Thanks Everyone!

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!

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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?

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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.

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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?

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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

The Onion reports that counter-top Chicken Rotisserie is now the final frontier of American innovation

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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

Bloomberg News: GE using its giant pile of accumulated profits sitting overseas to purchase France’s Alstom

Piketty’s “Capital” is a huge hit!

Piketty, Krugman, Stiglitz, and Durlauf on Piketty (Video posted on Economist’s View)

 

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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

Josh Barro, writing in the New York Times new blog The Upshot, on the recent Sargent Graduation piece

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

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