Tag Archives: Economic Theory

November 3rd, 2019, I delivered remarks on the closing panel of The New School/UMASS Amherst Graduate workshop held in New York City. The panel theme was “Broadening the boundaries of political economy”. I have since graduated and successfully gone through the job market. I hope my remarks from last year can serve as encouragement for fellow female, black, African-American, Latinx, and ethnic minority economic students, as well as all students in the field who have ever felt...

November 3rd, 2019, I delivered remarks on the closing panel of The New School/UMASS Amherst Graduate workshop held in New York City. The panel theme was “Broadening the boundaries of political economy”. I have since graduated and successfully gone through the job market. I hope my remarks from last year can serve as encouragement for fellow female, black, African-American, Latinx, and ethnic minority economic students, as well as all students in the field who have ever felt...

A sizeable portion of the US discussions about economic policy toward China seem to me based on two conceptual mistakes. One mistake is that China's rapid economic growth fundamentally depends on trade with the US. The other mistake is that the bulk of US economic problems depend in some fundamental way on trade with China.... It's worth spelling out the underlying logic here a bit. The formula for economic growth is to invest in human capital, physical capital, and technology, in an...

Knowledge as a factor of production. Knowledge is broader than information. Knowledge includes tacit knowledge, skill, and critical and creative thinking. In other words, the study of knowledge involves epistemology, logic and language, psychology, and other relevant fields in addition to information.  Information can be formalized but a great deal of knowledge cannot, at least given present limitations and future prospects through technology. Labor as the human component of...

Paul Krugman still wrong. The mainstream model of an economy based on general equilibrium, rational utility maximization, and money neutrality is one of a possible world that doesn't exist and can't exist in a monetary production economy. There is nothing wrong with constructing models of possible worlds, and, in fact, all models exist in possibility space, not real space. But it is wrong to claim or imply that such models of possible worlds apply to the real world when there is evidence...

J.W. Mason kicked off the latest skirmish in the never-ending macro wars with his Jacobin article "A Demystifying Decade for Economics." (Note: at the time of writing, the article was taken down until its publication in Jacobin.) This prompted a Twitter debate about representative agent macro, which eventually led to this Beatrice Cherrier article on heterogeneous agent models. In my view, the debate about representative agent models is a red herring. Mainstream macroeconomists main skill...

(The new issue of Jacobin has a piece by me on the state of economics ten years after the crisis. Since it’s not online yet, I’m posting the full text here, plus a few paragraphs that did not make it in. Even though they gave me plenty of space, and Seth Ackerman’s edits were as always superb, they still cut some material that, as king of the infinite space of this blog, I would rather include.) J. W. Mason's BlogIn Jacobin: A Demystifying Decade for EconomicsJW Mason | Assistant Professor...

Jason Smith comments on J. W. Mason and Arun Jayadev on MMT and conventional economics from the point of view of scientific modeling in macro.Information Transfer EconomicsWhat do equations mean?Jason Smith

Abstract An increasingly visible school of heterodox macroeconomics, Modern Monetary Theory (MMT), makes the case for functional finance – the view that governments should set their fiscal position at whatever level is consistent with price stability and full employment, regardless of current debt or deficits. Functional finance is widely understood, by both supporters and opponents, as a departure from orthodox macroeconomics. We argue that this perception is mistaken: While MMT’s policy...

My paper is a survey of the huge amount of solid empirical evidence against the utility maximization hypothesis that is at the core of all microeconomics currently being taught today in Economics textbooks at universities all over the world. It is obviously important, because if what it says is true, the entire field of microeconomics needs to be re-constructed from scratch. Nonetheless, it was summarily rejected by a large number of top journals, before being eventually published by Jack...