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Tag Archives: Uncategorized

Do economic models actually explain anything?

from Lars Syll One of the limitations with economics is the restricted possibility to perform experiments, forcing it to mainly rely on observational studies for knowledge of real-world economies. But still — the idea of performing laboratory experiments holds a firm grip of our wish to discover (causal) relationships between economic ‘variables.’ If we only could isolate and manipulate variables in controlled environments, we would probably find ourselves in a situation where we with...

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Radically misleading calculations

from Geoff Davies The point of a theory or model is to provide a useful guide to understanding the world. People like Paul Krugman are fond of claiming simple equilibrium models provide a useful first cut or first approximation to understanding. Others put their faith in more elaborate equilibrium models. But do equilibrium models, simple or elaborate, offer any useful guidance to actual economies, or are they perhaps radically misleading? Is this a useful guide to this? Or this? The...

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Taxing financial transactions is more strategic than taxing high wealth

from Dean Baker Presidential candidate Joe Biden is considering to propose a financial transactions tax as part of his campaign for the Democratic nomination, according to a recent report from The Washington Post. This is big news for those of us who have long advocated such a tax. Sen. Bernie Sanders has taken the lead on this issue among presidential candidates, including a financial transactions tax — also known as an FTT — as part of his plan for making college tuition free. Several...

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What is MMT?

from L. Randall Wray MMT provides an analysis of fiscal and monetary policy that is applicable to national governments with sovereign currencies. We argue that there are four essential requirements that qualify a national currency as sovereign in the sense in which we use the term: the National government chooses a money of account in which the currency is denominated; the National government imposes obligations (taxes, fees, fines, tribute, tithes) denominated in the chosen money of...

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Teflon economics

from Lars Syll At least since the time of Keynes’s famous critique of Tinbergen’s econometric methods, those of us in the social science community who have been impolite enough to dare to question the preferred methods and models applied in quantitative research in general and economics more specifically, are as a rule met with disapproval. Although people seem to get very agitated and upset by the critique — just read the commentaries on this blog if you don’t believe me — defenders of...

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Canadian Political Economy on Staple Thesis

In an impressive overview of the state of Canadian Political Economy, a new book Change and Continuity ed. by Mark P. Thomas et.al. includes two important articles on the continuing relevance of the staple thesis. On the one hand, Jim Stanford’s “Staples Dependence Renewed and Betrayed: Canada’s Twenty-First Century Boom and Best” does just as its title tells because of the reversion to dependence on petroleum as a staple export since 2000 and the deindustrializing effect on the national...

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An ideology called consumerism

We are guided by an ideology so familiar and pervasive that we do not even recognise it as an ideology. It is called consumerism. It has been crafted with the help of skilful advertisers and marketers, by corporate celebrity culture, and by a media that casts us as the recipients of goods and services rather than the creators of political reality. It is locked in by transport, town planning and energy systems that make good choices all but impossible. It spreads like a stain through...

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Central Bank History (3/5) 1914-1980

from Asad Zaman This series of posts is based on a single lecture (Lecture 13 of Advanced Macro II) exploring the evolving functions of Central Banks through time. It goes through a vast amount of material in a very short time, and hence is a very sketchy treatment. This is the 3rd post,  which deals with the period from WW! to the 1980s.  read more

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