Tag Archives: Economics

Give the public debt some respect and end austerity! The claim that our public debt is excessive has been used as a major justification for austerity – cuts in spending. That massive debt, we are told, 1) must be repaid, 2) threatens our country with bankruptcy, and 3) is a burden on future generations. All these are wrong. Let me explain why … Britain’s national currency is managed by our central bank, the Bank of England, owned by the citizens of the...

Lange prägten Legenden das Bild des Investors Keynes. Sein Biograf Donald Moggridge etwa berichtet, dass Keynes das Volumen der King’s Chapel, der weltberühmten gotischen Kapelle des Colleges, schätzen ließ, in der Absicht, dort Getreide einzulagern, um es später mit Gewinn zu verkaufen. Wie Keynes wirklich für das College investiert hat, haben kürzlich zwei Ökonomen untersucht. David Chambers (Cambridge) und Elroy Dimson (London) konnten Abrechnungen und Jahresberichte aus...

Why every economics paper should come with a warning label It should be part of the academic competences of trained economists to be able to be clear about what their models are for; what the models are about; what the models are capable of doing, and what not; how reliable the models are; what sorts of criticisms have been levelled against the models and how the criticisms have been responded; what alternative models there are; etc. The challenge is not...

På Ekonomistas har Jesper Roine några ‘spelteoretiska resonemang’ kring den pågående och utdragna regeringsbildningen i vårt land: Det överlägset mest kända resultatet när det gäller att applicera spelteori på politik är det så kallade medianväljar-teoremet. Enkelt uttryckt säger det att om politik kan beskrivas som att inta en position på en vänster-högerskala och två partier (eller ”block”) konkurrerar om väljarnas stöd så tenderar politiken att konvergera mot det som...

Chicago economics — utterly and completely wrong Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both. This form of “crowding out” is just accounting, and doesn’t rest on any perceptions or behavioral assumptions. John...

How do models relate to reality?  [embedded content] Advertisements

Guest post by Jeff Mosenkis of Innovations for Poverty Action. I’ve been really enjoying the Vox and IRC collaboration podcast Displaced (Apple). Some highlights for me were Rachel Glennerster (who had an amazing response to the Guardian op-ed on RCTs), Alix Zwane, Owen Barder, and Stefan Dercon. I think I pinpointed one reason it feels so informative – the hosts have clearly read up on the topic, and the way they ask questions gives you all the background you need to get right into a really...

New Keynesians use mathematics to ‘prove’ some very odd stuff … Take, for example, a paper by Campbell Leith and Simon Wren-Lewis entitled Electoral Uncertainty and the Deficit Bias in a New Keynesian Economy. The thrust of the paper is that our particular form of party-based democracy naturally leads to ‘deficit bias’ … The authors identify the root problem to be one of ‘heterogeneity’ — the fact that different political parties will have different views about how to run the...

RBC — nothing but total horseshit! They try to explain business cycles solely as problems of information, such as asymmetries and imperfections in the information agents have. Those assumptions are just as arbitrary as the institutional rigidities and inertia they find objectionable in other theories of business fluctuations … I try to point out how incapable the new equilibrium business cycles models are of explaining the most obvious observed facts of...

Keynes e il ruolo dello stato nell’economia  [embedded content] Advertisements