Real-World Economics Review

from Lars Syll Unfortunately, nothing is more dangerous than dogmas donned with scientific feathers. The current crisis might offer an excellent occasion for a paradigm change, previously called for by prominent economists like John Maynard Keynes, Alan Kirman and Steve Keen. They have forcefully highlighted the shortcomings and contradictions of the classical economictheory, but progress has been slow. The task looks so formidable that some economists argue that it is better to stick...

from David Ruccio American capitalists love immigration. So, as it turns out, should American workers. The last time I addressed the issue of immigration, I made the argument that recent waves of immigration have benefited a tiny group of employers at the top, who in turn have managed to shift the costs—through wage reductions and higher taxes—onto workers (both recent immigrants and native-born workers). In fact, just a couple of weeks ago, American corporate titans used a collegial...

from June Sekera In standard economics scripting, government is most often cast in the role of bumbler or villain. Whether as market fixer, intervenor, enforcer or redistributor, its actions are portrayed as resulting in “distortion,” “inefficiency,” “deadweight loss,” and worse. Three quarters of a century ago, Paul Studenski rejected such casting. He found government to be a vital figure whose role was not simply to intervene or redistribute. Government was a producer. A professor of...

from Lars Syll Professors may find themselves ill-prepared for the macro classroom. To become academics they had to answer erudite questions posed by more senior members of the discipline. To become good teachers of introductory macro, they have to give clear answers to muddled students. That requires an intuitive feel for the subject. It is not enough to crank through the equations. Indeed, Mr Rowe attributes part of his success as a teacher to his shortcomings as a mathematician. He...

Source: http://politicsthatwork.com/graphs/share-of-wealth   Source: http://gabriel-zucman.eu/uswealth/

from Lars Syll In Easterlin’s (1974) seminal paper, he finds that within any one country, in cross sectional studies, there was a strong correlation between income and happiness. One would easily conclude that money can buy happiness. However, looking at a cross section of countries, one comes to a different conclusion … For 10 of the 14 countries surveyed, the happiness ranking is about the same, even though the income per capita changes by a factor of 30 from $140 to $2,000 … The...

from C. P. Chandrasekhar and Jayati Ghosh Recent data from the Annual Survey of Industries, covering up to 2015-16, provide some interesting insights into the changing nature of industrial employment in India. In the decade up to 2015-16, there was a significant increase in the number of factory workers, by around 40 per cent. This expansion can be dated from around 2005-06 onwards and especially up to 2011-12. This is to be expected, given that that was the period of India’s economic...

from Lars Syll Back in 1992, New Jersey raised the minimum wage by 18 per cent while its neighbour state, Pennsylvania, left its minimum wage unchanged. Unemployment in New Jersey should — according to mainstream economics textbooks — have increased relative to Pennsylvania. However, when economists David Card and Alan Krueger gathered information on fast food restaurants in the two states, it turned out that unemployment had actually decreased in New Jersey relative to that in...

from David Ruccio Marketplace’s Kai Ryssdal is no class warrior. Far from it. But after Donald Trump’s chief economic adviser Larry Kudlow spent considerable time during a recent interview celebrating the latest statistics about economic growth, jobs, and wages and minimizing the effects of the trade tariffs, Ryssdal was encouraged to challenge him:  Ryssdal: Look, sir, really with all respect that’s easy for you to say sitting here on the second floor of the West Wing of the White...