Real-World Economics Review

from  Merijn Knibbe “Everyone can create money; the problem is to get it accepted.“ Hyman Minsky Summary. Central banks the world over publish sophisticated Flow of Funds data which shows who and how and, to an extent, why all kinds of money are created and used and if stocks and flows of debt and money are becoming a threat to stability. Institutional analysis of these data, which looks at different kinds of credit as well as at different kinds of money and using a grid which enables the...

from David Ruccio John Hatgioannides, Marika Karanassou, and Hector Sala are absolutely right: mainstream macroeconomists and policymakers never venture beyond the “holy trinity” of economic growth, inflation, and unemployment.* Everything else, including the distribution of income and wealth, is relegated to the fringes.  This problem, while always serious, has been magnified in recent decades as inequality has grown to obscene levels, particularly in the United States. The labor share...

from Lars Syll Stage 0. Late 1960’s. The Phelps volume, and Milton Friedman’s paper (pdf), both thinking about the microfoundations of the Phillips Curve, the difference between actual and expected inflation, and the role of monetary policy. This was the ancestral homeland of both New Keynesian and New Classical macroeconomics, which could not be distinguished at this stage … Stage 1. Mid 1970’s. Now we see the difference. A distinct New Keynesian approach emerges. New Keynesians assume...

from David Ruccio The new jobs report is out and, once again, little has changed—including wage growth (the blue line in the chart above), which for production and nonsupervisory workers was only 2.3 percent.  That may not be good for workers but their employers and stock-market investors couldn’t be happier. The Dow Jones Industrial Average (the red line in the chart above) continues to soar, on the expectation of higher future profits. Just in the first couple of hours of trading, the...

1. Economic Philosophy: complexities in economics, 2nd October – 30th November 2017 2. Monetary Policy After The Global Crisis:How Important Are Economic (Divisia) Monetary Aggregates for Economic Policy? 15th January – 15th February 2018 Deadline for submissions: 15th DecemberOPEN CALL FOR PAPERS

from Lars Syll We must learn WHY the argument for revealed preference, which deceived Samuelson, is wrong. As per standard positivist ideas, preferences are internal to the heart and unobservable; hence they cannot be used in scientific theories. So Samuelson came up with the idea of using the observable Choices – unobservable preferences are revealed by observable choices … Yet the basic argument is wrong; one cannot eliminate the unobservable preference from economic theories....

The August issue of WEA Commentaries is now available at: https://www.worldeconomicsassociation.org/files/2017/09/Issue7-4.pdf Content is as follows: Eveybody can create money Merijn Knibbe 2 html Adam Smith and Altruism 5   Time for critics of economics critics to move on David Orrell 6 html Two forthcoming WEA conferences 7   Going rogue: Economic practice and hitting the orthodox wall  Andrew Vonnegutt 8 html Why economics needs pluralism Edward Fullbrook 9...

from David Ruccio “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master—that’s all.” Alice in Wonderland (pdf) is the key to understanding much of what is happening in the world today—especially the language of economics. For example, we’re going to hear and read...

from Lars Syll “A wonderful set of clearly written and highly informative essays by a scholar who is knowledgeable, critical and sharp enough to see how things really are in the discipline, and honest and brave enough to say how things are. A must read especially for those truly concerned and/or puzzled about the state of modern economics.”Tony Lawson Table of Contents Introduction What is (wrong with) economic theory? Capturing causality in economics and the limits of statistical...

from Dean Baker We are seeing many terrible pictures from Houston as a result of Hurricane Harvey. People with young children and pets are wading through high water in the hope of being rescued by boat or helicopter. Elderly people in nursing homes are sitting in waist high water waiting to be rescued. It’s a pretty horrible story. One thing we can feel good about is that because the United States is a wealthy country, we do have large numbers of boats and helicopters and trained rescue...