Real-World Economics Review

from Lars Syll Paul Krugman is back again telling usthat he doesn’t really want to spend time on arguing about MMT — and then goes on complaining that well-known MMTer Stephanie Kelton says things “obviously indefensible.” What has especially irritated the self-proclaimed ‘conventional’ Keynesian is that Kelton “seems to claim that expansionary fiscal policy … will lead to lower, not higher interest rates.” Now, the logic behind Krugman’s “conventional Keynesian”...

In fact, externalities are “external” only in the language of conventional economics and conventional politics, for those who benefit from them.  They are external to the system of economic power and its intellectual representations, to the hierarchy that produces the dominant discourse and practices. They are gains (“positive externalities”) for hegemonic classes, groups, and countries, and often a condition of their prosperity, and are externalized by power practices and conventional...

from Lars Syll Almost a hundred years after John Maynard Keynes wrote his seminal A Treatise on Probability (1921), it is still very difficult to find statistics books that seriously try to incorporate his far-reaching and incisive analysis of induction and evidential weight. The standard view in statistics — and the axiomatic probability theory underlying it — is to a large extent based on the rather simplistic idea that more is better. But as Keynes argues — more of the same is not what...

from David Ruccio Mainstream economists continue to insist that workers benefit from economic growth, because wages rise with productivity. Here’s the argument as explained by Donald J. Boudreaux and Liya Palagashvili: Firms cannot afford a misalignment of their workers’ pay and productivity increases—the employees will move to other firms eager to hire these now more productive workers. Higher economy-wide productivity, after all, means that workers add more to the bottom lines of...

from Dean Baker We know the way Republicans win elections these days. They call their opponents offensive names. This is probably a good political tactic. After all, when your party’s agenda is about redistributing as much money as possible to the very richest people in the country, you are not likely to win much support based on your policies. Therefore, we get name-calling. The latest bad word in the Republicans’ schoolyard taunts is “socialism.” President Trump and his team have...

from Lars Syll Krugman complains that Lerner was too “cavalier” in his discussion of monetary policy since he called for the interest rate to be set at the level that produces “the most desirable level of investment” without saying exactly what that rate should be. It’s an odd critique, since Krugman himself subscribes to the idea that monetary policy should target an invisible “neutral rate,” a so-called r-star that exists when the economy is neither depressed nor overheating. For what...

from Dean Baker An average family participating in the federal Temporary Assistance for Needy Families (TANF) program costs taxpayers $400 a month. We pay $126 a month to the typical beneficiary of food stamps—the Supplemental Nutrition Assistance Program (SNAP). By contrast, Susan Desmond-Hellmann, the CEO of the Bill & Melinda Gates Foundation, costs us $44,200 a month. This figure may catch some readers by surprise, because they probably don’t think of themselves as paying the...

from Maria Alejandra Madi In the introductory note to the book Trade and Market, Polanyi invites the readers to re-examine the notion of the “economy” since many people think that the only way of organizing the livelihoods of men is the market economy. In his own words: ‘What is to be done, though, when it appears that some economies have operated on altogether different principles, showing a widespread use of money, and far-flung trading activities, yet no evidence of markets or gain...

from Lars Syll The master-economist must possess a rare combination of gifts …​ He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must be entirely outside his regard. He...

from Lars Syll Machine-learning techniques used by thousands of scientists to analyse data are producing results that are misleading and often completely wrong. Dr Genevera Allen from Rice University in Houston said that the increased use of such systems was contributing to a “crisis in science” … The data sets are very large and expensive. But, according to Dr Allen, the answers they come up with are likely to be inaccurate or wrong because the software is identifying patterns that exist...