Real-World Economics Review

Yanis Varoufakis . . . what is really going on? My answer: A half-century long power play, led by corporations, Wall Street, governments and central banks, has gone badly wrong. As a result, the West’s authorities now face an impossible choice: Push conglomerates and even states into cascading bankruptcies, or allow inflation to go unchecked. For 50 years, the US economy has sustained the net exports of Europe, Japan, South Korea, then China and other emerging economies, while the...

from Dean Baker I just read this NYT column by Bryan Stryker, on how Democrats can win back the working class. I have no idea how its proposals poll, but as an economic matter, they will do little to help the working class. The big problem with Stryker’s argument is that it assumes that the working class will somehow benefit from having more manufacturing jobs. This would have been true 20-years-ago when noncollege educated workers in manufacturing enjoyed a substantial pay premium over...

from Lars Syll Research shows not only that individuals sometimes act differently than standard economic theories predict, but that they do so regularly, systematically, and in ways that can be understood and interpreted through alternative hypotheses, competing with those utilised by orthodox economists. To most market participants — and, indeed, ordinary observers — this does not seem like big news … In fact, this irrationality is no news to the economics profession either. John Maynard...

from Dean Baker California’s Governor, Gavin Newsom, announced plans last week for the state to set up its own manufacturing facility to produce low-cost insulin for California residents. This is a great idea. Insulin is an old drug that can be produced as a cheap generic, which is the case almost everywhere else in the world. A monthly supply of insulin in Canada costs $12, in Germany $11, and in Italy $10. In the United States, it costs on average around $100, and in many cases, people...

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I do not have ‘physics envy‘. I do not want economics to look too much like physics. But I do have chemistry envy. I want economics to have something like the magnificent periodic table of elements, for prices. Input prices, output prices, mark up prices, shadow prices, market prices, administered prices, government prices, expenditure prices, asset prices, monopoly prices, monopsony prices – all of these and many more neatly ordered in a relatively simple table. Somebody still has to...

from Lars Syll Most research in economics nowadays involves empirical work … It is therefore odd to find a great deal of economic reasoning still starting from “standard theory”. Whilst it does generate predictions that can be tested empirically, it does not have an empirical foundation, but rather is based on a story about universal human nature … It remains true that the traditional models retain a central place, and accumulating evidence does not tend to lead to the abandonment of a...

from Peter Söderbaum Mainstream neoclassical economics is attacked by many and from different angles or vantage points. Neither the defendants nor the critics can claim value-neutrality. “Values are always with us” (Myrdal 1978) and economics is always ‘political economics’. The neoclassical attempt to construct a ‘pure’ economics has failed. Neoclassical theory may still survive as a theory that is specific in scientific and ideological terms and useful for some purposes. But this...

from Ted Trainer It is not commonly understood how large the reductions would have to be to enable a society that is globally sustainable and just. The World Wildlife Foundation’s Footprint measure (2018) estimates the average Australian per capita use of productive land at 6–8 ha. Thus, if the 9–10 billion people expected to be on earth by 2050 were to live as Australians do now, up to 80 billion ha of productive land would be needed. But there are only about 12 billion ha of productive...

from C. P. Chandrasekhar The meltdown in May 2022 in the cryptocurrency world, in which the values of digital coins plunged and rendered some near-worthless, is a wake-up call. It once again shows that cryptocurrencies are nothing but a bunch of insubstantial, digital ‘bits’ created by speculators as ‘coins’ for speculation. Over the years since 2009, when the first bitcoin was minted, privately generated cryptocurrencies have failed to live up to the claim that they offer an...