Real-World Economics Review

In 1898 Thorstein Veblen asked ‘Why isn’t economics an evolutionary science?’. At the ASSA 2018 conference Avsar, Duroy and Scorsone mused about this. Below, the abstracts of their papers. Here, Mark Thomas about this. Avsar’s article is, with its link to neurology, truly Veblenian in spirit. An interesting question is: it seems that the behavior of hunter-gatherers, who have little property as they can’t carry it with them, have behavior that is more economic rational than the behavior...

from Lars Syll It has been more than eight years since many of the United States’ cashiers, dishwashers, janitors, lifeguards, baggage handlers, baristas, manicurists, retail employees, housekeepers, construction laborers, home health aides, security guards, and other minimum-wage workers last got a raise. The federal minimum wage now stands at just $7.25. In real terms, these workers’ earnings have declined by nearly 13 percent since the last hike, in 2009—and have fallen by over...

Some (institutional) stuff from the ASSA conference, the first one with nice definitions of trust and control (but there might be more empirical stuff). The second one on the role of the ideology of judges in economic cases when there are no clear legal rules. More tomorrow. Claudius Gräbner, Johannes Kepler University-Linz Wolfram Elsner. To trust or to control: Informal value transfer systems and computational analysis in institutional economics Here, the PPT This paper illustrates the...

A variable like GDP (Gross domestic Product) receives a lot of flack from economists. Much of this is misguided. The economists should not look at GDP but at the national accounts (of which GDP is one, but only one, variable). And they should not criticize the accounts but praise them. A 2016 ECB working paper about the flagship ECB ‘EAGLE-FLI’ neoclassical macro-model (Bokan e.a. (2016)) shows why: neoclassical have no idea about how and what to measure. National account statisticians...

from Lars Syll Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. To pick up a copy of The American Economic Review or The Economic Journal these days is to wonder whether one has landed on a strange planet in...

Volume 7, Issue No. 6  Download the issue as a PDF In this issueA Philosophical Framework for Rethinking Theoretical Economics and Philosophy of EconomicsGustavo Marqués Interview on The Fascist Nature of NeoliberalismFlavia Di Mario Doomed to RepeatPeter Radford The Invisible Hand in Context Global Rentier CapitalismDavid F Ruccio Perfect Competition and CounterfactualsStuart Birks Keynes was right about Quantitative EasingMerijn Knibbe How UBER Money Dominates and Distorts Economic...

from C.P. Chandrasekhar Bitcoin has left the world of finance gasping. Though the total market value of all of that cryptocurrency in circulation is only a fraction of the value of the world’s financial assets, the rapid rise in the value of the currency has made it the most wanted of those assets. On January 1, 2017, the currency was trading at between $972 to $990 a unit. By December 7 that range had risen to $14,063 to $17,363. According to a calculation by Reuters, an investment of...

from Stuart Birks and new issue of WEA Commentaries 7(6) From: P.17 of Birks, S. (2015). Rethinking economics: from analogies to the real world. Singapore: Springer. Market failure is defined in comparison to the ideal of perfect competition. An alternative is needed for comparison, and value judgments must be applied to justify one situation being considered superior to another. This raises two questions: (i) Is perfect competition the right ‘ideal’? (ii) If it is, then given that the...

from Lars Syll The unsellability of DSGE models — private-sector firms do not pay lots of money to use DSGE models — is one strong argument against DSGE. But it is not the most damning critique of it. To me the most damning critiques that can be levelled against DSGE models are the following two: DSGE models are unable to explain involuntary unemployment In the basic DSGE models the labour market is always cleared – responding to a changing interest rate, expected lifetime incomes, or...

from Dean Baker With the Republicans having just passed a $1.5 trillion tax cut, the bulk of which goes to the richest one percent, it was inevitable that the generational warriors would come out of the woodwork and resume the attack on Social Security and Medicare. Generational warriors try to divert attention away from how our economy has redistributed income upwards over the last four decades, and convince a large portion of today’s workers that their real problems stem from their...