Real-World Economics Review

real-world economics review issue 113download whole issue Entropy and Economics:A bioeconomic perspective on economic development and sustainability    2Luigi Capoani, Margarita Shnaider and Martina Griseri Do we need our needs?    28Andri W. Stahel How invisible capital gains drive extreme U.S wealth concentration     39Steve Roth and Dirk Bezemer The systematic extraction of global resources under […]

from Peter Radford Who is Neil Lawrence? Why do I ask? The Financial Tims published a letter he wrote in which he directs us to the real value in artificial intelligence.  It will not be sourced through some centrally orchestrated “grand plan” that investors in various AI businesses can more readily put a value on.  […]

from Lars Syll Economics today has — as we all know — become a ‘the model is the message’ discipline. However, as long as it does not seriously examine and evaluate the compatibility between the models and their real‑world target systems, the belief that these models significantly improve our ability to understand or explain what […]

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from Lars Syll The purported strength of New Classical macroeconomics is that it has firm anchorage in preference-based microeconomics, and especially the decisions taken by inter-temporal utility maximising ‘forward-looking’ individuals. To some of us, however, this has come at too high a price. The almost quasi-religious insistence that macroeconomics has to have microfoundations — without […]

from Dean Baker Productivity growth is an old concept; we’ve been seeing it at a substantial pace for more than 200 years. Nonetheless, many elite intellectual types like to claim they know nothing about it when they talk about AI. It’s far from clear how much of a productivity boom we will see with AI. […]

from Dean Baker I have written before on the AI bubble. The stock valuations we are seeing now look a lot like the valuations we saw before the Internet bubble began to crash in 2000. Even a quarter century later, people miss much of the story of that bubble. It’s true we had companies that never made […]

from Lars Syll The recurring pattern in financial crises is broadly the same. For one reason or another, a shift occurs in the economic cycle — such as war, innovation, or new regulation — which alters profit opportunities for banks and firms. Demand and prices rise, drawing ever larger parts of the economy into a […]

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from Dean Baker The Economist gave us a classically sloppy piece last week, telling us that we need the mega-wealthy types like Elon Musk and Mark Zuckerberg.  The argument is largely tautological.  It points out that the mega-rich have been responsible for the diffusion of important technologies. There is considerable truth to that, but this is because we […]

from Lars Syll For more than 20 years, economists were enthralled by so-called “rational expectations” models … That such models prevailed bears testimony to a triumph of ideology over science … Good science recognises its limitations, but the prophets of rational expectations have usually shown no such modesty. Joseph Stiglitz The rational expectations hypothesis presupposes […]

from Dean Baker Since it seems for the moment that Netanyahu and Donald Trump have stepped back from their bombing entertainment in Iran and Lebanon, it might be a good time to turn to the war on crypto. Everyone knows crypto, that giant cesspool masquerading as an alternative currency or a great investment opportunity. As […]

from Lars Syll Beneath the civic ideal of taxation as a collective, equitable endeavour lies an entrenched hypocrisy: the architecture of modern tax codes serves not the public good but the consolidation of private wealth. The progressivity of income tax is hollowed out at the uppermost tiers, where income is largely derived from capital — […]

from Dean Baker I have tremendous respect for both Paul Krugman and former FTC Commissioner Lina Khan. That is why it was frustrating to see their brief discussion of pharmacy benefit managers (PBMs) in a longer interview that Krugman did with Khan. Khan noted how, in her role as FTC commissioner, she sought to crack down on […]

from Asad Zaman Conventional university education is obsolete. The typical student earning a bachelor’s degree studies the equivalent of roughly forty textbooks over eight semesters. Today, however, any intelligent teenager with access to ChatGPT — trained on millions of books and articles — can surpass that graduate in a contest of factual knowledge. The model […]

from Paul Krugman Earlier today, Donald Trump posted on Truth Social, A whole civilization will die tonight, never to be brought back again. Not going to be a problem if we ever do get the war crimes trial that all of this deserves. A statement of motive, intent is completely clear. I don’t need to […]

from Lars Syll What economics does is to convert open systems into closed systems by excluding ‘moves’ which would render the system unstable. Dictators ‘freeze the frame’ by order: economists do it by ‘modelling.’ They model the world as a giant computer network in which every possible move has been programmed, and anything outside the […]

from Dean Baker There is an effort by several progressive unions and other organizations to put a 5% wealth tax for the state’s billionaires on California’s ballot this fall. It’s not clear they will succeed in getting it on the ballot or how the initiative will do (I’m in), but Donald Trump has already one-upped them. […]

from Lars Syll ‘Rigorous’ and ‘precise’ economic models cannot be considered anything else than unsubstantiated conjectures as long as they aren’t supported by evidence from outside the theory or model. To my knowledge, no in any way decisive empirical evidence has been presented. No matter how precise and rigorous the analysis, and no matter how […]

from Dean Baker A weather person who told us to bundle up for the cold weather, but also be sure to drink plenty of fluids to protect against the heat, would not be taken very seriously. That is roughly the state of economics when it comes to basic demographic questions. On alternate days the economy […]