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from Lars Syll Deductivist modeling endeavours and an overly simplistic use of statistical and econometric tools are sure signs of the explanatory hubris that still haunts mainstream economics. In an interview Robert Lucas says the evidence on postwar recessions … overwhelmingly supports the dominant importance of real shocks. So, according to Lucas, changes in tastes and technologies should be able to explain the main fluctuations in e.g. the unemployment that we have seen during the...

from Dean Baker As we know, Donald Trump is not very good with numbers. He gave more evidence of this fact when he told a campaign rally in West Virginia: “When I came, we were heading in a certain direction that was going to allow China to be bigger than us in a very short period of time …That’s not going to happen anymore.” Actually, China’s economy is already considerably bigger than the US economy. Using the purchasing power parity measure, which is recommended by most economists and...

from Lars Syll The largest problem with the economics profession’s focus on general equilibrium theory is the opportunity costs of that exploration. Important policy problems are not addressed. Consider Pareto optimality and the welfare theorems, which Fisher sees as the underpinnings of Western capitalism. In a world, such as ours, where property rights cannot be allocated effortlessly and costlessly, economist’s welfare theorems have little policy relevance. Does a policy maker care...

from David Ruccio The argument I’ve been making during this series on utopia is that the utopian moment of the Marxian alternative to mainstream economics is critique.* Let me explain. All modern economic theories have a utopian moment. In the case of mainstream economics, that moment is a full-blown utopianism—the idea that there is, or at least in principle can be, a perfectly functioning economic and social order. Such an order is both envisioned as a model within the theory (often by...

from Lars Syll Having gone through a handful of the most frequently used textbooks of economics at the undergraduate level today, I can only conclude that the models that are presented in these modern mainstream textbooks try to describe and analyze complex and heterogeneous real economies with a single rational-expectations-robot-imitation-representative-agent. That is, with something that has absolutely nothing to do with reality. And — worse still — something that is not even amenable...

from Norbert Häring My book in German with the translated title: “Brave New Money: PayPal, WeChat, Amazon Go – A Totalitarian World Currency in the Making” has just been published by Campus. I have tanslated the “Introduction and Overview” and part of Chapter 1. I will publish this translation in two parts over the next few days. This is part 1. The future of payments has arrived in early 2018, when the first Amazon Go store opened its gates for the general public in Seattle. If you shop...

Source: https://www.marketslant.com/article/next-crisis-not-our-lifetimes-yellen-62717

The Liberals’ disastrous result in the recent Longman by-election obviously played a major role in bringing an effective end to Malcolm Turnbull’s Prime Ministership. But the lesson drawn from the outcome by nearly all political pundits, and particularly those on the political right seems to me to be totally unfounded. The central claim is that the Liberals lost votes to One Nation, which more accurately reflected the views of their conservative basis. The corollary is that to win seats...

from Dean Baker Prior to the collapse of the housing bubble and the resulting financial crisis, major news outlets had little interest in pieces warning about the bubble and the risks it posed to the economy. These days there seems to be a large demand for such pieces. Unfortunately, in choosing these pieces, news outlets seem little better informed today than they were in the years before the housing bubble collapse. To take a recent example, the New York Times published a piece by...