Real-World Economics Review

from Peter Radford This is just for fun.  It’s nearly the holiday season after all. Let’s tell a story: a friend of ours here in southern Vermont was looking for a job.  She saw an advertisement posted by a local business.  Or, perhaps, she heard something about a job from a friend.  In any case she applied and got the job. Well done. Her wage is, naturally, determined by her marginal productivity.  We all know that.  All wages are determined by individual worker marginal productivity....

from Asad Zaman and WEA Pedagogy Bog I recently gave a talk to students of Modern Money and Economics of Sustainability at Torrens University. The video of the talk is here. I have also written up some notes about this talk which clarify some points only sketched briefly in the talk, and provide links to more detailed discussions.  The following writeup provides some details and background missing from the talk, and also links to related materials: The transition from a traditional...

from Lars Syll “the heart of darkness in ‘New Keynesian’ macroeconomics” Macroeconomic models may be an informative tool for research. But if practitioners of ‘New Keynesian’ macroeconomics do not investigate and make an effort to provide a justification for the credibility of the assumptions on which they erect their building, it will not fulfil its tasks. There is a gap between its aspirations and its accomplishments, and without more supportive evidence to substantiate its claims,...

from Peter Radford I keep coming upon ideas that seem to make such sense that, surely, they have been imported into economics.  But, no, hubris prevents an expansion of the discipline to include such novelty.  The threat they represent to the entire mainstream edifice is too much of a threat.  The guild closes ranks.  The guild closes its mind.  And gets quite snooty in the process.  Outsiders are seen as simple, lacking in basic understanding, or naively misunderstanding the great...

According to the Monetary Statistics of the European Central Bank, the credit impulse to the Euro Area economy is getting even weaker (graph 1, the yellow part of the bars). Which not only forbodes a recession but already is a recession. Graph 1. Monetary developments in the Euro Area. Source. This interpretation (the EA is in a recession) gains credibility when we realize that most of the remaining net credit is used to finance the purchase of existing houses and not to finance...

from Dean Baker Like many self-imagined “free-traders,” the Washington Post editorial board cannot even conceive of free trade when it comes to prescription drugs. They demonstrated this fact yet again in discussing ways to deal with the high price of effective weight-loss drugs like Wegovy. These drugs carry price tags of more than $1,000 a month, making them costly for insurers, governments, or individuals who have to pick up the tab themselves. The Post throws out a couple of ideas...

from Maria Alejandra Madi I am writing today about a new online conference of the World Economics Association ”Capitalism, Socialism and Democracy 80 years later: Looking at capitalism today in light of its past and possible future”.  It runs from 1st February to 28th February, 2024.  You can find more information about it here: https://capitalismanddemocracy2024.weaconferences.net/ Home Background Submissions Register Frequently Asked Questions Conference Leaders Arturo Hermann and...

from Lars Syll In 2022, the U.S. National Institutes of Health (NIH) placed a large bet on an experimental drug developed to limit brain damage after strokes … The gamble seemed warranted. Lab studies, most by a longtime grantee, prominent University of Southern California (USC) neuroscientist Berislav Zlokovic, had generated promising data. A small safety study of the drug, sponsored by a company Zlokovic co-founded called ZZ Biotech, was also encouraging. Because of its potential to...

from Norbert Häring Shortly after it has become known that hackers are offering the identity data of most Indians from the world’s largest digital identity database for sale, the European Parliament and Council have agreed to introduce something similar for Europeans, while Washington praises the Ukrainian version as an export model and Bill Gates wants to impose a biometric digital marker on every newborn child in Kenya for life. In early October, IT security...

from Peter Radford To ignore power is to ignore reality. How can you construct a theory of economic activity that excludes the power embedded in relationships between the various actors on the stage you are directing?  More to the point why would you?  To ignore power is to ignore reality. I think, perhaps we need to reverse those two questions.  You see, power matters even in the construction of economic theories. The reason you ignore power is because the powerful want you to. It’s that...