Real-World Economics Review

According to the European Commission, Spain does well. And it does: after 6 years of decline employment has increased with 1,2 million. This is, when it comes to EU job creation, a decisive development! But… well, look at graph 1. Employment is nowhere where it has to be. And double digit increases in the number of tourists won’t last forever – Spain will need a new growth sector (or a more equitable division of labor). When it comes to this:  half of the employment increase took place...

Ashoka Mody on Bloomberg Then came the cardinal error: At the IMF’s Board, over the fierce opposition of several executive directors, the Europeans and Americans pushed through a bailout program that, contrary to the fund’s rules, did not impose losses on Greece’s private creditors. The decision was based on a spurious claim that “restructuring” private debt would trigger a global financial meltdown. Thus, European governments and the IMF lent Greece a vast sum to repay its existing...

In an article in today’s Mail on Sunday, David Rose makes the extraordinary claim that “world leaders were duped into investing billions over manipulated global warming data, accusing the US National Oceanic and Atmospheric Administration (NOAA) of manipulating the data to show more warming in a 2015 study by Tom Karl and coauthors. What he fails to mention is that the new NOAA results have been validated by independent data from satellites, buoys and Argo floats and that many other...

from Dean Baker The trade deals negotiated in the last quarter century are becoming less focused on traditional trade barriers like tariffs and quotas. Instead, they are imposing a regulation structure on the parties, which tend to be very business oriented. In many cases, the rules being required under the trade deals would never be accepted if they went through the normal political process. The renegotiation of the North American Free Trade Agreement allows the United States, Canada and...

from David Ruccio Regular readers know I take statistics quite seriously. So, as it turns out, did Stephen Jay Gould who, in the most poignant story about statistics of which I am aware, explained how important it is to go beyond the abstractions of central tendencies and understand the distribution of variation within the numbers. And right now, when the numbers are under attack—when, for example, the new Trump administration is threatening to purge the inconvenient numbers about climate...

from Lars Syll Eminent statistician David Salsburg is rightfully very critical of the way social scientists — including economists and econometricians — uncritically and without arguments have come to simply assume that one can apply probability distributions from statistical theory on their own area of research: We assume there is an abstract space of elementary things called ‘events’ … If a measure on the abstract space of events fulfills certain axioms, then it is a probability. To use...

from Peter Radford One of the greatest shifts in our economy over the past few decades has been the steady rise of what we call contingent workers. These are people who make their livings on a part-time or contractual basis and have no full-time job. In the US the increase in contingent workers accounted for all the increase in jobs between 2005 and 2015. Whilst  there was an increase in full-time jobs during that period that increase was more than offset by a simultaneous elimination of...

Update: after writing this post I discovered that today Matthew Klein wrote a much longer and much more in depth article about the same subject here. Same conclusion. Should we start a trade war? Let’s, before doing this, take a closer look at current accounts: higher current account surpluses or smaller deficits are not necessarily associated with higher employment. To the contrary. Two examples: between 2009 and 2016 the monthly Eurozone Current Account changed from about minus 10...

from Dean Baker With the official death of the Trans-Pacific Partnership (TPP) and the likely renegotiation of the North American Free Trade Agreement (NAFTA), the proponents of these deals are doubling down in their defense of the current course of US trade policy. While there are serious arguments that can be made in defense of these policies, advocates are instead seeking to deny basic reality. These trade policy proponents are trying to deny that these policies have hurt large...

from David Ruccio source (pdf) The share of American workers in unions fell to 10.7 percent in 2016 (down from 11.1 percent in 2015), the lowest level on record, according to the Bureau of Labor Statistics (pdf). What we’re seeing is a return to the downward trend for organized labor after membership figures had stabilized in recent years—and this is before the new Republican administration even took office.  source (pdf) Union membership in the private sector fell by 119 thousand and...