Real-World Economics Review

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from Dean Baker In recent days, major fear has been evident in financial markets and elsewhere that the delta variant of the coronavirus will spread widely and be a considerable impediment to continued economic growth: On Monday, the Dow tumbled 700 points, for example. At least based on trends we’ve seen so far, these fears appear to be unfounded. It is highly unlikely that the delta variant will lead to shutdowns of major sectors of the economy, of the sort we saw last spring and...

from Lars Syll How would you react if a renowned physicist, say, ​Richard Feynman, was telling you that sometimes force is proportional to acceleration and at other times it is proportional to acceleration squared? I guess you would be unimpressed. But actually, what most mainstream economists do amounts to the same strange thing when it comes to theory development and model modification. In Dani Rodrik’s Economics Rules — just to take one illustrative example –the proliferation of...

--Dean Baker, Senior Economist at the Center for Economic and Policy Research and visiting professor at the University of Utah, joins David to discuss the state of the economy, whether we're heading to a recession, and much more --- Become a Member: https://www.davidpakman.com/membership Become a Patron: https://www.patreon.com/davidpakmanshow Book David Pakman: https://www.cameo.com/davidpakman --- Subscribe to the SECOND channel: https://www.youtube.com/pakmanlive Follow David on Twitter:...

from Dean Baker I get to say this about the drug companies, now that President Biden has said that Facebook is killing people because it was allowing people to use its system to spread lies about the vaccines. There is actually a better case against the drug companies. After all, they are using their government-granted patent monopolies, and their control over technical information about the production of vaccines, to limit the supply of vaccines available to the world. As a result, most...

from Lars Syll There is first of all the central question of methodology — the logic of applying the method of multiple correlation to unanalysed economic material, which we know to be non-homogeneous through time. If we are dealing with the action of numerically measurable, independent forces, adequately analysed so that we were dealing with independent atomic factors and between them completely comprehensive, acting with fluctuating relative strength on material constant and homogeneous...

from Ken Zimmerman  (originally a comment) On the one side were those who believed that the existing economic system is in the long run self-adjusting, though with creaks and groans and jerks, and interrupted by time-lags, outside interference and mistakes … These economists did not, of course, believe that the system is automatic or immediately self-adjusting, but they did maintain that it has an inherent tendency towards self-adjustment, if it is not interfered with, and if the action...

from Gerald Holtham  (originally a comment) The biggest problem, it seems to me, is not the tools that economists use but the failure to start from real, concrete questions and issues in the real world. Someone builds a model of a real situation. It may be useful or not but if it is ingenious it gets published. People then play tunes on the model; they seek to “generalise” it in various ways. We embark on a process of theoretical development for its own sake, increasingly divorced from...

from C. P Chandrasekhar and Jayati Ghosh International observers still view Asia and particularly East Asia as the most dynamic economic region in the world, a perception that has been even more entrenched over the period of the pandemic. Certainly, if aggregate GDP growth rates in real terms (as shown in Figure 1) are anything to go by, there is no doubt that the region of East Asia has been growing faster than the world as a whole, and has even managed to maintain positive growth in the...

from Lars Syll Mathematics, especially through the work of David Hilbert, became increasingly conceived as a practice concerned with formulating systems comprising sets of axioms and their deductive consequences, with these systems in effect taking on a life of their own … The emergence of the axiomatic method removed at a stroke various hitherto insurmountable constraints facing those who would mathematise the discipline of economics … In particular it was no longer regarded as...