Real-World Economics Review

from Maria Alejandra Madi   Technological change has significantly transformed the labour scenario as the result of the diffusion of innovative practices at the micro-level. The technological impact on the future of work was deeply analysed by Jeremy Rifkin. According to him, we are facing a new phase of history – Third Industrial Revolution – that is characterized by the steady and inevitable decline of jobs in the production and marketing of goods and services. Today, the Third...

from Asad Zaman Before Keynes, Classical Economic Theory (CET) was based on three principles. The First Principle is that Unemployment is automatically eliminated by the free market. The Second Principle is the Quantity Theory of Money, which states that money supply makes no difference to real economic outcomes. The Third Principle is that private investors automatically find the right investment opportunities to create the best economic outcomes for future. The realities of the Great...

from Peter Radford I try to take my own advice: when you have nothing to say, don’t say anything. Thus, for the best part of a month I have busied myself doing other things and staying away from here. It’s been a nice break, and here I am still convinced that there’s not much to say. The economy is where it was. Economics is where it was. Politics is where it was. The three intermingle, mix, merge, separate and go their different ways in the same manner as before. The same complaints and...

Big, listed banks, darlings of the neoliberal establishment, brought Ireland to its knees. Small Irish community banks (credit unions, a volunteer led movement with over 3 million members), while severely affected by the financial crisis, did not only not contribute to the financial crisis but also weathered it, retaining the trust of their members. Mind: ‘members’, not ‘clients’. Via the website of the Irish Central Bank some excerpts of a speech by Registrar Anne Marie McKiernan to Irish...

From climate change to resource overconsumption to pollution, the engine that has powered three centuries of accelerating economic development revolutionizing technology, science, culture, and human life itself is, today, a roaring out-of-control locomotive mowing down continents of forests, sweeping oceans of life, clawing out mountains of minerals, drilling, pumping out lakes of fuels, devouring the planet’s last accessible resources to turn them all into “product” while destroying...

Is total German consumption really growing that slowly? In a tweet, Erwan Mahé (@ThalersCorner) expressed his surprise and confusion about the slow increase of private consumer expenditure in Germany, despite robust job growth and relatively low unemployment (and sizeable increases of real wages!). I do share his surprise and confusion, but the world starts to make more sense when we do not just look at household expenditure but at ‘Actual Individual Consumption’ (AIC). This broader...

Is money ‘neutral’? Is it just a veil over ‘real’ transactions? Or does it affect the level and composition of ‘real’ expenditure? Stephen Cecchetti and Enisse Kharroubi recently published an article which in a very net way shows that money (and credit) is non-neutral. It’s not a veil. It’s part of the essence of our economy. The abstract: “We examine the negative relationship between the rate of growth of the financial sector and the rate of productivity growth. Using a panel of 20...

from Dean Baker Eduardo Porter used his NYT column this week to remind us that we have seen people like Donald Trump before and it didn’t turn out well. Porter is of course right, but it is worth carrying the argument a bit further. Hitler came to power following the devastating peace terms that the allies imposed on Germany following World War I. This lead to first the hyper-inflation that we will continue to hear about until the end of time, and then austerity and high unemployment that...

from David Ruccio According to a new report from the Pew Research Center, in 2014, for the first time in more than 130 years, adults aged 18 to 34 were more likely to be living in their parents’ home than they were to be living with a spouse or partner in their own household or in any other living arrangement. Dating back to 1880, the most common living arrangement among young adults has been living with a romantic partner, whether a spouse or a significant other. This type of arrangement...

from Robert Locke I am constantly perplexed by the way people on this blog handle the development of science as a history of ideas.  I find this view particularly expressed in the exchange of opinions Asad  Zaman provokes in his posts and comments to which others respond.  I have noted that trying to explain the development of science without going into the political, social, and economic environment in which science exists, will not bear much explanatory fruit.  Here are three examples of...