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Monetary developments in the Euro Area, september 2024. Quiet. | Real-World Economics Review Blog
Like John Stuart Mill, I´m more interested in credit than in money. Developments in the amount of credit provided are much more instructive to the economist than data on money. Look at the graph below (no. 2 in the ECB press release) , a highly Post-Keynesian graph that originated from the pre-Euro Bundesbank and is…
NAIRU — a harmful fairy tale | Real-World Economics Review Blog
from Lars Syll The NAIRU story has always had a very clear policy implication — attempts to promote full employment are doomed to fail since governments and central banks can’t push unemployment below the critical NAIRU threshold without causing harmful runaway inflation. Although a lot of mainstream economists and politicians have a touching faith in…
Superinflation in Milei´s Argentina | Real-World Economics Review Blog
Hyperinflation is defined as over 50% inflation per month. Let´s define ´normal´ inflation as anything between 0 and 1% per month and anything between 1 and 50% per month as superinflation (1% a month is still a lot, yearly!). Before President Milei, Argentina already knew superinflation. After Milei, inflation accelerated, and the country almost entered…
Election: Take Four | Real-World Economics Review Blog
from Peter Radford Take four. I continue to listen in on the conversation. The election reverberates loudly around leftish circles. Recriminations mount. Criticisms fly. Finger pointing and over-analysis have become all too common. And this is after just a week. Imagine what a month can produce. So far the central narrative seems to be that…
Employment growth in Europe. Stark differences. | Real-World Economics Review Blog
Eurostat published new data on employment in Europe. Average employment growth is +0,9%. The average hides stark differences. A Germany-centered core consisting of Germany, Austria, Sweden, Estonia, Finland, and Hungary shows declines. Surprisingly, it excludes Denmark, Belgium and the Netherlands. The South does better. Countries like Portugal, France, Greece, and, especially, Spain post above-average increases.…
In Greece, gross fixed investment still is at a pre-industrial level. | Real-World Economics Review Blog
Executive summary: if investments are needed, do not reform. Invest. Investments are the reform. Angus Maddison (historical patterns of growth) and Jan Kregel (leading post-Keynesian economist) were the intellectually dominant forces during my economics study in Groningen around 1982. Let´s apply their frameworks to Greece. Growth, as we measure it, has many sources: increasing the…
Argentina bucks the trend. Vitamin A deficiencies are increasing | Real-World Economics Review Blog
Because of libertarian policies of the Milei government in Argentina, poverty and food deficiencies are increasing. People are getting less healthy and, hence, less able to care for themselves and their loved ones. One problem we thought we got rid of but resurfaces in Argentina: vitamin A deficiencies. Children are getting sick and starting to…
Making America Great Again, 2024 | Real-World Economics Review Blog
from Shimshon Bichler & Jonathan Nitzan In 2019, we published a RWER paper assessing Trump’s promise to ‘Make America Great Again’. https://bnarchives.net/id/eprint/630/ Here are updates of two key charts from this paper. The first figure depicts the relative global decline of U.S. corporations. It shows that U.S. firms currently accounts for ~1/3rd of global corporate profit,…
Völkermord in Gaza. Two million deaths are in the cards. | Real-World Economics Review Blog
The new UN report on deaths in Gaza makes for Grim Reading. According to the admirable work of UN data sleuths, details close to 10.000 of the official 40.000+ deaths have been added. These are only the direct victims; indirect victims (starvation, stress, sickness) are omitted. One of the findings is that, unlike during earlier…
Weekend read – Logic and truth in economics | Real-World Economics Review Blog
from Lars Syll To be ‘analytical’ and ‘logical’ is something most people find recommendable. These words have a positive connotation. Scientists think more deeply than most other people because they use ‘logical’ and ‘analytical’ methods. In dictionaries, logic is often defined as “reasoning conducted or assessed according to strict principles of validity” and ‘analysis’ as…
Who brought us Trump? | Real-World Economics Review Blog
from Peter Radford Battle is joined … This might annoy some of you — it is my hasty first thought. The Democrats have been thoroughly defeated. Deservedly so. They no longer relate to, or reflect, the American working class. Without building such a relationship they cannot regain power. Nor should they. Yesterday, early on the…
MMT — debunking the deficit myth | Real-World Economics Review Blog
from Lars Syll We have already shown that deficit spending increases our collective savings. But what happens if Uncle Sam borrows when he runs a deficit? Is that wht eats up savings and forces interest rates higher? The answer is no. The financial crowding-out story asks us to imagine that there’s a fixed supply of savings from…
´Fryslan boppe´. An in-depth inspirational analysis of work rewarded with the 2024 Riksbank prize in economic sciences. | Real-World Economics Review Blog
Introduction< The 2024 Sveriges Riksbank Prize for Economic Sciences has been awarded to Daron Acemoglu, Simon Johnson and James Robinson for work on the influence of institutions on long-term economic progress and growth. Much has been written about this, for instance by ´Pseudoerasmus´ here and by Radford here. In this article, an ´in-depth´ analysis of…
AJR, Nobel, and prompt engineering | Real-World Economics Review Blog
from Peter Radford Well done AJR. A prize deserved. And remarkably little grumbling. What’s wrong with that? In other news, my wife is deep into creating an artificial intelligence application. One of the great challenges of getting AI to be useful is something called ‘prompt engineering’. What have these two snippets of news have…
Central bank independence — a convenient illusion | Real-World Economics Review Blog
from Lars Syll Today’s model of delegation has much to recommend it. But it should not be cloaked in euphemism. It is an abrogation of democratic sovereignty for pragmatic reasons, conditioned on the one hand by deeply entrenched and unflattering assumptions about electoral politics and, on the other, on an unquestioning acceptance of the private…
The 2024 economic laureates and more Nobel nonsense | Real-World Economics Review Blog
from Steven Klees I am quite sure that this year’s three Nobel Laureates in economics -- Daron Acemoglu, Simon Johnson and James Robinson – are very competent new institutionalist economists. Lars Syll offers a thoughtful critique of their substantive arguments, but he misses the main point for me. New institutional economics, by and large, is nonsense. …
Pathways to sustainability (2): a critical review | Real-World Economics Review Blog
from Maria Alejandra and WEA Pedagogy Blog Jean-Baptiste Fressoz, professor at the School of Advanced Studies in Social Sciences in Paris, challenges our understanding of the current energy transition process. In his book “The Shock of the Anthropocene: The Earth, History, and Us,” co-authored with Christophe Bonneuil, Fressoz offers a critical history of the Anthropocene, the current geological…
Falling shares of labour income | Real-World Economics Review Blog
from C. P. Chandrasekhar and Jayati Ghosh The latest World Employment and Social Outlook Report (update for September 2024) from the International Labour Organisation highlights some disturbing trends. Importantly, it identifies a significant decline and then stagnation in the share of labour income in GDP, for the world as a whole, in the past few years. This…
Breaking boundaries in economics: Rediscovering the roots of welfare | Real-World Economics Review Blog
from Asad Zaman and WEA Pedagogy Blog 1. The Methodenstreit: How Economics Forgot History In the late 19th century, economics experienced a deep philosophical debate over methodology, known as the Methodenstreit, or Battle of Methodologies. Geoffrey Hodgson, in his book How Economics Forgot History, emphasizes the critical nature of this debate. The essential conflict was between…
Pathways to sustainability (1) | Real-World Economics Review Blog
from Maria Alejandra and WEA Pedagogy Blog Setting the scene Economists and policymakers continue to dominate headlines with the conceptualization of “sustainability,” “sustainable investing,” and “sustainable finance,” along with their various worldwide geographical manifestations. The prevailing scenario, which is characterized by conflict, economic instability, and political disputes, is not favorable to incorporating sustainability into investment…
How to deal with inflation? | Real-World Economics Review Blog
In Europe (the Euro area, to be precise), both unemployment and inflation are down, according to Eurostat,. Which, again, shows that the Phillips curve, a crucial concept behind neoclassical macroeconomic thinking that assumes a more or less stable negative relation between unemployment and inflation (high unemployment will bring inflation down), is not the place to go…
The 2024 economic sciences laureates | Real-World Economics Review Blog
from Lars Syll The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 is awarded to Daron Acemoglu, Simon Johnson and James Robinson “for studies of how institutions are formed and affect prosperity.” Daron Acemoglu and James Robinson’s work, particularly in Why Nations Fail (2012), is widely recognized within new institutional economics for its…
The European Central Bank and the return of history | Real-World Economics Review Blog
The end of the post-World War II ´Pax Americana, an almost eighty-year period of peace for European countries allied with the USA, will soon lead the EU to end the prohibition of monetary financing of governments by the European Central Bank (ECB). This might take the shape of the ECB providing credit to an entity…
Automation is called “Productivity Growth” | Real-World Economics Review Blog
from Dean Baker It is more than a bit bizarre reading pieces that talk about automation or job-killing AI as something new and alien. These are forms of productivity growth. They allow more goods and services to be produced for each hour of human labor. Productivity growth is usually thought of as a good thing.…
Brenner’s satisfactory | Real-World Economics Review Blog
from Peter Radford “Mathematics is the art of the perfect. Physics is the art of the optimal. Biology, because of evolution, is the art of the satisfactory”. That’s Sydney Brenner speaking. He should know a thing or two. He won a Nobel Prize. It’s a shame, is it not? Economies are always changing. Not just…
“15 Best Economics Book Blogs and Websites in 2024” | Real-World Economics Review Blog
from Feedspot The best Economics Book blogs from thousands of Book blogs on the web and ranked by traffic, social media followers & freshness. Economics Book Blogs Here are 15 Best Economics Book Blogs you should follow in 2024 1. Real-World Economics Review Blog The Real-World Economics Review blog serves as a critical platform for economists, scholars,…
The Road Not Taken | Real-World Economics Review Blog
from Lars Syll We all heterodox economists who have chosen the road ‘less traveled by’ know that this choice comes at a price. Fewer opportunities to secure ample research funding or positions at prestigious institutes or universities. Nevertheless, yours truly believes that very few of us regret our choices. One doesn’t bargain with one’s conscience.…
Automation is called “productivity growth” | Real-World Economics Review Blog
from Dean Baker It is more than a bit bizarre reading pieces that talk about automation or job-killing AI as something new and alien. These are forms of productivity growth. They allow more goods and services to be produced for each hour of human labor. Productivity growth is usually thought of as a good thing.…
Escaping the jungle: Rethinking land ownership for a sustainable Future | Real-World Economics Review Blog
from Asad Zaman and WEA Pedagogy Blog Introduction: Beyond the Jungle For centuries, capitalism has told us that land is a commodity to be bought, sold, and exploited for profit. It has also sold us a dangerous myth: that humans are inherently competitive, isolated individuals, destined to fight for survival in a brutal world. According…
Break Up Economics — continued | Real-World Economics Review Blog
from Peter Radford What? Surely not! How dare he suggest such a thing. What, you are correct in asking, am I talking about? The recent speech by a Department of Justice official who dared suggest that it is getting quite difficult to find a truly neutral technocratic expert to give testimony in court. Imagine the…
What is heterodox economics? | Real-World Economics Review Blog
from Lars Syll Based on our interviews, heterodox economics appears to be a positive project, inevitably defined somewhat in terms of the mainstream but not exhaustively so. It is also efficacious, with policy and real-world impact. It is a complex object, not amenable to definition by a single criterion. Its dimensions are partly intellectual, in…
Rizzo goes for the guild | Real-World Economics Review Blog
from Peter Radford Is it a cult? Is it a guild? Both perhaps? I remember reading sometime not long ago that Steve Levitt was leaving Chicago. Two things stood out in the article bringing that news: first, Levitt said he was concerned that economics was becoming irrelevant; second, someone had told him he was not…
Windows in the past. Some words on glass, the importance of repairing broken windows and GDP. | Real-World Economics Review Blog
This post was written because of a tweet by David Andalfatto, who wondered why medieval and early modern Europe, a society that built cathedrals, did not show any per capita growth. Per capita growth is an average, and when the rich get richer, it can increase even when the number of poor and destitute increases.…
Rethinking public debt | Real-World Economics Review Blog
from Lars Syll Few issues in politics and economics are nowadays more discussed — and less understood — than public debt. Many raise their voices to urge for reducing the debt, but few explain why and in what way reducing the debt would be conducive to a better economy or a fairer society. And there…
The Chinese threat in critical minerals | Real-World Economics Review Blog
from C. P. Chandrasekhar and Jayati Ghosh It is more than a year since China, reportedly in retaliation to US-driven restrictions on exports of advanced semiconductors and related manufacturing equipment, imposed export controls on two crucial materials—germanium and gallium—that enter into the production of semiconductors and military and communications equipment (advanced microprocessors, fibre-optic products and…
Diverting class warfare into generational warfare | Real-World Economics Review Blog
from Dean Baker In the last-half century, productivity has outpaced the growth of real compensation for the median worker by more than 40 percent. This means that if workers’ pay had kept pace with productivity, as it did in the three decades after World War II, it would be roughly 40 percent higher than it is today.…
Casino capitalism | Real-World Economics Review Blog
from Lars Syll According to Keynes, financial crises are a recurring feature of our economy and are linked to its fundamental financial instability: It is of the nature of organised investment markets, under the influence of purchasers largely ignorant of what they are buying and of speculators who are more concerned with forecasting the next…
Price Gouging Part Two | Real-World Economics Review Blog
from Peter Radford When you are only concerned with one thing and have only one tool things can go awry quite easily. So it is with our price theory friends. They bask in the rigor of their thinking and look askance at the inability of regular folks to grasp the point of the logic of…
How empirical is ’empirical’ macroeconomics? | Real-World Economics Review Blog
from Lars Syll At a first glance, DSGE models seem to imply total ignorance because representative agents (or representative groups of agents with limited heterogeneity) featuring objective utility functions populate the literature. At a second glance, however, it becomes obvious that “methodological individualism” prevails and even dominates. To understand this dominance one only has to…