Tag Archives: conventional economics

My office was subject to a random power failure for most of today because some greedy developer broke power lines in our area. So I am way behind and what was to be a two-part blog series will now have to extend into Wednesday (as a three-part series). That allows me more time today to catch up on other writing commitments. The three-part series will consider a recent intervention that was posted on the iNET site (September 6, 2018) – Mainstream Macroeconomics and Modern Monetary Theory:...

I just want to comment briefly on a few points that I saw some disagreements. Bond Economics Jayadev/Mason Article On MMTBrian Romanchuk

Say's Law ("money is a hot potato").Lars P. Syll’s BlogMainstream economics — peddling fake knowledgeLars P. Syll | Professor, Malmo University

One of the more puzzling aspects of neo-classical economic theory is the assertion that profits are zero in equilibrium under the conditions that are assumed for many models. One should re-interpret this statement as "excess profits" are zero, but there are still some awkward aspects to the treatment of profits in standard macro models. This article works through the theory of profits for an example dynamic stochastic general equilibrium (DSGE) model, and discusses the difficulties with the...

What Skidelsky and other critics of mainstream economics (both in its micro and macro parts) fail to recognise is that no new big idea willappear because mainstream economics is a deliberate result of the need to avoid considering the reality of capitalism. Its theories are ideological justifications of capitalism( its supposed tendency to harmonious growth, equilibrium and equality). When reality does not bear out the mainstream, it is ignored. That’s because ‘mainstream’ means support...

How did conventional economics survive the crisis? Handwaving.Criticism of Paul Krugman and New Keynesian economics, which is based on "rational behavior and market equilibrium as a baseline" (Krugman).Skidelsky concludes, "Macroeconomics still needs to come up with a big new idea."  I would rephrase that as "a new big idea." Theories are based on a "big idea" that constitutes the architecture of the framework. Rationality and equilibrium isn't it.Project SyndicateHow [Conventional]...

The good (ideal) and the bad (real) of conventional economics. The policy consequences are essentially two-fold. The first is in not recognizing the disjunction between the ideal (formal) and the real (empirical), which violates the basic requirement of a scientific approach and makes the undertaking an excursion in philosophy rather than science, even though it is dressed put to look like science. The consequence is policy formulation that doesn't lead to the predicted results,...

Hayek, Coase and uncertainty. In any case I find it fascinating that the two, Hayek and Coase, both in their own way, brought the impact of uncertainty to the fore in the same year. It’s a shame that economics has never fully embraced, nor realized, the full richness of their ideas. Neither author was willing to step into the world that they clearly understood existed. Hayek was right about universal central planning: it is an impossibility. He was wrong to assert that this implied...

History lesson. Trading one dogmatism for another?Michael Roberts BlogThe economics of Luther or Munzer?Michael Roberts

The other day, Rethinking Economics and the New Weather Institute published "33 theses" and metaphorically nailed them to the doors of the London School of Economics. They're re-published here. I think the "Protestant Reformation" metaphor they're going for is definitely appropriate: they're aiming to replace "neoclassical economics" — the Roman Catholic dogma in this metaphor — with a a pluralistic set of different dogmas — the various dogmas of the Protestant denominations (Lutheran,...