Real-World Economics Review

from Lars Syll One of the most effective ways of clearing up this most serious of all semantic confusions is to point out that private debt differs from national debt in being external. It is owed by one person to others. That is what makes it burdensome. Because it is interpersonal the proper analogy is not to national debt but to international debt…. But this does not hold for national debt which is owed by the nation to citizens of the same nation. There is no external creditor. We owe...

from Shimshon Bichler & Jonathan Nitzan Here is a silent killer. While the proportion of the world’s population subject to hunger keeps falling, that of the overfed, mostly with junk, is climbing. In 2005, the two trends crossed: for the first time in the history of humanity, the number of obese people surpassed that of the underweight, and the process continues unabated. The latest data, for 2016, show that almost 14% of the world’s population is now obese — nearly three times more...

from Prabhat Patnaik A crucial component of the imperialist system is the colonisation of third world minds that helps to sustain it. This colonisation is pervasive, but here we shall discuss only academic colonisation and that too relating to the social sciences. Social sciences are of critical importance because the problems of the third world are above all social problems, and since the colonisation of third world minds has the effect of inculcating in them the belief that imperialism...

from Dean Baker With inflation remaining stubbornly high for longer than I, and many others, expected, I want to take another stab at the argument of the inflation hawks. As a jumping off point, I will use the argument put forward by Larry Summers and Jason Furman, probably the two most prominent and coherent economists arguing that we have underestimated the risks of persistently high inflation.[1] There are three main components to the Summers-Furman (SF) argument. (Their arguments are...

from Maria Alejandra Madi and WEA Pedagogy Blog Hayek proposed the abolition of the government’s monopoly on the issuance of fiat money in his book “Denationalisation of Money: The Argument Refined” (1976). In reality, his support for a complete privatization of the money supply stemmed from his dissatisfaction with the management of central banks, which, in his opinion, had been heavily influenced by political considerations. As a result, the ultimate goal of Hayek’s denationalisation of...

from Lars Syll Breaking news! Using advanced multiple nonlinear regression models similar to those in recent news stories on alcohol and dairy and more than 3.6M observations from 1997 through 2012, I have found that drinking more causes people to turn into men! Across people drinking 0-7 drinks per day, each drink per day causes the drinker’s probability of being a man to increase by 10.02 percentage points (z=302.2, p<0.0001). Need I say, profound implications for public health...

from Nat Dyer Famously, Queen Elizabeth II asked professors at the London School of Economics (LSE) in 2008 why they did not notice the crisis coming. The moment has become a founding story of ‘new economics’. In the aftermath, the net was cast wide to catch those who did anticipate parts of the crisis. Many names have been put forward including Dean Baker, Steve Keen, Nouriel Roubini, Ann Pettifor, Raghuram Rajan, and Hyman Minsky. But, a name that’s missing from virtually every list was...

from Dean Baker The news media have been constantly hyping inflation in recent months. While everyone has been seeing the huge rise in gas prices over the last year (that’s what happens when the world reopens after a pandemic), used car prices have risen almost as rapidly. From December 2020 to December 2021 they rose 37.3 percent. This accounted for 1.03 percentage points of the 7.0 percent overall inflation in the last year. We know the story of these price increases. A fire in a...

from Lars Syll Piketty argues that the higher income share of wealth-owners is due to an increase in the capital-output ratio resulting from a high rate of capital accumulation. The evidence suggests just the contrary. The capital-output ratio, as conventionally measured has either fallen or been constant in recent decades. The apparent increase in the capital-output ratio identified by Piketty is a valuation effect reflecting a disproportionate increase in the market value of certain...

from Dean Baker and WEA Commentaries There have been numerous news articles in recent years telling us that China faces a demographic crisis. The basic story is that the market reforms put in place in the late 1970s, together with the country’s one-child policy, led to many fewer children being born in the last four decades. As a result, the number of current workers entering retirement exceeds the size of the cohorts entering the workforce, leading to a stagnant or declining workforce....