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from C. P. Chandrasekhar and Jayati Ghosh Everyone seems to have woken up to the fact that global debt levels are too high and portent difficulties ahead. As Figure 1 indicates, the levels of credit to GDP, which were so high as to be unsustainable and resulted in the big crisis of 2008, have increased even more since then. There was a phase of deleveraging in the advanced economies until around 2014, and in developing countries and emerging markets until 2011, but since then, credit/debt...

from Maria Alejandra Madi Global warming and global CO2 emissions are interconnected. In 2018, heatwaves were observed in Europe, Asia, North America and northern Africa, while the extent of Arctic sea ice has been continuously dropping. According to the World Meteorological Organization (WMO), the last four years (2015-2018) have been the warmest years on record. In particular, between January and October 2018, global average temperature increased 0.98 degrees Celsius above the levels of...

from David Ruccio Mainstream economists continue to discuss the two great crises of capitalism during the past century like the pillars of society in the brothel—a “house of infinite mirrors and theaters”—in Jean Genet’s The Balcony.* The order they represent is indeed threatened by an uprising in the streets, and the only question is: can they reestablish the illusion of control? The latest version of the absurdist economic play opens with Brad DeLong, who dons the costume of the...

from Lars Syll Paul Krugman has repeatedly over the years argued that we should continue to use maistream economics hobby horses like IS-LM and AS-AD models. Here’s one example: So why do AS-AD? … We do want, somewhere along the way, to get across the notion of the self-correcting economy, the notion that in the long run, we may all be dead, but that we also have a tendency to return to full employment via price flexibility. Or to put it differently, you do want somehow to make clear the...

from Dean Baker There is an argument that carries considerable currency on the right about the need to force the poor to do things that are actually good for them. This comes up frequently in the context of work requirements for people receiving benefits like Medicaid or food stamps (the Supplemental Nutrition Assistance Program). The claim is that people will be made better off by working, since that will give them a foot into the labor market. They can eventually move up and earn enough...

Economic Thought History, Philosophy and MethodologyVol. 7, No. 2  download issue in full A Common Misunderstanding about Capitalism and Communism Through the Eyes of InnovationDirk-Hinnerk Fischer, Hovhannes Yeritsyan Cherchez la Firme: Redressing the Missing – Meso – Middle in Mainstream EconomicsStuart Holland, Andrew Black The Lucas Critique: A Lucas CritiqueChristian Müller-Kademann Quantum EconomicsDavid Orrell Computational Agents, Design and Innovative Behaviour: Hetero...

from Lars Syll The first thing to understand about macroeconomic theory is that it is weirder than you think. The heart of it is the idea that the economy can be thought of as a single infinite-lived individual trading off leisure and consumption over all future time … This approach is formalized in something called the Euler equation … Some version of this equation is the basis of most articles on macroeconomic theory published in a mainstream journal in the past 30 years … The models...

October new home sales plummet — but take it with a big grain of salt As you may have already read elsewhere, new home sales plunged -8.9% in October to the seasonally adjusted annual rate of 544,000. Here’s the accompanying graph: BUT … take this with a big grain of salt. The reason I rely on building permits, espectially single family permits, is their much smaller volatility, and *much* smaller rate of revisions. To put this in context, here’s...