new issue of Real-World Economics Review

real-world economics review

issue 103
31 March 2023

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How to Make the Oil Industry Go Bust
Blair Fix     2

Technological Change and Strategic Sabotage:
A Capital as Power Analysis of the US Semiconductor Business
Christopher Mouré     26

Do copyrights and paywalls on academic journals violate the US Constitution?
Spencer Graves     56

Mainstream economics – the poverty of fictional storytelling
Lars P. Syll     61

Why do economists persist in using false theories?
Asad Zaman     84

Revisiting the Principles of Economics through Disney
Junaid Jahangir     89

On the Employer-Employee Relationship
David Ellerman     111

Why is yield-curve inversion such a good predictor of recession?
Philip George     122

Book Review: Thomas Picketty, A Brief History of Equality
Junaid Jahangir     128

Book Review: John Komlos, Foundations of Real-World Economics, 3^rd Edition
Alan Freeman     132

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new issue of real-world economic review

real-world economic review

issue no. 101   –   September 2022

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Two conceptions of the nature of money 
Tony Lawson          2

How power shapes our thoughts
Asad Zaman         20

SARS-CoV-2: The Neoliberal Virus
Imad A. Moosa          27

The giant blunder at the heart of General Equilibrium Theory
Philip George          38

A life in development economics and political economy: An interview with Jayati Ghosh
Jayati Ghosh and Jamie Morgan          44

John Komlos and the Seven Dwarfs
Junaid B. Jahangir          65

A three-dimensional production possibility frontier with stress
John Komlos           76

Free trade theory and reality:
How economists have ignored their own evidence for 100 years
Jeff Ferry          83

The choice of currency and policies for an independent Scotland:
A debate through the lenses of different economic paradigms
Alberto Paloni          90

End Matter 107

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Yes, economics has a problem with women

from Julie Nelson

Yes, economics has a problem with women. In the news recently we’ve heard about the study of the Economics Job Market Rumors (EJMR) on-line forum. Student researcher Alice H. Wu found that posts about women were far more likely to contain words about their personal and physical issues (including “hot,” “lesbian,” “cute,” and “raped” ) than posts about men, which tended to focus more on academic and professional topics. As a woman who has been in the profession for over three decades, however, this is hardly news.

Dismissive treat of women, and of issues that impact women more than men, comes not only from the sorts of immature cowards who vent anonymously on EJMR, but even from men who probably don’t think of themselves as sexist. And because going along with professional fashion may be necessary for advancement, women economists also sometimes play along with the dominant view.

Consider a few other cases I’ve noticed during my thirty years in the profession:  

Financial Times and Wall Street Journal look at parallel currency solution for Greece

Today both the Financial Times and the Wall Street Journal are talking about the increasing possibility of a parallel currency solution for Greece.  Primary sources of this idea are four papers from the Real-World Economics Review:

Trond Andresen and Robert W. Parenteau, “A program proposal for creating a complementary currency in Greece”, real-world economics review, issue no. 71, 29 May 2015, pp. 2-10, http://www.paecon.net/PAEReview/issue71/AndresenParenteau71.pdf

Alan Harvey, “Updated proposal for a complementary currency for Greece (with response to critics)”, real-world economics review, issue no. 71, 29 May 2015, pp. 12-18, http://www.paecon.net/PAEReview/issue71/Harvey71.pdf

Claude Hillinger, “From TREXIT to GREXIT? – Quo vadis hellas?”, real-world economics review, issue no. 70, 20 Feb 2015, pp. 161-163, http://www.paecon.net/PAEReview/issue70/Hillinger70.pdf

Trond Andresen, (2013). Improved Macroeconomic Control with Electronic Money and Modern Monetary Theory, real-world economics review, issue 63, http://www.paecon.net/PAEReview/issue63/whole63.pdf

 

Issue no. 71 of the real-world economics review

Leave comments on issue 71 here.

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Issue no. 71 , 28 May 2015

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Two proposals for creating a parallel currency in Greece                                                   

A program proposal for creating a complementary currency in Greece
Trond Andresen and Robert W. Parenteau          download pdf

Updated proposal for a complementary currency for Greece
Alan Harvey          download pdf

China’s communist-capitalist ecological apocalypse 
Richard Smith          download pdf

Trends in US income inequality 
Pavlina R. Tcherneva          download pdf

The market economy: Theory, ideology and reality 
C. T. Kurien          download pdf

Explaining money creation by commercial banks
Ib Ravn          download pdf

Realist Econometrics? – Nell and Errouaki’s, Rational Econometric Man 
Jamie Morgan          download pdf

Who does the state work for? – Geopolitics and global finance 
Tijo Salverda         download pdf

Leave comments on issue 71 here.

“This may all sound far-fetched, but the idea has been developed in some detail by a Norwegian academic, Trond Andresen”

The conservative UK newspaper The Telegraph has featured an article “How to end boom and bust: make cash illegal” about Trond Andresen’s RWER paper “Improved macroeconomic control with electronic money and modern monetary theory”.  It has already attracted over 3,000 comments.

Most downloaded back-issue RWER papers in March 2015

/PAEReview/issue58/Koo58.pdf
/PAEReview/issue69/Varoufakis69.pdf
/PAEReview/issue46/Baker46.pdf
/PAEReview/issue66/Syll66.pdf
/PAEReview/issue69/Hudson69.pdf
/PAEReview/issue69/Wade69.pdf
/PAEReview/issue56/GuerrienGun56.pdf
/PAEReview/issue69/Knibbe69.pdf
/PAEReview/issue56/Smith56.pdf
/PAEReview/issue52/Kellecioglu52.pdf
/PAEtexts/Chang1.htm
/PAEReview/issue64/Smith64.pdf
/PAEReview/issue60/KaragiannisKondeas60.pdf
/PAEReview/issue66/Huber66.pdf
/PAEReview/issue60/Reinert60.pdf

Issue no. 70 of the real-world economics review

Issue no. 70 of the real-world economics review                   leave comments here

Reading Piketty in Athens

from Richard Parker

I have been reading Thomas Piketty this past week in Athens, where I came back to assess how Greece is faring half a decade after its economy imploded, initially as a consequence of its own ills and then – in an act of monumental malpractice by Germany, the ECB, and the IMF – the cure imposed.^[1]

Signs of recovery are few.

It is hot here, as Mediterranean summers always are – but as thick as the heat is, an air of solemnity and defeat lies far more thickly over this concrete-gray capital and its now concrete-gray people, for whom what we know as the Great Recession has been their Great Depression, where the GDP has contracted 40% in five years and more than a quarter of its workforce can find no paid employment.

Four years ago, tens of thousands of Greeks would turn up regularly, week after week, at Syntagma Square in the heart of Athens to protest, again and again, the terms of the European-and-IMF-designed austerity regime that was the price Greece was being made to pay for loans meant to keep its government and economy afloat.

The streets lack protestors now, filled instead by tourists (more than 20 million visitors are expected this year, nearly two tourists for every Greek citizen) but also with drunks, junkies, and beggars out in alarming numbers of their own. Syntagma Square – jammed when I was here in 2011 with the tents and makeshift lean-tos of young protestors – has been scrubbed clean, the grass and flowers replanted, and new marble steps and benches replacing the stonework that had been chipped and broken to provide rocks to hurl at riot police.^[2]

But cross the street from Syntagma Square and walk into the five-star Hotel Grande Bretagne and you suddenly encounter  

We need economic theories fit for the real world

from The Guardian

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.

Judea Pearl on regression and causation

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.

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.

real-world economics review – issue no. 65

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

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3. issue no. 64 of real-world economics review
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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

rwer-issue-61

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  

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

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. 

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

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%, . . .

RWER issue 57: Hazel Henderson

From rigged carbon markets to investing in green growth

Hazel Henderson  

Abstract

Reviews failure of global carbon trading underKyotoand reasons why alternatives emerged.  Assesses prospects for climate policies beyondKyotoand covers shifts toward green growth in governments and private sector investments.

            The Kyoto Protocol and its global carbon emission-trading scheme expire in 2012.  The World Bank in State and Trends of the Carbon Market found that the market declined in 2010 and is at a crossroads, due to loss of political momentum. 

RWER issue 56: Egmont Kakarot Handtke

Scrap the lot and start again

Egmont Kakarot-Handtke   [Germany]

Abstract: In the wake of the recent financial crisis heterodox economists have taken up a time-honored refrain and proposed to abandon the axiomatic method. The present paper argues that this proposal is self-defeating.

            An economic crisis is always a crisis of economic theory – of mainstream economics, to be sure – and the latest financial crisis is no exception. This is the day of reckoning for the heterodox camp and, of course, rightly so for quite different reasons.

RWER issue 56: George DeMartino

The economist as social engineer: Maxi-max decision, utopia and the need for professional economic ethics^*
George DeMartino   [University of Denver, USA]

Introduction

             The economics profession has attracted a good bit of attention lately due to revelations regarding the failure of influential economists to disclose potential conflicts of interest when serving in the role of public intellectual. For this we are indebted to filmmaker Charles Ferguson, whose film “Inside Job” ought to serve as a wake-up call to a profession that has suppressed its ethical obligations for over a century. Even worse,