Archive

What is most demoralizing to participants in the financial markets? Falling prices? Constant volatility? How about a vacuum of trust?

I’ve already blogged on how undergraduate education evolved at MIT in the postwar era here and here, but since Mike Konczal and Paul Krugman make the case that, to bring introductory economics closer to the real world, macro should be taught before micro as Samuelson did in the first 13 editions of his Economics textbook, it may be worth returning to it.

What happens when a market-based economy becomes a market-based society?

In the past decade, the volume of literature in the history of economics has been of 500 articles and just under 50 books a year. The graph below traces the count in two year intervals (articles left axis, books right axis). The absolute volume is stable but given the growth of economic literature in the period, stable might be rebranded as static.

The Bank of England took the first step in putting the brakes on the surging property market as it scrapped the United Kingdom’s flagship initiative that encourages mortgage lending, introduced earlier this year by Treasury minster George Osborne.

Historians like labels. X history. History of y. The labels carve out subjects, set boundaries in time and space, at times even suggest methodological commitments.

The short answer is yes. For the long answer I will make you sit through seven paragraphs.

Why does Benn Steil’s history of Bretton Woods distort the ideas of Harry Dexter White?

Adair Lord Turner, former Chairman of Great Britain’s Financial Services Authority and current Senior Fellow at the Institute for New Economic Thinking, will argue in a keynote address to the Federal Reserve Bank of Chicago on Thursday that central banks must be equipped in future to address the dangers of excessive private sector leverage, using both pre-emptive interest rate policy and macro-prudential policy tools.

When Greece’s sovereign-debt crisis threatened the euro’s survival, U.S. officials called their European counterparts to express bewilderment at their inability to resolve the issue.

So, most Nobel Prize exegetes went a long way, this week, toward explaining that asset pricing is not primarily born out of theoretical reflection but out of prize-deserving empirical work.

If Congress and the White House fail to raise the debt ceiling this week and the United States defaults on its debt, what can we expect and how can we protect ourselves against these events?

This morning, when I woke up a few hours before the Nobel announcement, I felt seriously dissatisfied. I had meant to write a post on Thomson Reuters’s prediction that Card, Angrist and Krueger may win the Nobel for their work on empirical microeconomics.

“You are now leaving the world as you know it.”

World leaders who are gathering for the APEC summit next week had hoped to be signing the Trans-Pacific Partnership Agreement (TPP). The pact would bring together key Pacific-rim countries into a trading bloc that the United States hopes could counter China’s growing influence in the region.

Friedrich von Hayek described the economist’s task as demonstrating how little we really know about what we imagine we can design

A look at the large role the trade deficit of the United States has played since the 1980s.

What have we learned about the American political economy from the crisis and its aftermath?

Ronald Coase, who passed away last week at age 102, spent his academic career swimming against the current.

Can China lead the way on innovation?

Every nation faces the challenge of imagining what a good life means. Sound nutrition, shelter, health care, personal safety, social stability, security of savings, clean air and water, and the development of children are among the elements of what many envision as vital to a happy and healthy society.

The Obama stimulus remains controversial even as we approach the fourth anniversary of its launch.

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.

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.

Between July 5th and 12th, the second annual summer school in development economics, jointly sponsored by Azim Premji University and the Institute for New Economic Thinking, was held in Bangalore, India.

is the public sector really sclerotic and conservative in contrast with a dynamic and innovative private sector?

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.

Looming behind the aforementioned narratives of postwar economics is a notion – economics as engineering – which at times appears as a metaphor and at times stands for a straight depiction of economists’ professional milieu and practices.

The rise of the economist as engineer is, economists and historians say, an essential characteristic of the development of economics in the postwar period.

To illustrate the previous post on the difficulties in putting together a chronology, here is tentative chronology of economics at Carnegie. It’s still in process, and links, sources and entries will be updated as I read.

This year, I’m sharing an office with an econometrician on Mondays and with a geographer on Fridays (you don’t want to go into the subtleties of the French educational system).

There is a “tendency to neglect applied economics in writing the history of economic thought,” Roger Backhouse and Jeff Biddle remarked in 2000. They then followed the “applied” trail back into the XIXth and early XXth centuries, at a time the scope and nature of economics were debatted by continental and especially British political economists

INET Advisory Board members Carmen Reinhart and Kenneth Rogoff today issued a response to recentcriticism of their paper “Growth in a Time of Debt.” Their response in full is below.

It is often argued that in recent years the question of the ‘dissemination’ of economic knowledge has been increasingly addressed by historians of economics.

A minimum wage is a small minnow in an ocean of deficient aggregate demand

These are extraordinary times for central banks. Near zero interest rates and massive liquidity injections are still failing to bring life back to so many economies in the developed world.

In this paper we provide a summary and a guide to the literature for a new line of research which goes under the name of Economic Complexity and is partly performed incollaboration with INET.

“Look! Up there in the sky! What is it? Is it a plane? Is it a bird?” No, it’s a distraction from the robbery that is taking place in broad daylight on the ground.

The exteriors of major central banks may be solid marble and doric columns, but, inside, monetary policy remains a work in progress.

Only a few years ago, comparisons of American politics to opéra bouffe were not outrageously farfetched at least if you were not poor or sick.

Since the dawn of this millennium, and long before the current financial turmoil and the subsequent bitter pill of austerity therapy hit the Untied States and the European Union, the Chinese Communist Government has publicly recognized the monumental challenge of polarity.

There are a number of possible purposes in assessing the level of economic development of a country or part of a country. The assessment may provide an incentive for better development, particularly if it can be compared meaningfully with assessments for other countries.

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

“Taking advantage of the opportunity offered by the structural adjustments of the global economy…”The decisions on the four modernisations taken at the Third Plenum represented a radical change in Chinese domesticdevelopment strategy.

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.

The reason why the Euro zone crisis has dragged on for so long is that Europe’s leaders have focused too much on short-term measures to patch up the emergency of the moment, rather than formulating a comprehensive plan.

After the announcement of Mario Draghi, the ECB president, to do “whatever it takes” to preserve the integrity of the European Monetary Union (EMU) in July 2012 and the establishment of the Outright Monetary Transactions (OMT) program in September 2012, the crisis of EMU is far from being resolved.

Mercantilism, Accumulation of Foreign Exchange Reserves, and RMB Internationalization

Regulation and supervision of banks and financial markets are now upgraded in the euro area. Surveillance of macroeconomic performance of all EU countries is also intensified.

Europe can choose its musical accompaniment. In Berlin, 50 Cent’s All Things Fall Apart has just had its premiere. Or go back to Giuseppe Verdi, born two hundred years ago.

Internationalization of the renminbi is a stated goal of the Chinese government, its brief flirtation with Special Drawing Rights and an Asian Currency Unit notwithstanding. Chinese officials understand that a dollar-centric international monetary and financial system is a mixedblessing.

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.

Japan is going to double its money supply, according to today’s front page of the Financial Times (5 April 2013), and a salient question might be what we should compare that to. It sounds like a lot, but is it?

Having lunch next to Edward Fullbrook he told me the story of how the post-autistic economic review got its start, leading to what we today know as the World Economic Association and all the great work coming from this community.

Some personal touches to hospitality at the INET conference, although I feel for the people who have been holding that sign all day.

In his opening remarks, Robert Johnson said that this “is not the institute of anything goes” with INET now getting to a point where it needs to stop criticising the mainstream and should instead “create a new vision.”

The Institute for New Economic Thinking held its annual plenary conference in Hong Kong from April 4-7, 2013 at the InterContinental Hotel in Kowloon. The event discussed Asia’s emergence in the global economy and other core issues.

Healthy innovation economies are the main driver of prosperity in the 21st century. But the three players that have traditionally sponsored basic research and invention in those economies are no longer willing or able to perform that role.

The developed economies of Europe, North America, and Japan are facing tremendous challenges related to indebtedness and stagnation. How will the developing economies of Asia respond to this challenge as they reorient their growth strategies to meet the rising aspirations oftheir people?

The Foundations of Economic Prosperity: The Lessons of Innovation Process and History

My remarks today will be focused primarily on features of the developed world’s financial system which led to the crisis of 2008 and to the Great Recession that followed, from which we are only slowly and painfully emerging.

In his recent lecture at the Cass Business School, Lord Turner noted that even mentioning the possibility of overt monetary financing was akin to breaking a taboo.

The INET conference in Hong Kong is serious business.

Further system reforms will enable China to overcome middle-income trap and push forward social 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.

There has been an important movement towards making available on the web a host of open courses.

The relatively new field of inequality studies is gaining increasing momentum as economic disparity grows throughout the world, in advanced countries as well as less developed ones—especially in the United States.

The notion of “field” is so pervasive that economists hardly pay conscious attention to it.

Although the objectivity-Grail Quest has ended with total success decades ago (so economists say), the question of the possibility and consequences of economists’ values smuggling into their daily practice still periodically surfaces, and crises make good times for such debates.

Paul Samuelson is well-known to have been a compulsive citer and for having a particular Whig program for the history of economics

Economists and historians of economics have related differently over time, and the past of the discipline has then served for varied purposes.

Eric Beinhocker and Tony Dolphin argue that lasting reform to the financial sector will not be achieved without tackling the price rigging and anti-competitive behaviour that is rife in the industry.

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).

INET has chosen the label “openness” to describe New Economic Thinking - “open” for other disciplines, for other methods, for other questions, for other interpretations, etc. It’s easy to hurrah.

The Azim Premji University-Institute for Economic Thinking Advanced Graduate Workshop in Poverty, Development and Globalization is interested in identifying the complex global interactions that influence poverty and development as well as the development strategies that have proven successful in promoting equitable growth, promoting capabilities, and reducing poverty.

This research project compiles and annotates the archival legacy of the Bellagio Group’s founders Fritz Machlup, Robert Triffin, and William Fellner as they sought to reform the international financial system between 1963 and 1974.

This research project argues that economics currently lacks the capability to assess when mathematical modeling, on its own, is a sufficient means for understanding a given set of social phenomena.

This research project examines the political and ideological implications of different ways of framing the relationship between humanity, nature, and the world of goods.

This research project focuses on the effect of the technological changes that led to the British Industrial Revolution in the eighteenth century on the market for skilled workers.

This research project investigates the influence of economic doctrines on policy norms in recent decades through analysis of the history of the Nobel Prize in Economics.

This research project explores and documents the development of graduate economics training in the leading centers of doctoral education in the United States.

This research project uncovers the economic forces which reshaped the evolution of the imperial examination system in traditional China, using a new dataset from archival sources of ancient Chinese Books.

Economics is very theoretically comfortable with what may be termed `Keynesian’ waste.