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from Lars Syll Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each​ competitor has to pick not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of...

from Mark Weisbrot Talk of trade wars and falling skies has taken up much space in the media since Donald Trump first announced tariffs on imported steel and aluminum on March 1. But such fears are highly exaggerated, which should not be surprising in a country where the benefits of a succession of misnamed “free trade” agreements have been grossly exaggerated for decades. Within weeks of announcing the tariffs, the administration had already exempted most of the major suppliers of steel...

from Lars Syll Half a century ago there were widespread hopes game theory would provide a unified theory of social science. Today it has become obvious those hopes did not materialize. This ought to come as no surprise. Reductionist and atomistic models of social interaction — such as the ones mainstream economics and game theory are founded on — will never deliver sustainable building blocks for a realist and relevant social science. That is also — as yours truly argues in the latest...

from Dean Baker The explosion in the pay of corporate CEOs is well documented. While the heads of major corporations were always well paid, we saw their pay go from 20- to 30-times the pay of ordinary workers in the 1960s and 1970s to 200- or 300-times the pay of ordinary workers in recent years. Paychecks of more than $20 million a year are now standard, and it’s not uncommon to see a top executive haul in more than $40 or $50 million in a single year. Soaring CEO pay is an important...

from Asad Zaman The root cause of our hopelessly defective economic theories is a fundamentally misguided model of human behavior. Modern economic theory assesses the impact of policies by replacing all human beings with homo economicus, which is a brain connected to a mouth and stomach. Because the heart and soul of human beings is removed from the picture before the economist begins his calculations, economists are routinely baffled by behavioral economics, based on actual behavior...

from Lars Syll This is not new to most of you of course. You are already steeped in McCloskey’s Rhetoric. Or you ought to be. After all economists are simply telling stories about the economy. Sometimes we are taken in. Sometimes we are not. Unfortunately McCloskey herself gets a little too caught up in her stories. As in her explanation as to how she can be both a feminist and a free market economist: “The market is the great liberator of women; it has not been the state, which is after...

Just published is Volume I of an exhaustive – occasionally exhausting – biography of Paul Samuelson. It’s titled Founder of Modern Economics: Paul A Samuelson Vol I: Becoming Samuelson, 1915-1948 and authored by Roger E Backhouse. The two books of my blog title are Foundations of Economic Analysis, published in 1947, a revision of Samuelson’s Harvard doctoral dissertation, in which he unearthed the mathematical scaffolding of economic theory, and Economics: An Introductory Analysis, the...

from David Ruccio Millennials may be the largest, best educated, and most diverse generation in U.S. history. But they’re also generation screwed. As a result, they’re more likely than their elders to think of themselves as working-class and less likely to identify as middle-class.   The large downshift in class identity among young adults is explained by the fact that they are being left behind—with lower earnings, fewer jobs, more part-time employment, and a higher unemployment rate...