Tag Archives: Economics

Is ‘modern’ macroeconomics for real? Empirically, far from isolating a microeconomic core, real-business-cycle models, as with other representative-agent models, use macroeconomic aggregates for their testing and estimation. Thus, to the degree that such models are successful in explaining empirical phenomena, they point to the ontological centrality of macroeconomic and not to microeconomic entities … At the empirical level, even the new classical...

What is missing in Keynes’ General Theory The cyclical succession of system states is not always clearly presented in The General Theory. In fact there are two distinct views of the business cycle, one a moderate cycle which can perhaps be identified with a dampened accelerator-multiplier cycle and the second a vigorous ‘boom and bust’ cycle … The business cycle in chapter 18 does not exhibit booms or crises … In chapter 12 and 22, in the rebuttal to Viner,...

När svenska medier vill veta något om ekonomi frågar de Arturo Arques.Han är privatekonom på en storbank och när tidningen Flamman i förra veckan (4 jan) granskade vilka ekonomer som citeras i 100 artiklar i svensk press är han kårens mest pratsamma stjärna … Sex av tio intervjuade ekonomer kommer från näringslivet, framför allt från arbetsgivarorganisationer, banker och försäkringsbolag. Det är tiofalt fler än från facken och deras närstående organisationer, till exempel...

Cutting wages — the wrong medicine A couple of years ago yours truly had a discussion with the chairman of the Swedish Royal Academy of Sciences (yes, the one that yearly presents the winners of ‘The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel’). What started the discussion was the allegation that the level of employment in the long run is a result of people’s own rational intertemporal choices and that how much people work...

Guest Post by Jeff Mosenkis of Innovations for Poverty Action Hope everybody’s off to a great new year, and good luck to all the job candidates interviewing at ASSA. Also, remember from the last links that Ben Casselman, who’s been co-reporting on sexual harassment in economics for the New York Times, is there and happy to meet confidentially with anybody who wants to tell him about their experience. If you’re not on twitter, feel free to email me and I’ll put you in touch with him...

Why Bayesianism has not resolved a single fundamental​ scientific​ dispute Bayesian reasoning works, undeniably, where we know (or are ready to assume) that the process studied fits certain special though abstract causal structures, often called ‘statistical models’ … However, when we choose among hypotheses in important scientific controversies, we usually lack such prior knowledge​ of causal structures, or it is irrelevant to the choice. As a consequence,...

Economists telling fairy tales An important point is implicit. Economics is not hard because of math. The math in even graduate level economics is no greater than in sophomore physics. Classical economics is hard because it can attack social problems in a value-free, cause-and-effect way, and upends the little morality stories that most people use to think about those problems — rents are high because landlords are greedy. John Cochrane Mainstream...

20th anniversary for the euro — no reason for celebration When the euro was created twenty years ago, it was celebrated with fireworks at the European Central Bank headquarters in Frankfurt. Today we know better. There are no reasons to celebrate the 20-year anniversary. On the contrary. Already since its start, the euro has been in crisis. And the crisis is far from over. The tough austerity measures imposed in the eurozone has made economy after economy...

General equilibrium theory — nonsense on stilts General equilibrium is fundamental to economics on a more normative level as well. A story about Adam Smith, the invisible hand, and the merits of markets pervades introductory textbooks, classroom teaching, and contemporary political discourse. The intellectual foundation of this story rests on general equilibrium, not on the latest mathematical excursions. If the foundation of everyone’s favourite economics...

How to re-establish​​ trust in economics as a science Students all over the world are increasingly questioning if the kind of economics they are taught — mainstream economics — really is of any value. Some have even started to question if economics is a science. Two ‘Nobel laureates’ in economics — Robert Shiller and Paul Krugman — have lately tried to respond: Critics of “economic sciences” sometimes refer to the development of a “pseudoscience” of...