Archive

In 1953, Oskar Morgenstern proposed to reform the eligibility criterion for fellows of the Econometric Society, in an attempt to foster empirical work.

Public funding behind the technology is the secret ingredient.

The Institute extends its congratulations to Philip Lane, who has been named to succeed Patrick Honohan as the Irish central bank chief, and inherit his role on the council of the ECB.

This essay critically evaluates the benefits and costs of the dominant methodology in macroeconomics, the DSGE approach. Although the approach has led to great progress in some areas, it has also created biases and blind spots in the profession that hold back our understanding and our ability to govern the macroeconomy. There is great scope for progress in macroeconomics by judiciously pushing the boundaries of some of the methodological restrictions imposed by the DSGE approach.

The Institute recently sponsored several panels at the Kiel Global Economic Symposium. In particular, the panel on Income Distribution and Mobility struck us as likely to be of especially wide interest. We are grateful for the participation of all the scholars on them and are pleased to present summaries of their presentations here.

A new online course challenges typical teaching approaches.

Do we need to rethink the teaching of economics?

The World Bank’s global poverty estimates suffer from deep-seated problems arising from a single source, the lack of a standard for identifying who is poor and who is not that is consistent and meaningful.

Economists’ assumptions, even about seemingly “small” matters, make an enormous difference to global poverty estimates but their impact often goes unnoticed, and the choices made have been badly justified. We must stop pretending that the World Bank’s “$1 per day” estimates are at all reliable.

Hot on the heels of the BIS, now comes the IMF Global Financial Stability report, “Corporate Leverage in Emerging Markets–A Concern?”. Yes, a concern, and just in time for the annual meeting in Peru next week.

A student of microeconomics learns that any competitive equilibrium leads to a Pareto efficient outcome (First Fundamental Theorem of Welfare Economics). What do we mean by the efficiency or inefficiency of markets?

A student of microeconomics learns that any desirable efficient market allocation can be sustained by a competitive equilibrium (the Second Theorem of Welfare Economics), given appropriate lump-sum wealth redistributions. This is typically understood as a means to correct unfair market outcomes. What are the real world implications of the second theorem? How well does it address distributional concerns?

The best-known China bear says the emperor is not yet naked, but getting there.

Have economists fallen in love with an idealized vision of an economy in which rational individuals interact in perfect markets? To what extent is standard microeconomics responsible for this state of affairs?

As Greece heads to the polls, a look back at the crisis and what the future will bring.