Archive for December, 2010

Got ethics?

December 31, 2010 9 comments

from David Ruccio

Economists have no ethics.

Certainly not like sociologists [pdf], psychologists, or statisticians, all of whom have well-defined ethical guidelines or codes of conduct. The American Economic Association has no such guidelines or code nor do most economics programs offer courses—at either the undergraduate or graduate level—on ethics.

That situation may now be changing. Read more…

Nominations for Best Anywhere Economics Blog Post of the Month – December 2010

December 30, 2010 7 comments

The object of this exercise is to draw readers to outstanding posts on economics blogs.  You may nominate up to three posts by leaving for each as a comment below their link, title and author.  The only restriction is that the blog post must have appeared in December 2010.  After a week to ten days the editor will select from the nominations a shortlist of 10 which will then be used as the basis of a PollDaddy poll.  The poll will remain open for two weeks, and then the winner will be announced.

Falling down

December 29, 2010 2 comments

from David Ruccio

According to the latest reports, Americans are struggling to work under increasingly temporary and unequal conditions. Through no fault of their own, they’re trying harder and falling down.

According to the Working Poor Families Project [pdf], there were more than 100 million low-income working families in the United States in 2009, an increase of nearly a quarter million from the previous year. Read more…

Post-Keynesian free banking – or towards a string theory of money

December 29, 2010 8 comments

from Merijn Knibbe

Arjo Klamer has long been ridiculed. Fellow economists did not take him serious – as he was not only against the Euro back in the nineties but also predicted Euro doom and Euro gloom. One year ago, the Euro was still hailed as a spectacular succes. But the world changes.  Klamer was right. But what’s his alternative? As I read in the newspaper, he proposes a whole variety of moneys: special money for transactions between certain companies, special kinds of money for specific regions – just imagine. Should we ridicule him for this? Read more…

10 most viewed posts of 2010

December 28, 2010 Leave a comment

Below, in reverse order, are the 10 most viewed posts of 2010, excluding those dealing with the Dynamite Prize and the Revere Award. 

10. The Department of Economics and Policy Studies at the University of Notre Dame has     been officially dissolved.   Read more…

Economic growth disappoints

December 28, 2010 Leave a comment

from Peter Radford

The latest revision to the third quarter GDP numbers produced a disappointing report. While most analysts had been looking for growth to be about 3.0%, which would have meant another slight upward adjustment, the final tally was only 2.6% and thus quite a bit short of expectations. The hope had been that growth would be picking up as we head into 2011, and that the new stimulus hidden within the recent tax deal would then catapult us higher into the mid 3.% to 4% range. Now such a spurt looks much more difficult unless the fourth quarter comes in unexpectedly strong. Read more…

Why not rural inequality?

December 27, 2010 1 comment

from David Ruccio

The latest report from the International Fund for Agricultural Development (IFAD) is about rural poverty. It would have been a much better report if it had focused on rural inequality.

As a report on rural poverty, it offers the usual diagnosis and remedies—in other words, agricultural development as usual. It focuses, as expected, on Read more…

Neoliberals do not know what markets look like

December 27, 2010 3 comments

from Merijn Knibbe

Exchange takes place without any specification of its institutional setting. We have consumers without humanity, firms without organizations,and even exchange without markets.
Ronald Coase

I love markets. I love businesses. My family background: the so called ‘Kleine luyden’, ‘Small people’ who had all kinds of business: farming, small scale real estate, groceries, transport, meat – you name it. I recall going to the vegetable auction, sitting in the back of a truck with my nephews, watching the auctioneer and coming back with loads of radishes, cabbages – you name it. This world has largely vanished.

Read more…

GDP outlook in 2011 after the tax deal

December 26, 2010 1 comment

from Dean Baker

The enthusiasm of the U.S. business press for the compromise tax package worked out by President Obama and Republicans in Congress led to a mini euphoria of upbeat economic projections for 2011. While the economy will do better with this tax package than if no deal were forthcoming, much of the discussion has exaggerated the potential stimulus to the economy.  Read more…

Idle Speculation

December 24, 2010 9 comments

from Peter Radford

One of the most heated discussions during the current crisis has been the argument over the imminence, or not, of inflation. Most often those arguing we are in danger base their dire predictions on the growth in money supply – the monetary base, which is the narrowest definition of money, has grown by about 58% since 2008. Worse still, they argue, is the constant printing of money going on over at the Fed as it tries to revive the economy. That there has been no burst in inflation since the  money supply erupted, and that all measures of inflation indicate continuing disinflation seems , to these people, of no importance.

The other side of the argument, where I sit, is based on the observation of the enormous and ongoing slack in the economy. Read more…

Shared sacrifice: Where’s Wall Street’s share?

December 23, 2010 5 comments

from Dean Baker

The theme in Washington these days is “shared sacrifice.” Many of the country’s most prominent political figures are insisting that the public must get used to sacrifice. This means giving up some of the benefits, like Social Security and Medicare, that they have come to rely upon.

The shared sacrifice might also mean that middle-income people have to pay higher taxes. Telling a country that is suffering from near double-digit unemployment that it must get used to sacrifice might seem a bit strange, but polite Washington circles have never had much connection to the lives of normal people. Read more…

A company town

December 22, 2010 2 comments

from David Ruccio

The other day, I was explaining to a friend the links between inequality and the financial crisis in the United States. His first response was, “That sounds like a company store.” “Exactly,” I replied.

As it turns out, Maxine Udall also finds the metaphor of the company store appropriate to describe the effects of growing U.S. income inequality: Read more…

Coase, uncertainty, and the firm

December 21, 2010 12 comments

from Peter Radford

The Economist notes Ronald Coase’s one hundredth birthday. I should not allow this to go uncommented upon. To me Coase asked one of the most simple yet subversive questions of all time in economics: why do firms exist?

To regular people outside the wonderland of orthodox economic theory, this question usually induces something between an indifferent yawn, and a totally indifferent shrug. Business firms are such a huge factor in our daily lives that we take them for granted.  Most people work in one, or know plenty of others who do. So why ask such a dull and, frankly, obvious question? Surely economists have that one covered.  Read more…

IMF report: reckless lending caused housing bubbles!

December 20, 2010 3 comments

from Merijn Knibbe

There seems to be a debate about why house prices in the USA rose (and fell). House prices did not only rise in the USA (table 1). An explanation for the rises can’t, therefore, be confined to the USA. An explanation also has to take into account that there were some countries were prices did not increase (Japan, South Korea, Germany). Read more…

RWER issue 55: Marvin Brown

December 17, 2010 8 comments

Adam Smith’s view of slaves as property: A response to Thomas Wells and Bruce Elmslie
Marvin T. Brown   [University of San Francisco, USA]

In a previous issue of the Review, both Thomas Wells and Bruce Elmslie argue that I got it wrong when I pointed out in “Free Enterprise and the Economics of Slavery” that in The Wealth of Nations, Smith treated slaves as property. Read more…

RWER issue 55: Richard Smith

December 17, 2010 8 comments

If Herman Daly has a better plan, let’s hear it
Richard Smith    [Institute for Policy Research and Development, London]

The great strength of Herman Daly’s work has always been his passionate, eloquent, and insistent argument against both mainstream economics and green growth proponents that economic growth cannot continue forever on a finite planet and that humanity will not survive unless we construct a sustainable “steady-state” economy. I could not agree more with this thesis. Read more…

RWER issue 55: Merijn Knibbe

December 17, 2010 3 comments

Why did Dutch economists get it so wrong?
Merijn Knibbe   [Wageningen University, Netherlands]

As late as February 2010, at the time when it already had exploded, Dutch economists denied the existence of a ‘housing bubble’ in the Netherlands. The reasons for this denial seem to be an unwarranted trust in formalized economic models as well as econometric estimates, the neglect of basic historical, comparative and statistical information as well as a curious lack of knowledge about ‘sate of the art’ ideas and models, let alone ‘heterodox’ ideas. Read more…

RWER issue 55: Ian Fletcher

December 17, 2010 3 comments

Dubious assumptions of the theory of comparative advantage
Ian Fletcher   [U.S Business and Industry Council, USA]

The theory of comparative advantage is the core of the case for free trade. However, contrary to orthodox myth, this theory is crippled by the dubious assumptions upon which it depends. Read more…

RWER issue 55: Michael Hudson

December 17, 2010 1 comment

U.S.“quantitative easing” is fracturing the Global Economy
Michael Hudson   [Levy Economics Institute and Uni. of Missouri, K.C, USA]

             Great structural changes in world trade and finance occur quickly – by quantum leaps, not by slow marginal accretions. The 1945-2010 era of relatively open trade, capital movements and foreign exchange markets is being destroyed by a predatory financial opportunism that is breaking the world economy into two spheres: a dollar sphere in which central banks in Europe, Japan and many OPEC and Third World countries hold their reserves the form of U.S. Treasury debt of declining foreign-exchange value; and a BRIC-centered sphere, led by China, India, Brazil and Russia, reaching out to include Turkey and Iran, most of Asia, and major raw materials exporters that are running trade surpluses. Read more…

RWER issue 55: Arista, Erturk

December 17, 2010 1 comment

          The case for international monetary reform

Jane D’Arista and Korkut Alp Ertürk   [Financial Markets Center and University of Utah, USA]


The conventional view on global imbalances is based on a few basic propositions: that Read more…