Real-World Economics Review

Source On 24 December 1717, three hundred years ago today, a northwesterly storm hit the coasts of North Europe. About 14.000 died, over 2.000 of these in the Dutch province of Groningen but only 150 in neighboring Friesland. Why this difference? We do know the answer: Friesland had better coastal defences. Frisian ‘dijken’ were better designed, higher and, especially, better maintained than in Groningen. As Frisian public governance of these public goods was better. In 1716, the...

Previous posts in this series on central banking: ideas of Willem Buiter, Richard Werner, Thomas Mayer, excerpts from a recent paper by Mike Konczal and Josh Mason, Edward Harris and ideas from the German Handelsblatt shadow council. Today: the European Commission. Why? A lot of people want to change (European) monetary policy and central banking. This includes the members of the European Commission. They want 2 things: A larger Eurozone Some kind of ‘transfer’ union which somehow...

from Lars Syll A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative to the failing mainstream theory, I shouldn’t expect people to pay attention. This is, however,​ to totally and utterly misunderstand the role of philosophy and methodology of economics! As John Locke wrote in An Essay Concerning Human Understanding: The Commonwealth of Learning is not at this time without Master-Builders, whose mighty Designs, in advancing the...

real-world economics reviewIssue no. 82  download whole issue China’s drivers and planetary ecological collapse          2Richard Smith          download pdf The Saudi Palace coup, the oil market, China and the United States          29Ali Kadri          download pdf Teaching relevant microeconomics after the global financial crisis          47Michel S. Zouboulakis          download pdf On microfoundations of macroeconomics          60Prabhath Jayasingh          download pdf The trouble...

from Lars Syll Keynes’ General Theory is both a critique and a replacement of classical macroeconomic theory. Both are necessary for an intellectual revolution. On one hand, it is a critique and demolition of classical macroeconomics. On the other hand, it offers a novel alternative theory of the workings of a modern industrial capitalist economy … Keynes’ argument involves sweeping away old theory and introducing new theory. First, Keynes rejected the loanable funds theory of interest...

from Maria Alejandra Madi Current food challenges involve issues ranging from land and food access to commodity price volatility, besides national and international regulation. Although the scope and intensity of these challenges vary according to the different economic and social situations of countries, the debate has been global. Today, once again, these issues arise deep concerns on behalf of the 2017 WTO ministerial conference  that has just been closed, in Buenos Aires, Argentina....

from Lars Syll The really interesting questions about the Efficient Markets Hypothesis — at least when discussed by mainstream economists — usually drown in “the model is the message” pseudoscientific mumbo-jumbo of four-factor models with two mispricing factors being better-performing than three-factor models, blah, blah, blah … Diane Coyle has a much more accurate view of what it’s all about: I would defend using the assumption of rational choice as long as one realises that it is not a...

from Dean Baker There has been much greater concern about the danger of asset bubbles ever since the collapse of the housing bubble sank the economy. While it is good that people in policy positions now recognize that bubbles can pose a real danger, it is unfortunate that there still seems very little understanding of the nature of the problem. First, an economy-threatening bubble does not just sneak up on us. Often the discussion of bubbles implies that we need some complex measuring...