Archive

Changing the incentives for how economists determine both the content of the subject and their approach to scientific research could increase the range of thinking in the profession

In introducing game theory (in chapters 7-9), MWG build upon the theory of rational choice by individual agents, developed previously in the book to attempt to analyze (describe, explain, and even predict?) the interactions of such agents as well as the outcomes to which they give rise. In previous chapters, MWG discuss interactions only in the form of the arms-length interactions of numerous firms and consumers in specific markets (e.g. under ‘perfect competition’, in chapters 3 and 5).

Orville Schell, Director of the Asia Society’s Center on U.S.-China Relations, discussing his new book, “Wealth and Power: China’s Long March to the Twenty First Century.”

Is China is “too big to fail.”?

Economic theories are powerful things, to be used and misused. Those who write economic theory and do economic policy need to be aware of the consequences of what they are doing.

Will Abenomics succeed in getting Japan’s economy back on the path to sustainable growth? Or is it doomed to fail?

A review of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, the new book by Mariana Mazzucato

Between July 5th and 12th, the second annual summer school in development economics, jointly sponsored by Azim Premji University and the Institute for New Economic Thinking, was held in Bangalore, India.

Matheus Grasselli discusses how the use of advanced mathematics in economics enables innovative new thinking.

The Institute have organized a Workshop on “Interlinkages and Systemic Risk” in Ancona, Italy that will take place on July 4th and 5th.

We estimate the effect of the diffusion of photovoltaic (PV) systems on the fraction of votes obtained by the German Green Party.

In this short interview, Institute co-founder George Soros tackles the question at the heart of the Institute’s mission: What’s wrong with economics and what can we do to change it?

Axiomatic bargaining is presented in MWG in the context of welfare economics (Ch. 22), the aim being the formulation of reasonable criteria for dividing gains resulting from cooperative endeavors (the “joint surplus”). It is further presented as an application of cooperative game theory, in which an arbitrator distributes the joint surplus in a manner that reflects “fairly” the bargaining strength of the different agents (although we could conceive of a situation where the parties are bargaining without an external party). If bargaining fails, the outcome is the parties’ own fallback positions (the threat point, or status quo).

is the public sector really sclerotic and conservative in contrast with a dynamic and innovative private sector?