Real-World Economics Review

from Dean Baker I have a birthday coming up, so it seems a good time to assess progress, or lack thereof, on the various issues that I have worked on over the decades. There is some big progress in at least a couple of areas, but not much to boast about in the others. I’ll start with the success stories. The Benefits of a Tight Labor Market The big one, where I feel we really have made huge progress, is the battle for full employment. It might seem like ancient history, but a quarter...

from Steve Keen and RWER issue 104 The 6th edition of Mankiw’s Macroeconomics textbook (there’s now a 9th edition, but I’m not about to waste money buying a dead parrot) passes on the Money Multiplier Fairy Story by telling students to consider “an imaginary economy” in which the money supply is initially $100 in cash. Then, the population deposits all that cash in “First National Bank”. The money supply now consists of $100 in bank deposits, while all the cash is in the vault of First...

from Lars Syll Yours truly’s latest book has made it onto Amazon’s lists of best sellers in economics and econometrics. I am — of course — truly awed, honoured and delighted.

from John Komlos and RWER issue 104 . . . for the first 97 percent of our species’ history, humans did not compete for status by amassing economic and political power and thus such inequality cannot be viewed as socially necessary. Such competition was proscribed because it would be destructive of these societies’ collective well-being. Instead, their rules of the game compelled them to compete in other manners beneficial to the community, such as by being good warriors, good hunters and...

from Lars Syll According to Keynes, financial crises are a recurring feature of our economy and are linked to its fundamental financial instability: It is of the nature of organised investment markets, under the influence of purchasers largely ignorant of what they are buying and of speculators who are more concerned with forecasting the next shift of market sentiment than with a reasonable estimate of the future yield of capital-assets, that, when disillusion falls upon an...

from http://www.paecon.net/PAEReview/issue104/Fichtner_Morgan104.pdf The Institutional Investor publishes an annual league table of top hedge fund managers earnings. The latest data at time of interview was from March 2022 and reported that “Altogether, the 25 highest-earning hedge fund managers earned a combined $26.64 billion last year, the second-highest amount in the history of the Rich List… Over the past two years, the members of the Rich List’s First Team have made more than $58...

from Dean Baker The media are really going overboard in telling us the days of the free market are over with Biden’s new economic policies. President Biden has quite explicitly implemented policies intended to reshape the direction of the economy, pushing clean energy and more domestic production of advanced semiconductors and other products. He also has reinvigorated anti-trust policy, which was largely shelved by his predecessors. But the idea that the policies of the last four decades...

Please click here to support this journal and the WEA RWER Issue no. 104download whole issue The Dead Parrot of Mainstream EconomicsSteve Keen 2 Why Hedge Funds Matter: An interview with Jan FichtnerJan Fichtner and Jamie Morgan 17 ETF shares as shadow moneyAlexandru-Stefan Goghie 49 The Dollar Centric Financial System and the Conflict in UkraineMarcello Spanò 67 A Note on Teaching Economic InequalityJunaid B. Jahangir 75 Book Review: Muhammad Ali Nasir, Off the Target: The Stagnating...

from Jayati Ghosh Abstract The title of this article is a riff off a publication of G. C. Harcourt’s 1974 piece, ‘The social consequences of inflation’. He wrote this in a period of the global economy that bears some strong similarities to our own contemporary phase when inflation is suddenly back in the global headlines. There is at least one significant difference: at that time, Harcourt highlighted inflation as the outcome of an excess of total demand in real terms over available...

from Lars Syll [Jevons] is a man of some ability, but he seems to me to have a mania for encumbering questions with useless complications, and with a notation implying the existence of greater precision in the data than the questions admit of.  John Stuart Mill Fixation on constructing models — “implying the existence of greater precision in the data than the questions admit of” — showing the certainty of logical entailment — realiter simply collapsing the necessary ontological gap...