Real-World Economics Review

from Lars Syll In his critique of MMT the last couple of weeks, Krugman has claimed Stephanie Kelton and other MMTers have got things terribly wrong: Anyway, what actually happens at least much of the time – although, crucially, not when we’re at the zero lower bound – is more or less the opposite: political tradeoffs determine taxes and spending, and monetary policy adjusts the interest rate to achieve full employment without inflation. Under those conditions budget deficits do crowd out...

from Dean Baker Matt Bruenig — the president of the progressive, grassroots-funded People’s Policy Project think tank — put forward a creative set of policy proposals last month on child care and family policy under the title of the Family Fun Pack. It prompted a major discussion in progressive circles on child care policy, helped in part by Sen. Elizabeth Warren’s important proposal in this area that was released the next week. In the hope of prompting the same sort of debate on policy...

from Peter Radford Some jumbled thoughts prompted by my recent reading of Robert Skidelsky’s book, “Money and Government” Just how anti-social is economics? I don’t think the question is difficult to answer: economics in its modern mainstream form is, at its heart, designed to undermine democratic government.  It is, therefore, profoundly anti-social. The genesis of this antipathy towards democracy is all the way back in the beginning moments of economics as an intellectual discipline...

from Lars Syll The axioms of revealed preference have been part of the foundations of economics since they were formulated by Paul Samuelson in 1947. These principles allowed economists to continue to use the calculus of utilitarianism even though utilitarianism had ceased to be a fashionable philosophical doctrine. And they enabled economists to give a particular, and special, meaning to the term rationality. In modern economics rationality is equated with consistency. But consistency,...

from David Ruccio They keep promising, ever since the recovery from the Great Recession started more than eight years ago, that the share of national income going to American workers will finally begin to increase. But it’s not.  Sure, profits continue to rise. And so is the stock market. But not what workers receive. In fact, as is clear from the magnified section of the chart above, the labor share has actually been declining in recent quarters—even as the unemployment rate has fallen...

Welcome to our second School of Nursing and Health Professions Facebook live series, Conversations with the Dean. On this opportunity, Dean Baker is with Dr. Andrew Nguyen, Director of the Master of Science in Health Informatics Program.

Welcome to our second School of Nursing and Health Professions Facebook live series, Conversations with the Dean. On this opportunity, Dean Baker is with Dr. Andrew Nguyen, Director of the Master of Science in Health Informatics Program.

from Lars Syll Is there some reason the straightforward framework Krugman laid out is wrong? Yes, as even its creator went on to acknowledge. MMT rejects the IS-LM framework that Krugman uses to demonstrate the conclusion that widening budget deficits put upward pressure on interest rates and crowd out private investment. The model remains the workhorse for many mainstream Keynesians. MMT considers it fundamentally flawed … Keep this in mind: Higher deficits give rise to higher interest...

from David Richardson Krugman has decided to take on the MMT supporters and based his New York opinion piece on criticising the views of influential Stephanie Kelton. In particular it seems Krugman does not like the idea that, as he puts it, “expansionary fiscal policy is automatically expansionary monetary policy”. Earlier I argued (Richardson 2015) that fiscal magnitudes need to be examined in a stock-flow consistent analysis. I pointed out that when government spending increases, that...