This comment by Paul De Grauwe in the Financial Times, deserves more discussion that I can provide at this juncture (I am about to do a face plant), but I trust readers will find it a worthy offering. De Grauwe focuses on sacred cows that have been gored in the credit crunch. He has written […]
Read more...Even though Greg Mankiw claims in the New York Times today that ” Economists are nearly unanimous in their support of an unfettered system of world trade,” another Harvard economics professor begs to differ. Dani Rodrik, writing for Project Syndicate, finds that some prominent former staunch advocates of liberalized trade regimes are having serious doubts […]
Read more...This comment in the Guardian by Simon Jenkins is a tad unfair, since it treats economists as having a fair degree of unanimity of thinking. Dean Baker, Nouriel Roubini, and Calculated Risk, among others, point out that there were economists (and market participants) who saw the housing bubble and the credit crunch coming. Jim Hamilton […]
Read more...Nobel Prize winning economist Joseph Stiglitz tells us that neo-liberalism, witch is a catch phrase for policies that favor domestic deregulation and dismantling trade barriers internationally, has failed. The problem that Stiglitz fails to acknowledge is that despite the questionable record of these practices, they still hold considerable sway in the media and in the […]
Read more...Wolfgang Munchau, in his latest Financial Times comment, “Recession is not the worst possible outcome” takes up a theme near and dear to our and many readers hearts: that policies to avoid recessions do more damage in the long run than letting slumps run their course. Munchau is hard on economists, but not the purely […]
Read more...Reader Juan provided a well-argued and provocatively-worded critique of so-called market fundamentalism yesterday that I thought would provide grist for thought and discussion. The main argument in favor of less regulated commerce, both domestically, in the form of deregulation, and internationally, via more liberal trade regimes, is that it generates higher growth. Juan argues that […]
Read more...It’s gratifying when someone takes on a topic I had wanted to address and does a better job than I could have. Various readers have explained how prices are formed in oil markets, most importantly, how for the vast majority of oil sold, prices are specified in long-term supply contracts and the benchmark is not […]
Read more...Although we don’t always agree with his views, we are fans of Thomas Palley posts because he is willing to question economic orthodoxy. We were particularly taken with his piece, “Demythologizing Central Bankers and the Great Moderation.” In his latest offering, Palley disputes the idea that the recent runup in oil prices is entirely the […]
Read more...A comment in the Financial Times, “Our need to sustain the ‘great moderation’,”by Stephen Cecchetti, professor of global finance at Brandeis, set my teeth on edge. I suspect many readers will react the same way. Let’s start: The US housing market has collapsed, placing severe strains on the financial system and, as a direct consequence, […]
Read more...With the financial system on the exam table, it has been more than a bit troubling, that certain questions are neglected in serious academic/policy debates. The discussion of possible remedies focuses on regulatory solutions, everything from requiring mortgage brokers to be licensed to increasing financial institution capital requirements and having much greater harmonisation, as the […]
Read more...The headline summarizes the observations of economist Paul De Grauwe, who takes central banks to task for their reliance on so-called Dynamic Stochastic General Equilibrium models (DSGE). De Grauwe objects to some of the fundamental assumptions embedded in them (consumers are rational and all have the same preferences, any disruptions are the result of external […]
Read more...I’ve been quite taken with Thomas Palley’s few but very high quality posts, particularly since they have often made bold, persuasive arguments. Today, however, he does himself a disservice by giving a well written but conventional (among US academic economists) defense of the central bank’s conduct. Note that he deals only with monetary policy (he […]
Read more...Reader Michael called to my attention a wide-ranging interview with Nassim Nicholas Taleb, author of the Black Swan and professional iconoclast, in the Times of London. The article is colorful, wide-ranging, and a bit long, so I’ve excerpted some of the most provocative bits. Needless to say, I am particularly taken by his dim view […]
Read more...Below is an article in the New York Review of Books by John Cassidy about a new book by Richard Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness. The piece does a good job of giving an overview of behavioral economics, presenting (and critiquing) how Thaler and Sunstein see it being […]
Read more...I somehow missed this piece by Robert Nadeau in Scientific American when it came out earlier this year, and I thought it made for good Sunday/holiday reading. Nadeau’s criticisms are admittedly pretty broad and similar observations have been made elsewhere (although Nadeau does add some useful historical detail), and a short piece by a non-expert […]
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