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How does economic theory match up with reality?

Motivated by the long-standing debate on the pros and cons of competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country’s international competitiveness. We refocus the analysis on the implications of monetary stabilization for a country’s comparative advantage.

Budget cuts can be dangerous. Inspired by the wrenching experience in Greece, increasing attention is now being paid to the fact that austerity may fail to reduce the government deficit if the economy declines in response, as is likely in a liquidity trap (Delong and Summers 2012).

Increased hospital system consolidation in small Metropolitan Statistical Areas is adversely related to nurse wage growth.

The conventional measures of economic well-being are dangerously limited, and we are seeing the resulting policy consequences play out daily.

Lynn Parramore discusses her INET article on neoliberalism and mental health with The Healthcare Policy Podcast

How do we make economic development work for everyone?

“If you want to make the world a more equal place, you need to understand the tools.”

The debt-growth relationship is complex, varying across countries and being affected by global factors. While there is no simple universal threshold above which debt-to-GDP becomes a significant brake on growth, based on data from the last four decades we show that high and rising public debt burdens slow down growth in the long term.

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

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

Political meritocracy is the idea that a political system is designed with the aim of selecting political leaders with above average ability to make morally informed political judgments. That is, political meritocracy has two key components: (1) the political leaders have above average ability and virtue and (2) the selection mechanism is designed to choose such leaders.

Inequality has emerged as a major economic issue: sharp increases in the share of income going to those at the very top of the income distribution, a rising share of income going to profits, stagnant real wages, and a fall in median family income have raised concern over the sustainability of our economies and societies.

The Consumer Welfare Standard is severely limited or defective, preventing it from being an appropriate standard for modern antitrust.

Why do economists avoid ethics, and over-simplify harm?