Tag Archives: Economics

Uskali Mäki on the ’empirical turn’ in economics  [embedded content]

Alesina’s ‘expansionary austerity’ — a tale of scientific delusion Alberto Alesina has returned to the debate on budget deficits, austerity, and growth … Now, with fellow economists Carlo Favero and Francesco Giavazzi, Alesina has written a new book entitled Austerity: When It Works and When It Doesn’t … New book, old tune. The authors’ conclusion, in a nutshell, is that “in certain cases the direct output cost of spending cuts is more than compensated for...

Economics education needs a revolution Economics has become a rather quaint and highly guarded discipline. We urgently need to update economics education to change this – because economics, as taught in universities, does not reflect or speak to many of the issues of the real world, be they political, environmental or social. Take the tricky entanglement between politics and economics, which economists tend to try to avoid. Such an attempt is futile....

10 Jahre Finanzkrise: Die Party der Banker geht weiter  [embedded content]

Although expected utility theory is both theoretically and descriptively inadequate, mainstream economists gladly continue to use it, as though its deficiencies were unknown or unheard of. Daniel Kahneman writes — in Thinking, Fast and Slow — that expected utility theory is seriously flawed since it doesn’t take into consideration the basic fact that people’s choices are influenced by changes in their wealth. Where standard microeconomic theory assumes that preferences are...

Randomization and experimental design in the social sciences Thad Dunning’s book Natural Experiments in the Social Sciences is a very useful guide for social​ scientists interested in research methodology in general and natural experiments in specific. Dunning argues that since random or as-if random assignment in natural experiments obviates the need for controlling potential confounders, this kind of “simple and transparent” design-based research method...

Money, law and democracy  [embedded content]

Warren Mosler und die Modern Monetary Theory ZEIT ONLINE: Eine Regierung kann also Geld ausgeben, so lange es keine Inflation gibt? Mosler: So ungefähr. Etwas technischer formuliert: So lange in der Volkswirtschaft freie Kapazitäten vorhanden sind, es also zum Beispiel Menschen gibt, die eine Arbeit suchen und in der Privatwirtschaft nicht fündig werden. ZEIT ONLINE: Gibt es die in Europa? Mosler: Mit Sicherheit. Schauen Sie sich doch die...

SMD theory means that assumptions guaranteeing good behavior at the microeconomic level do not carry over to the aggregate level or to qualitative features of the equilibrium. It has been difficult to make progress on the elaborations of general equilibrium theory that were put forth in Arrow and Hahn 1971 … Fifteen years after General Competitive Analysis, Arrow (1986) stated that the hypothesis of rationality had few implications at the aggregate level. Kirman (1989) held...

Comment éviter la prochaine crise financière mondiale ?  [embedded content]