Category Archives: The dismal science

The IMF’s Olivier Blanchard Writes a Greek Tragedy

The IMF’s research head, Olivier Blanchard, attempted to defend the IMF’s sorry record in Greece. What if any of his argument makes sense?

Old Economic Thinking is the Problem, Says BIS

The BIS shellacks Bernanke’s savings glut hypothesis and stresses that financial fragility is still a big risk.

The Washington Consensus and Long-Term Austerity in Latin America

Most Latin American countries—including those, like Chile and Brazil, where democratically elected leftist governments were overthrown in the 1960s and 1970s. reversed course to adopt “neoliberal” economic policies. How well did that work?

Tsipras Accepts Most Creditor Terms as Merkel Insists on Referendum

Post-bailout expiration dynamics are likely to produce even worse outcomes for Greece than it had on offer from the creditors last month.

What if the Euro Area Falls into Serious Deflation?

Why structural reforms will not ward off deflation in Europe.

View from the Past: Banks Preferred Lending to Businesses, Not Collateral

Why the rise of collateral-based lending has been bad for our economic health.

Some Pointers on How to Catch the Dubious Use of Statistics

A long standing pet peeve is how the use of figures has been fetishized in political discourse and in our society generally, to the point where many people too easily swayed by argument that invoke data (I discussed this phenomenon at length in the business context in a 2006 article for the Conference Board Review, […]

New Study Debunks Myth That Exorbitant CEO Pay Results from “Talent”

In the last month or so, I’ve seen some remarkably dubious studies flogged around what Lambert calls the Innertubes, all ringing changes on the same themes: outsized pay for those at the top is a reflection of a state of nature. Fortunately, a new study from Lawrence Mishel and Alyssa Davis of the Economic Policy Institute has done the heavy lifting of shredding new, creative defenses of out-of-control CEO pay.

Bill Black: A Harvard Don is Enraged that Pope Francis is “Opposed to the World Economic Order”

An economics professor rails against Pope Francis for daring to point out that we don’t live in the best of all possible worlds.

Banks are Not Intermediaries of Loanable Funds – and Why This Matters

Problems in the banking sector played a seriously damaging role in the Great Recession. In fact, they continue to. Macroeconomic models failed to explain the interaction between banks and the macro economy. The problem lies with thinking that banks create loans out of existing resources. Instead, they create new money in the form of loans. The traditional model greatly understates bank and macroeconomic risk.

How Overgrown Financial Service Sectors Kill Growth

It’s now becoming cutting edge conventional wisdom that oversized financial service industries are bad for your economic health. Yet the media is only occasionally and timidly is willing to say that what is good for Jamie Dimon is bad for the rest of us.

Are Locavores a Threat to Feeding the Planet Efficiently?

As local food has grown, so have the number of critics who claim that locavores have a dilemma. Are they right?

Ilargi: QE Breeds Instability

Why both Keynes and Minsky regarded low interest rates as poor policy.

The Economics of Parallel Currencies

As Greece’s cash crunch continues and its negotiations are moving slowing and tending towards an impasse, it becomes more and more likely that the beleaguered borrower will issue some sort of scrip in order to fund operations while remaining in the Eurozone. How and how well might that work?