Real-World Economics Review

Sources: Credit Suisse (aggregating data from national records) Last updated: May 12, 2016

from Lars Syll Between 1920 and 1950, a debate took place which defined the future of economics in the second half of the 20th century. On one side were John Maynard Keynes and Frank Knight; on the other, Frank Ramsey and Jimmie Savage. Knight and Keynes believed in the ubiquity of “radical uncertainty”. Not only did we not know what was going to happen, we had a very limited ability to even describe the things that might happen. They distinguished risk, which could be described with the...

from Peter Radford Let’s start with a different approach: Reality suggests there are many ways in which resources are allocated within an economy, not just one.  Economics, as it now exists in its mainstream or standard form, has withered to study just one: that which takes place in markets — where markets are strictly defined in such a way as to guarantee outcomes compatible with a certain ideological perspective.  As we have discussed before this trajectory for the discipline was deemed...

from Lars Syll According to the Swedish government official website, “Historically, the Swedish economy suffered from low growth and high inflation,” which the nation overcame with “inventive and courageous reforms” that “succeeded in maintaining control over public spending. “First, in 1996, a ceiling for public spending was introduced. This was accompanied by the addition of the ‘surplus goal’ … for the government budget.” ​Swedish government spending reforms were the consequence of a...

Amartya Sen tells Radio 4’s Today that economic inequality must be tackled GETTY IMAGES CALIFORNIA TODAY

from C.P. Chandrasekhar and Jayati Ghosh When the third estimate of US growth in the last quarter of 2018 was released the euphoria exuded by forecasters of global growth even a few months earlier waned. The annualised quarter on quarter growth rate that had risen to a more than comfortable 4.2 per cent in the second quarter of 2018, had fallen to 3.4 and 2.2 per cent in the subsequent two quarters (Chart 1). The quarterly rates measuring growth relative to the corresponding quarter in...

from Lars Syll The ad nauseam repeated claim that our public debt is excessive and that we have to balance the public budget is nothing but absolute nonsense. The harder politicians — usually on the advice of mainstream establishment economists — try to achieve balanced budgets for the public sector, the less likely they are to succeed in their endeavour. And the more the citizens have to pay for the concomitant austerity policies these wrong-headed politicians and economists recommend as...

from Blair Fix, Shimshon Bichler and Jonathan Nitzan Nowadays, it is commonplace to claim that the economy overuses our limited material and energy resources (Figure 1) and that this overuse threatens both human society and the biosphere. Other than ant-science cranks, the only ones who seem to deny this claim are mainstream economists (Fullbrook 2019). In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological...

from Lars Syll Markets are never just given. Neither God nor nature hands us a worked-out set of rules determining the way property relations are defined, contracts are enforced, or macroeconomic policy is implemented. These matters are determined by policy choices. The elites have written these rules to redistribute income upward. Needless to say, they are not eager to have the rules rewritten — which means they also have no interest in even having them discussed. But for progressive...

What’s an economic model? A little semantic intro (don’t worry, we will get to Keynes in a moment) I work together with biologists, agronomists and even test animal specialists on a regular basis. These people use words like ‘conceptual models’ or ‘even ‘animal model’ all the time. Check this:  ‘Mouse Models of Diabetic Nephropathy‘. Yes, a live animal is considered to be a scientific model. I had to get used to this as this use of the word ‘model’ transcended the boundaries used in the...