Category Archives: The dismal science

Thomas Palley: Fraternity of Failure – The Alternative, as in Hillary Clinton, Version

Hillary Clinton does not want to talk about past economic controversies.

Michael Perelman: The Dysfunctionality of Slavery and Neoliberalism

Slavery and periods of low pay to labor are correlated with low innovation .

Bill Black: Krugman is Half Right

Paul Krugman’s latest column fingers some valid targets but lets way too many other equally deserving ones off.

Latest Award of Frederic Mishkin Iceland Prize for Intellectual Integrity: Former CBO Director Holtz-Eakin’s Garbage-In, Garbage Out Attack on Dodd Frank

As readers know all too well, there is so much obviously half-baked economic research that this site could turn itself over to shredding examples and only scratch the surface. But we have established the Frederick Mishkin Iceland Prize for Intellectual Integrity to highlight outstanding examples of economic shillery in which the attempt at analysis is obviously cooked so as to produce a pre-determined outcome.

Former Greenspan Fan Paul Krugman Now Calls Greenspan “Worst Fed Chairman Ever”

Why does Paul Krugman find it so difficult to admit to past error?

Branko Milanovic: Income Inequality and Citizenship

Dave here. This is a readable discussion of inequality between nations, but the conclusions suffer from the conceit that people – particularly people in poor countries – have universal freedom, wherewithal and mindset to pick and choose what country to which they want to emigrate. But other than that nitpick, worth a read. By Branko […]

Alicia García-Herrero: Additional Monetary Easing for China?

As many other central banks in the Asian region, the People Bank of China (PBoC) has been on an easing mode for a few months now and more seems to be in the store. The once relatively polarized debate on what the PBoC monetary policy stance should be has increasingly leaned towards additional easing. Some analysts are even proposing full-fledged quantitative easing (QE), in the form of US Treasury sales to raise funds for assets locally, such as local government bonds and other hardly–performing assets. There is no doubt that the PBoC could, thereby, bring another big stimulus into the already heavily massaged Chinese economy as it would help debt-saddled local governments to clean their balance sheets and, at the same time, allow banks’ to lend further. As if this were not enough, any additional easing – capital controls permitting- would also push the RMB to a more depreciated level, bringing thereby an additional push to external demand.

Matías Vernengo: On Free Trade and Economics Consensus

Mankiw tells us in his most recent NYTimes column that economists agree that Free Trade is good. He links to a poll in which, essentially, mainstream economists of different persuasions, some Keynesian and some not, and different political views, some liberal and some conservative, say that trade agreements are good. He backs his argument by suggesting that theoretically the argument is at the heart of the economics profession since the beginning; I guess an argument of authority.

The Persecution and Assassination of the People of Greece as Performed by the Inmates of the Troika, Under the Direction of the Eurogroup

A new paper shreds the myths that justified the misguided application of austerity and wage-rate reduction policies in Greece and the Eurozone.

The Investor Arbitration Clauses in TPP Are Indeed Very Bad

Compensation for “lost profits” really means “minimizing political risk” for corporations by gutting the ability of democratic governments to protect their citizens.

Boston Globe Misapplies Economic Theory to Defend High Drug Prices

This post serves to illustrate how “economics says” has become a magic talisman in political discourse. Invoking it generally results in the audience accepting what follows, even when it is patent nonsense. Here we see how an editorial writer abjectly misapplied economic theory to justify super-high drug prices.

One Reason Economists Don’t Get Any Love: They Refuse to Take Any Blame for the Great Crash

Economists still act as if their role in devising the policies that led to the crisis has no bearing on their credibility.

Pettifor Warns of GFC 2.0 Approach

Yves here. This is a short but important debate over how much to worry about the upcoming train wreck in emerging markets when the Fed finally gets around to tightening. Pettifor sees it as a potential global crisis event; Macrobusiness sees it as a typical emerging markets bust. The Pettifor viewpoint seems more on target. First, […]

Nobel Prize Winner Robert Merton Slams Fed for “Negative Wealth Effect” Policies

Nobel Prize winner Robert Merton and Arlin Muralidhar have charged ZIRP and QE happy central banks with economic malpractice.