Wednesday , February 26 2020
Home / Tag Archives: Uncategorized

Tag Archives: Uncategorized

Do stockholders look forward to a decade of very low returns?

from Dean Baker In spite of completely missing the crash of the stock bubble in 2000-2002 and the housing bubble in 2007-2010, people tend to think that the big actors in the stock market have great insight into the economy’s prospects. While I won’t claim to have a crystal ball that predicts the future of the economy (I had warned of both of those crashes), I did learn arithmetic in third grade. There are some simple and important statements we can make about future stock returns, based...

Read More »

The ‘New Keynesian’ Monetarist fantasy is finally over

from Lars Syll 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 assigned role. At least fiscal policy might in principle be up to the task...

Read More »

Cross-country comparisons of wealth

from Asad Zaman This continues a sequence of posts on how objective looking statistics conceal hidden values, because a positivist approach prohibits open expression and discussion of value judgments. Previous posts in the sequence are: Lies, Damned Lies, and Statistics, Subjectivity Concealed in Index Numbers, and The Values of a Market Society. Countries compete with each other on the GDP numbers, without any awareness of the values which are embodied in such competitions. Such...

Read More »

Paul Romer explains what went wrong with economics

from Lars Syll 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 models that they can use a model to show that almost anything is...

Read More »

The values of a market society

from Asad Zaman Continued from previous post on Subjectivity Concealed in Index Numbers. Because modern epistemology rejects values as being just opinions, and only accepts facts as knowledge, values have be to disguised in the shape of facts. What better way to do this than by embodying them in cold hard and indisputable numbers? This post discussed how the GDP embodies the values of a market society. From the sixteenth to the eighteenth century, the values of European societies were...

Read More »

We need a ‘Fridays for Keynesianism’ movement!

from Lars Syll 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 …...

Read More »

How to roast the planet with good intentions: The Climate Equity Act

I have suggested (here and here) that idealism is leading progressives astray.  Unfortunately, climate policy offers many examples. Consider the Climate Equity Act of 2019.  The CEA was, I believe, the first concrete piece of legislation proposed as part of the Green New Deal.  Unfortunately, it illustrates several of the problems with progressive idealism.  The CEA is moralistic rather than strategic.  It does not take policy analysis seriously; it...

Read More »

Wealth has always been about power

What has confused economists for centuries is that they’ve focused on what’s inside the fence of property rights, not the fence itself. And who can blame them? Historically, the things that were owned were easy to see. In contrast, the act of ownership — the institutional fence of private property — was abstract. And so economists tied wealth to property, not the property-rights fence. The confusion dates back to the physiocrats. They saw agricultural land and proposed that it was the...

Read More »