Real-World Economics Review

from Lars Syll The completeness of the Ricardian victory is something of a curiosity and a mystery. It must have been due to a complex of suitabilities in the doctrine to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a...

from Dean Baker The NYT had an article reporting on how the Pew Research Center had discovered work done by the Economic Policy Institute for a quarter century (the middle class is hurting). At one point the piece compares the United States with France and Germany: “The United States, including the middle class, has a higher median income than nearly all of Europe, even if the Continent is catching up. The median household income in the United States was $52,941 after taxes in 2010,...

from Dean Baker There has been growing attention in recent years to the near monopolization of many sectors of the U.S. economy. For example, Google completely dominates the search engine market, while Facebook has an overwhelming presence in social media. Amazon controls close to 70 percent of book sales in the United States and an ever growing share of retail more generally. Microsoft remains by far the dominant force in computer operating system software. Recent research has found an...

from Lars Syll Ricardo’s … interest was in the clear-cut result of direct, practical significance. In order to get this he cut that general system to pieces, bundled up as large parts of it as possible, and put them in cold storage — so that as many things as possible should be frozen and ‘given.’ He then piled one simplifying assumption upon another until, having really settled everything by theses assumptions, he was left with only a few aggregative variables between which, he set up...

from David Ruccio source First, it was conspicuous consumption. Then, it was conspicuous philanthropy. Now, apparently, it’s conspicuous productivity.   According to Ben Tarnoff, the acquisition of insanely expensive commodities isn’t the only way that modern elites project power. More recently, another form of status display has emerged. In the new Gilded Age, identifying oneself as a member of the ruling class doesn’t just require conspicuous consumption. It requires conspicuous...

from WEA Commentaries My first book since Debunking Economics has just been released in the UK, and will come out in May in the USA. Can we avoid another financial crisis? is a brief (140 page, 25,000 word) explanation for the lay reader of how the 2008 crisis was caused by factors that mainstream economics ignores—fundamentally, the levels of private debt and credit-based demand—and why other countries that avoided a crisis in 2008 are likely to suffer a similar crisis in the near...

From: Larry Hamilton and Merijn Knibbe Following a twitter discussion between him and me about the question if the 2013-2015 warming of the first 700 meters of ocean was above trend or if 2016 was below trend, Larry Hamilton (@ichiloe) produced the next graph (which shows consistent and relentless warming not just of the surface of the earth but also of the first 700 meters of the oceans). These series are as far as I know measured in a totally independent way. ‘2017’ are partial data. We...

from Peter Radford Simplification, in the context of an economy, is the eradication of all things of interest. This does not mean that studying an economy is thus doomed to be a pointless recitation of history as it unfolds. It is, rather, the recognition that as an economy moves through time it is never, to paraphrase Heraclitus, possible to see the same thing twice. Each economy is different. Each instance of the same economy is different. Any attempt to generalize eradicates those...

from Asad Zaman Environmentalist David Suzuki hits the nail on the head. The number of ways that economic theory systematically blinds you to the realities of the world we live in is almost uncountable. When Henry George’s land tax became widely popular, economists “disappeared” land as a factor of production from economic theories, merging it illegitimately with capital. Money is made to “disappear” by using the quantity theory of money to claim that money is veil. This makes it...

from Lars Syll Plenty of people will try to convince you that globalization and free trade could benefit everyone, if only the gains were more fairly shared … This belief is shared by almost all politicians … and it’s an article of faith for the economics profession. You are right to reject it … It’s a fallacy based on a fantasy, and it has been ever since David Ricardo dreamed up the idea of “Comparative Advantage and the Gains from Trade” two centuries ago. The best way to prove that...