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from Lars Syll Ed Leamer’s Tantalus on the Road to Asymptopia is one of my favourite critiques of econometrics, and for the benefit of those who are not versed in the econometric jargon, this handy summary gives the gist of it in plain English: Most work in econometrics and regression analysis is made on the assumption that the researcher has a theoretical model that is ‘true.’ Based on this belief of having a correct specification for an econometric model or running a regression, one...

The next post is interesting on different levels. First, interest rates are low and it shows that medium run changes in these rates can to quite some extent be ‘explained’ by a cocktail of:  economic variables, price setting by central banks and expectation variables (mind that the model is straightforward but the variables aren’t!). This, however, does not explain why USA rates are quite a bit higher than (in this case) German rates, even when inflation, growth and unemployment in the...

… what replaces it will be even worse. That’s the (slightly premature) headline for my recent article in The Conversation. The headline will become operative in December, if as expected, the Trump Administration maintains its refusal to nominate new judges to the WTO appellate panel. That will render the WTO unable to take on new cases, and bring about an effective return to the General Agreement on Trade and Tariffs (GATT) which preceded the WTO. An interesting sidelight is...

by New Deal democrat Weekly Indicators for October 21 – 25 at Seeking Alpha My Weekly Indicators post is up at Seeking Alpha. The producer side of the economy generally, and manufacturing specifically, remains weak or even contracting. But the larger consumer side, benefitting from lower mortgage rates, continues to power ahead. As usual, clicking over and reading helps reward me a little bit for my efforts. ...

from Jared Bernstein and Dean Baker The claim that automation is responsible for massive job losses has been made in almost every one of the Democratic debates. In the last debate, technology entrepreneur Andrew Yang told of automation closing stores on Main Street and of self-driving trucks that would shortly displace “3.5 million truckers or the 7 million Americans who work in truck stops, motels, and diners” that serve them. Rep. Tulsi Gabbard (Hawaii) suggested that the “automation...

Economy, Society, Nature: An introd… By Geoff Davies

from Lars Syll Paul Krugman has never suffered fools gladly. The Nobel Prize-winning economist rose to international fame—and a coveted space on the New York Times op-ed page—by lacerating his intellectual opponents in the most withering way. In a series of books and articles beginning in the 1990s, Krugman branded just about everybody who questioned the rapid pace of globalization a fool who didn’t understand economics very well. “Silly” was a word Krugman used a lot to describe pundits...

from David Colander MMT has done what few heterodox economic theories have done; it has become part of the mainstream conversation. It is talked about by pundits and politicians, which means that standard macro economists have felt compelled to respond to its arguments. That’s an enormous accomplishment that will, I hope, lead to improvements in macroeconomic theory and policy. Its creators deserve to be congratulated. But I am not too hopeful. MMT is more of a marketing success than an...