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Readers are probably aware that there is quite a lot of discussion of Modern Monetary Theory (MMT) and the potential for fiscal experimentation batting around at the moment. Others have weighed in on this already, and I have little to add. It is striking, however, that most of the push-back — where there is push-back — is not focused on trying to discredit the idea that we should engage in fiscal experimentation. Indeed, the notion that we should engage in fiscal experimentation seems...

from Dave Taylor . . . most heterodox critics of the mainstream are thinking “macro” – of the economy as a whole – whereas most mainstream economists are still thinking “micro”, assuming what is true of all is true of any, and confusedly suggesting the many different things true of any and at different times are always true of all. Consider the analogy of ships in an exogenously choppy sea. The equilibrists are right, the waves will even out; and the rationalists are right: the navigators...

from Lars Syll A couple of years ago yours truly had an interesting discussion — on the Real-World Economics Review Blog — with Paul Davidson on ergodicity and the differences between Knight and Keynes re uncertainty. It all started with me commenting on Davidson’s article Is economics a science? Should economics be rigorous? : LPS: Davidson’s article is a nice piece – but ergodicity is a difficult concept that many students of economics have problems with understanding. To understand...

from Ken Zimmerman  “The propositions of economic theory are derived by logical reasoning from these assumptions in exactly the same way as the theorems of geometry are derived from the axioms upon which the system is built.” Which without fail ends with the conclusion you set out, “A theory as an internally consistent system is valid if the conclusions follow logically from its premises, and the fact that neither the premises nor the conclusions correspond to reality may show that the...

from Lars Syll Operations Research does not incorporate the arts and humanities largely because of its distorted belief that doing so would reduce its objectivity, a misconception it shares with much of science. The meaning of objectivity is less clear than that of optimality. Nevertheless, most scientists believe it is a good thing. They also believe that objectivity in research requires the exclusion of any ethical-moral values held by the researchers. We need not argue the desirability...

from Dean Baker U.S. trade policy is truly fascinating. Probably more than in any other area of public policy, trade agreements are structured by corporate interests behind closed doors. Then when a deal is produced, the establishment media and economists insist that we have to support the deal behind the important principle of “free trade.” The opponents are treated as knuckle-dragging Neanderthals who just can’t understand how the economy works. We got another episode in this...

from Rob Reno Mathematics is to science what a hammer is to a carpenter. It is a man-made tool (a language invented as needed) with an uncanny power to accurately measure physical reality. But it is not the only tool in a scientists toolbox, albeit an essential one and indispensable for creating an intersubjective verifiable intelligent discussion of the material aspects of the cosmos. But it is not necessarily a part of the higher realization of truth. The recognition of emergent...

The scary headlines of the past few days have been well-discussed below by Dale Coberly and Barkley Rosser. Data, however, is only as good as its assumptions, and the overall trend is well worth a glance. (Note: I took the 2013-2017 data from BC professor (and director of their Center for Retirement Research) Alicia H. Munnell’s Table 1 here. Year of Trustees Report: 2013 2014 2015 2016 2017 2018 2019 First year outgo exceeded income excluding interest...

from Lars Syll Not exactly the story that Mankiw et consortes tell you. But Heiner Flassbeck did.