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A friend of mine who has made it into his sixth decade without ever sullying himself with gainful employment is now doing deliveries, shared-economy style. (Packages, not people via Uber or Lyft.) I thought he was going to rail against the system when he described what is new in his life, but his attitude surprised me. Transcribed, to the best my of my recollection, his comments were: So I went down for orientation. There were a bunch of people just...

from David Ruccio Kevin Hassett and the other members of the president’s Council of Economic Advisers are just like the long-haired preachers Joe Hill sang about more than a century ago. They come out every night to tell us what’s wrong and what’s right. But when asked about something to eat, they answer in voices so sweet: You will eat, bye and bye In that glorious land above the sky Work and pray, live on hay You’ll get pie in the sky when you die. That’s a lie With one notable...

from Lars Syll If a demand function for the economy as a whole is to be estimated, just drawing upon the economy’s overall income and the price system, is it legitimate to use the demand system derived for an individual? In other words, can we estimate demand functions independently of the distribution of income and preferences across consumers? Not surprisingly, the answer is no in general, and the conditions for it to be yes are extremely stringent, indeed unrealistically so....

 On this blog Jayati Gosh published an excellent post about the monetary folly in India where without any notice overnight large denominations of cash were abolished to force people to use digital bank money. I totally agree with this analysis but I am able to add a little. The author takes cash withdrawals from ATM machines as an indicator of the re-monetization of the economy. The Bank of India however publishes data on the composition of the stock of money in India. See also here. This...

Now down year over year, and in line with the deceleration in bank mortgage lending: Highlights Existing home sales posted their first gain in four months, rising 0.7 percent in September to a 5.390 million annualized rate that is near Econoday’s top forecast. Hurricane effects are hard to gauge with the National Association of Realtors reporting that sales in Florida were down substantially though sales in Houston have already recovered. The sales gain came at a price...

from Jayati Ghosh So it’s official: cash use is back in almost full force in the Indian economy. Cash withdrawals from ATM machines – a reasonable if incomplete proxy for the use of cash in the economy – are nearly back to the level of just before the demonetisation shock of 8 November 2016. RBI data on use of debit and credit cards to withdraw money from ATMs show that such withdrawals, which had collapsed to only Rs 850 billion in December 2016 largely because of the sheer...

Here’s the abstract of a discussion paper from the IZA Institute of Labor Economics by Felix Bransch and Michael Kvasnicka: Using data on articles published in the top-five economic journals in the period 1991 to 2010, we explore whether the gender composition of editorial boards is related to the publishing success of female authors and to the quality of articles that get published. Our results show that female editors reduce, rather than increase, the...

from Joseph E. Stiglitz, Dean Baker and Arjun Jayadev When the South African government attempted to amend its laws in 1997 to avail itself of affordable generic medicines for the treatment of HIV/AIDS, the full legal might of the global pharmaceutical industry bore down on the country, delaying implementation and extracting a high human cost. South Africa eventually won its case, but the government learned its lesson: it did not try again to put its citizens’ health and wellbeing into...

from Lars Syll Mainstream neoclassical economists often maintain — usually referring to the methodological individualism of Milton Friedman — that it doesn’t matter if the assumptions of the theories and models they use are realistic or not. What matters is if the predictions are right or not. But, if so, then the only conclusion we can make is — throw away the garbage! Because, oh dear, oh dear, how wrong they have been! The empirical and theoretical evidence is clear. Predictions and...