Tag Archives: Economics

Game theory — a severe case of ‘as if’ Model Platonism The critic may respond that the game theorist’s victory in the debate is at best Pyrrhic, since it is bought at the cost of reducing the propositions of game theory to the status of ‘mere’ tautologies. But such an accusation disturbs the game theorist not in the least. There is nothing a game theorist would like better than for his propositions to be entitled to the status of tautologies, just like...

An earlier post discussed some of the dynamics of output and demand implicit in the income-expenditure model. Attention was confined to a simplified economy that was stationary other than when adjusting to one-off exogenous changes in demand. The present post considers a continually growing economy in which autonomous demand changes over time. The discussion is kept simple by treating all demand other than private consumption as exogenous. The model can be extended to include additional...

The status quo of Economics ten or fifteen years ago was that paying $8 to see a revenge fantasy of a fictitious protagonist taking fictitious revenge on a fictitious bad guy who has fictitiously wronged him falls tightly under economists de-gustibus-non-est-disputandum sensibility, whereas a subject spending $8 to take real revenge on a real-life bad guy who has wronged the subject himself needed explaining. Looked at by an outsider not wedded to the assumption of 100%...

Tooze: Viele Menschen, die Trump gewählt haben, sind der Überzeugung: Die Regierungen der vergangenen Jahrzehnte haben sich nicht um mich gekümmert. Damit haben sie sogar Recht. Jetzt ist da aber plötzlich jemand, der nimmt uns ernst. ZEIT ONLINE: Aber stimmt das wirklich? Nimmt Trump diese Menschen ernst? Tooze: Natürlich ist Trump in Wahrheit kein Interessensvertreter für die Stahlarbeiter im Rustbelt. Das zu glauben, wäre sehr naiv. Er mag eine Sympathie für diese Menschen...

Top 20 heterodox economics books Karl Marx, Das Kapital (1867) Thorstein Veblen, The Theory of the Leisure Class (1899) Joseph Schumpeter, The Theory of Economic Development (1911) Nikolai Kondratiev, The Major Economic Cycles (1925) Gunnar Myrdal, The Political Element in the Development of Economic Theory (1930) John Maynard Keynes, The General Theory (1936) Karl Polanyi, The Great Transformation (1944) Paul Sweezy, Theory of Capitalist Development...

Guest post by Jeff Mosenkis of Innovations for Poverty Action. Preregistration stops medications from working Tyler Cowen interviewed Chris Blattman and in typical Cowen fashion came prepared – I had to slow down my usual podcast playback speed to keep up. Topics Included what Chris learned from his first job at a higher class Canadian KFC, interviewing child soldiers, causes of the Peloponnesian Wars, why he’d rather transfer accountants to poor countries than cash, and how he tries to...

Ricardian equivalence — nothing but total horseshit! Ricardian equivalence basically means that financing government expenditures through taxes or debts is equivalent since debt financing must be repaid with interest, and agents — equipped with ‘rational expectations’ — would only increase savings in order to be able to pay the higher taxes in the future, thus leaving total expenditures unchanged. Why? In the standard mainstream consumption model — used in...

In mainstream economics — especially in microeconomics, social choice and game theory — it is taken for granted (by definition) that the actors appearing in the model world, are rational and try to satisfy given preferences. But, confronting the axiomatic model world with the real world, it usually turns out that quite a few actors​ are irrational. In a classic experiment conducted by Barbara McNeil and colleagues, it was investigated how variations in the way information was...

How money is created Everything we know is not just wrong – it’s backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There’s really no limit on how much...

The belief in the power and necessity of formalizing economic theory mathematically has thus obliterated the distinction between cognitively perceiving and understanding concepts from different domains and mapping them into each other. Whether the age-old problem of the equality between supply and demand should be mathematically formalized as a system of inequalities or equalities is not something that should be decided by mathematical knowledge or convenience. Surely it would...