Real-World Economics Review

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...

from Maria Alejandra Madi From the 1950s onwards, the macroeconomic models of the neoclassical synthesis, based a system of simultaneous equations, focused on the interaction between the market for goods and services and the money market in the context of a general equilibrium analysis. According to John Hicks (1904-1989),  in the general case, the capitalist economy is at full employment level of output.  The underlying employment theory is based on the demand and supply of labour in a...

from David Ruccio Last week, to judge by the commentary on the latest Census Bureau report, Income and Poverty in the United States: 2015 (pdf), you’d think the fountain of broadly shared economic prosperity had just been discovered. Binyamin Appelbaum is a good example:   Americans last year reaped the largest economic gains in nearly a generation as poverty fell, health insurance coverage spread and incomes rose sharply for households on every rung of the economic ladder, ending years...

from David Ruccio The other day, I argued (as I have many times over the years) that contemporary mainstream macroeconomics is in a sorry state. Mainstream macroeconomists didn’t predict the crash. They didn’t even include the possibility of such a crash within their theory or models. And they certainly didn’t know what to do once the crash occurred. I’m certainly not the only one who is critical of the basic theory and models of contemporary mainstream macroeconomics. And, at least...