Real-World Economics Review

from Peter Radford Well done AJR.  A prize deserved.  And remarkably little grumbling.  What’s wrong with that? In other news, my wife is deep into creating an artificial intelligence application.  One of the great challenges of getting AI to be useful is something called ‘prompt engineering’.   What have these two snippets of news have in common? The great thing about our better economists — the triumvirate we know affectionately as AJR being an example — is that they all seem to...

from Lars Syll Today’s model of delegation has much to recommend it. But it should not be cloaked in euphemism. It is an abrogation of democratic sovereignty for pragmatic reasons, conditioned on the one hand by deeply entrenched and unflattering assumptions about electoral politics and, on the other, on an unquestioning acceptance of the private organization of credit markets and their lack of confidence in democratic control of economic policy. This may be an abrogation that we are...

from Steven Klees I am quite sure that this year’s three Nobel Laureates in economics — Daron Acemoglu, Simon Johnson and James Robinson – are very competent new institutionalist economists.  Lars Syll offers a thoughtful critique of their substantive arguments, but he misses the main point for me.  New institutional economics, by and large, is nonsense.  We used to have many sensible institutional economists who offered a qualitative, sociological-type analysis of the role of economic...

from Maria Alejandra and WEA Pedagogy Blog Jean-Baptiste Fressoz, professor at the School of Advanced Studies in Social Sciences in Paris, challenges our understanding of the current energy transition process. In his book “The Shock of the Anthropocene: The Earth, History, and Us,” co-authored with Christophe Bonneuil, Fressoz offers a critical history of the Anthropocene, the current geological epoch defined by significant human impact on Earth’s geology and ecosystems. The authors...

from C. P. Chandrasekhar and Jayati Ghosh The latest World Employment and Social Outlook Report (update for September 2024) from the International Labour Organisation highlights some disturbing trends. Importantly, it identifies a significant decline and then stagnation in the share of labour income in GDP, for the world as a whole, in the past few years. This comes as part of a persistent trend of decline in labour income shares, other than spikes in “crisis years” like 2008-10 and...

from Asad Zaman and WEA Pedagogy Blog 1. The Methodenstreit: How Economics Forgot History In the late 19th century, economics experienced a deep philosophical debate over methodology, known as the Methodenstreit, or Battle of Methodologies. Geoffrey Hodgson, in his book How Economics Forgot History, emphasizes the critical nature of this debate. The essential conflict was between those who believed that historical context and specificity are crucial for understanding economic phenomena,...

from Maria Alejandra and WEA Pedagogy Blog Setting the scene Economists and policymakers continue to dominate headlines with the conceptualization of “sustainability,” “sustainable investing,” and “sustainable finance,” along with their various worldwide geographical manifestations. The prevailing scenario, which is characterized by conflict, economic instability, and political disputes, is not favorable to incorporating sustainability into investment decisions. However, pressing...

In Europe (the Euro area, to be precise), both unemployment and inflation are down, according to Eurostat,. Which, again, shows that the Phillips curve, a crucial concept behind neoclassical macroeconomic thinking that assumes a more or less stable negative relation between unemployment and inflation (high unemployment will bring inflation down), is not the place to go when predicting or analysing inflation. Sometimes, this relation is specified as a relation between wage increases and...

from Lars Syll The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 is awarded to Daron Acemoglu, Simon Johnson and James Robinson “for studies of how institutions are formed and affect prosperity.”  Daron Acemoglu and James Robinson’s work, particularly in Why Nations Fail (2012), is widely recognized within new institutional economics for its argument that inclusive political and economic institutions are key determinants of long-run prosperity and...