Real-World Economics Review

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from Thomas Piketty in Le Monde The Covid crisis is forcing us to rethink the tools of redistribution and solidarity. Proposals are springing up everywhere . . . . The idea that we just have to wait for wealth to spread doesn’t make much sense: if that were the case, we would have seen it long ago. The simplest solution is a redistribution of inheritance allowing the whole population to receive a minimal inheritance, which, to fix ideas, could be of the order of 120,000 Euros (i.e. 60% of...

from Lars Syll Mainstream macroeconomics can only progress if it gets rid of the DSGE albatross around its neck. It is better to do it now than to wait for another 20 years because the question is not whether but when DSGE modeling will be discarded. DSGE modeling is a story of a death foretold … Getting rid of DSGE models is critical because the hegemonic DSGE program is crowding out alternative macro methodologies that do work … DSGE practitioners, who with a mixture of bluff and...

from Dean Baker Like most economists, I have always been a Bitcoin skeptic. The question has always been what purpose does it serve? The idea that it would be a useful alternative currency is laughable on its face. How can you have a currency that wildly fluctuates year to year and even hour to hour?  Imagine if you had a wage or rent contract written in Bitcoin. Both your pay and your rent would have more than tripled over the last year, likely leaving you unemployed and unable to pay...

from  Finance as warfare by Michael Hudson The economy is polarizing because of how the 1% use their wealth. If they invested their fortunes productively as “job creators” – as mainstream textbooks describe them as doing – there would be some logic in today’s tax favoritism and financial bailouts. Rentier elites would be doing what governments are supposed to do. Instead, today’s financial oligarchy lends out its savings to indebt the economy at large, and uses its gains to buy control...

from Lars Syll If contributions made by statisticians to the understanding of causation are to be taken over with advantage in any specific field of inquiry, then what is crucial is that the right relationship should exist between statistical and subject-matter concerns … Where the ultimate aim of research is not prediction per se but rather causal explanation, an idea of causation that is expressed in terms of predictive power — as, for example, ‘Granger’ causation — is likely to be...

from Asad Zaman and RWER issue 85 The methodology and ideology of modern economics are built into the frameworks of educational methods, and absorbed by students without any explicit discussion. In particular, the logical positivist philosophy is a deadly poison which I ingested during my Ph.D. training at the Economics Department in Stanford in the late 1970s. It took me years and years to undo these effects. Positivism uses clever arguments to make you deny what you feel in your bones...

from Shimshon Bichler & Jonathan Nitzan For much of the 20th and early 21st centuries, U.S. unemployment and incarceration went hand in hand. This is how the rulers disciplined their subjects. But during the Great Depression and Great Recession, the link broke, if only temporarily. The following figure shows these patterns. Part of the rational for this two-pronged discipline is illustrated in the next figure: since the Second World War, the income share of the top 10% of the U.S....