Tag Archives: Economics

A philosophical look at economics Owing to the elegance of explanations in natural science, scientists in other disciplines are likely to be tempted to emulate this success. While that is a good thing in the sense of striving to observe the four criteria or coherence, correspondence, practicality and economy, it is not a good thing if scientists doing life or social science become unmindful of the limitations imposed by the subject matter of their...

Economics — more like phrenology than physics What made phrenology so popular was what also made economics so popular at the time: it gave a rationale for a society based on Progress and also provided a blueprint for how this could be achieved. The phrenological doctrine, being so vague in its pronouncements, was highly malleable and could be used to justify whatever those in power needed justifying. So, for example, in 19th century England phrenology was...

My recent research with Carine Nourry and Alain Venditti argues that while there are strong reasons for believing there are no free lunches left uneaten by bonus-hungry market participants, there are really no reasons for believing that this will lead to Pareto efficiency, except, perhaps, by chance … In our model environment, booms and crashes occur simply as a consequence of the animal spirits of market participants. Why should we care if there are big movements in the...

Reality virus strikes economics! The WHO today warned of a virulent new virus affecting vulnerable groups in the Mid-West and Eastern USA. The outbreak, which began in the Mid-West’s extensive Great Lakes ‘Freshwater’ river system, has recently jumped the ‘Saltwater’ barrier, meaning that the entire population of its target species – ‘Mainstream’ economists – is now at risk. Speaking on behalf of the WHO, Dr Cahuc explained that the virus works by turning...

New Keynesianism — neither new nor Keynesian Maintaining that economics is a science in the ‘true knowledge’ business, I remain a skeptic of the pretences and aspirations of ‘New Keynesian’ macroeconomics. So far, I cannot really see that it has yielded very much in terms of realist and relevant economic knowledge. And there’s nothing new or Keynesian about it. ‘New Keynesianism’ doesn’t have its roots in Keynes. It has its intellectual roots in Paul...

A true Post Keynesian But these more recent writers like their predecessors were still dealing with a system in which the amount of the factors employed was given and the other relevant facts were known more or less for certain. This does not mean that they were dealing with a system in which change was ruled out, or even one in which the disappointment of expectation was ruled out. But at any given time facts and expectations were assumed to be given in a...

Unless you have a PhD in economics, you probably think it uncontroversial to argue that we should be concerned about the unemployment rate. Those of you who have lost a job, or who have struggled to find a job on leaving school, college, or a university, are well aware that unemployment is a painful and dehumanizing experience. You may be surprised to learn that, for the past thirty-five years, the models used by academic economists and central bankers to understand how the...

This is cute because it makes the process seem kind of badass, but here’s the thing- the WSJ has to be, well, the WSJ, so this description is both accurate and completely misleading. As such, allow me to provide my less sanitized but more representative account: Yes, there is a big economics conference- the annual meeting of the “Allied Social Sciences Association,” which is the parent organization of the American Economic Association- held the first weekend in January each year,...

The true nature of saving An act of individual saving means — so to speak — a decision not to have dinner to-day. But it does not necessitate a decision to have dinner or to buy a pair of boots a week hence or a year hence or to consume any specified thing at any specified date. Thus it depresses the business of preparing to-day’s dinner without stimulating the business of making ready for some future act of consumption. It is not a substitution of future...

Rational expectations — knowing what you see can’t be there …  [embedded content]