Blogs

Why is the U.S. Economy Underperforming?

 

Researchers Say Rising Inequality is the Key.

 

Steven M. Fazzari and Barry Z. Cynamon, researchers long interested in consumer behavior, wrote an op-ed for the St. Louis Post Dispatch in October, 2007 in which they predicted that an end to the relentless trend of rising household debt and a subsequent crash in household spending could lead to a surprisingly deep U.S. recession. Soon after, their prediction came true in the aftermath of the global financial crisis.

Why Keynes is Important Today

By Peter Temin and David Vines

Macroeconomists have been notably unhelpful in explaining and recommending policies since the global financial crisis of 2008. 

How could this have happened? 

Since John Maynard Keynes created macroeconomics in the 1930s, the field has grown to be half of all introductory courses in economics and has become well represented and respected among academic economic publications. Keynes was considered helpful in the “Golden Age of Economic Growth” after the Second World War, but he is largely ignored now that we have recreated conditions similar to the Great Depression in many countries. Read more

Income and Wealth Distribution in Germany: A Macroeconomic Perspective

Household economic surveys, such as the German Socio-Economic Panel, notoriously underestimate the degree of income and wealth inequality at the upper end of the distribution.

To combat this, a new approach developed by Thomas Piketty and co-authors analyzes tax return data in an attempt at better measuring top incomes and wealth. But in the case of Germany, this approach faces a number of difficulties. Since 2009, capital incomes have been subject to a flat rate withholding tax, levied at source. In addition, Germany abandoned the wealth tax in 1997. Read more

A History of the JEL Codes: Should There be a Separate "Economic Theory" Category? [Part 2]

 I've been toying with the disappearance of the Theory category for a while, yet it is still unclear to me how the story below should be interpreted. Does it reflect a change in the pecking order between theory and empirical work, as once suggested by Krugman? A change in theoretical work itself? And if so, how to characterize it? The requirement that applications should be built in theoretical thinking ('applied theory')? Or the standard that a theoretical intuition be presented alongside application/ empirical work in scholarly articles? Read more

What Apple Should Do with Its Massive Piles of Money

Cross-Posted via Harvard Business Review

An Open Letter to Tim Cook, CEO of Apple

Dear Mr. Cook, Read more

Adam Smith's first - and last! - book: what rational choice?

Penguin's 250th anniversary editionI was going to call this blog post 'Utility maximising agents in Adam Smith's Theory of Moral Sentiments' but realised that was much too dull - even if it accurately describes my bedtime reading at the present moment. The intention with this, and a series of blog posts, will be to share my on-going reading of the theory of moral sentiments, and this first post is about the first chapters on sympathy in particular. Read more

A History of the JEL Codes: Classifying Economics During the War [Part 1]

In the spring of 1940, as the war in Europe escalated and the likelihood of American involvement grew greater and greater, scientists understood that they would soon be drafted to help national defense planning. In an effort to control the process, several scholarly oriented institutions, including the Social Science Research Council and the American Council of Learned Societies recommended the establishment of “a national agency for the registry and procurement of scientific personnel.” Christened the National Roster of Scientific and Specialized Personnel, the governmental organization set out to send a general questionnaire and a disciplinary “technical check list” of subject matters to all scientists in the country. Read more

The IMF and Human Development: Little Progress and Worrisome Trends

By Alexander E. Kentikelenis, Thomas H. Stubbs, and Lawrence P. King

The International Monetary Fund and the World Bank celebrate their 70th anniversary this year, yet few countries have been eager to join the festivities. Read more