Tag Archives: Economics

Guest post by Jeff Mosenkis of Innovations for Poverty Action Thanks for being patient while the links were on hiatus, we’re back! COVID-19 is obviously on everybody’s mind. For the dev crowd, let’s remember that right now travel from US/Europe to the Southern hemisphere might spread the disease to vulnerable places with much weaker health systems.I apologize for not having it handy, but there was a good thread about how the mental model of the poor countries being the source of diseases may...

A new must-read for every MMTer

Was Hyman Minsky a communist? Was Minsky a communist? Definitely not. Was Minsky a socialist? Definitely yes. His daughter Diana remembers that, “in eighth grade, the Social Studies teacher, Mr. Snodgrass, was engaging the students in conversation about political parties and dialogue in the United States, so we were all asked to bring home a list of questions. One was our family’s political allegiance, not answering was an option—plus Democratic or...

Why every econ paper should come with a warning label! It should be part of the academic competences of trained economists to be able to be clear about what their models are for; what the models are about; what the models are capable of doing, and what not; how reliable the models are; what sorts of criticisms have been levelled against the models and how the criticisms have been responded; what alternative models there are; etc. The challenge is not easy,...

How economists reshaped the world [embedded content] To yours truly, the real value of Appelbaum’s meticulously researched history of how economists have come to increasingly influence public policies in modern societies, is that it shows how fundamentally ideological economics is. Of course, you never hear anyone at our seminars telling the lecturer that the assumptions on which his models are built are only made for ideological reasons. But that does not...

The ‘New Keynesian’ Monetarist fantasy is finally over Kenneth Rogoff of Harvard recently argued that fiscal stabilization policy “is far too politicized to substitute consistently for modern independent technocratic central banks.” But instead of considering how this defect might be overcome, Rogoff sees no alternative to continuing with the prevailing monetary-policy regime – despite the overwhelming evidence that central banks are unable to play their...

Paul Romer explains what went wrong with economics Economists cannot simply dismiss as “absurd” or “impossible” the possibility that our profession has imposed total costs that exceed total benefits. And no, building a model which shows that it is logically possible for economists to make a positive net contribution is not going to make questions about our actual effect go away. Why don’t we just stipulate that economists are now so clever at building...

Basically, the classical model is a model for a corn economy: households decide whether to consume the corn or to save it. If it is saved it can be supplied to investors who sow the grains, repaying to the households one period later the credit amount plus interest. In the Keynesian model the ‘funds’ exchanged on the capital market are made up of money—‘funds’ are bank deposits. Funds are not created here by a renunciation of consumption but by the banks granting credit … In...

What is truth in economics? In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner. Robert Aumann What a handy view of science … How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to...

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