Real-World Economics Review

From today’s Guardian The Nobel prize in economics takes too little account of social democracyAvner Offer The Nobel prize in economics will be announced today. For economists, it is the pinnacle of reputation. When the word Nobel becomes attached to a winner’s name, his word acquires newsworthy authority (only one woman, Elinor Ostrom, has won the prize so far). The prize matters to everyone else too, because of market liberalism, which advocates marketisation, deregulation,...

from David Ruccio In a recently leaked audio file (from a private fundraiser in February), Hillary Clinton referred to them as “children of the Great Recession. . .living in their parents’ basement,” who “feel they got their education and the jobs that are available to them are not at all what they envisioned for themselves. And they don’t see much of a future.”* Well, as it turns out, the children of the Great Recession, especially those who completed college in recent years, were right:...

New paperback from WEA BooksA Philosophical Framework for Rethinking Theoretical Economics and Philosophy of Economics by Gustavo Marquesis now available from the Amazon pages listed below Here are links to the book’s pages on the various AmazonsUnited States $18.50,  Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Spain, United Kingdom £14.25 This book argues that mainstream theoretical economics has been a basically misdirected effort at creating and exploring imaginary...

from David Ruccio The case for changing the way we teach economics is—or should be—obvious. It certainly is apparent to the students of Manchester University’s  Post-Crash Economics Society and to the other 44 student groups, members of Rethinking Economics, pressing for pedagogical changes on campuses from Canada to Italy and from Brazil to Uganda. But as anyone who teaches or studies economics these days knows full well, the mainstream that has long dominated economics (especially at...

from Mark Weisbrot Republican nominee Donald Trump’s embarrassments and scandals keep piling up, from his Twitter meltdown last Friday night to The New York Times revelations that he could have gotten away without paying income taxes for the past 18 years. These may have some impact on the race, although it’s tough to guess how much. But a recent piece in the Times about Trump’s potential influence on the stock market could really take some votes away from him, if it happens to go...

The potential future costs of financial fragility and asset price bubbles raise the prospect of policy whiplash effects due to contradictions between current and future policy actions. The economy currently suffers from shortage of AD owing to systemic failings related to income inequality and trade deficit leakages. That demand shortage was papered over by a thirty-year credit bubble plus successive asset price bubbles, which eventually burst with the financial crisis of 2008. Now,...

Negative interest rates or 100% reserves: alchemy vs chemistry Herman Daly   [University of Maryland, USA] The close connection of fractional reserve banking with alchemy was recently emphasized by Mervyn King, former head of the Bank of England, in the very title of his recent book, The End of Alchemy: Money, Banking, and the Failure of the Global Economy. He refers to the more thorough development of this connection by Swiss ecological economist H. C. Binswanger in his brilliant study,...

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...