Tag Archives: Economics

The neocon factor dramatically changes the interpretation of the Trump administration’s unilateralist international economic policy chatter. Donald Trump’s first one hundred days have revealed his inclination for unilateralism in international relations. That inclination reflects his opportunistic and bullying disposition, and it also fits well with his anti-globalization pose. Trump’s unilateralism has also spawned a dangerous waltz with [...]

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 Cochrane What Cochrane is reiterating here is nothing but Say’s law,...

[embedded content] Today is Mother’s Day in Sweden. This one is in loving memory of my mother Lisbeth, and of Kristina, beloved wife and mother of David and Tora. Those whom the gods love die young. But in dreams, I can hear your name. And in dreams, We will meet again. When the seas and mountains fall And we come to end of days, In the dark I hear a call Calling me there I will go there And back again. div{float:left;margin-right:10px;} div.wpmrec2x div.u >...

Just face it — austerity policies do not work!  If failing to understand some basic Keynes­ian relations is a part of the explanation of what happened, there was also another, and more subtle, story behind the confounded economics of austerity. There was an odd confusion in policy thinking between the real need for institutional reform in Europe and the imagined need for austerity – two quite different things … An analogy can help to make the point clearer:...

Expansionary austerity? You gotta be kidding! [embedded content] [h/t Gabriel Uriarte] div{float:left;margin-right:10px;} div.wpmrec2x div.u > div:nth-child(3n){margin-right:0px;} ]]> Advertisements

Trumponomics: How Trump skillfully used anti-globalization as bait to cover up his extremely neoliberal switch. A key element of Trump’s political success has been his masquerade of being pro-worker, which includes posturing as being anti-globalization. However, his true economic interests are the exact opposite. That creates conflict between Trump’s political and economic interests. For political leaders [...]

Financial crises — no big deal Many say or think that there were problems in the financial system that gave rise to the Great Depression. We’ve looked at that in a systematic way using modern theory. And we found that businesses had all kinds of money to invest, and they didn’t. They increased distributions to owners. Why? The answer is that businesses did not perceive they had profitable investment opportunities. I don’t think financial crises are a big...

Building a science of economics for the real world [embedded content] Following the greatest economic depression since the 1930s, Robert Solow in 2010 gave a prepared statement on “Building a Science of Economics for the Real World” for this hearing in the U. S. Congress. According to Solow modern macroeconomics has not only failed at solving present economic and financial problems, but is “bound” to fail. Building microfounded macromodels on “assuming the...

Neoliberalism — an oversold ideology So what’s wrong with the economy? … A 2002 study of United States fiscal policy by the economists Olivier Blanchard and Roberto Perotti found that ‘both increases in taxes and increases in government spending have a strong negative effect on private investment spending.’ They noted that this finding is ‘difficult to reconcile with Keynesian theory.’ Consistent with this, a more recent study of international data by the...

Tio trasiga teorier om ekonomi Under ett par decennier har jag undersökt företagsvärlden och samhällsekonomins många olika uttryck och avarter. Men det har hela tiden varit något som skavt … Tänk om det var något med själva kartan. Själva teorin och modellen … Snabbt blev det uppenbart för mig att många av teorierna och modellerna bakom den dominerande ekonomiska politiken inte alls var så objektiva, vetenskapligt robusta och okontro-versiella som de ofta...