Real-World Economics Review

Does, contrary to the assumptions of many economic models, ‘involuntary unemployment’ exist? Of course. We measure it (for the definition see below). And in the USA it is going down. About two months ago I posted this graph, which showed that what I call involuntary unemployment in the USA tended upwards. Two months of additional data show that this was, fortunately, just a hiccup – though the decline is not as fast as it used to be. Some musings about models and measurement, starting...

The UK environmental accounts.“Energy consumption from renewable and waste sources has been increasing since 1990; reaching a record high of 14.4 million tonnes of oil equivalent in 2014. These sources contributed 7.1% of total energy consumption.Emissions of greenhouse gases have decreased since 1990; peaking in 1991 at 845.2 million tonnes of carbon dioxide equivalent and falling to 608.6 million tonnes of carbon dioxide equivalent in 2014. This is the lowest level since 1990. The...

from David Ruccio We need to fundamentally reject our “free trade” policies and move to fair trade. Americans should not have to compete against workers in low-wage countries who earn pennies an hour. We must defeat the Trans-Pacific Partnership. We must help poor countries develop sustainable economic models. Sanders’s critique is buttressed by the conclusion of the latest report from the Economic Policy Institute, that the gaps between the richest and poorest families have grown in...

from David Ruccio Mainstream economics has clearly had a great fall. Just two days ago, I argued that—after the crash of 2007-08 and, now, Brexit—mainstream economists have had “nothing to offer, either in terms of insight or a path moving forward.” Also recently, Antonio Callari challenged Brad DeLong’s attempt to reduce economics to the mainstream debate between supply-siders and demand-siders and his argument that there’s no room for economists as public intellectuals. Now, Mark Thoma...

Should European countries accept free in-migration of people? Hmmm… many countries should focus on the problem of how to totally discourage out-migration. In many countries the young and well-educated have left in droves because of boom-bust crises followed by austerity, this despite unfavorable demographics. Latvia, Estonia, Bulgaria, Lithuania are examples – but even in Germany the ‘Harz-reform’ of around 2000 was followed by high net out-migration of Germans.  States should be...

This is a comment that Asad Zaman left on Lars Syll’s post Mainstream economics — a pointless waste of time, but it deserves a post of its own. My view is that economics does perfectly what it is designed to do. It is a MISTAKE to think that conventional economic theory is WRONG. In order to make progress, it is essential to understand the function of economic theories. 1. Every economic policy hurts some groups and helps others 2. No group has sufficient POWER to ENFORCE policies...

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From: Erwan Mahé ” This is why one of the only ways to get out of the current mess is to bring together all the major decision-making states in Europe, including Germany, to decide on a clear-cut stimulus programme, minus the sterile Maastricht criteria.” Brexit shock. And now what? All the investment scenarios have been shaken in the wake of the surprise victory of the Leave forces in the Brexit referendum last Thursday. The many discussions I have held with clients since the referendum...

from David Ruccio The U.S. economy is a remarkable success according to the standards of neoclassical economic theory. Yet, for “prime-age” men, who need to work to provide for themselves and their families, it is increasingly a failure.   That’s the clear lesson from the latest report from the Council of Economic Advisors (pdf) on “The Long-Term Decline in Prime-Age Male Labor Force Participation” (which has been taken up and discussed in a wide variety of news media,...

Graph 1. Wage levels and vote shares, Brexit. Brad deLong is very annoyed about this Voxeu piece by a whole slew of famous economists, which advises that we, as a consequence of Brexit, have to double down on the Euro. Full disclosure: the piece is also signed by Brad’s academic Bossom Buddy Barry Eichengreen. I agree with the gist and arguments of the piece of deLong: “From my perspective, this piece at Vox.eu makes many too many bows to conventional-wisdom idols with not just feet but...