Real-World Economics Review

from John Komlos Mainstream economics –as taught to well over a million students a year in the U.S. alone –is replete with implications that feed into structural racism.[i] That should not be misinterpreted to imply that economists themselves are racist.  Rather, the market fundamentalism they promulgate have the unintended consequence of providing ample justification for maintaining the economic status quo which privileges the well-to-do but finds most minorities at the lower end of the...

WEA Commentaries Volume 11, Issue 1  –    April 2021 download the whole issue Review of Internet Oligopoly: The Corporate Takeover of our Digital WorldMitja Stefancic  The puzzle of western social science Asad Zaman Taking the Dasgupta Review seriously (with an interview with Professor Partha Dasgupta)Mitja Stefancic A New Book on the Economics of Gift Stuart Birks interviews Ioana Negru US Government SpendingDean Baker Please click here to support the WEA...

from Lars Syll It is often said that the error term in a regression equation represents the effect of the variables that were omitted from the equation. This is unsatisfactory … There is no easy way out of the difficulty. The conventional interpretation for error terms needs to be reconsidered. At a minimum, something like this would need to be said: The error term represents the combined effect of the omitted variables, assuming that (i) the combined effect of the omitted variables is...

The Rapid creation of covid-19 vaccines is an amazing technological feat. It shows how much can be accomplished when human inventiveness and private-sector involvement are given extensive public support, from basic research to massive subsidies. However, the innovation is futile unless the vaccines are distributed equitably. The public-health benefits are undermined by a deepening chasm in availability. With most inoculations occurring in just a few rich countries and the vast majority of...

from Peter Radford One of the greatest shifts subsequent to the rise of machinery and industrialization is the social acceptance of apparently  never-ending technological change.  A change, moreover, that we are told will inevitably lead us all towards an improved, more prosperous, healthier, and happier existence.  That this future cannot be precisely determined or known to us is set aside, we simply accept the drumbeat of change and presume the rest. Or at least that’s one view.  How...

from Thomas Palley Almost fifty years ago the renowned Swedish econographer, Professor Axel Leijonhufvud (1973), wrote a seminal study on the Econ tribe titled “Life among the Econ”. Back then the Econ were divided into sub-tribes which referred to themselves as the Micro and the Macro. . . . The new sectarian make-up of the Macro can be traced back to the doctrines of “K” and “M” which Professor Leijonhufvd identified fifty years ago. The doctrine of K concerns itself with what is the...

from Lars Syll As anyone who has ever been responsible for legislative oversight of central bankers knows, they do not like to have their authority challenged. Most of all, they will defend their mystique – that magical aura that hovers over their words, shrouding a slushy mix of banality and baloney in a mist of power and jargon … In our day, the voices of Modern Monetary Theory perturb the sleep not only of present central bankers, but even of those retired from the role. They prowl the...

from Peter Radford There’s a story about Richard Feynman who is reputed to have said that anyone who claims to understand quantum physics almost certainly does not.  This coming from someone who almost certainly did.  I have much the same reaction to anyone who claims to have understood Ricardo on their first read through his work.  Then again, perhaps it’s just my own struggle: every time I grapple with Ricardo it takes me a while to understand where he’s going.  It’s a case of knowing...

Beijing and US agree to increase climate commitments from Richard Smith  . . . President Xi Jinping gave hope to despairing environmentalists with his stunning announcement to the UN that: “Humankind can no longer afford to ignore the repeated warnings of Nature and go down the beaten path of extracting resources without investing in conservation, pursuing development at the expense of protection, and exploiting resources without restoration. The Paris Agreement on climate change charts...

from Lars Syll An ongoing concern is that excessive focus on formal modeling and statistics can lead to neglect of practical issues and to overconfidence in formal results … Analysis interpretation depends on contextual judgments about how reality is to be mapped onto the model, and how the formal analysis results are to be mapped back into reality. But overconfidence in formal outputs is only to be expected when much labor has gone into deductive reasoning. First, there is a need to feel...