Tag Archives: Economics

Panglossian trade theory facing reality I feel a little like Rip Van-Winkle. The consensus amongst economists in the 1980s was that trade is always and everywhere good for everyone. After attending a UCLA workshop on trade a couple of weeks ago, I learned that all that has changed. There is a new consensus, summarized in two papers, “The China Syndrome”, published in the American Economic Review, and “the China Shock”, a new working paper, by David Autor, David Dorn and Gordon Hanson...

Remember the old times? Here is a quote from ECB President Jean-Claude Trichet … on September 3rd, 2010: “We encourage all countries to be absolutely determined to go back to a sustainable mode for their fiscal policies,” Trichet said, speaking after the ECB rate decision on Thursday. “Our message is the same for all, and we trust that it is absolutely decisive not only for each country individually, but for prosperity of all.” “Not because it is an elementary recommendation to care for...

 [embedded content] If your German isn’t to rusty, this lecture by Hagen Krämer might give you some interesting reflections on the rather sad state of ‘modern’ macroeconomics.

Macroeconomics after the financial crisis A new volume of Routledge Frontiers of Political Economy series is out, featuring accessible, informative and provocative contributions by leading Post-Keynesian scholars on the shortcomings of mainstream microfoundeds DSGE modeling and the need for new — relevant and realist — views on economic — both fiscal and monetary — policies. Oh, and yes, yours truly is one of the contributors — as are e. g. James Galbraith, Engelbert Stockhammer and Jesper...

Keynes’ deadheads — still alive I am not confident, however, that on this occasion the cheap-money phase will be sufficient by itself to bring about an adequate recovery of new investment. It may still be the case that the lender, with his confidence shattered by his experiences, will continue to ask for new enterprise rates of interest which the borrower cannot expect to earn … If this proves to be so, there will be no means of escape from prolonged and perhaps interminable depression...

Krugman and ‘what Keynes really meant’ Paul Krugman has often been criticized by people like yours truly for getting things pretty wrong on  the economics of  John Maynard Keynes. When Krugman has responded to the critique, by himself rather gratuitously portrayed as about ‘what Keynes really meant,’ the overall conclusion is — ‘Krugman doesn’t care.’ Responding to a post up here on the blog, Krugman writes: Surely we don’t want to do economics via textual analysis of the masters. The...

So much for pluralism … It comes as no surprise to me—but it probably does to everyone outside of economics—that a senior lecturer at the University of Glasgow, Alberto Paloni, an expert in post-Keynesian theory, has been stopped from teaching a core degree module on macroeconomics. This, after an essay in the Royal Economic Society newsletter specifically cited Paloni’s course as introducing a necessary pluralism into the teaching of economics … All Paloni did was teach students some Post...

Lucas’ FORTRAN caricature of economics Lucas … internalized the caricature he extracted from Samuelson’s Foundations: that mathematical analysis is the only legitimate way of doing economic theory, and that, in particular, the essence of macroeconomics consists in a combination of axiomatic formalism and philosophical reductionism (microfoundationalism). For Lucas, the only scientifically legitimate macroeconomic models are those that can be deduced from the axiomatized...

  Back in the 80’s yours truly had the pleasure of studying German at University of Vienna. A wonderful town full of history and Kaffeehäuser. I’m really looking forward to visiting it again. In case you can’t be there, here’s an admittedly insufficient substitute, but still …  [embedded content]

Life Among the Econ A comparison of status relationships in the different “fields” shows a definite common pattern. The dominant feature, which makes status relations among the Econ of unique interest to the serious student, is the way that status is tied to the manufacture of certain types of implements called “modls.” The status of the adult male is determined by his skill at making the “modl” of his “field.” The facts (a) that the Econ are highly status-motivated, (b) that status is...