Tag Archives: Economics

Italy — shows why the euro has to be abandoned if Europe is to be saved Investors had until recently been widely expected the European Central Bank to signal at its next meeting in two weeks’ time that it would wind down QE later in the year. Now, questions are growing about how feasible it will be to withdraw the ECB’s buying power at a time when investors are already driving Italian debt costs higher. Nearly half a decade ago, the Greek debt crisis turned...

The ultimate takedown​ of teflon-coated defenders of rational expectations James Heckman, winner of the “Nobel Prize” in economics, was inteviewed by John Cassidy in 2010. What about the rational-expectations hypothesis, the other big theory associated with modern Chicago? How does that stack up now? … It became a kind of tautology that had enormously powerful policy implications, in theory. But the fact is, it didn’t have any empirical content. When Tom...

Behavioural economics — still too devoted to ideas it is supposedly attacking Behavioral economics is still ‘in a relationship’ with orthodox economics and, in a relationship, one makes compromises … We all know how stubborn the other side in this relationship is: standard economics will always ‘rationalize’ behavior wherever it can and will only recognize ‘irrationality’ when there is clear and convincing evidence of it. Understandably, behavioral...

Modern division of labour … Advertisements

The follies and fallacies of Chicago​ economics  [embedded content] Advertisements

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Mainstream economics — peddling fake knowledge Based on the [quantity theory of money equation MV = PQ] holding the money velocity constant, if the money supply (M) increases at a faster rate than real economic output (Q), the price level (P) must increase to make up the difference. According to this view, inflation in the U.S. should have been about 31 percent per year between 2008 and 2013, when the money supply grew at an average pace of 33 percent per...

  Macroeconomics was born as a distinct field in the 1940s (sic!), as a part of the intellectual response to the Great Depression. The term then referred to the body of knowledge and expertise that we hoped would prevent the recurrence of that economic disaster. My thesis in this lecture is that macroeconomics in this original sense has succeeded: Its central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many...

The truth about what money really is  [embedded content] Advertisements

The ugly truth about gangsters of finance  [embedded content] Advertisements