Archive for November, 2010

Cancún and the new economics of climate change

November 30, 2010 1 comment

from Frank Ackerman and Kevin P. Gallagher

The failure of US climate legislation, following last year’s disappointing negotiations at Copenhagen, casts a pall over the round of climate talks in Cancún this week. And the global recession and budget-cutting crisis makes this seem like the worst time for new climate initiatives. Unfortunately, we don’t have the luxury of delaying action: the laws of physics don’t need 60 votes in the US Senate to continue making the world’s climate less and less liveable.

There are two battles over climate change. Read more…

World Stock Market Capitalization: 4 graphs

November 30, 2010 7 comments

1. World Stock Market Captialization 1980 – 2007
2. World Stock Market Captialization 1996-  2010
3. Dow Jones World Stock Index 1998 – Oct 24 2008
4. Stock Market Capitalization Around the World  Read more…

Thought for the day: the paradox of toil exists

November 30, 2010 9 comments

from Merijn Knibbe

In a recent paper, Eggertson and Krugman introduced the ‘paradox of toil’: when there is a lot of debt, working harder and smarter can lead to less demand and, therefore, to less production. Does that exist? Yes, it does (the example is not for households as in the paper, but for companies). Read this, from the Washington Post:  Read more…

Beating up on Brad DeLong

November 29, 2010 3 comments

from Dean Baker

For a mainstream economist Brad DeLong is about as good as you get. He is widely read in a number of areas including even (heaven forbid) economic history. He also is extraordinarily open-minded, recognizing that neo-classical economics may not hold all truths past, present, and future. This leaves me perplexed as to how he could be so off the mark in his understanding of the current crisis.  Read more…

Krugman fails to take up the challenge

November 29, 2010 24 comments

from Peter Radford

Sifting amongst the debris left after the recent collapse of economic orthodoxy is not easy. The big guns of the academy are clinging on for all they are worth to the idea that a few fixes and we are all back on track. They have the most to lose in reputation and standing, so I suppose this stubborn refusal to admit the extent of the defeat is understandable. But it is not acceptable. Things have to change in a more dramatic way for economics to rehabilitate itself as a credible body of thought upon which policies can be based. Read more…

Discussion of the week: Is economics a science?

November 28, 2010 6 comments

from Fred Foldvary, Leon, Bruce Edmonds, Antonio Garrido, Michael Meeropol, Dave Raithel, Ken Zimmerman, David Ruccio, Peter Radford, Jon Cloke, Vladimer A. Masch, Merijn Knibbe and Alice

Comments on Is economics a science?  Read more…

Thought for the Dutch: “don’t mention the houses!”

November 27, 2010 9 comments

from Merijn Knibbe

The Netherlands will be next. Everybody is thinking and writing about the problems of Ireland and Spain. Soon, they will be thinking and writing about the Netherlands. Check it out: Read more…

Government debt in advanced economies: 3 Graphs

November 26, 2010 Leave a comment

1. Levels and trends

2. Sovereign bond yields

3. Percent of government debt held by residents and non-residents 

Read more…

Capitalist Wimps: Ireland buckles under

November 26, 2010 9 comments

from Peter Radford

One of the stark lessons we have learned from the financial crisis here and abroad is that old fashioned capitalists are hard to find. Perhaps they always were. At least in banking.

I am amazed at the severity of the new budget squeeze Ireland is being put through by its government. Here we have a perfect example of a democratically elected government, whose duty, presumably, is to the people of Ireland, imposing crushing cuts and increased taxes on those very people.


To avoid upsetting bankers. Most of whom don’t live in Ireland. 

Here is a classic confrontation between democracy and capitalism, and the capitalists are winning.  Read more…

Free economics and philosophy books

November 25, 2010 1 comment

from Edward Fullbrook

Multiple publisher courtesy copies of books that I have edited and authored are taking up needed space in my cupboards.  And they are not being read.  So here’s the deal.  So long as they last, you may have for free one copy of either one or two of the titles listed below if you promise to make an online (here: donation to the Real-World Economics Review equal to the postage that should be shown on the package that you receive from me.  Email your order with your postal address to Please put “free books” in the subject box. 

Here are the 10 titles and number of copies of each that I am giving away.  Read more…

Graph of the day: The disappearing middle: EU and US

November 25, 2010 3 comments

Change in share of total hours worked by lowest, middle and highest income occupations between 1993 and 2006

Read more…

Video: Quantitative Easing Explained

November 24, 2010 4 comments

Adbusters’ “Kick It Over” campaign

November 24, 2010 5 comments

Here are the latest links in Adbuster’s “Kick It Over” campaign aimed at mobilizing students to work for a curriculum change in economics.

Kick It Over (Neoclassical Economics)  

Deep in a recession and with scary ecological scenarios looming, now may be the ripest moment we’ll ever have to power-shift global capitalism onto a new path. Adbusters #85 asks economics students around the world to join the fight to revamp Econ 101 curriculums and challenge the endemic myopia of their tenured neoclassical profs. Read a few articles, download the Kick it Over Manifesto (and other posters) and whack them up in the corridors of your campus. Make sure your university is at the forefront of the paradigm shift from neoclassical to ecological economics now underway. Read more…

The European Central Bank sinks Ireland

November 23, 2010 5 comments

from Dean Baker

When a firefighter or medical team make a rescue, the person is usually better off as a result. This is less clear when the rescuer is the European Central Bank (ECB) or the IMF.

Ireland is currently experiencing a 14.1 percent unemployment rate. As a result of bailout conditions that will require more cuts in government spending and tax increases, the unemployment rate is almost certain to go higher. The Irish people are likely to wonder what their economy would look like if they had not been rescued. Read more…

USA long-term unemployment: 5 graphs

November 23, 2010 2 comments

1. Unemployment Rate – U6   2000 -2010
2. Long-term unemployment 1949 – 2010
3. Unemployed over 26 weeks 1969 – 2010
4. Change in employement: Current recession vs. summary of 10 post-war recessions
5. Average number of weeks unemployed 1949 – 2010
  Read more…

Is economics a science?

November 22, 2010 19 comments

from David Ruccio

“Is economics a science?” It’s the question posed by Alex J. Pollock, to which his emphatic answer is “no.” And it’s all because of uncertainty.

Economics aspires to be a science. But in this it does not succeed. Neither does finance. This despite the fact that there is an annual, optimistically named Nobel Prize in “Economic Sciences.” . . .

But why should this be? Read more…

Thought for the day: neoclassical atomicons resemble brain injured humans

November 22, 2010 6 comments

from Merijn Knibbe

I’m reading a book of the paradigm-changing Dutch neurologist Dick Swaab. According to him, autopsies as well as experiments as well as MRI scans show that morality is hard wired into our brain. ‘Mirror-neurons’ become active when we see people doing something, mimicking the observed behavior. Their joy is our joy, their pain is our pain. One hour after birth, babies already show this reaction. According to Swaab: ’empathy is an automatic reaction which does not only show in the … pre frontal cortex but also in evolutionary old parts of the brain … when two monkeys obtain the same reward for a job, everything is fine … when one gets a higher reward … the other one will throw his reward away and will refuse cooperation’. People are empathic (and envious) by nature.  Read more…

Graph of the week: USA productivity and real hourly wages 1964-2008

November 20, 2010 5 comments

from David Ruccio
Mind the gap. Read more…

Ignorance or ill will? Stephen D. Williamson in denial about aggregate demand

November 19, 2010 8 comments

from Merijn Knibbe

Last week I read the rightly famous Paul Krugman essay ‘How did economists get it so wrong’ (September 2, 2009). In this essay he suggests that present day ‘freshwater economists’, i.e. hard core market fundamentalists, are not only far to the right of people like Milton Friedman, de facto denying involuntary unemployment, but also do not know about Keynesian economics anymore. Krugman seems to understate the case. Read more…

Retail sales versus debt liquidation: Which wins?

November 19, 2010 4 comments

from Peter Radford

The phase of the recovery we are now in can be described as a tussle between two opposing sentiments for households. Do they go out and buy? Or do they pay down debt? Of course this is an aggregate view because there will be plenty of households in both camps. So it is the balance between these two opposing forces that we will need to track, especially as we go through the traditional year end selling season.

More to the point, this is a global tussle as well Read more…