Real-World Economics Review

from Dean Baker President Joe Biden’s recovery and jobs plans have led to considerable alarm over the resulting increases in the deficit and debt. Most of these concerns are misplaced. The issue of whether a deficit is too large depends entirely on whether it causes us to push the economy too far, leading to inflation. The deficit for last year was $3.1 trillion, which was equal to 15.2% of GDP. This was by far the largest deficit, relative to the size of the economy, since World War II....

from Asad Zaman Defining Feature of Real Econometrics We can define “Real Econometrics” as being the search for causal relationships within a collection of variables. There exists an enormous amount of confusion about what exactly is a causal relationship. We will take a simple and practical approach, developed by Woodward in his book on “Making Things Happen”. Given a collection of variables X,Y,Z1,Z2,…,Zn, we will say that X is a cause of Y if we can create changes in Y by changing the...

from Peter Radford Jamie Dimon, CEO of JP Morgan Chase writes his annual letter to shareholders, Wall Street quivers in anticipation at his wisdom.  This year’s is a doozy.  Dimon, it seems, wants to explain to us all that corporations play many roles in society and are not simply focused on “short term rapacious profit taking” (his words, not mine). Let me begin with an aside: why it is that an annual communication from a CEO to the shareholders of a corporation that he/she leads is...

from Lars Syll In 2016, Vox sent out a survey to more than 200 scientists, asking, “If you could change one thing about how science works today, what would it be and why?” One of the clear themes in the responses: The institutions of science need to get better at rewarding failure. One young scientist told us, “I feel torn between asking questions that I know will lead to statistical significance and asking questions that matter.” The biggest problem in science isn’t statistical...

from Jason Hickel While the scholarship on  degrowth  has  outlined  the policy changes that would be necessary to achieve a safe and equitable transition to an ecological post-growth economy, the deep logic of such an economy remains undertheorized. Are the reforms that degrowth scholars propose in and of themselves sufficient to euthanize the capitalist growth imperative? Here I want to address this question by elaborating further on the argument that expanding public goods and services...

from Constantine Passaris and RWER current issue Internetization is a new word and concept that I have coined to describe the electronic empowerment of the 21st century. COVID-19 has forced us to acknowledge the extent to which technological change has impacted our individual and collective lives at every level and in numerous dimensions. Internetization includes global linkages and extends them by simultaneously embracing electronic connectivity and the empowerment of the Internet....

from Lars Syll Following the greatest economic depression since the 1930s, Robert Solow in 2010 gave a prepared statement on “Building a Science of Economics for the Real World” for a hearing in the U. S. Congress. According to Solow modern macroeconomics has not only failed at solving present economic and financial problems, but is “bound” to fail. Building microfounded macromodels on “assuming the economy populated by a representative agent” — consisting of “one single combination...

from Theodore Lianos and current RWER issue The increasing intensity of the environmental problems that we face as a global community for the last fifty years has led to the development of several important ideas and proposals regarding the systemic changes that may be introduced in order to reverse the existing tendencies. Most prominent among them are the Steady-State Economy (Daly, 1972), the Green Growth Economy or Green Economy (OECD, 2015, 2011; UN, 2012), the ideas of Degrowth...

from Dean Baker I realize that I may seem obsessed with the topic of patents (and copyrights), but it really is a big deal, and few people seem to appreciate the issue in its larger economic context. I have written about the inefficiency and corruption associated with these monopolies for decades, but if there was ever a time when public attention should be focused on reforming the system, it is now. With the pandemic costing millions of lives around the world, and costing our economies...

from Lars Syll Lawson believes that there is a ‘coherent core’ of heterodox economists who employ methods that are consistent with the social ontology they implicitly advance. However, Lawson also acknowledges that many also use mathematical modelling, a method that presupposes a social ontology that is in severe tension with it. Therefore, I repeat, Lawson proposes that heterodox economists in fact exist in two groups, those who use methods consistent with the social ontology they are...