Articles

Recent austerity policies have been guided by ideology rather than research. This column discusses research that reconciles disparate estimates of fiscal multipliers in the literature. It finds that common identification assumptions are problematic. Matching methods based on propensity scores show how contractionary austerity really is, especially in economies operating below potential.

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?

The recent debate about the reproducibility of the results published by Carmen Reinhart and Kenneth Rogoff offers a showcase for the importance of replication in empirical economics.

So why am I hopeful about the future?

At dinner yesterday Niall Ferguson made the argument that China (or the East) were perhaps no longer looking to how Western countries had built their social institutions and formed their empires, and were instead now doing their own thing as the Western approach was shown to be flawed

Imperfect knowledge economics, or IKE to their friends, is popular with all the popular kids. George Soros, Bill Janeway and Anatole Kaletsky were in attendance as Roman Frydman and Michael Goldberg - or more properly, their students - showed the latest work in progress.

What happens when there’s no leader in the global economy?

There is a certain rich irony attached to the sight of corrupt Russian oligarchs now posing as liberal champions of the rule of law as they find themselves sucked into the maelstrom of Cyprus’s ongoing financial crisis.

The History of Economics Society (HES) held four sessions at the Allied Social Science Associations (ASSA) 2013 meeting, in San Diego, Jan. 4-6: “Keynes and the International Monetary System” (co-organized by Robert Dimand and Rebeca Gomez Betancourt), “Writing MIT’s History” (organized by E. Roy Weintraub and having our blog fellow Yann Giraud presenting), “Looking for Best Practices in Economic Journalism: Past and Present” (organized by our blog fellow Tiago Mata), and “Real Business Cycle after Three Decades: Past, Present and Future” (a panel discussion co-organized by Warren L. Young and Sumru Altug).