Real-World Economics Review

from Lars Syll ZEIT: Today, the debate focuses on the labor shortages facing many industrialized countries. Angus Deaton: I am always cautious when people talk about a scarcity of labor but don’t talk about wages. The argument always is: Americans don’t want to do these jobs, Germans don’t want to do these jobs. So we have to have migrants. But in many cases, it is not that Germans or Americans don’t want to do these jobs, but that they don’t want to do them at the wages we can pay...

from Peter Radford “Economics has become irrelevant.” PART ONE Oh my.  Apparently Brad DeLong and I have the same problem.  He, of course, is part of the elite club.  I am decidedly not.  So it is quite a shock to share something. What? He set out to write an 800 word review of Dan Davies’ new book and ended up about 5,000 words later still writing.  I set out to write 1,000 words on William Janeway’s recent article on mesoeconomics, and here I am nearly 5,000 words later, still writing. ...

from Lars Syll So, certainly, both non-theorists and some theorists have little patience for research that displays mathematical ingenuity but has no value as social science. But defining this work exactly is impossible. This sort of work is like pornography quite simple to recognize when one sees it. Jeffrey Ely As researchers, we (mostly) want to try to understand and explain reality. How we do this differs between various disciplines and thought traditions. Creating a ‘map’ at a 1:1...

from Lars Syll Beyond the significant financial expenses required to conduct RCTs … critics have raised concerns about considerable opportunity costs associated with their privileged status in programme and policy assessment. These costs result from how an over-emphasis on experimental evaluations in evidence generation systematically undermines alternative research methods potentially better equipped to answer questions about causal mechanisms (or the channels by which interventions work...

The population of Argentina is suffering. The purchasing power of people who still have a job is down (a lot), and unemployment must have doubled (it was 5,7% in the last quarter of 2023) if it has not tripled. Less government spending, less consumer spending, and, no doubt, less private investment means that Argentina is experiencing an economic disaster which will scar the country for decades. Retail sales (volume): down around 20% while, at this moment, people will still be able to...

from Dean Baker The belief in free-market fundamentalism runs very deep. When I say that, I don’t mean that support for the concept runs deep, I mean the belief that we had been pursuing free-market policies in the years before the Trump and Biden presidency runs very deep. I was reminded of this fact in a New York Times column by Farah Stockman, touting the development of a new post-free-market fundamentalist paradigm. To be...

from Lars Syll As has become abundantly clear during the last couple of years, it is obvious that most mainstream economists seem to think that Modern Monetary Theory is something new that some wild heterodox economic cranks have come up with. That is actually very telling about the total lack of knowledge of their own discipline’s history these modern mainstream guys like Summers, Rogoff and Krugman have. New? Cranks? Reading one of the founders of neoclassical economics, Knut Wicksell,...

from Lars Syll In a word, Economics is an Impossible Science because by its own definition the determining conditions of the economy are not economic: they are “exogenous.” Supposedly a science of things, it is by definition without substance, being rather a mode of behavior: the application of scarce means to alternative ends so as to achieve the greatest possible satisfaction—neither means, ends, nor satisfaction substantially specified. Exogenous, however, is the culture, all those...

from Asad Zaman and WEA Pedagogy Blog The Most Valuable Kind of Knowledge These lectures aim to provide the reader with knowledge. But what is knowledge? Our lives consist of a small number of infinitely precious moments. What makes it worthwhile to invest these moments in the acquisition of knowledge? Is it the kind of knowledge that can teach us how to lead better lives—how to make the most of the few moments that we have? This has been the central preoccupation of philosophers and...