Paul Krugman, Gattopardo Economist

25 April 2014

In response to Thomas Palley’s op-ed, Paul Krugman has written a couple of pieces on his New York Times blog (here and here) I have seen many heteredox economists defending Krugman but these pieces should now make it crystal clear that Paul Krugman himself is the head of Gattopardo Economics. Consciously or subconsciously, Krugman’s strategy has been […]


Thomas Palley On Thomas Piketty’s Capital

23 April 2014

Thomas Palley has an open-ed on Thomas Piketty’s book Capital In The Twenty First Century.  The accidental controversialist: deeper reflections on Thomas Piketty’s “Capital” Thomas Piketty’s Capital in the Twenty-First Century is a six hundred and eighty-five page tome that definitively characterizes the empirical pattern of income and wealth inequality in capitalist economies over the past two hundred and […]


Thomas Palley On Asset Based Reserve Requirements

10 April 2014

Thomas Palley has a new paper Monetary policy after quantitative easing: The case for asset based reserve requirements (ABRR). Abstract: This paper critiques the Federal Reserve’s quantitative easing (QE) exit strategy which aims to deactivate excess liquidity via higher interest rates on reserves. That is equivalent to giving banks a tax cut at the public’s expense. […]


Keen’s Reply To Palley

8 April 2014

Steve Keen has replied to Thomas Palley’s critique of him with an article How not to win an economic argument. All models are incomplete because they ignore many complications in order to highlight a few key concepts. In other times, a simple model is a starting point with the aim that the modeler adds more complications […]


Profits And Borrowing

4 April 2014

I think Marshall Auerback is seriously mixing up different parts of the flow of funds accounts of an economy. He is heteredox, so it will be good if he gets these things right. In his latest, he asks Why Are US Corporations Borrowing So Much If Profits Are At A Record Percentage Of GDP?, i.e., the […]


The Phrase Money Multiplier Itself Is Inaccurate And Misleading

31 March 2014

Some people point out that the critique “there is no money multiplier” is wrong because it is a ratio whatever said. No! The phrase “money multiplier” itself is wrong because the phrase itself captures a wrong causal story. A phrase is a small group of words standing together as a conceptual unit and hence the phrase […]


Thomas Palley’s Nice Critique Of Steve Keen’s Models

31 March 2014

Thomas Palley has a new paper Effective Demand, Endogenous Money, And Debt: A Keynesian Critique Of Keen And An Alternative Theoretical Framework, which can be found on his blog. In the abstract, among other things, Palley points out that Steve Keen’s treatment of endogenous money “falls into the theoretical morass regarding the black box of velocity of […]


Nicholas Kaldor On Rational Expectations

29 March 2014

I was recently re-reading an article by Nicholas Kaldor and J. Trevithick [1] and I came across this fine description of rational expectations: The main plank of the monetarist school has hitherto been that inflation is invariably ‘demand induced’: it can result only from an excessive demand for goods which, however, can manifest itself in […]


Paradox Of Profits?, Part 2

25 March 2014

In the previous post Paradox of Profits?, I mentioned how I view the paradox of profits as the confusion between production firms’ operating surplus (as defined in the SNA such as the 2008 SNA or earlier versions) and surplus on the financial account of the system of national accounts. The paradox is highlighted by saying that at the […]


Paradox Of Profits?

22 March 2014

Post-Keynesians unnecessarily worry a lot about the paradox of profits. This post is on my thoughts on the paradox. In my view, there is no paradox at all. It is simply the case of not looking at all the parts of the system of national accounts/flow of funds. Although Post-Keynesians use Kalecki’s profit equation in […]