Real-World Economics Review

Decoupling is the idea that when societies get richer, additional units of GDP will require less physical resources and will produce less carbon dioxide. This seems true when we look at national rich country production data. But it is not true when we look at rich country consumption data – as we outsourced energy and material intensive parts of producing our consumption goods to developing countries. We really have to blame our consumption pattern… Look here for an article of Mir and...

from David Ruccio It’s clear that, for decades now, American workers have been falling further and further behind. And there’s simply no justification for this sorry state of affairs—nothing that can rationalize or excuse the growing gap between the majority of people who work for a living and the tiny group at the top. But that doesn’t stop mainstream economists from trying. Look, they say, American workers are clearly better off than they were before. Both real weekly earnings (the...

from Julie Nelson Yes, economics has a problem with women. In the news recently we’ve heard about the study of the Economics Job Market Rumors (EJMR) on-line forum. Student researcher Alice H. Wu found that posts about women were far more likely to contain words about their personal and physical issues (including “hot,” “lesbian,” “cute,” and “raped” ) than posts about men, which tended to focus more on academic and professional topics. As a woman who has been in the profession for over...

from Peter Radford Let me be very quick: Geography is not taught [if it is taught at all] as if there are no rivers, mountains, plains, valleys, coasts, seas, or oceans. Cities, towns, villages and the networks that connect them exist in even the most elementary geography lesson. Geographers don’t begin their lessons by ignoring reality. They dive right in and use the real world as the backdrop for teaching the processes and forces that result in what we actually see. So why does...

from Lars Syll Nash equilibrium has since it was introduced back in the 50’s come to be the standard solution concept used by game theorists. The justification for its use has mainly built on dubious and contentious assumptions like ‘common knowledge’ and individuals exclusively identified as instrumentally rational. And as if that wasn’t enough, one actually, to ‘save’ the Holy Equilibrium Grail, has had to further make the ridiculously unreal assumption that those individuals have...

from David Ruccio They keep promising, ever since the recovery from the Great Recession started more than eight years ago, that workers’ wages will finally begin to increase. But they’re not. Sure, profits continue to rise. And so is the stock market. But not wages. And mainstream economists can’t come up with an adequate explanation of why that’s the case. We’ve all heard or read the story. According to mainstream economists, as the unemployment rate falls (the blue line in the chart...

from Peter Radford So we go through it all again. We go through the constant call for payers. The incessant search for reasons; the outpouring of emotion; the interviews; the graphics; the enumeration of mayhem; the grief of families; the interviews with experts; and the silence of the voices lost. There are never, however, efforts to deal with the problem. America is obsessed with guns. It adores them It worships them. It is sick with guns. Blame it on the foolishness of the second...

from Lars Syll Research shows not only that individuals sometimes act differently than standard economic theories predict, but that they do so regularly, systematically, and in ways that can be understood and interpreted through alternative hypotheses, competing with those utilised by orthodox economists. To most market participants — and, indeed, ordinary observers — this does not seem like big news … In fact, this irrationality is no news to the economics profession either. John Maynard...

from David Ruccio The latest Federal Reserve Board’s triennial Survey of Consumer Finances (pdf) is out and the news is not good—at least for the majority of Americans. They’re falling further and further behind those at the top. Sure, on the surface, the results for the latest period of recovery from the Second Great Depression appear to be positive. Between 2013 and 2016, real gross domestic product in the United States grew at an annual rate of 2.2 percent, the civilian unemployment...

from Peter Radford I have tried to use diagrams to explain the vast impact that the never ending search for higher shareholder value has had on the American workplace. Here is my attempt to show what the old workplace looked like in terms of the benefits to a worker … This diagram demonstrates that a traditional job brought with it a package of “compensation” far beyond a basic wage. It also helps us understand why, as the cost of parts of the package rose rapidly — healthcare costs...