Real-World Economics Review

from Asad Zaman During the last two semesters, I taught Macroeconomics based on a new approach which re-incorporates the history that Economists forgot (See  Method or Madness?). The central idea of the course is that economic theories cannot be understood outside of their historical context. Conversely, economic history cannot be understood except by studying the economic theories (right or wrong) which were used by contemporaries to shape policy responses to historical events. The...

from Ken Zimmerman Today and for the last 50 years economists have played a large part in increasing both the rate and impacts of poverty. Of the many factors involved in poverty, economists have increased the severity of three of these–unemployment, low wages, and poor health. Dominant economic theory today doesn’t even recognize the event unemployment, so its virtually impossible that these same economists can develop public policies to address the factors that lead to the rise of...

from Jorge Buzaglo Is it fake science? Is it magic realism? Or is it the launch of a serious, rational, open debate beyond establishment politicians, diplomats, and other amateurs? The following is (the internet translation of) an article published in the main Swedish morning newspaper by Mats Persson, economics professor and member of the Royal Academy of Sciences. According to him, it does not have to be painful and difficult to stop the climate catastrophe; on the contrary, it can be...

from Lars Syll A couple of years ago, in a lecture on the US recession, Robert Lucas gave an outline of what the New Classical school of macroeconomics today thinks on the latest downturns in the US economy and its future prospects. Lucas starts by showing that real US GDP has grown at an average yearly rate of 3 per cent since 1870, with one big dip during the Depression of the 1930s and a big – but smaller – dip in the recent recession. After stating his view that the US recession that...

from Ikonoclast . . . my ontology is quite different from the ontology of conventional economics. The ontology of conventional economics is implicitly that of Cartesian dualism; meaning mechanical and deterministic in the realm of res extensa (extended thing(s), the physical) and spiritually animated in the realm of res cogitans (thought or thinking). A consequent product of thinking that ideas are pure and immaterial (in the Platonic sense) is the belief that ideas may refer to directly...

from Dean Baker Donald Trump put manufacturing jobs at the center of his economic platform in 2016. He endlessly harped on the loss of relatively good-paying manufacturing jobs. He blamed this job loss on “terrible” trade agreements and other countries “manipulating” the value of their currency to get an advantage in trade. He put China at the top of the list of bad actors, promising to declare them a currency manipulator on day one of his administration, which would directly lead to...

from Lars Syll If contributions made by statisticians to the understanding of causation are to be taken over with advantage in any specific field of inquiry, then what is crucial is that the right relationship should exist between statistical and subject-matter concerns … Where the ultimate aim of research is not prediction per se but rather causal explanation, an idea of causation that is expressed in terms of predictive power — as, for example, ‘Granger’ causation — is likely to be...

from Ken Zimmerman Most cultures in human history have failed. The consequences of cultural collapse are almost always catastrophic. Culture defines our existence and makes us who we are. Without culture we have no past and no future. As all the products of the people of a society–material and non-material, culture is a complement to society, interacting people living in the same territory who share a common culture. Impossible to have one without the other (unless you want to call...

from Ikonoclast Economics is not a science and it cannot be a science. It is an ideology. The policy applications of an ideology may be “science-informed”, or not, as the cases might be, but the discipline itself, economics of any ideological persuasion, is not a science. Economics properly considered is really political economy. The term “political economy” carries two connotations: one meaning “national economy” and the other literally meaning economics is always political. The attempt...

from Lars Syll In Dani Rodrik’s Economics Rules it is argud that ‘the multiplicity of models is economics’ strength,’ and that a science that has a different model for everything is non-problematic, since economic models are cases that come with explicit user’s guides — teaching notes on how to apply them. That’s because they are transparent about their critical assumptions and behavioral mechanisms. Hmm … That really is at odds with yours truly’s experience from studying and teaching...