Archive

“How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of$283 million in taxpayer money to a professional hockey stadium?

Changing the incentives for how economists determine both the content of the subject and their approach to scientific research could increase the range of thinking in the profession

In introducing game theory (in chapters 7-9), MWG build upon the theory of rational choice by individual agents, developed previously in the book to attempt to analyze (describe, explain, and even predict?) the interactions of such agents as well as the outcomes to which they give rise. In previous chapters, MWG discuss interactions only in the form of the arms-length interactions of numerous firms and consumers in specific markets (e.g. under ‘perfect competition’, in chapters 3 and 5).

Is China is “too big to fail.”?

Economic theories are powerful things, to be used and misused. Those who write economic theory and do economic policy need to be aware of the consequences of what they are doing.

A review of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, the new book by Mariana Mazzucato

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?

To what extant do existing mainstream models properly address issues such as heterogeneity and interactions, which are considered central ingredients to understand economic crises as emergent, endogenous phenomena.

“Four men sat at a table. Raised sixty floors above the city, they did not speak loudly as one speaks from a height in the freedom of air and space; they kept their voices low, as befitted a cellar.”

How does debt influence growth?

‘Helicopter money’ may in some circumstances be the only certain way to stimulate nominal demand

In the wake of the 2008 financial crisis, many of our policy makers and top economists are still stumbling in the dark.

Recovery from recessions takes longer than it has in the past.