November 2011

READING ROOM: The Dance of the Meta-Axioms

"Neoclassicism owes its hegemonic position in the social sciences to this most peculiar, axiomatically inbuilt, theoretical failure." So says Yanis Varoufakis, Professor of Economic Theory at the University of Athens, Greece. In this working paper, he defines three meta-axioms that characterize neoclassical economic theory. Confronted with a theoretical challenge, the meta-axioms begin to dance. Quickstep, move, and shuffle -- that is how neoclassicism defends its hegemony, according to Varoufakis.

READING ROOM: Adair Turner on Debt and Deleveraging

Adair Turner, Chairman of the UK Financial Services Authority (FSA), recently gave the presidential lecture at the Centre for Financial Studies in Frankfurt, Germany: "Debt and Deleveraging: Long Term and Short Term Challenges". Paper here and slides here.

Robin Wells: We Are Greg Mankiw… or Not?

In response to the walkout staged by students in the intro economics class at Harvard, INET launched the syllabus project 30 Ways to Teach Economics. We invited professors and students to send us syllabi, and to share their experience with teaching and learning intro economics. Here are three responses, from Bruce Caldwell, Duncan Foley, and Stephen Ziliak. Read more

Professors share their experience with teaching intro economics

In response to the walkout staged by students in the intro economics class at Harvard, INET launched the syllabus project 30 Ways to Teach Economics. We invited professors and students to send us syllabi, and share their experience with teaching and learning intro economics. Find responses below, and more syllabi here. Read more

Giovanni Dosi: A Response to John Kay: Elements of an Evolutionary Paradigm

INET published a paper, written by John Kay, that deals with the relationship between economics and the world we live in. The Map Is Not the Territory: An Essay on the State of Economics spells out methodological critiques of economic theory in general, and of DSGE models and rational expectations in particular. Read more

Steve Keen: Credit Created Out of Thin Air

The neoclassical vision of saving and lending -- the standard model being taught in universities -- causes economists to be blindsided by the dynamics of debt in the economy, according to Steve Keen. In part 3 of this INET interview, Keen talks about the role of private debt in the economy.

It is true that one person's debt is another person's asset, but it is equally true that banks create money when they lend. This kind of endogenous expansion of debt, Keen says, drives economic activity, and most economists are completely oblivious to it.

Read more

Edward Fullbrook: Toxic Textbooks

Last week, Harvard students staged a walkout to draw attention to the bias they perceive in the intro economics course. The Harvard students are not alone, and the staged walkout is not the first protest against the economics curriculum. In June 2000, economics students in Paris circulated a petition calling for the reform of their curriculum. What began as a protest of French students developed into the Post-Autistic Economics Movement. A brief history of the movement here. Read more

Imagining a New Intro Economics

Yesterday, Harvard students of Ec 10 staged a walkout to draw attention to the bias they detect in the course. Here is their open letter to the professor, Greg Mankiw.

Curriculum reform has been central to INET's own project from the beginning. Here is the work of the Economics Curriculum Committee to date. Read more

Steve Keen: How He Saw "It" Coming

The two intersecting lines of supply and demand penetrate economics textbooks like Einstein’s mass-energy equivalence penetrates physics textbooks. The theory behind the two lines is inherently flawed, says Steve Keen.

It is not possible logically to derive from individuals and their preferences the aggregate demand and supply curves presented in economic textbooks – unless one is willing to make a host of unrealistic assumptions, such as that all people are alike. That is why the theory is flawed, according to Steve Keen, Professor of Economics at University of Western Sydney in Australia. Read more