Real-World Economics Review

from David Ruccio While Wells Fargo (whose CEO blamed employees for his bank’s failings) has put traditional banks in the news lately, the resurgence of the so-called shadow banking sector has largely gone unnoticed. Until now. The Dallas Fed (pdf) has issued an alarming report concerning the growth of financial activities that, while connected to traditional banks, remains largely unregulated—even under Dodd-Frank. “Shadow banking,” an almost sinister-sounding term that originated in...

For a group that has helped change the way economics is taught at universities up and down Britain, the Post-Crash Economics Society had a less than momentous start. It was November 2012 when seven undergraduates met in a cramped room on the top floor of Manchester university’s student union. Chairs drawn into a semi-circle, they listened as the two founding members went through a brief PowerPoint presentation explaining what they thought was wrong with the economics curriculum. A polite...

Stamps are money. And as such often adorned with the heads of presidents. A sign of the times: nowadays also with the heads of super models (Anton Corbijn meets Doutzen Kroes edition, both live up to their reputation). The core neoliberal value: companies and markets first, families second. Which explains the absence of involuntary unemployment from neoclassical macro models. But this value is also bad for the health of young children The core free choice value of western society (maybe...

download the whole issue Negative interest rates or 100% reserves: alchemy vs chemistry          2Herman Daly          download pdf Why negative interest rate policy is ineffective and dangerous          5Thomas I. Palley          download pdf  Japan’s liquidity trap          15Tanweer Akram          download pdf Paul Romer’s assault on ‘post-real’ macroeconomics          43Lars Pålsson Syll          download pdf                                                                           ...

from Dean Baker Most workers suffer serious consequences when they mess up on their jobs. Custodians get fired if the toilet is not clean. Dishwashers lose their job when they break too many dishes, but not all workers are held accountable for the quality of their work. At the top of the list of people who need not be competent to keep their job are economists. Unlike workers in most occupations, when large groups of economists mess up they can count on the media covering up their...

from David Ruccio source Niall Ferguson, Harvard’s incorrectly political ignorant gay-bashing bloviating right-wing infotainment war-crimes-apologist historian, finally gets something right. In explaining the “fight isn’t going as planned” for Hillary Clinton, Ferguson writes:  Last week, Clinton’s supporters seized on new economic data from the Census Bureau showing that median household income rose by more than 5 percent in real terms last year. Poverty is down. So is the number of...

from David Ruccio We can thank Donald Trump for one thing: he’s put the white working-class on the political map.* In recent months, we’ve seen a veritable flood of articles, polls, and surveys about the characteristics, conditions, and concerns of white working-class voters—all with the premise that the white working-class is fundamentally different from the rest of non-working-class, non-white Americans. But why are the members of the white working-class attracting so much attention? My...

In Nature Branko Milanovic published an interesting article about (very) long run cycles in inequality, using among other metrics the wage-rent quotiënt as an indicator of inequality (wage income relative to income of landowners). See the first graph. I can actually add a little to this. I’ve extended the Dutch (Frisian) wage/rent series published earlier on this blog backward to 1697 and forward to 1862 (below). Up to about 1800, developments in Friesland and Spain seem to be pretty...

from David Ruccio Has the policy consensus on economics fundamentally changed in recent years? To read Mike Konczal it has. I can’t say I’m convinced. While some of the details may have changed, I still think we’re talking about different—liberal and conservative—versions of the same old trickledown economics. But first Konczal’s argument. He begins with a pretty good summary of the policy consensus before the crash of 2007-08: Before the crash, complacent Democrats, whatever their...