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from Asad Zaman Part 1: Power/Knowledge – How Macro Theory is shaped by the Powerful Why Understand Macro? If we understood macroeconomics, we would be able to understand the reasons for the major economic events currently going on all around us. For instance, increasing inequality, effects of austerity, Brexit, inequities of post-Bretton Woods dollar based financial system, impacts of emerging economy of China on global finance, and many other questions of vital importance for conduct of...

Blowing Up The Iran Nuclear Deal This is probably Donald Trump’s biggest mistakes, his refusal to certify Iran’s compliance with the JCPOA nuclear deal with Iran and his fullout abrogation of it by announcing the reimposition of full economic sanctions against Iran, although we had not fully undone those sanctions anyway.  An immediate victim in the US of this action will be Boeing workers who were to benefit from a $3 billion contract Boeing had with...

from Lars Syll A couple of years ago — in a debatewith James Galbraith and Willem Buiter — Paul Krugman made it perfectly clear that he was a strong believer of the ‘loanable funds’ theory. Unfortunately, this is not an exception among ‘New Keynesian’ economists. Neglecting anything resembling a real-world finance system, Greg Mankiw — in his intermediate textbook Macroeconomics — more or less equates finance to the neoclassical thought-construction of a ‘market for loanable funds.’ On...

Download the issue as a PDF In this issueGame Theory—A Severe Case of ‘as-if’ Model Platonism     Lars SyllUtopia and Macroeconomics     David RuccioA Better Way for Development Theory and Practice     Habtamu Girma DemiessieOn Kurien’s new book, Economics of Real-Life     Stuart BirksEconomics Education and Pedagogy     Malgorzata Dereniowska interviews Peter Söderbaum Announcements and WEA contact details Please support the WEA by paying a membership fee or making a small donation....

from Lars Syll In our extended NAIRU model, labor productivity growth is included in the wage bargaining process … The logical consequence of this broadening of the theoretical canvas has been that the NAIRU becomes endogenous itself and ceases to be an attractor — Milton Friedman’s natural, stable and timeless equilibrium point from which the system cannot permanently deviate. In our model, a deviation from the initial equilibrium affects not only wages and prices (keeping the rest of...

Passivity is a key term in Guy Debord’s Society of the Spectacle: 12. The spectacle presents itself as something enormously positive, indisputable and inaccessible. It says nothing more than “that which appears is good, that which is good appears. The attitude which it demands in principle is passive acceptance which in fact it already obtained by its manner of appearing without reply, by its monopoly of appearance. 13. The basically tautological...

from David Ruccio Does anyone really need any additional evidence of the lopsided nature of the current recovery?  Employers certainly don’t. They’re managing to hire additional workers, thus lowering the unemployment rate. But they don’t have to pay the workers they hire much more than they were getting before, with wages barely staying ahead of the rate of inflation. As a result, corporate profits continue to grow. Clearly, what we’re seeing remains a one-sided recovery: employers are...

from Dean Baker Everyone with a 401(k) has been impressed by the stock market’s run-up in recent years. Even adjusting for inflation, the S&P 500 is more than 20 percent higher than its peak in the 1990 stock bubble. Of course, the economy is nearly 40 percent larger, which makes the run-up somewhat less striking. Nonetheless, the ratio of stock prices to corporate earnings is at unusually high levels. According to data from Nobel Laureate and economist Robert Shiller, the current...