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Back in 2009, I looked at the implications of the GFC for retirement income, working on the assumption that retirees could safely aim for a 2 per cent real rate of return. The bottom line was that current workers need double contributions, to 20 per cent of income and shift the work-retirement balance, so that you work from 25 to 65 to finance an expected 20 years of retirement income. Since then, the real rate of return on safe investments like government bonds has fallen to...

from David Ruccio Keynes’s criticisms of neoclassical economics set off a wide-ranging debate that came to define the terms of—and, ultimately, the limits of debate within—mainstream economics. On one side are neoclassical economists, who celebrate the invisible hand and argue that markets are the best way to efficiently allocate scarce resources. On the other side are Keynesian economists, who argue instead for the visible hand of government intervention to move markets toward full...

from Dean Baker I have been harping on the fact that it is very likely China will be mass producing and distributing a vaccine at least a month, and quite possibly several months, before the United States. This should make people very angry. Even a month’s delay is likely to mean tens of thousands of avoidable deaths and hundreds of thousands of avoidable infections. And, it adds a month to the time period before we can get back to living normal lives. Of course, the delay could end up...

from Lars Syll Standard new Keynesian macroeconomics essentially abstracts away from most of what is important in macroeconomics. To an even greater extent, this is true of the dynamic stochastic general equilibrium (DSGE) models that are the workhorse of central bank staffs and much practically oriented academic work. Why? New Keynesian models imply that stabilization policies cannot affect the average level of output over time and that the only effect policy can have is on the amplitude...

I have a couple of articles responding to the most momentous budget in Australian history. For those who’ve forgotten, it was introduced on Tuesday. Here’s one in The Conversation on environment and energy policy (heavily edited and done in a hurry, so there are a few points I would have written differently). And here’s one in Independent Australia, headlined Budget like its 2019, on the government’s failure to learn from the catastrophes of the last year. Share this:Like...

from Gregory Daneke and RWER issue 93 The global financial crisis that began in earnest in 2008 (and is yet to be resolved) prompted significant challenges to the theory and methods of mainstream or orthodox (also known as Neoclassical and/or Neoliberal) economics. Even distinguished orthodox economists, Paul Krugman (2009) Joseph Stiglitz (2017), and Paul Romer (2020) have joined with the crescendo of obscure, yet profound, voices, such as: “institutionalist” (e.g. Hodgson, 2004),...

Another in my series of extracts from my book-in-progress, Economic Consequences of the Pandemic. So far I’ve looked at luck the limited relationship between returns and social value and the fact that risk-taking is mostly done (involuntarily) by the poor, not the rich. Now I’m going to consider possibilities for reform The biggest lesson of the pandemic, and indeed of the decade since the Global Financial Crisis is that (just about) anything is possible. The decades in which the...

Amazon  US  UK  DE  FR  ES  IT  JP  CA The everyday operations of our economies produce the goods and services that keep us alive and enable us to enjoy life. But that is not the only way that those operations effect our lives; they also effect societies and ecosystems. The Inequality Crisis, which threatens our societies, and the Climate Crisis, which threatens both our societies and our species, are also, no less than production, brought about directly by the everyday operations of our...