Tag Archives: Economics

The cost of focusing on general equilibrium theory The largest problem with the economics profession’s focus on general equilibrium theory is the opportunity costs of that exploration. Important policy problems are not addressed. Consider Pareto optimality and the welfare theorems, which Fisher sees as the underpinnings of Western capitalism. In a world, such as ours, where property rights cannot be allocated effortlessly and costlessly, economist’s welfare...

Reformulating the economics curriculum Having gone through a handful of the most frequently used textbooks of economics at the undergraduate level today, I can only conclude that the models that are presented in these modern mainstream textbooks try to describe and analyze complex and heterogeneous real economies with a single rational-expectations-robot-imitation-representative-agent. That is, with something that has absolutely nothing to do with reality....

[unable to retrieve full-text content]On the Revival of the “Quarterly Capitalism” Discussion: I’m definitely not screaming “YES YOU HAVE A POINT THAT’S WHY HILLARY BROUGHT IT UP YEARS AGO” into a pillow…

[unable to retrieve full-text content]On the Revival of the “Quarterly Capitalism” Discussion: I’m definitely not screaming “YES YOU HAVE A POINT THAT’S WHY HILLARY BROUGHT IT UP YEARS AGO” into a pillow…

Unfortunately, nothing is more dangerous than dogmas donned with scientific feathers. The current crisis might offer an excellent occasion for a paradigm change, previously called for by prominent economists like John Maynard Keynes, Alan Kirman and Steve Keen. They have forcefully highlighted the shortcomings and contradictions of the classical economictheory, but progress has been slow. The task looks so formidable that some economists argue that it is better to stick with...

The rational expectations hoax A lot of mainstream economists still stick with ‘rational expectations’ since they think it has not yet been disconfirmed. They are, of course, entitled to have whatever views they like — after all, it is, to say the least, difficult to empirically disconfirm the non-existence of Gods … But for the rest of us, let’s see how rational expectations really fare​ as an empirical assumption. Empirical efforts at testing the...

“I never learned maths, so I had to think” Professors may find themselves ill-prepared for the macro classroom. To become academics they had to answer erudite questions posed by more senior members of the discipline. To become good teachers of introductory macro, they have to give clear answers to muddled students. That requires an intuitive feel for the subject. It is not enough to crank through the equations. Indeed, Mr Rowe attributes part of his...

Touring again. Regular blogging to be resumed during the weekend. Advertisements

[unable to retrieve full-text content]Here are the Victims of Insider Trading, Hope I Didn’t Keep You Waiting Too Long: It’s official, we’re in a place where I have to actively counter “actually insider trading is just a victimless crime” takes…

[unable to retrieve full-text content]Here are the Victims of Insider Trading, Hope I Didn’t Keep You Waiting Too Long: It’s official, we’re in a place where I have to actively counter “actually insider trading is just a victimless crime” takes…