Real-World Economics Review

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...

Related website: https://www.middlebury.edu/institute/events/budget-horror-stories-health-care-and-future-national-deficit-dr-dean-baker-02-27-2019 Title: Budget Horror Stories: Health Care and the Future of the National Deficit Speaker: Dr. Dean Baker, Senior Economist & Co-Founder, Center for Economic and Policy Research Description: We continually hear horror stories about future budget deficits in the United States. What we don't hear, overlooked by press and policy makers alike,...

Related website: https://www.middlebury.edu/institute/events/budget-horror-stories-health-care-and-future-national-deficit-dr-dean-baker-02-27-2019 Title: Budget Horror Stories: Health Care and the Future of the National Deficit Speaker: Dr. Dean Baker, Senior Economist & Co-Founder, Center for Economic and Policy Research Description: We continually hear horror stories about future budget deficits in the United States. What we don't hear, overlooked by press and policy makers...

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...