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from Lars Syll It is the somewhat gratifying lesson of Philip Tetlock’s new book that people who make prediction their business — people who appear as experts on television, get quoted in newspaper articles, advise governments and businesses, and participate in punditry roundtables — are no better than the rest of us. When they’re wrong, they’re rarely held accountable, and they rarely admit it, either. They insist that they were just off on timing, or blindsided by an improbable event,...

From the Daily Mirror: None of the 400 citizens returning here after fighting for Islamic State in Syria and Iraq have been charged with war crimes. Yet the Council of Europe’s legal affairs committee recently ruled membership of the terror group, also known as Daesh, is enough for prosecution at the Hague’s International Criminal Court. Labour Shadow Minister Liam Byrne, representing Britain, backed the decision. He said: “We know British citizens were...

Nava Ashraf, Edward Glaeser, Abraham Holland, Bryce Millett Steinberg  NBER Working Paper No. 23807 Providing clean water requires maintenance, as well as the initial connections that are typically measured. Frequently, the water supply fails in the developing world, especially when users don’t pay the marginal cost of water. This paper uses the timing of frequent, unexpected water service outages in Lusaka, Zambia to identify the short-term impacts of piped water access on contagious...

A recent meme of the fact free right in my country (the Netherlands) is the idea that the Acid Rain problem spontaneously disappeared. It didn’t. It was the government, stupids! And it is a really serious problem which did and does require attention. Source

from David Ruccio David Brooks should have left well enough alone. Middle-class wage stagnation is the biggest economic fact driving American politics. Over the past many years, so the common argument goes, capitalism has developed structural flaws. Economic gains are not being shared fairly with the middle class. Wages have become decoupled from productivity. Even when the economy grows, everything goes to the rich. But then Brooks spends the rest of his column trying to convince us...

from Maria Alejandra Madi The economist John R. Commons is considered one of the founding fathers of institutional economics. He played a leading role in the developing of the labor economics field by establishing some core principles in his book Institutional Economics: Its Place in Political Economy (1934). Besides, as Kenneth Boulding (1957) stated, Commons’ ideas as a social reformer were very influential in shaping the New Deal and the American labor legislation and social security...

from Lars Syll In his recent article on Where Modern Macroeconomics Went Wrong, Joseph Stiglitz acknowledges that his approach “and that of DSGE models begins with the same starting point: the competitive equilibrium model of Arrow and Debreu.” This is probably also the reason why Stiglitz’ critique doesn’t go far enough. It’s strange that mainstream macroeconomists still stick to a general equilibrium paradigm more than forty years after the Sonnenschein-Mantel-Debreu theorem — SMD —...

I came across the following graph: (Click to embiggen) Both the supply curve for labor in the state of California and the demand curve for housing in California are made up of the states residents. In general, if you increase the supply of something, all else being equal you bring down its price. On the other hand, if you increase the demand for something, all else being equal you increase its price. The graph above suggests that in California, two...

 from The seven sins of economists