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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...

These surveys are the ‘soft data’ that’s looking good. They all gapped higher around election time and have remained elevated. In fact it looks like there’s already been a recession followed by a recovery: Unfortunately the ‘hard data’ isn’t looking so good:

Continuing evidence that the slowdown in bank lending is reflecting slowdowns in the macro economy: Highlights Single-family permits continue to rise in what, however, is the main positive in an otherwise weaker-than-expected housing starts and permits report. Looking first at headline totals, starts fell 4.7 percent in September to a 1.127 million annualized rate which is well under Econoday’s low estimate. Permits fell 4.5 percent to a 1.215 million rate that is above the...

from Lars Syll To me, the crucial difference between modelling in physics and in economics lies in how the fields treat the relative role of concepts, equations and empirical data … An economist once told me, to my bewilderment: “These concepts are so strong that they supersede any empirical observation” … Physicists, on the other hand, have learned to be suspicious of axioms. If empirical observation is incompatible with a model, the model must be trashed or amended, even if it is...

Back to back on my to read list were two articles that made an odd juxtaposition. First up was Race Is a Social Construct, Scientists Argue in the once great Scientific American. Here’s a representative blurb: More than 100 years ago, American sociologist W.E.B. Du Bois was concerned that race was being used as a biological explanation for what he understood to be social and cultural differences between different populations of people. He spoke out...

from Dean Baker In the speech where President Reagan launched his push for the last major tax reform in 1986, he criticized a tax code that “treats people’s earnings, similar incomes, much differently regarding the tax that they pay; and… causes some to invest their money, not to make a better mousetrap but simply to avoid a tax trap.” He was right to make these criticisms. Unfortunately the current Republican plan goes in the opposite direction in two important areas: the treatment of...

from David Ruccio The latest IMF Fiscal Monitor, “Tackling Inequality,” is out and it represents a direct challenge to the United States. It’s not just a rebuke to Donald Trump, who with his allies is pursuing under the guise of “tax reform” a set of policies that will lead to even greater inequality—or, for that matter, Republicans in state governments across the country that have sought to cut back on programs targeted at poor Americans. It also takes to task decades of growing...

from Asad Zaman 2nd Lecture (90min) on Advanced Microeconomics at PIDE, (14 Sep 2017). While planning to teach a heterodox micro course, I was faced with the dilemma of choosing a suitable textbook. Interestingly, there are many options available, but I was not happy with most of them. Some were too mathematical for my taste, some made too many concessions to conventional micro while being critical of it, and some were simply not suitable for use as texts. Eventually, I decided to use Rod...

from Lars Syll Although discounting empirical evidence cannot be the right way to solve economic issues, there are still, in my opinion, a couple of weighty reasons why we perhaps shouldn’t be too excited about the so-called ’empirical revolution’ in economics. Behavioural experiments and laboratory research face the same basic problem as theoretical models — they are built on often rather artificial conditions and have difficulties with the ‘trade-off’ between internal and external...