Just a quick post to say Thank You to all the folks who showed up to the Economics Club Autumn Social. It was a really pleasant little affair, with lots of conversation, and discussion of all sorts. A good start for the semester!
This one’s going out to Prof Z….
Came across two different pieces that reminded me of Professor Ziliak this morning and wanted to throw them up on the blog.
1) John Q of Crooked Timber talks about Rawls, Bentham and the Laffer Curve. Understanding Rawlsian justice through the concept of the Laffer Curve sounds pretty strange to me– personally, I have for some time now thought that the difference principle in the Theory of Justice interesting for pointing out the lower limit of society: if the welfare of an individual does not enter into the calculations of public action, that individual is not part of society, and is, moreover, not counted as having rights. Quiggin takes an entirely different view of Rawls, one that implies that we ought to have a top marginal tax rate of 73% (which sounds great to me, but politically impossible.)
2) The Environmental Economist has not apparently heard about the Cult of Statistical Significance. In a post citing all-too-familiar evidence about economists obsessed with statistical significance and error terms, we also read about the exciting new possibilities of data coming out of computer science these days. Also, what the heck is a neural net?
Is Class War really over?
Nick Carnes over at Vox declares that the class war over, and the rich have won. Although he does bring up some insightful statistics, and makes a strong case that the wealthy 1% has indeed captured American political institutions, it would seem perhaps that we are, rather, at the beginning of the class war. When unions were well represented in Congress and workers rights better protected, there was something of an alliance between the classes, and it is this that has collapsed in recent times.
Olivier Blanchard gets Dangerous
IMF Chief Economist Olivier Blanchard writes in the latest edition of Finance & Development about the “dark corners” of macroeconomics, and the need to keep clear of them. Macroeconomics in the last 30 years, for reasons both internal and external to the profession, had largely ignored these corners, much to its detriment in the financial crisis of 2008. Danger, it turned out, was much closer at hand that economists expected, and the result was that, when the crisis came, macroeconomists did not have a good explanation, nor a ready plan of action. Today, research in macroeconomics and finance is becoming more coordinated, in the hopes of avoiding future crises.
On the other hand, one might wonder, given the persistence of unemployment and the lack of growth in developed states, coupled with the continuation of austerity policies in the European Union and the US, is it the prevalence of darkness that is the problem, or rather the lack of adequate light? Is macroeconomics fundamentally suited to its task, or should we engage in a critique of its basic underpinnings?
25 April 2014
Haiku of the Day
How now, socialists? / We all know Utopia / is “no place” to be.
Quote of the day
No social order ever disappears before all the productive forces, for which there is room in it, have been
developed; and new higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society. Therefore, mankind always takes up only such
problems as it can solve; since, looking at the matter more closely, we will always find that the problem
itself arises only when the material conditions necessary for its solution already exist or are at least in the process of formation…The bourgeois relations of production are the last antagonistic form of the social
process of production…This social formation constitutes, therefore, the closing chapter of the prehistoric
stage of human society.” -Karl Marx, A Contribution to the Critique of Political Economy, 1859
Links of the Day
Everybody is talking about Piketty, even David Brooks at the New York Times
Simon Wren-Lewis defends mainstream economics against calls for plurality in education
Discussion of Piketty over at Brad Delong’s blog, with a large quote from The Slackwire
David Ruccio on Poverty in Appalachia (and how it is reported)
The Political Economy of Game of Thrones, from the Marginal Revolution blog
24 April 2014
Haiku of the Day
Piketty tops charts! / Inequality’s mainstream! / Now–ambivalence.
Quote of the Day
“A long-run fall in the rate of interest would do much to stimulate private investment, while an extension
of public investment could make up for its deficiencies, and a drastic policy of redistribution of income
would increase consumption, and reduce the amount of investment necessary to preserve a reasonable level of employment. All these policies meet with serious difficulties and have to contend with violent
opposition, and it remains to be seen whether it is possible for the present economic system to adapt itself to the requirements of the future.”–Joan Robinson, Introduction to the Theory of Employment, 1937
Links of the Day
Matt Yglesias of Vox talks about Piketty
Deep observations on Piketty by Thomas Palley
Fivethirtyeight finds that fewer high school graduates are going to college
Piketty’s “Capital” is a huge hit!
Piketty, Krugman, Stiglitz, and Durlauf on Piketty (Video posted on Economist’s View)
23 April 2014
Haiku of the Day
We have more, better / Data and technology / and Nothing makes sense.
Quote of the Day
“Economic distress will teach men, if anything can, that realities are less dangerous than fancies, that fact-finding is more effective than fault-finding.” –Carl Lotus Becker, Progress and Power (1935)
Links of the Day
Anatole Kaletsky, chairman of INET, muses on whether or not Economics is useful
Noah Smith on the interminable rise of solar power
Robert Solow is remarkably positive about Piketty in the New Republic
Dani Rodrik writes about globalization and deindustrialization
21 April 2014
Haiku of the Day:
Aggregate demand: / Add up all the things we want, / then subtract the dreams.
Quote of the Day:
“Mathematics, rightly viewed, possesses not only truth, but supreme beauty—a beauty cold and austere, like that of sculpture, without appeal to any part of our weaker nature, without the gorgeous trappings of painting or music, yet sublimely pure, and capable of a stern perfection such as only the greatest art can show.” –Bertrand Russell, The Study of Mathematics (1902)
Links of the Day
Clive Crook at Bloomberg declares that Piketty’s “Capital” is All Wrong
UAW gives up on Tennessee VW plant (Reuters)
Is the US Military a Socialist Paradise (The Daily Beast)
Thomas Sargent’s comprehensive summary of Economics, from Ezra Klein
Wage theft is a criminal offense, but rarely treated as one (Washington Post Op-Ed)
Long Read of the Day:
17 April 2014
Haiku of the Day
Nothing so inspires / Fear and Trembling as Quiet, / Careful, Analysis.
Quote of the Day
“In point of substantial merit the law school belongs in the modern university no more than a school of fencing or dancing.” -Thorstein Veblen, The Higher Learning in America (1918)
Links of the Day
Antonio Fatas – “Secular Stagnation or Secular Boom?”
Robert Reich – “Antitrust in the New Gilded Age”
Karl Polanyi Explains It All – The American Prospect
“They’ll Mess it All Up!” – Bleeding Heart Libertarian
US Jobless claims steady, indication of good economic prospects – Reuters
15 April 2014
Haiku of the Day
More significant / than any number supply’d: / soldiers marching feet.
Quote of the Day:
. “Opposing one species of superstition to another, set them a-quarrelling; while we ourselves, during their fury and contention, happily make our escape into the calm, though obscure, regions of philosophy.” –David Hume, The Natural History of Religion (1757)
Links of the Day:
Ukrainian troops move to suppress separatists (New York Times)
Mohammed El-Erian on the constraints facing the ECB, and the possibility of a European QE
An interesting post on the critical realist approach to social science
Ian Bremmer at Reuters on the entry of Chinese companies into US equity markets
A column from VoxEU on how fiscal policy works in mitigating income inequality
The IMF takes aim at income inequality (New York Times)
Roosevelt University Economics 