Archive for January, 2010

The Revival of Political Economy

January 26, 2010 1 comment

The Revival of Political Economy
Prospects for sustainable provision
Coimbra, Portugal, October 21-23, 2010

The recent financial collapse and the ensuing economic downturn are still imposing hardship and suffering upon millions all over the world, especially the poor and the unemployed. The crisis has raised public awareness of the consequences of neoliberal drift and of the shortcomings of a mainstream academic economics that did not anticipate the financial meltdown and economic downturn, and even actively contributed to setting up the new (toxic) financial architecture. Read more…

Soul-searching in economics

January 25, 2010 23 comments

Newsweek’s Rana Foroohar reports [ht: ja] that the most recent meeting of the American Economic Association (in Atlanta) involved “more soul-searching than number crunching.”

Hundreds of the profession’s most eminent thinkers turned out to hear panel after panel discuss how, exactly, they’d gotten things so wrong. Why did most of the world’s top economists fail to forecast the financial crisis? Should the teaching of economics in universities be entirely rethought? While past stars at the AEA have been conservative, finance–oriented intellectuals like Eugene Fama, this year’s meeting belonged to the liberal realists— Read more…

Financial Transactions Tax – urgent call for support

January 24, 2010 10 comments

From: Nigel Stanley <NStanley@TUC.ORG.UK
Subject: [new-pol-econ] Financial Transactions Tax – urgent call for support
Trade Unions Congress

The TUC is involved with a high profile campaign for a financial transactions tax with a wide coalition of development, poverty and faith groups which is due to be launched in a few weeks time with some celebrity fairydust.
Importantly this is a real international campaign with a similar group coming together in the USA and working with existing coalitions in Europe.
One initiative that is taking place in the run-up to the launch is a letter to G20 leaders signed by a worldwide group of economists. The idea is to get some attention just before Davos.
I would very much welcome signatures from this group – and just as importantly – help with getting further signatures from colleagues. I am sure that you are members of other lists or know people who could sign.
I’ve put the list of those signing already (which includes members of this group) at the end of this email so that you can see there are some substantial figures on board.
The letter follows: Read more…

New economics series: call for proposals

January 21, 2010 2 comments

Zed Books is looking for economists to write short, accessible, non-neoclassical books on climate change, inequality, gender, global institutions and development.  Here is their call.  Read more…

The LSE Debate: Ormerod and Hodgson

January 21, 2010 27 comments

Last night’s public debate “What kind of economics should we teach?” at the London School of Economics and featuring  RWER authors Geoffrey Hodgson and Paul Ormerod proved an interesting occasion.  We hope soon to have a podcast of the event, but meanwhile here is a link to Hodgson’s very useful slide show:–WhatKindEconTeach.pdf

And here are Ormerod’s notes from his presentation. Read more…

From Gender as an Exogenous Variable to Gender as an Endogenous Force in the New Mainstream Economics

January 21, 2010 1 comment

from Irene Staveren

I will present a paper at ‘The New Economics as Mainstream Economics’ conference (Cambridge, 28-29 January 2010), titled: From Gender as an Exogenous or Impact Variable to Gender as an Endogenous Force in the New Economics. In the paper I argue that in the old mainstream macroeconomics, gender is often completely absent, either as a variable, or as driving certain institutions, or as underlying the gender division of labour between the paid and unpaid economy, whereas the unpaid economy is often completely ignored in macroeconomic analyses. At most, gender is Read more…

Fama’s Fallacy

January 19, 2010 15 comments

from Peter Dorman

Listen to this excerpt from his interview with John Cassidy:

Back to the efficient markets hypothesis. You said earlier that it comes out of this episode pretty well. Others say the market may be good at pricing in a relative sense—one stock versus another—but it is very bad at setting absolute prices, the level of the market as a whole. What do you say to that?

People say that. I don’t know what the basis of it is. If they know, they should be rich men. What better way to make money than to know exactly about the absolute level of prices.

He makes this point several other times within a few minutes: we know markets are efficient because they are unpredictable.

But those famous monkeys, Read more…

NAFTA: Old Enough to be Tried as an Adult

January 13, 2010 1 comment

by Kevin P. Gallagher and Timothy A. Wise

In a welcome move, President Obama’s US trade representative, Ron Kirk, has made a new year’s resolution to craft “a new kind of trade agreement for the 21st century.” Those were the words he used in his letter to congressional leaders notifying them of the administration’s intent to negotiate the Trans-Pacific partnership agreement (TPP), a proposed eight-country trade deal with countries as diverse as New Zealand, Chile and Vietnam.

The trade pact would be Read more…

Announcing Two Prizes for Economics

January 11, 2010 6 comments

The  Real-World Economics Review Blog is holding polls to determine the awarding of two prizes:

  • The Dynamite Prize for Economics , to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC), and

Name change (February 3,2010): ‘Dynamite Prize in Economics’

In some ears our “Ignoble Prize for Economics” sounds too much like the unrelated Ig Nobel Prizes, which are offered annually as humorous awards for dubious and outrageous accomplishments in many fields, economics included.  Confusion between the two would be regrettable, not least because our prize is offered without humor and the people deciding the winner are expected in the main to be subscribers to the Real-World Economics Review.  So henceforth the “Ignoble Prize for Economics” will be called the “Dynamite Prize in Economics”.

Why “dynamite”?  Two reasons.  One, it retains the allusion to “Nobel”, as Alfred Nobel, the founder of the Nobel Prizes, made his fortune through the invention of dynamite.  Two, as initially announced, the prize is “to be awarded to the three economists who contributed most to enabling the Global Financial Collapse”, or more figuratively, to the three economists who contributed most to blowing up the global economy.

  • The Noble Prize for Economics , to be awarded to the three economists who first and most cogently warned of the coming calamity.

It is accepted fact that the economics profession through its teachings, pronouncements and policy recommendations facilitated the GFC.  We also know that danger signs became visible long before the event and that some economists (those with their eyes on the real-world) gave public warnings which if acted upon would have averted the human disaster. 

With other learned professions entrusted with public confidence, such as medicine and engineering, it is inconceivable that their professional bodies would not at the very least censure members who had successfully persuaded governments and public opinion to ignore elementary safety measures, so causing epidemics and widespread building collapses. 

To date, however, the world’s major economics associations have declined to censure the major facilitators of the GFC or even to publicly identify them.  This silence, this indifference to causing human suffering, constitutes grave moral failure.  It also gives license to economists to continue to indulge in axiom-happy behaviour.  Nor has the economics establishment offered recognition to those economists who were not taken in by fads and fashion and whose competence, if listened to, would have prevented the collapse. 

These two silences reveal a continuing moral crisis within the economics profession .  The Dynamite and Noble Prizes for Economics are being offered as small first steps towards a cure.

Poll Procedures for the Dynamite Prize for Economics   Read more…

The Bakken Formation — hype or a new Saudi Arabia

January 10, 2010 3 comments

from Lewis L. Smith

A friend asked me to comment on some material which he had received, extolling the virtues of the Bakken Formation, which appears to have received considerable publicity among investors in the USA.

This is a large mass  of underground rock located mostly in Montana and Wyoming, running up to the Canadian border at least. According to a recent study by the US Geological Survey, this formation may contain large amounts of oil and gas which could be extracted using current technology. In fact, it is already being exploited successfully, and some people believe that it might even be another Saudi Arabia !

The Bakken Formation should not be confused with the  now famous, gas-bearing Barnett Formation. Their only similarities are that both both names begion with the letter “B”, both contain lots of shale rock and both have been subject to broker-inspired hype.

Since this  “good news” has coincided in  with the promotion of stock in oil or gas companies,  I though that I would try to inject a word of caution into the discussion of this geological phenomenon with  possibly large economic, environmental and political significance. Read more…

US Economy Loses 85,000 Jobs in December, Ends Decade With Job Loss

January 9, 2010 Leave a comment

The economy lost another 85,000 jobs in December, driven by continued job losses in construction and manufacturing. While the current data still show a 378,000 job gain for the decade, these numbers will be lowered by approximately 824,000 when the benchmark revision is incorporated into the data with the release of the January employment report. The data show a decline in private sector jobs of 1,549,000 for the decade. The benchmark revision will increase the private sector job loss for the decade to more than 2.4 million.

The index for hours worked shows an even more dismal story. Hours worked are down 3.8 percent for the decade, even before the benchmark revision. Read more…

Miscellaneous #1: Public debate; James Galbraith; etc.

January 7, 2010 1 comment

London School of Economics Public Debate

What kind of economics should we teach? Read more…

“Please post in Real-World Economics Review Blog”

January 5, 2010 Leave a comment

Heterodox economists have now a new, effective channel to disseminate work of a more technical character. There is now a new Working Papers section on The section started with a paper by Alvaro Calzadilla and Jorge Buzaglo, “Simulating extended reproduction: poverty reduction and class dynamics in Bolivia.” It can be found at:

Happy New Year
Jorge Buzaglo

Real-World Economics in Germany

January 5, 2010 2 comments

Thomas Duermeier reports:

The German working group on post-autistic economics is making huge progress. Finally, the German business press has seen our critique, because at the moment there is a huge debate between Read more…