… One Funeral At A Time?

8 April 2013

Eine neue wissenschaftliche Wahrheit pflegt sich nicht in der Weise durchzusetzen, daß ihre Gegner überzeugt werden und sich als belehrt erklären, sondern vielmehr dadurch, daß ihre Gegner allmählich aussterben und daß die heranwachsende Generation von vornherein mit der Wahrheit vertraut gemacht ist. Translation: A new scientific truth does not triumph by convincing its opponents and making [...]

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“It’s remarks like that which explain why people hate economists!”

1 April 2013

A lot of heterodox economists are sympathetic to Paul Krugman because he seems to have argued for fiscal expansion. Ha! First, we are in this mess because of people like Paul Krugman who has promoted free trade – which has been destructive to the world economy as a whole and has prevented debtor nations from [...]

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Cyprus Rescue

30 March 2013

Cyprus has recently received the attention of academicians and financial professionals in recent weeks. Need I say that? So national bankruptcy is to be resolved by winding down a bank, moving guaranteed deposits (i.e., upto €100,000) to another and as per the latest Reuters article on this, big numbers (anywhere ranging from 20 to 40 per [...]

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The Saving = Investment Identity

21 March 2013

Recently I have come across many people saying S = I is not correct or that it is valid only for a purely private economy. People who come across the sectoral balances identity S − I = G − T + CAB sometimes mix up with another macroeconomic identity S = I They are unsure [...]

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The Heavenly Walrasian Auctioneer

9 March 2013

When an economist talks of the “price mechanism”, it can be assumed that his theory is bunkum. Of course, it doesn’t mean that prices don’t play a role but the role played is entirely different than what the raw intuition of a normal person or the learned intuition for neoclassical economists says. Economists – neoclassical [...]

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A Dubious FT Critique Of The UK ONS

4 March 2013

On 28 Feb, FT’s columnist Chris Giles attacked the United Kingdom Office of National Statistics in his article titled UK’s official statistics cannot be trusted. As his title suggests, Giles argues that the ONS is helping the UK government hide some public finances statistics and is losing its independence. His article is misleading to say the [...]

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So The Bank Of England And The UK Government Cannot Default On Its Bonds – Is It?

27 February 2013

Always start macroeconomics with balance of payments :-) Recently, Moody’s Investors Service has today downgraded the domestic- and foreign-currency government bond ratings of the United Kingdom by one notch to Aa1 from Aaa. It also downgraded the Bank of England: In a related rating action, Moody’s has today also downgraded the ratings of the Bank [...]

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A New Handbook Of Post-Keynesian Economics

22 February 2013

This looks nice but will be released only in May :( Links: OUP, Amazon Table of Contents Preface and acknowledgements Introduction – G.C. Harcourt and Peter Kriesler 1. A personal view of the origins of post-Keynesian ideas in the history of economics – Jan Kregel 2. Sraffa, Keynes and post-Keynesianism – Heinz Kurz 3. Sraffa, [...]

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Fake Trade-Offs

13 February 2013

Elasticities for one last time for now. Recently Tom Palley wrote a fine critique of the Neochartalist approach to solve the world problems with oversimplistic solutions. Among other things, Palley challenges the simplistic Chartalist solutions due to dilemmas posed by the external sector. Bill Mitchell of Australia wrote a reply in which he states the [...]

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A Nation’s Net Indebtedness: An Example

8 February 2013

Over this thread at Matias Vernengo’s blog Naked Keynesianism, I got into an exchange about current account deficits and sustainability with an anonymous commenter – a topic I had blogged on recently in 2-3 posts. The commenter seems to not understand how this works or seems to believe that net indebtedness cannot keep rising relative to [...]

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