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Christmas thoughts about counting the dead in zones of armed conflict. | Real-World Economics Review Blog
In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. (This was the first census that took place while Quirinius was governor of Syria.) And everyone went to their own town to register. Luke 1:3 (as will turn out below, this quote is not frivolous) Summary.…
Mainstream distribution myths | Real-World Economics Review Blog
from Lars Syll Pretending that the distribution of income and wealth that results from a long set of policy decisions is somehow the natural workings of the market is not a serious position … Pretending that distributional outcomes are just the workings of the market is convenient for any beneficiaries of this inequality, even those…
Health insurance killing: Economics does have something to say | Real-World Economics Review Blog
from Dean Baker I’m not one to generally tout the wisdom of the economics discipline, but it actually does offer some useful insights into the likely motive for the murder of Brian Thompson, the CEO of United Healthcare (UHC). According to media accounts, the suspect, Luigi Mangione, was angered by his own and others’ experiences…
Debunking mathematical economics | Real-World Economics Review Blog
from Lars Syll It is a great fault of symbolic pseudo-mathematical methods of formalising a system of economic analysis … that they expressly assume strict independence between the factors involved and lose all their cogency and authority if this hypothesis is disallowed; whereas, in ordinary discourse, where we are not blindly manipulating but know all…
´Extra Unordinarily Persistent Large Otput Gaps´ (EU-PLOGs) | Real-World Economics Review Blog
A PLOG is a ´Persistent Large Output Gap´. Read: a long period of high unemployment. Literature about PLOGs tries to mitigate one of the ideas of economic orthodoxy, especially the unsubstantiated idea that lowering high post-economic crisis unemployment will fuel inflation. According to this literature, which is quite empirical, it doesn´t. However, this somewhat older…
The Geology of Economics? | Real-World Economics Review Blog
from Peter Radford This is something I need to get off my desktop. It’s just for fun … Asymmetry is the very beginning and end of an economy. It’s the bumps that matter. Explain them and you explain the economy. After all the very notion of exchange presumes differences between those involved, and difference is…
Money for beginners | Real-World Economics Review Blog
from Lars Syll Economists have sometimes misled us with their belief that it is their job to tell “white lies” to scare the population into “behaving themselves.” We think that is the wrong approach. This book trusts you, the reader, with that truth. We trust you to do what you can to spread the truth…
new issue of RWER | Real-World Economics Review Blog
real-world economics review issue no. 109 download whole issue Culture - the elephant in the roomHardy Hanappi 22 The capitalization of everythingShimshon Bichler and Jonathan Nitzan 18 From the Bretton Woods system to global stagnationLeon Podkaminer 29 The role of internetization in creating sustainable development for the Global SouthConstantine E. Passaris 35 The works of Ha-Joon ChangJunaid B. Jahangir 56 A critique of Saito’s Slow…
Capitalism and Democracy: The market is far more flexible than Christopher Caldwell imagines | Real-World Economics Review Blog
from Dean Baker New York Times columnist Christopher Caldwell devoted his Thanksgiving piece to describing the German sociologist Wolfgang Streeck’s views on capitalism and democracy. I have not read much of Streeck’s work, but as recounted by Caldwell, he gets many of the basic facts about the U.S. economy badly wrong. According to Caldwell’s account, capitalists were…
More ´Natural rate of unemployment´ busting, bad measurement edition. | Real-World Economics Review Blog
The ´natural rate of unemployment´, also called ´Non-Accelerating Inflation Rate of Unemployment´ (NAIRU) or ´Non-Accelerating Wage Rate of Unemployment´ (NAWRU), is as, on this blog, Lars Syll states (here and here), a dangerous tool. According to NAIRU/NAWRU theory, a) When unemployment falls below a certain threshold, an inexorable increase in inflation will start. This is…
Busting the ‘natural rate of unemployment’ myth | Real-World Economics Review Blog
from Lars Syll Sixty years ago Milton Friedman wrote an (in)famous article arguing that (1) the natural rate of unemployment was independent of monetary policy and that (2) trying to keep the unemployment rate below the natural rate would only give rise to higher and higher inflation. The hypothesis has always been controversial, and much…
The political economy of estimating productivity. | Real-World Economics Review Blog
Who decides what statistical offices measure and how they measure it? And what are the implicit values embedded in these decisions? Recently, the ILO issued a new manual on measuring productivity. Below, I´ll discuss the questions posed. But for starters, it is essential to realize that economists measure monetary productivity, not physical productivity, which leads…
Peak babies has been. Young men are not expendable, anymore. | Real-World Economics Review Blog
Peak Babies was in 2012. At this moment, we´re back to the level of forty years ago (and the most recent data may well be an overestimate). For the first time in centuries, cohorts entering the global labour market will soon be smaller than the cohorts preceding them. Even when there are significant differences in…
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…
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…
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…
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…
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,…
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…
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…
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…
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,…