Category Archives: The dismal science

Inequality, Technical Change and the “Hunger for Surplus Value”

By Alejandro Nadal, Professor at the Centre for Economic Studies of El Colegio de Mexico. Cross posted from Triple Crisis

There is (almost) no quarrel about the fact that inequality has increased during the past three or four decades. One of the consequences of this is the growth of unsustainable indebtedness of households in order to maintain aggregate demand, a problem intimately related to the global financial crisis and the so-called Great Recession.

So it is critically important to understand the causes of this rising inequality.

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The Inflation Dog Didn’t Bark, But What About the Others?

By Eric Yeldan, Professor of Economics and Dean at the Faculty of Economics and Administrative Sciences Yasar University. Cross posted from Triple Crisis

The IMF released the April edition of its World Economic Outlook (WEO). One of the key analytical chapters (Chapter 3) of the Report is titled “The Dog that Didn’t Bark: Has Inflation Been Muzzled, or Was It Just Sleeping?” Its main argument (or rather sort of a mystery that needs to be resolved, in the words of its authors) is that over the course of the previous crisis episodes we used to witness severe increases in unemployment along with a simultaneous fall in inflation. Yet, during the current great recession there has been very little movement in inflation, while unemployment rates soared almost everywhere; —hence the metaphor: inflation (the dog…) does not respond (… bark). And the alleged mystery is but why?

The WEO suggests two candidates for explaining the mystery. Perhaps instead of looking for dogs, they should stop ignoring the elephant in the room.

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Stephanie Kelton: Making The Case Against Austerity

By Stephanie Kelton, Associate Professor of Economics at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

Neil Irwin at Wonkblog has a new post up: The Deficit is Falling Fast. Can Washington Accept Victory?

He quotes John Makin of the American Enterprise Institute, who says, approvingly, that the U.S. has probably imposed enough austerity “for now.” Then he shows us the, erm, evidence.

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Yanis Varoufakis: Bitcoin and the Dangerous Fantasy of ‘Apolitical’ Money

By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog The Crash of 2008 has infused our societies with enormous scepticism on the role of the authorities, both government and Central Banks. It is quite natural that many dream of a currency that politicians, bankers and central bankers cannot […]

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Philip Pilkington: Defrocking Reinhart and Rogoff – Controversy Ignores Fundamental Issues in the Use and Abuse of Statistical Studies

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

Over the past week there has been some fuss over alleged inconsistencies found by the economists Herndon, Pollin and Ash in the famous 2010 Rogoff-Reinhart study on levels of government debt and its effects on growth. What is really interesting about the critique of Reinhart and Rogoff is that it raises the issue of just how contentious these studies are.

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Was “Cigarette-Money” in World War II POW Camps a Case of Commodity Money Origination?

By Matthew Berg. Cross posted from New Economic Perspectives

1. A Parable About the Origin of Money

Perhaps the most convincing single example cited by proponents of the view that money is a commodity is the well-known use of cigarettes as “money” by Allied prisoners of war in Germany during World War II.

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Bill Black: The New York Times Thinks Bleeding Cyprus is “Strong Medicine”

Yves here. I’m overdue for a post on the propagandizing against Cyprus. Black describes one element of this barrage.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posed from Benzinga

I’m announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like “screamer”).

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Nathan Tankus: News Flash – North Korea is a Rational Actor

By Nathan Tankus, a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus (https://twitter.com/NathanTankus)

Sometimes debates that surround a country’s policies are about whether that country’s officials are taking the correct course of action. Other times, however, when a country is perceived as a virulent enemy, the attitude forms that their actions aren’t just wrong, they are irrational and crazy (it’s telling that in a society obsessed with rationality and the “rationality” of the market, our worst insult is “irrational”). As a result, it is radical and disreputable to argue that these countries are pursing their objectives in rational manner. North Korea is one of the best examples of this dynamic the post-war period has to offer. As such, I think it’s time to offer a disreputable opinion of North Korea.

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Euro-da-Fé

By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives

(Brussels) Nonplussed by this week’s unemployment report showing the Eurozone jobless rate rising to an unprecedented 12%, members of the European Parliament and Europe’s national governments pressed ahead on Wednesday with passage of a stringent new package of austerity measures. Dubbed “hyperaustérité” or “Übersparpolitik” by its backers, the new program of ruthless cuts and social demolition promises to deliver even higher levels of joblessness, misery and hopelessness than has been achieved so far by earlier rounds of austerity.

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