Real-World Economics Review

from Lars Syll Truth exists, and so does uncertainty. Uncertainty acknowledges the existence of an underlying truth: you cannot be uncertain of nothing: nothing is the complete absence of anything. You are uncertain of something, and if there is some thing, there must be truth. At the very least, it is that this thing exists. Probability, which is the science of uncertainty, therefore aims at truth. Probability presupposes truth; it is a measure or characterization of truth. Probability...

from Norbert Häring A year ago, I described how the controversial and well-financed ride-hauling platform Uber pays economists with data and money to do Uber-related research. This research invariably leads to favourable results, which can be used to fend off criticism and regulation. One such study has now been ripped apart in the Industrial & Labor Relations Review (ILR), a top journal in labor-economics. Two fearless economists, Janine Berg, senior-economist at the International...

from Dean Baker Austin Frakt had an interesting Upshot piece in the NYT saying that drug spending in the US began to sharply diverge from other countries in the 1990s. This actually is not very clear, since the comparison group dating back to the 1980s is small. I am actually more struck by the explosion in spending in the 1980s, with it nearly doubling as a share of GDP over the course of the decade. Note that drug spending had not been increasing at all as a share of GDP over the prior...

from Lars Syll Although prepared to admit that our empirical research procedures may be based on some very shaky assumptions, [some thoughtful scholars see] no point in saying much about this unless superior alternatives are presented. I understand this concern … Nevertheless, a hard look at the skeletons in the closet is beneficial, especially when there is a propensity to keep the door locked. Nothing is gained by avoiding that which the discipline must face up to sooner or later. If a...

from David Ruccio Teaching critical literacy. That’s what professors do in the classroom. We teach students languages in order to make some sense of the world around them. How to view a film or read a novel. How to think about economics, politics, and culture. How to understand cell biology or the evolution of the universe. And, of course, how to think critically about those languages—both their conditions and their consequences. I’ve been thinking about the task of teaching critical...

Graph 1. Unemployment in the USA, % of the labor force, monthly data. One of the central and most pressing questions of macro-economics is how to estimate and explain unemployment. Thomas Sargent, card-carrying member of the neoclassical cabal and winner of the ‘Sveriges Riksbank Prize In Economic Sciences In Memory Of Alfred Nobel’ (SRPIESIMOAN)  just made a shot at it. A somewhat Marxist shot, as far as I’m concerned. Which, considering the hard core neoclassical nature of the rest of...

from C. P. Chandrasekhar Voices questioning the claim that nations and the majority of their people stand to gain from global trade are growing louder. The one difference now is that the leading protagonist of protectionism is not a developing country, but global hegemon United States under Donald Trump. Free trade benefits big corporations with production facilities abroad, Trump argues, while harming those looking for a decent livelihood working in America. With time Trump has made...

from Lars Syll Mainstream economists often hold the view that Keynes’ criticism of econometrics was the result of a sadly misinformed and misguided person who disliked and did not understand much of it. This is, however, nothing but a gross misapprehension. To be careful and cautious is not the same as to dislike. Keynes did not misunderstand the crucial issues at stake in the development of econometrics. Quite the contrary. He knew them all too well — and was not satisfied with the...