Real-World Economics Review

Coronavirus has widened the cracks in this unequal system, fuelling a pernicious cycle of poverty and economic inequality in Asia. The World Bank estimates that coronavirus and rising economic inequality pushed 140 million additional people into poverty in Asia in 2020, and 8 million more in 2021.6 New variants alongside higher inequality levels than expected7 mean these figures are likely to be underestimates. Yet, while lockdowns and economic stagnation destroy the livelihoods of many...

from Lars Syll MMT includes both problematic propositions and perfectly reasonable — even highly useful — positions. In the latter category, the idea that stands out is essentially functional finance theory. Proposed by Abba Lerner in 1943, FFT holds that, because governments borrowing in their own currency can always print money to service their debts, but still face inflation risks, they should aim to balance supply and demand at full employment, rather than fret about balancing the...

from Dean Baker The national debate on free trade is one where honesty has no place. The purpose of our trade agreements, which were not free trade, was to reduce the pay of manufacturing workers, and non-college educated workers more generally, to the benefit of more highly educated workers and corporations. This was the predicted (by standard economics) and actual result. We made our manufacturing workers compete with low-paid workers in China and elsewhere in the developing world. This...

WEA Commentaries Volume 11, Issue 4 download the whole issue Pandora Papers and tax havens: what do they tell us?Mitja Stefancic Brazilian Foreign Policy: crisis and preliminary effects on International Cooperation and DevelopmentPatrícia Andrade de Oliveira e Silva and Pietro Carlos de Souza Rodrigues On Diane Coyle’s Cogs and MonstersLars Syll Combatting Global Warming: The Solution to China’s Demographic “Crisis”Dean Baker Regulation of international capital flows in developing...

from Lars Syll We live in a world permeated by unmeasurable uncertainty — not quantifiable stochastic risk — which often forces us to make decisions based on anything but ‘rational expectations.’ Our expectations are most often based on the confidence or ‘weight’ we put on different events and alternatives, and the ‘degrees of belief’ on which we weigh probabilities often have preciously little to do with the kind of stochastic probabilistic calculations made by the rational agents as...

from Dean Baker Okay, I’m a bit slow for a New Year’s piece, but what the hell, we can always use a bit of optimism. Anyhow, I thought I would spout a few things about what the world might look like if we didn’t rig the market to give all the money to rich people. Not much new here for regular readers, I just thought I would spell it on paper, since it is a nice backdrop for many of our battles. Before I go through my favorite unriggings, let me start by making a general point, which some...

About one month ago I wroute about Euro Area inflation: “troubling but transitory“. One month more of data are in. It is even more troublesome but also more transitory. The increase of the consumer price index is dominated even more by energy prices than one month ago. As the Euro Area is a net importer of energy (among other items: natural gas from Russia.). This particular kind of inflation is, to use confusing terminology, highly deflationary… (for the non-energy sectors)....

from Philip George How could the 1970s stagflation have been avoided? The stagflation of the 1970s is widely believed to have heralded the eclipse of Keynesian economics and the rise of monetarism. In a previous post (https://rwer.wordpress.com/2021/08/14/weekend-read-what-caused-the-stagflation-of-the-1970s-answer-monetarism/) I had argued that this was not the case and that the stagflation was directly caused by the monetarist policies of the time. But there is an even more important...

It still has to feed into the management of pension funds or global wealth funds. Or, does it? It seems that Black Rock is already investing more in real estate… Look here and here. It might well be that this happens because because the smarties at Black Rock read the work of Jorda, Knoll, Kuvshinov, Schularick and Taylor, who gathered data on ‘‘The Rate of Return on Everything, 1870–2015”, including the rate of return on ‘houses’ (better: the rate of return on ‘land underlying...