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issue no. 66 of the real-world economics review

January 15, 2014 Leave a comment

We need economic theories fit for the real world

November 22, 2013 17 comments

from The Guardian

Jon Super

The Post-Crash Economics Society at Manchester University. Photograph: Jon Super for the Guardian

The Association for Heterodox Economics welcomes student initiatives for fundamental reform of the economics curriculum, as do our post-Keynesian colleagues (Letters, 19 November). Heterodox economists, drawing on a range of theorists, including Keynes, Marx, Minsky and others, have consistently argued for greater pluralism in both economics curricula and economics research evaluation. We recognise the clear benefits of pluralism in economics: it encourages, by exposing them to alternative perspectives, the development of students’ critical thinking and judgment. Read more…

Judea Pearl on regression and causation

September 28, 2013 7 comments

from Lars Syll

Judea Pearl was kind enough to send yours truly his article (co-authored with Bryant Chen) Regression and causation: a critical examination of six econometrics textbooks a while ago. It has now been published in real-world economics review  issue no. 65.

causation

The article addresses two very important questions in the teaching of modern econometrics and its different textbooks – how is causality treated in general, and more specifically, to what extent they use a distinct causal notation. Read more…

real-world economics review – issue no. 65

September 27, 2013 20 comments

Issue no. 65, 27 September 2013
http://www.paecon.net/PAEReview/issue65/whole65.pdf  
You can download the whole issue as a pdf document by clicking here    
 

In this issue: 

Regression and causation: a critical examination of econometrics textbooks          2
Bryant Chen and Judea Pearl          download pdf 

Diagrammatic economics          21
John Pullen          download pdf 

A plea for reorienting philosophical attention from models to applied economics          30
Gustavo Marqués          download pdf 

A Copernican turn in banking union urgently needed          44
Tom Mayer          download pdf 

A monetary and fiscal framework
for macroeconomic stability in the European Monetary Union         
51
Thomas Oechsle          download pdf 

The experience of three crises:
the Argentine default, American subprime meltdown and European debt mess          65
Víctor A. Beker          download pdf 

Global output growth: wage-led rather than profit-led?          116
Leon Podkaminer          download pdf  

Striking it richer: the evolution of top incomes in the United States          120
Emmanuel Saez          download pdf 

New Paradigm Economics          129
Edward Fullbrook          download pdf 

Past contributors, submissions and etc.          132


Wikipedia has the beginning of an article on the RWER, http://en.wikipedia.org/wiki/Real-world_economics_review.  It needs much work.  It would be useful if RWER subscribers contributed to this

10 most viewed posts of the last 90 days

August 5, 2013 Leave a comment

issue no. 64 of real-world economics review

Issue no. 64, 2 July 2013

You can download the whole issue as a pdf document by clicking  here  

In this issue: 

Is it a bubble?          download pdf           2     

          Steve Keen — A bubble so big we can’t even see it         download pdf          3

          Dean Baker – Are the bubbles back?          download pdf          11      

          Ann Pettifor – The next crisis          download pdf          15

          Michael Hudson – From the bubble economy to  . . . . .           download pdf          21

Rethinking economics using complexity theory          23
Dirk Helbing and Alan Kirman          download pdf

The fate of Keynesian faith in Joseph’s countercyclical moral          52
Douglas Grote              download pdf

A constructive critique of the Levy sectoral financial balance approach          59
Brett Fiebiger                download pdf

Capturing causality in economics and the limits of statistical inference          81
Lars Syll           download pdf

Money as gold versus money as water          90
Thomas Colignatus         download pdf

Constant returns to scale: Can the competitive economy exist          102
M. Shahid Alam             download pdf

Reassessing the basis of corporate business performance          110
Robert Locke                download pdf

Capitalism and the destruction of life on Earth          125
Richard Smith                           download pdf

Past contributors, submissions and etc.          152

issue no. 63 of real-world economics review

March 25, 2013 2 comments

Issue no. 63,  25  March  2012

You can download the whole issue as a pdf document by clicking  here  

In this issue:

The veil of deception over money           2
Norbert Häring           download pdf

Ultra easy monetary policy and the law of unintended consequences           19
William White            download pdf

Civilizing capitalism           57
Erik Reinert           download pdf

Looking at the right metrics in the right way – Two kinds of models           73
Merijn Knibbe           download pdf

Crisis and methodology: Some heterodox misunderstandings          98
Egmont Kakarot-Handtke          download pdf

Inapplicable operations on ordinal, cardinal, and expected utility          118
Jonathan Barzilai          download pdf

Reduced work hours as a means of slowing climate change         124
David Rosnick          download pdf

Electronic money and Modern Monetary Theory          135
Trond Andresen          download pdf

Productivity, unemployment and the Rule of Eight          142
Alan Taylor Harvey          download pdf

What I would like economic majors to know          147
David Hemenway          download pdf

Past, contributors, submissions and etc.          155

An online journal started in 2000

December 3, 2012 3 comments

from Edward Fullbrook

The current issue of Bloomberg Business Week features an article on Ronald Coase’s plans to launch a new journal.  The article ends as follows.

Coase and Wang are still talking to university publishers about supporting Man and the Economy. The University of Chicago Press considered it but found other publications with the same approach, for example the Real-World Economics Review, an online journal started in 2000 by young French economists. They had originally titled it the “post-autistic economics newsletter.” Papers published this summer by the Review include “Rethinking macroeconomics in light of the U.S. financial crisis” and “Neoclassical economics: A trail of economic destruction since the 1970s.” Even if Coase never launches his journal, he’s already helped inspire a generation of economists. One of the quotes on the home page of the Review reads: “Existing economics is a theoretical system which floats in the air and which bears little relation to what happens in the real world.” The source? Ronald Coase.

I was fascinated to learn that in 2000 I was young French economists.

rwer-issue-61

September 26, 2012 8 comments

Issue no. 61, 26 September 2012

You can download the whole issue as a pdf document by clicking   here

In this issue:

The optimal material threshold:
Toward an economics of sufficiency       2

Samuel Alexander    download pdf

The normative foundations of scarcity        22
Asad Zaman    download pdf

Degrowth, expensive oil, and the new economics of energy        40
Samuel Alexander    download pdf

Nash dynamics of the wealthy, powerful, and privileged:       52
America’s two-player, Darwin metaeconomy
L. Frederick Zaman    download pdf

Capital as power: Toward a new cosmology of capitalism       65
Shimshon Bichler and Jonathan Nitzan    download pdf

A warrant for pain:
Caveat emptor
vs. the duty of care in American medicine         85
Avner Offer    download pdf

Reassessing the basis of economics:
From Adam Smith to Carl von Clausewitz       100
Robert R Locke    download pdf

Mankiw’s attempted resurrection of marginal productivity theory       115
Fred Moseley    download pdf

The evolution of economic theory:
And some implications for financial risk management      125

Patrick Spread    download pdf

More on why we should bury the neoclassical theory       137
of the return on capital

Roy Grieve  download pdf   Read more…

For ratio of female to male income the USA ranks 12th out of 30

September 3, 2012 2 comments

“The Chart That Scares The “1%” The Most”

June 21, 2012 9 comments

Below is the first part of an article by Tyler Durden on ZeroHedge that relates directly to the Shimshon Bichler and Jonathan Nitzanpaper “The asymptotes of power” published yesterday in the RWER #60.  At the bottom of the excert their is a link to the full article.

      Capitalists have been gripped by ‘systemic fear’ making them worry not about the day-to-day movements of growth, employment, and profit, but about ‘losing their grip’. An interesting recent article by the Real-World Economics Review on the Asymptotes of Power focuses on the fact that the capitalists are forced to realize that their system may not be eternal, and that it may not survive in its current form. The authors fear that, peering into the future, the ’1%’ realize that in order to maintain (or further increase) their distributional power (their net profit share of national income – which hovers at record highs) they will have to unleash even greater doses of social ‘violence’ on the lower classes. The high level of force already being applied makes them increasingly fearful of the backlash they are about to receive (think Europe to a lesser extent) and nowhere is this relationship between the wealthy capitalists and social upheaval more evident than in the incredible correlation between the Top 10% share of wealth and the percent of the labor force in prison. In order to have reached the peak level of power it currently enjoys, the ruling class has had to inflict growing threats, sabotage and pain on the underlying population. Read more…

RWER issue 60

June 20, 2012 10 comments

real-world economics review

- Subscribers: 20,120                      Subscribe here                            ISSN 1755-9472
- a journal of the World Economics Association (13 months old; 10,099 members)
- back issues at www.paecon.net recent issues: 59 58 57 56  55 54 53 52 51 50

Issue no. 60
, 20 June 2012

http://www.paecon.net/PAEReview/issue60/whole60.pdf
You can download the whole issue as a pdf document by clicking
here

In this issue:

Neo-classical economics:          2
A trail of economic destruction since the 1970s
Erik S. Reinert        download pdf

The asymptotes of power          18
Shimshon Bichler and Jonathan Nitzan       download pdf

The Greek financial crisis and a developmental path to recovery          54
Nikolaos Karagiannis and Alexander G. Kondeas       download pdf

Open peer review, open access and a House of Commons report          74
Grazi Ietto-Gillies       download pdf

Llimits to growth and stochastics          92
Nicolas Bouleau       download pdf

Democracy and sustainable development          107
Peter Soderbaum       download pdf

Rethinking macroeconomics in light of the US financial crisis          120
Victor A Beker       download pdf

Marginal productivity theory of the price of capital:
an historical perspective on the origins of the codswallop          139
Roy H. Grieve       download pdf

Past Contributors, etc.          150

1. Germany’s beggar-thy-neighbour wages policy and 2. Shrinking the financial sector to its 1970s pre-bubble size

June 18, 2012 Leave a comment

The above and related issues arise in two papers in the current issue 59 of the Real-World Economics Review

Matías Vernengo and Esteban Pérez-Caldentey, “The euro imbalances and financial deregulation: A post-Keynesian interpretation of the European debt crisis” http://paecon.net/PAEReview/issue59/VernengoPerez59.pdf 
and
Robin Pope, “Public debt tipping point studies ignore how exchange rate changes may create a financial meltdown” (co-author Reinhard Selten) http://paecon.net/PAEReview/issue59/PopeSelten59.pdf

 Vernengo, Pérez-Caldentey and Pope all  agree on the need for: 

(i) fiscal stimulus while the private sector deleverages, 

(ii) inter-country fiscal transfers to losers in a global downturn in order to reduce contagious adverse aggregate demand effects, 

(iii) re-regulation of the financial sector to aid in averting future financial bubbles, and 

(iv) an absolute rise in German wages – though for different reasons.
Robin Pope: in order to try to curb the dramatic increase in inequality in Germany between the upper echelon and the average German worker that has occurred over the past decade, an increase that damages democracy and damps internal demand.
Matías Vernengo and Esteban Pérez-Caldentey: in order to reverse the dramatic narrowing of the gap between wages in Germany and non-core countries that occurred over the past decade, a reversal that they believe would eliminate Germany’s dramatically increased export surplus to non-core countries that occurred over this same decade plus.

On where the three disagree, see their extremely interesting exchange below, and do, if inclined, append your comments.  Read more…

The Pope, Vernengo and Pérez-Caldentey Discussion

May 17, 2012 Leave a comment

from Robin Pope,  Matías Vernengo and Esteban Pérez-Caldentey

Below is an extremely interesting exchange between the authors of two papers in the current issue of the Real-World Economics Review.

Matías Vernengo and Esteban Pérez-Caldentey, “The euro imbalances and financial deregulation: A post-Keynesian interpretation of the European debt crisis” http://paecon.net/PAEReview/issue59/VernengoPerez59.pdf

and

Robin Pope,  “Public debt tipping point studies ignore how exchange rate changes may create a financial meltdown” (co-author Reinhard Selten) http://paecon.net/PAEReview/issue59/PopeSelten59.pdf 

—————————————————————————————————————–

Here is an exchange on the paper, “The euro imbalances and financial deregulation: A post-Keynesian interpretation of the European debt crisis”

Robin, Matías, Esteban Interchange, collated 9th May 2012
order:
1) Robin comments on Matías and Esteban’s RWER article and relatedly adds a 2nd comment on Trond Andresen’s RWER article
2) Matías responds
3) Robin rejoinders
4) Esteban objects to austerity
5) Robin agrees austerity is the wrong policy
6) Esteban objects to austerity for Spain
7) Robin makes concrete for Spain the non-austerity proposal presented in her joint RWER Tipping Points paper with Reinhard Selten
8) Esteban objects to Robin highlighting a basic similarity in the modeling of him and Matías with that of Ken Rogoff
9) Robin is intransigent
10) Esteban sees the problem as external trade imbalances
11) Robin models with reverse causation to Esteban and Matías and Ken Rogoff – sees the problem as bubble finance causing unhealthy trade imbalance
12) Esteban holds by the current account imbalance as the causal direction
13) Robin grants that there is some two-way causation
14) Esteban sees a deficit balance of payments as a constraint
15) Robin sees no hard constraints
16) Robin beckons RWER readers to her and Reinhard Selten’s verdict in favour the imperfect euro and the dangers of not shifting to an imperfect single world currency
17) Esteban argues for making the euro feasible
18) Robin argues for the euro already being feasible
19) Matías and Esteban’s 4-point Position Summary with Robin’s responses

1 Robin Pope
In their RWER paper on Euro c, Matías Vernengo, Esteban Pérez-Caldentey propose that Read more…

20,097, 10,749 and 652

May 10, 2012 Leave a comment

Dear Subscriber,

The real-world economics review now has 20,097 subscribers.

10,749 of them have not yet joined the World Economics Association (WEA).

Next week on the 16th the WEA will be one year old.

If 652 of those 10,749 were to join the WEA between now and then, the WEA will have 10,000 members on its first birthday.

Yes, I know 9,348 in its first year of existence is amazing, but 10,000 sounds even more so.

If you are one of the 10,749, Read more…

Forbes’ update on the state of plutonomy or “democracy for the few”

March 30, 2012 15 comments

from Edward Fullbrook

The current Forbes, the bi-weekly of The One Percent, features an update on the current state of what it, like Citigroup, calls plutonomy.  Also called by its insiders “democracy for the few”, this is the basic economic-political reality of our time, which one-percenters chat about daily and which the rest of us generally pretend doesn’t exist.  Skeptics of the analysis of plutonomy offered in “The Political Economy of Bubbles” in the current issue of RWER are encouraged to read Forbes’ plutonomy update.   Below is a taster. 

The new “us versus them” is not like the racism of colonial times. This is starkly different. It’s the 99% versus the 1%, . . . Read more…

The ergodic axiom: Davidson versus Stiglitz and Lucas

March 28, 2012 26 comments

Contemporary neoclassical economists proceed under the assumption that as concerns the economy there exists a predetermined reality that can be fully described by “unchanging objective conditional probability functions”.  This is called the ”ergodic axiom”, and its current supporters include Joseph . Stiglitz and Robert Lucas.  In the anti-scientism spirit of Keynes, Paul Davidson has long campaigned against the use of the ergodic axiom, but never so tellingly as in his most recent paper, Is economics a science? Should economics be rigorous? It appears in the current issue of the Real-World Economics.  Here is one section from this paper.

The ergodic axiom 

First, let us take up the ergodic – nonergodic stochastic process distinction.  Paul Samuelson [1969] has written that if economists hope to move economics from “the realm of history” into “the realm of science” they must impose the “ergodic hypothesis” on their theory[1].  In other words Nobel Prize Winner Paul Samuelson has made the ergodic axiom the sine qua non for the scientific method in economics. Lucas and Sargent [1981] have also claimed the principle behind the ergodic axiom is the only scientific method of doing economics. 

Following Samuelson’s lead, most economists (e.g., Cochrane, Stiglitz, Mankiw, M. Friedman, Scholes, etc) and economic textbook writers either implicitly or explicitly have assumed that observable economic events are generated by an ergodic stochastic process.   Read more…

Plutonomy Bubble Number Three

March 24, 2012 15 comments

The herd instinct and the common theory

March 20, 2012 4 comments

Below are two thought-provoking, stand-on-their-own sections from Patrick Spread‘s paper “Science and Support: The Struggle for Mastery in Economics” in the new issue of RWER. 

The herd instinct

Fullbrook (2010a, p. 102), in the quotation above on page 3, refers to the AEA and neoclassical economists as ‘the old herd.’ References to ‘the herd instinct’ are fairly common in academic literature but its nature is never specified. The phenomenon is easily understood in terms of support-bargaining. An individual advances an idea that looks likely to advance the interests of himself, or herself, and his or her associates. Read more…

The prescription drugs bubble

March 15, 2012 Leave a comment

Below, from the new issue of RWER, is an especially interesting section from the lead paper, “Public debt tipping point studies ignore how exchange rate changes may create a financial meltdown”, by Robin Pope and Reinhard Selten.   Read more…

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