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from Asad Zaman This is the continuation of a sequence of posts on methodology of economics and econometrics (For previous posts, see: Mistaken Methodologies of Science 1, Models and Realities 2, Thinking about Thinking 3, Errors of Empiricism 4, Three Types of Models 5, Unrealistic Mental Models 6, The WHY of Crazy Models 7, The Knowledge of Childless Philosophers 8, Beyond Kant 9,). In this (10th) post, we consider the methodology of econometrics, which is based on Baconian or...

from Dean Baker Last week, Antonio Weiss, along with co-author Laura Kawano, released a paper advocating a financial transactions tax (FTT). I have long been an advocate of FTTs, so I’m always glad to see another paper making the case. However, what made this paper especially noteworthy is Weiss’s background. Weiss had been a top Treasury official under President Obama, and previously a partner at the investment bank, Lazard, so he is not the sort of person who would typically be expected...

from Blair Fix You can’t get the right answer when you ask the wrong question. This truism, I’ve come to believe, explains much of what is wrong with economics. When it comes to studying income, economists ask the wrong question. Economists, I argue, have mostly asked: is income fair? The problem is that this is a moral question, not a scientific one. It has no scientific answer. When the wrong questions get entrenched You can’t get the right answer when you ask the wrong question. This...

fro Norbert Häring If the trend of the last two decades continues, index funds could control 40 percent of the voting rights in the largest corporations by 2040.The share is already up to 25 percent in the US. There a two perspectives on this. Some scholars say it threatens shareholder value, others fear it will lead to too much of it. I side with the latter. … Law-and-economics professors Lucian Bebchuk and Scott Hirst from the Universities of Harvard and Boston make the extrapolation of...

Thomas I. Palley, Esteban Pérez Caldentey, and Matias Vernengo, Review of Keynesian Economics, January 2020. Professor Robert Rowthorn delivered the second annual Godley-Tobin lecture in New York City on March 1, 2019. The title of his lecture was “Keynesian economics: back from the dead?” and it is published in this issue of the Review of […]

from Lars Syll The gender pay gap is a fact that, sad to say, to a non-negligible extent is the result of discrimination. And even though many women are not deliberately discriminated against, but rather self-select into lower-wage jobs, this in no way magically explains away the discrimination gap. As decades of socialization research has shown, women may be ‘structural’ victims of impersonal social mechanisms that in different ways aggrieve them. Wage discrimination is unacceptable....

from Asad Zaman This is a continuation of previous post on “The Knowledge of Childless Philosophers“. I would like to clarify some aspects of the theory of knowledge which have become muddled and confused because childless philosophers did not observe how children learn about the world, and acquire knowledge starting from scratch. If they had taken this as the basic model for how we acquire knowledge, they would have been able to avoid a huge number of mistakes. A realist methodology for...

In a previous post, I argued that rising incomes and increasingly liberal attitudes may move opinion and policy in a progressive direction in the United States.  However, the Democratic victory in the 2018 election did not signal the start of a progressive “revolution”; it mostly reflected a predictable reaction to the unpopular policies of Trump and congressional Republicans.  Any major progressive shift in policy will be hard fought and will likely take...

from Blair Fix I confess that I have a recurring nightmare. In it, I realize that everything I’ve ever written about economics is wrong. Neoclassical economics is not, as I’ve repeatedly claimed, a pile of bullshit. In this nightmare, neoclassical economics is correct. And as a strident critic of neoclassical theory, I realize the horrible truth. I’m a crank! I wake up in a cold sweat, wondering if I’m wasting my life. Then, as rational thought returns, my fears ebb away. I think about...