from Maria Alejandra Madi                   GOING DIGITAL conference site The advent of digital economy creates new challenges for businesses, workers, and policymakers. Moreover, business prospects for artificial intelligence and machine learning are evolving quickly. These technologies have transforming implications for all industries, businesses of all sizes, and societies. The digitalization of economic activities calls for a deep reflection on the forces that will shape the future of...

from Lars Syll Hotelling’s model, then, is false in all relevant senses … And yet, it is considered explanatory. Moreover, and perhaps more importantly, it feels explanatory. If we have not thought much about Hotelling’s kind of cases, it seems that we have genuinely learned something. We begin to see Hotelling situations all over the place. Why do electronics shops in London concentrate in Tottenham Court Road and music shops in Denmark Street? Why do art galleries in Paris cluster...

from Ikonoclast “If we choose to continue to produce with the techniques we have developed, then our society and earth will disappear faster than if we introduce small-scale production, resource-saving technologies and limited consumption.” – Lars Syll. Correct! The hubris, arrogance and blindness of the neoclassical or neoliberal economic view is well exemplified by the anecdote about the member of the Nobel prize committee. The blindness of the modern conventional economic view is...

from Lars Syll Analogue-economy models may picture Galilean thought experiments or they may describe credible worlds. In either case we have a problem in taking lessons from the model to the world. The problem is the venerable one of unrealistic assumptions, exacerbated in economics by the fact that the paucity of economic principles with serious empirical content makes it difficult to do without detailed structural assumptions. But the worry is not just that the assumptions are...

from Joachim Spangenberg and Lia Polotzek  The discipline of economics has played and continues to play a major role in leading humankind towards the ultimate calamity. It is driven by world views and their ontologies, which are more based on Newton’s mechanics than rooted in modern science’s understanding of systems complexity (Spangenberg, 2016). To make good for its past harmful role, and to provide guidance for economic and other policies for a sustainable 21st century, economics must...

from Dean Baker It is impressive to see many of the leading Democratic candidates put forward bold progressive proposals. Unfortunately, in the case of prescription drugs, their imagination has been notably weak. While there have been proposals for lowering drug prices, none of them have been willing to attack the fundamental problem: government makes prices high by granting patent monopolies. This is a simple but incredibly important point that is often lost in the debate. We frequently...

from Ken Zimmerman A few basics for economists on money. Money is not a thing or even a physical object (although money may use physical objects). Money is a cultural process (institution) created to credit and clear, satisfy and impose obligations, duties, and responsibilities. Historians often misunderstand money because they focused too much on what it leaves behind, coins, contracts, pay and tax records, etc., rather than the networks created via money and their working out over time....

from guydauncey Complete agreement! Ecological literacy needs to be as standard as literacy and numeracy. Ecology 101 needs to be mandatory in every school and university. Colleges should not allow entrance unless students have passed it. Voters should not vote for candidates and corporations should not hire CEOs who have not done likewise. To set the change in motion we just need some leading universities to make a joint announcement that starting in two years’ time they will not accept...

from Ikonoclast The elites of course are in favor of the status quo. They are made immensely richer than average and most of this oligarchy (being rich, white men over 60) expect to be dead or still wealth-insulated when the unsustainable system begin collapsing. They are probably fairly evenly divided between those who don’t know and those who don’t care that a collapse is inevitable with business as usual. The masses are largely too poorly educated to know what is coming. Public...

from Lars Syll In a post up here earlier this week yours truly questioned the scientific value of Chicago economics. I took as an example the SMD theorem, that has unequivocally showed that there does not exist any condition by which assumptions on individuals would guarantee neither stability nor uniqueness of a general equilibrium solution — and that it, therefore, is intellectually dishonest to just go on pretending that it is still acceptable to model real-world economies building on...