Tag Archives: Economics

Economics textbooks transmogrifying truth — wages and unemployment A couple of weeks ago yours truly was sent a copy of the new edition of Chad Jones intermediate textbook Macroeconomics (4th ed, W W Norton, 2018). There’s much in the book I like, e. g. Jones’  combining of more traditional short-run macroeconomic analysis with an accessible coverage of the Romer model — the foundation of modern growth theory — and DSGE business cycle models. Unfortunately...

Labour’s manifesto — not continued austerity — is what the UK needs On 8 June, voters will go to the polls for perhaps the most important UK general election since 1945. The importance arises in great part from profound differences in economic policy, reflecting different views of the nature and health of the British economy. The Conservative manifesto calls for continued austerity, which will tend to slow the economy at a crucial juncture, against the...

‘Cauchy logic’ in economics What is 0.999 …, really? Is it 1? Or is it some number infinitesimally less than 1? The right answer is to unmask the question. What is 0.999 …, really? It appears to refer to a kind of sum: .9 + + 0.09 + 0.009 + 0.0009 + … But what does that mean? That pesky ellipsis is the real problem. There can be no controversy about what it means to add up two, or three, or a hundred numbers. But infinitely many? That’s a different story....

[embedded content] Nationalekonomer hävdar ofta — vanligtvis med hänvisning till Milton Friedman och hans metodologiska individualism — att det inte gör så mycket om de antaganden som deras modeller bygger på är realistiska eller ej. Vad som betyder något är om de prediktioner/förutsägelser/prognoser som modellerna resulterar i visar sig vara riktiga eller ej. Om det verkligen är så, är den enda slutsats vi kan dra att dessa modeller och prognoser hör hemma i papperskorgen....

Deirdre McCloskey — shallow and misleading This is not new to most of you of course. You are already steeped in McCloskey’s Rhetoric. Or you ought to be. After all economists are simply telling stories about the economy. Sometimes we are taken in. Sometimes we are not. Unfortunately McCloskey herself gets a little too caught up in her stories. As in her explanation as to how she can be both a feminist and a free market economist: “The market is the great...

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Economics textbooks transmogrifying truth — growth theory  [embedded content] The above vidoe is one in a series of videos where Alex Tabarrok and Tyler Cowen present their economics textbook Principles of Economics. In a later video, ‘ideas’ are introduced into the Solow growth model. But, not with a single word does one acknowledge that this in total contradiction to the Holy Grail of their mainstream economics — the “iron logic of diminishing returns.”...

Tax cuts won’t do it Stuck in the present ‘secular stagnation’ looking situation, politicians and economists have to make some choices if they want to get the economy going. From a Keynesian perspective one could perhaps contemplate (A) central banks lowering interest rates and doing some quantitative easing (B) governments cutting taxes and increase budget deficits (expansive monetary policies) (C) governments expanding through spending of their own...

Swedish housing bubble soon to burst House prices are increasing fast in EU. And more so in Sweden than in any other member state, as shown in the Eurostat graph below, showing percentage increase in annually deflated house price index by member state 2015: Sweden’s house price boom started in mid-1990s, and looking at the development of real house prices during the last three decades there are reasons to be deeply worried. The indebtedness of the Swedish...

Guest post by Jeff Mosenkis of Innovations for Poverty Action. “Why Poverty is Like a Disease” looks at epigenetics and how poverty interacts with one’s own biological development. It’s well written, by someone who describes what it was like growing up poor and how hard it was to escape. (h/t David Batcheck) Our World in Data asks “How Much Will it Cost to Mitigate Climate Change?” Some nice news via Dina Pomeranz: globally deaths from diarrheal disease fell by a third between 2005 and...