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
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
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
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
The way it works is that it visualizes the entire world’s economic output as a circle. That circle is then subdivided into a bunch of blobs representing the economy of each major country. And then each country-blob is sliced into three chunks — one for manufacturing, one for services, and one for agriculture. Check it out: You can see some cool things here. … More A striking diagram of the world economy – Vox
Neoclassical economics nowadays usually assumes that agents that have to make choices under conditions of uncertainty behave according to Bayesian rules, axiomatized by Ramsey (1931) and Savage (1954) – that is, they maximize expected utility with respect to some subjective probability measure that is continually updated according to Bayes theorem. If not, they are supposed to be irrational, and ultimately – via some “Dutch book” or “money pump”argument – susceptible to being ruined by some clever “bookie”. … More The Keynes-Ramsey-Savage debate on probability
This lecture explains the close relationship between private debt and employment. It draws a picture of what is coming next and proposes a concrete solution to the current debt crisis. … More The true state of our economy and what to expect
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
We need a new way of modeling macro economics instead of assuming that aggregate action leads to generalized welfare #SmartEconomy #finance #Money #Innovation #RealWorldEconomics
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
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