Interesting interview with professor Steve Keen, where he explains the role of debt in GDP (not currently included in economic models). He models the effects on lending acceleration and repayment options (slow vs. fast) in economic cycles and explains how he was able to successfully predict the 2008 economic crisis. Contrary to traditional Western fiscal … More Modern Economic Theory for the Digital Economy
What makes work satisfying? Apart from a paycheck, there are intangible values that, Barry Schwartz suggests, our current way of thinking about work simply ignores. It’s time to stop thinking of workers as cogs on a wheel. … More The Way in Which We Think About Work is Broken
I argue that there are several factors that contribute to development, these are: institutions, organizations and civil society. Both institutions and organizations are equally important when it comes to improving economic development. Both are interrelated as one focus on creating the operational framework (institutions) while the other (organizations) decides the level of compliance they are willing to apply to the execution of these norms. However, when speaking about human development measured by HDI, institutions and civil society plays a bigger role in setting the agenda. … More The Role of Civil Society and Institutional Reform in Economic and Human Development
This is a question that many development policy advisors struggle with when making suggestions that could improve human development in low and middle income countries. The assumption is that handing over government responsibility to poorly educated local authorities is a sure recipe for disaster. However, before we dive into arguing about the advantages or disadvantages … More Is Government Decentralization a Good Approach for Countries with Low Literacy Rates?
The informal sector plays a very important role in economic development in both complex and simple economies alike. Informality embodies the spirit of entrepreneurship and it is the way people ensure their livelihoods even when excluded from the informal sector (Allen). Development literature puts most emphasis on the establishment of democratic capitalism as the only path to economic development in low and middle-income countries. This research largely ignores the fact that some rich countries with high HDI still have a large informal sector that fuels the economy; such as it is the case of Italy (with 33%) and Sweden (15%) of their economic activity coming from the informal sector. … More Should the Informal Sector be Regulated?
On March 11, 2020 the WHO declared the Coronavirus a global pandemic. Although the first case was detected in the US on 01/20/20, president Trump skeptically dismissed the threat and waited patiently to take action, naively thinking that it would simply go away. It was not until March 13 that the federal government decided to declare a state of … More Shifting Public Discourse About #COVID-19
As the congress prepares to repeal Obamacare, millions of Americans on both sides of the argument wonder how this will affect their taxes, their access to quality care and ultimately their yearly income based on the policy changes proposed. The following article analyses some of the policy implications proposed by both senators during their February 7, 2017 debate. All proposals have marked winners and losers that will be determined by an array of variables. Ultimately, the fate of the losing group will reflect the views embraced by congress related to the value of good heath to the overall economy, based on productivity outcomes per demographic segment. Below is a brief explanation of the implications of each proposal. … More How Does The Repeal of Obamacare Affect Consumers and the Health Insurance Industry?
This paper explores the social implications of the postindustrial era and its effects in neoliberal economic models currently used in Western democracies. The changing nature of work (Landry, 2005), increases in global aging population, rapid environmental degradation and “the upcoming rise in consumer demand fueled by 1.7BN Chinese citizens that will be joining the middle class in the next decade” (Dobbs, 2015), underscore the urgent need to revise certain economic modeling assumptions in order to maintain the stability of democracies. The mathematical limitations imposed by technological innovation in the creation of wage based employment combined with a flawed framework of unlimited economic growth, point to an increased frequency in systemic risk and armed conflict as the future norm of the current socioeconomic system. Adapting institutional practices and economic frameworks to benefit from rapid change can help avoid further deterioration of established and emerging democracies and increase wealth creation in the short and long term. This paper will explore some of the existing challenges to creating a more efficient economic model adapted to support the digital economy, the construction of such a model, and outline the main institutional and monetary reforms that need to take place in order to enable this framework. … More The Antifragile Economic Model: Formalizing the Use of Complementary Currencies as a Method to Offset Systemic Risk
The collapse of the old system has already happened and efforts to perpetuate it are only aggravating the problem. People have experienced the reality of this shift in their everyday lives, in their vulnerability to systemic risk and sudden job losses. However governments have remained in denial, trying to apply the ‘one solution’ fits all problems model (i.e. trying to correct a private debt problem by creating more debt). Meanwhile… … More The Rise of the Liquid Society
Social media analysis reveals a growing trend towards a sense of shared responsibility. This should be a major concern for companies, because what happens when this paradigm makes the leap from humanitarian aid to consumer choice, is that socially responsible practices will become a requirement to stay in business and not an option. Smart brands will be wise to note this change in consumer attitudes, where new information is quickly translating into action. … More Consumer Choice and Growing Shared Responsibility
This paper challenges the notion of “modern economics” demonstrating that existing models are not sufficient to handle the next wave of global economic disruption that will be experienced during the next 40 years. Four examples are presented to illustrate the paradigm shifts in the making. Upcoming monumental challenges require reevaluating societal needs of the 21st century and approaching modeling from a fresh perspective. Technology has moved on, so should fundamental macroeconomic assumptions. … More Modern Economics not Keeping up with Modern Times
The escape from the balance sheet recession. Will the EU make it? … More The difference between a balance sheet recession and an economic recession
Discover how seemingly contradicting theories can be combined to create a Smart Economy that minimizes systemic risk and fosters innovation. … More Political Paradigms and the Smart Economy
Managing risk in a globalized economy – The London Economic. Take a 10 question survey. Help us build the economic models of the future. Be part of something big. We need your opinion as a consumer!
The term ‘entitlement’ is often used in political discourse to refer to welfare and social net ‘handouts’ that create debate among liberals, realists, socialists and postructuralists alike. These debates focus around the issue of fairness considering that some people work ‘harder’ than others. However, I would like to dissect this term from the definition that … More At What Level does the Culture of Entitlement Becomes Morally Wrong?
“An unlimited pool of ideas lost to a sea of short sighted goals” Innovation in the twenty first century has a very narrow definition that centers on the purpose of creating immediate monetary value. This term can take several shapes, such as creating a new product that people want to buy, finding new ways of … More Where Innovation Should be Headed
With so much time and effort being invested in this goal by NGO’s and governments alike, this is a question worth asking. Can we effectively end poverty at some point? And if so, what will it take? The answer depends on the measuring stick being used to define poverty. In order to mitigate any kind of problem, one must first define the parameters of the problem itself. … More Can we end poverty?
Monetary debates are usually seen as between Friedman-Keynes or Friedman-Hayek and so on. JP Koning points to this fascinating debate between Joseph Shield Nicholson and Benjamin Anderson. Both were not so famous economists but their views on what is money remains as relevant as ever. For instance, Nicholson spoke about dodo bones being money: via Bitcoin … More Bitcoin and The Dodo-Bones- Theory of Money
via Reducing risks in urban centres: think ‘local, local, local’ | International Institute for Environment and Development Urban centres can be among the world’s most healthy places to live and work – but many are among the least. How healthy they are is powerfully influenced by local government competence, local information, and support for local … More Urban Reducing Risks in Urban Centres: Think ‘local, local, local’
In “Mortality and morbidity in the 21st century,” Princeton Professors Anne Case and Angus Deaton follow up on their groundbreaking 2015 paper that revealed a shocking increase in midlife mortality among white non-Hispanic Americans, exploring patterns and contributing factors to the troubling trend. (Source: Mortality and morbidity in the 21st century) Short talk by authors … More Shocking Increase in Midlife Mortality Among White Non-Hispanic Americans
Don’t Play Strictly Dominated Strategy Put yourself in other people’s shoes Yale students are evil Rational decision can lead to a bad outcomes You can’t get what you want if you don’t know what you want via Game Theory | Yale University | Ch. 1 —
The largest economy in the world. A technological leader in many industries. Land of the free. Despite all this, poverty in the US remains widespread, affecting about one in seven people, according to the International Monetary Fund (IMF) and as reported by the BBC here. Growth by itself is not enough. If it is not … More The tragedy of poverty in the US — The Political Economy of Development
The Birth of Territory is reviewed in Law, Culture and the Humanities by Thanos Zartaloudis (requires subscription). It’s a generous summary of the book and says a few things about the legal aspects of the argument. To the legal audience the numerous references and remarks on the role of law in the eventual conception of […] … More The Birth of Territory reviewed in Law, Culture and the Humanities by Thanos Zartaloudis — Progressive Geographies
Post 3/4 – Continuation of Emergence of Science A well-known historian and philosopher of science Pierre Duhem reflects the typical Eurocentric attitude: “There is no Arabian science. The wise men of Mohammedanism were … faithful disciples of the Greeks, (and) … destitute of all originality.” It is amazing how prejudice can blind historians to the […] … More Economists Confuse Greek Method with Science — WEA Pedagogy Blog
The very expression “thinking outside the box” suggests that people get caught up in narrow minded boxes and can’t see outside their disciplinary frameworks. … More Scientific Revolution Type — bobreuschlein
From Lars Syll March 11, 2016 Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. … More Modern Economics is Sick
Policymakers in rich economies need to consider some radical approaches to tackling the next downturn Source: The Economist Feb 20th 2016 | From the print edition AT THE start of most years in the past decade, the list of worries about the world economy has seemed longer than that of reasons for hope. The first … More Unfamiliar ways forward | The Economist
n recent weeks market turmoil has put negative interest rates firmly on to the centrals banks’ agenda. The Bank of Japan sprang a surprise by following the European Central Bank in moving into negative territory, and there is even talk that the US Federal Reserve might be forced to reverse course and follow suit. … More Savers are Negative on Negative Rates
David Sloan Wilson has an interesting blogpost about modern evolutionary theory and economics in which he compares the ideas in a highly intelligent 1996 speech about this by Paul Krugman with subsequent developments in evolutionary theory. It reminds me a little of the early twentieth century ideas of Kropotkin (see this post on this blog): “Kropotkin … noticed that groupings of species thrived through cooperation. Researching human settlements in Siberia, Kropotkin likewise noted cooperation and mutual aid as the foundation for dealing with the larger struggle for survival against natural challenges.” … More David Sloan Wilson on economics and new developments in evolutionary theory
In the aftermath of terrorist attacks, education is often advocated as an antidote to terrorism, the idea primarily being that education may make individuals less vulnerable to the false promises of extremist ideologies. For instance, in the aftermath of the terrorist attacks on New York City and Washington DC on September 11, 2001, Eli Wiesel … More More Education = Less Terrorism? Studying the Complex Relationship Between Terrorism and Education
From the recent ILO (International Labour Organization) World Employment and Social Outlook – the changing nature of jobs publication. The part on labour and the increasing importance of international supply chains is a ‘must read’ – the economic history of today. Where are workers less likely to have a permanent contract? Increasing poverty for households … More World employment and social outlook 2015. The changing nature of jobs
Britain’s Conservative government recently released its much-awaited (or much-dreaded) ‘green paper’ on higher education (HE), a consultation document that sets out broad ideas for the sector’s future. Masochistically, I have read this document – so you don’t have to. This first post describes and evaluates the centrepiece of the green paper, the Teaching Excellence Framework … More The HE Green Paper: (Don’t) Read it and Weep – Part 1: The TEF & Social Mobility
I. Introduction In my previous blog entry, the normal form game and Nash equilibrium were introduced. Attention was restricted to pure strategies. As will be illustrated below, not every finite, normal form game has a pure strategies Nash equilibrium. The notion of mixed strategies extends the notion of pure strategies, allowing players to assign probabilities … More Game Theory: Mixed-Strategies and Zero-Sum Games
“Are you traveling together?” the ticket agent asked. “Yes,” you responded. “So how’s row 15 — aisle and center or center and window?” the agent inquired. “No, we’d like row 7, aisle and window,” you replied. The agent gave you a strange look, but decided not to question your motives and accommodated your request. What were your motives? You were banking on having extra room during … More Game Theory: The Game Of Life
New evidence suggests that the global economic slow down may have been present before the great recession of 2008. … More Conference: Making Sense of the Productivity Slowdown, Panel 1
Net employment has been increasing at a brisk pace in the UK and, since the third quarter of 2013, in Spain. Eurostat (kudo’s) has new data about this: labour market flows. This statistic shows how many employed people became unemployed, how many unemployed people became employed, how many ‘inactive’ people became ‘active'(i.e. became employed or started looking for a job) and how many ‘active’ people became ‘inactive’.
… More Labour market flows and the musical chairs economy
Liquid Modernity Liquid-modernity-maggie-nichols.jpg Definition Liquid Modernity is sociologist Zygmunt Bauman’s term for the present condition of the world as contrasted with the “solid” modernity that preceded it. According to Bauman, the passage from “solid” to “liquid” modernity created a new and unprecedented setting for individual life pursuits, confronting individuals with a series of challenges never … More Liquid Modernity – Cyborg Anthropology
“It’s not really a Nobel, and economics isn’t really a science.” October 13, 2015 Editor Leave a comment Go to comments from the Christian Science Monitor Is economics a science? … More “It’s not really a Nobel, and economics isn’t really a science.” | Real-World Economics Review Blog
Real world economists and the economics curriculum Keynes’ attempt to re-shape the world order in the 1940s highlighted the need of an international currency system that might only work by means of a “wide measure of agreement”, that is, by means of the creation of a new international convention. In Keynes’ time, this convention would rely on multiple needs: an international currency, a stable exchange rate system, redistribution of international reserves, stabilizing mechanisms, sources of liquidity, besides a central institution to aid and support other international institutions related to the planning and regulation of the world economic life. In our times, new convention-conducing institutions could foster financial regulation. As global finance has subordinated the outcomes of social reproduction, the main question is, as Hyman Minsky warned, Who will benefit? … More Real world economists and the economics curriculum
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