Real-World Economics Review

from  Norbert Haering When Prime minister Narendra Modi took the bulk of Indian cash out of circulation, he caused great hardship for many Indians, while a disruption-loving tech elite and political establishment asked for optimism and patience. In an earlier piece I have provided some indications for US involvement in that scheme. In this piece, I am adding some more, including earlier, evidence, summarize the evidence and ask if this evidence is reasonably compatible with the...

Predictably (as energy prices can’t fall forever) consumer price inflation in the EU recently increased. The present level is 1,1% which is, in a historical perspective, outright low. Also, ‘core’ inflation (which, unlike consumer price inflation, has never been negative) remained subdued and even below 1%. Predictably, however, people already start to scream that inflation is soaring and we should be afraid about worthless money. They are wrong. Four reasons: Inflation does not measure...

Very cool webpage which maps CO2 content of electricity in different European countries in real time (i.e.: German content drops when sun start to shine in Germany), as well as international flows. Blackest country: Poland. Greenest: Norway (hydro), France (nuclear). I’ve been tweeting a bit with global warming deniers. They are soooooo conservative, at least when it comes to their (lack of) believe in the power of technology. The transition is taking place already. Here, a real life zero...

from Asad Zaman This continues the sequence of posts on re-reading Keynes. The fundamental point about the labor market which is made in Chapter 2 is that the micro level negotiations on wages between firms and laborers do not determine the real wage in the macro-economy. Before explaining this point in detail, we want to show how it is just a special case of the general idea that the economy is a complex system which cannot be understood by looking at simple sub-systems. The idea of...

from David Ruccio As regular readers of this blog know, I try to make available and critically interpret charts of data—both to challenge others’ arguments and to provide a foundation for my own. Last year, I spent much more time using publicly available data to make my own charts, which readers are free to use for their own purposes. Here are some of those charts (just click on each chart to go to the post in which it originally appeared).

from Dean Baker Shortly after Donald Trump enters the White House, we should get an answer to a key question from his campaign: What does he actually intend to do about trade? Trade was one of his main issues when he campaigned in the key industrial states that he won in November. Trump argued that past presidents of both parties had failed the country’s workers by signing bad trade deals. He said that the negotiators were “stupid” and that he would instead appoint “smart” negotiators who...

from Peter Radford I am going to be writing an extensive review of Avner Offer and Gabriel Söderberg’s excellent book: “The Nobel Factor” in the near future. Meanwhile allow me to share a a couple of early comments because they bear heavily on how we all approach the Trump administration. Offer and Söderberg clarify the circumstances behind the shift in economics that occurred in the late 1970’s and came into full effect in the subsequent decades. Their  focus is heavily on how the Nobel...

from David Ruccio The capitalist machine is broken—and no one seems to know how to fix it. The machine I’m referring to is the one whereby the “capitalist” (i.e., the boards of directors of large corporations) converts the “surplus” (i.e., corporate profits) into additional “capital” (i.e., nonresidential fixed investment)—thereby preserving the pact with the devil: the capitalists are the ones who get and decide on the distribution of the surplus, and then they’re supposed to use the...

from  Norbert Haering In early November, without warning, the Indian government declared the two largest denomination bills invalid, abolishing over 80 percent of circulating cash by value. Amidst all the commotion and outrage this caused, nobody seems to have taken note of the decisive role that Washington played in this. That is surprising, as Washington’s role has been disguised only very superficially. US-President Barack Obama has declared the strategic partnership with India a...

from Peter Radford I am not going to become involved in endless analysis of Trump’s presidency. I think we ought let it speak for itself. Nor am I going to waste space critiquing the huge contribution that academic economics has made to Trump’s rise to power. I think the anti-democratic nature of mainstream economics is both palpable and speaks for itself too. Economics is largely a libertarian discipline and sneers at anything remotely involving “we the people” unless it can re-package...