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from Lars Syll As a descriptive exercise, all is well. One can compare the average salary of men and women, holding constant potential confounders. The result is a summary of how salaries differ on the average by gender, conditional on the values of one or more covariates. Why the salaries may on the average differ is not represented explicitly in the regression model … Moving to causal inference is an enormous step that needs to be thoroughly considered. To begin, one must ponder …...

from Thomas Palley and current issue of the RWER Economic failings and the rise of politics It has been ten years since the financial crisis. Since then, the global economy has recovered and attention has increasingly shifted to political risks as the trigger for the next economic crisis. That shift of attention has been driven by political events like the UK’s Brexit referendum, the election of President Trump, and the rise of anti-euro populist political parties in Italy. Such events...

from Dean Baker In his escalating trade war with China, Donald Trump is acting increasingly like Captain Queeg in the Caine Mutiny. He has imposed a 10 percent tariff on $200 billion in US imports from China, a rate he proposes to increase to 25 percent at the start of the next year. He also is threatening tariffs on the rest of our imports from China, an additional $300 billion in goods and services. The straight arithmetic tells us that 10 percent of $200 billion is $20 billion on an...

In an interview with Jake Tapper on CNN’s State of the Union, Kellyanne Conway said, “I’m a victim of sexual assault, I don’t expect Judge Kavanaugh or Jake Tapper or Jeff Flake or anybody to be held responsible for that. You have to be accountable for your own conduct.”  I believe Conway because she spoke about this before, in October 2016, in an interview with Chris Matthews, right after the Access Hollywood tape of Donald Trump’s “locker room talk”...

Graph 1. Printing Francs to satisfy external demand for Francs led to a fast increase of the amount of money in Switzerland. Did this lead to inflation? After 2008 rich people from all over the globe started to  buy Swiss Francs. This, of course led to appreciation of the Swiss Franc. The Swiss national bank didn’t like this: bad for exports. And, related to this but much worse, structural lower demand for export products of a small country like Switzerland will erode the manufacturing...

from Asad Zaman Linked below is a 95m Video Lecture on the previous post on “Simple Model Explains Complex Keynesian Concepts“. In Chapter 2 of General Theory, Keynes has two points against the classical theory of the labor market. He points out that laborers react strongly (with strikes) against wage cuts, but show no similar reaction to inflation. This means that the decision to supply labor does not depend on the real wage — instead it must depend only on the nominal wage. The SECOND...

from Lars Syll Economics may be an informative tool for research. But if its practitioners do not investigate and make an effort of providing a justification for the credibility of the assumptions on which they erect their building, it will not fulfil its task. There is a gap between its aspirations and its accomplishments, and without more supportive evidence to substantiate its claims, critics — like yours truly — will continue to consider its ultimate arguments as a mixture of rather...

This is an extract from my recent review article in Inside Story, focusing on Ellen Broad’s Made by Humans For the last thousand years or so, an algorithm (derived from the name of an Arab mathematician, al-Khwarizmi) has had a pretty clear meaning — namely, it is a well-defined formal procedure for deriving a verifiable solution to a mathematical problem. The standard example, Euclid’s algorithm for finding the greatest common divisor of two numbers, goes back to 300 BCE. There are...