Archive for the ‘Economist’ Category

What’s next in history of economics? A wish list

October 17, 2016

Beatrice Cherrier an upcoming economic hisotrian has a wishlist:

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How we lost economics and how to reclaim it?

October 14, 2016

There have been several pieces written on State of economics and more keep coming.

This one by Jeff Deist of Mises Institute does a good job of putting the debate in order. He says we teach and understand economics based on all wrong ideas:

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Mises vs Hayek – Who was more clear in thought?

September 13, 2016

Hans-Hermann Hoppe votes for Mises.

…..

I could go on and on, citing Hayek’s muddled and contradictory definitions of freedom and coercion, but that shall suffice to make my point. I am simply asking: what socialist and what green could have any difficulties with all this? Following Hayek, they can all proudly call themselves liberals.

In distinct contrast, how refreshingly clear — and very different — is Mises! For him, the definition of liberalism can be condensed into a single term: private property. The state, for Mises, is legalized force, and its only function is to defend life and property by beating antisocial elements into submission. As for the rest, government is “the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisonment. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.”

Most of us, can hardly differentiate between the two as history of economic thought has never been taught. Mises would not even be known to most as he was not given the prize. Hayek is far far popular that Mises.

It is not about which school you come from. It is knowing what each school and within each school the key actors have to say. This helps understanding where the key ideas are coming from and where they matter and where they do not.

All this reading (of whichever school) is really fascinating. The kind of debates and arguments help one get so many perspectives.  It is a pity that  most economics students of today have no idea about any of these issues.

Why economics should be concerned with disappearance of teaching of economic history and history of thought?

September 8, 2016

It is all so ironical really. Post-2008, there has been a rise in interest in economic history and economic thought.

This is because of two reasons. One, people are beginning to understand that much of economics today is a result of series of events in the past. So, to understand today or forecast future, you need alteast some understanding of past matters. Two, as economics profession has lost a lot of credibility, it is increasingly looking at past for some credibility, This is especially the case for central bankers who are increasingly trying to justify their decisions bringing some connections with the past.

Ideally, the rise in interest should be based on first but even second is fine as atleast there is some discussion on these issues.

So what is the irony bit? Well, economic historians are not getting their due. Worse is that few remaining departments which encourage historical work are struggling to remain open.

David Warsh of economicprincipals.com laments the issues:

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Economists should stop defending Milton Friedman’s pseudo-science

August 31, 2016

Another hard hitting article questioning Milton Friedman and his blind followers. Noah Smith just questioned relevance of Friedman’s permanent income hypothesis

This one is on one of Friedman’s core ideas – assumptions don’t matter as long as predictions are in line with the model/theory:

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The higher you go in economics, the more the common sense rains out of you…

August 31, 2016

This is a hard hitting post on the economics profession by Bill Bronner. He has written a book recently called Hormegeddon: How Too Much of a Good Thing Leads to Disaster.

The post is based on his book.

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Monetary policy in a low r-star world

August 19, 2016

This short paper by John Williams of San Francisco Fed is doing rounds.

Williams says much of the developed world is stuck in a low r star or the neutral rate:

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Why do economists fail? (EPW 1949 edition)

August 16, 2016

EPW has a piece from its archives (06 Aug, 1949) which remains relevant till date. Though, things have moved in terms of availability of data (lack of which leads to failure) etc but still we need a lot more as shocks keep coming from all kinds of sources.

 

Why voters aren’t listening to economists? Slow end to economic imperialism..

August 3, 2016

Life is a circle unlike a linear graph which we are taught especially in economics. The economic imperialism is slowly ending as people are increasingly rejecting the advice of economic experts. And all this rejection is not coming in Asian economies but in their own homes. Now they can no more say these other countries just don’t understand principles of economics.

Jeffry Snider (of Alhambra Partners, Florida based fund!)has a great piece on the topic. He lashes out at a recent piece by Greg Mankiw:

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Economists giving pp on Milton Friedman’s biggest idea – Permanent Income Hypothesis

July 27, 2016

Today is perhaps a Friedman day on Mostly Economics.

Noah Smith the usually good economist turned columnist has a piece. He says how more and more empirical evidence is coming against Friedman’s biggest idea – Permanent Income Hypothesis:

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Did Milton Friedman influence the Thatcher policy of 1980s?

July 27, 2016

It is fashionable in the financial media to project certain economists as superheroes. How certain economist came and changed the country/world is a common theme. In this story creation, lots of myths are hyped and facts ignored. Much of economic changes in any country are a combination of many factors and persons. It is hardly about a few people here and there.

Even given this limitation, it is for certain believed that and Hayek and Friedman played a central role in Thatcher and Reagan regimes in early 1980s. It would be a huge shock if anyone disagreed with this now well accepted fact.

Prof James Forder of University of Oxford does just that. He says there is hardly any evidence of Friedman playing any big role in Thatcher era.

Using a range of sources, it is argued that, contrary to common belief, Milton Friedman had no special influence on British policy in the 1970s and 1980s. The opposing impression appears to be derived in part from the work of Friedman’s admirers, but principally from the allegations of Margaret Thatcher’s opponents who believed they could taint her with his name.

Extracting from the PDF is difficult so can’t discuss the paper. Prof Forder digs through plenty of sources to question this well accepted fact as a piece of fiction. Infact he points to a similar paper which questioned influence of Friedman in Israel economic policy in 1977 as well.

Interesting bit..

 

Continuous hype over upcoming fears is fostering crises (why having less economists talk will help here..)

July 25, 2016

Thomas Fricke says there is this continuous sense of fear and insecurity blown by media and experts.

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Our disastrous monetary system: A new must-read book

July 25, 2016

I was just reading this interview of Nathan Bond, a budding entrepreneur. He wonders why Austrian School is not even mentioned in economics textbooks:

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The dangers of external economic advice

July 14, 2016

Given the debate on economic advisory in India (and elsewhere), one obviously wonders how global should economic advice be? Here too much of discussion is biased as Global or International advice essentially means advice coming from US based think-tanks and universities.  Globalisation should also mean that the US (and rest of the west) be open to hearing  views from other countries, but that of course is a joke. The rest of the world is hardly good enough to advice the best in the world. But how is it that those based in rest of the world are not even seen worthy of advising their own economies? Is it possible that experts based in US ivy league think-tanks and universities will know about most economies in the world?

The usual discourse in media is how external economic advice helped save some of the countries from an impending economic disaster.  One thing which is missing in such discussions is how the external advice has brought ruin as well.

Peter Bauer in this tribute to Prof B.R. Shenoy points how Indian govt’s second five year plan was equally supported by the distinguished external experts. He warns against relying too much such expertise:

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Who cooked Adam Smith’s dinner?

July 1, 2016

Didn’t know about this book at all – Who cooked Adam Smith’s Dinner? It is by Katrine Marcal who has written a scathing review of economics built around “rational man”:

It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest

When Adam Smith wrote that all our actions stem from self-interest and the world turns because of financial gain he brought to life ‘economic man’. Selfish and cynical, economic man has dominated our thinking ever since and his influence has spread from the market to how we shop, work and date. But every night Adam Smith’s mother served him his dinner, not out of self-interest but out of love.

Today, our economics focuses on self-interest and excludes all other motivations. It disregards the unpaid work of mothering, caring, cleaning and cooking. It insists that if women are paid less, then that’s because their labour is worth less – how could it be otherwise?

Economics has told us a story about how the world works and we have swallowed it, hook, line and sinker. Now it’s time to change the story.

In this courageous look at the mess we’re in, Katrine Marçal tackles the biggest myth of our time and invites us to kick out economic man once and for all.

🙂

Malcolm Harris reviews the book:

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How Keynes advocated central policies to advocate population control…

June 7, 2016

Phillip Magness points to this interesting aspect of Keynes thinking. He gave a lecture tracking history of laissez faire and said there are three areas where laissez faire needs to be done away  and we need a central control  – banking, need for population control and savings/investment:

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Keynesianism is the most successful and pernicious hoax in the history of economic thought…

May 27, 2016

Llewellyn H. Rockwell Jr. has a stinging piece on Keynes and his ianisms. The title of the post is Keynes must die which was picked from a Korean translator:

As the Korean translator of an Austrian text put it, “Keynes must die so the economy may live.” With your help, we can hasten that glorious day.

The piece goes onto show how Keynes successfully captured economics and politicians minds (but obviously) despite being a”tissue of distortions, fallacies, and drastically unrealistic assumptions”.

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12 Articles Every Aspiring Economist Should Read..

May 27, 2016

Steven Horwitz points to the 12 articles all wannabes must read. The list is for all those wanting to enrol into PhD in economics. I am pretty sure students of most econ places barely recommend reading all these pieces unless students discover them by themselves. The list has  Tullock, Hayek, Friedman, Coase and so on..

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Did Prof. Joseph Stiglitz endorse Venezuelan socialism?

May 25, 2016

Things are falling apart in Venezuela as documented by scores of articles.

Here is a startling post by Tho Bishop who quotes Joseph Stiglitz:

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Media macro vs actual macro, city economists vs academic economists…

May 13, 2016

Simon Wren Lewis introduced this term called media macro. It basically meant financial media taking control over economic matters. Using their propoganda they kept highlighting macro issues which they thought were important. The problem is their understanding of these macro issues is mostly flawed and actually creates further problems. He shows how British media’s obsession over austerity in early part of the crisis got the economy into tailspin laters.

In a longish essay Prof Lewis, explains the issues further:

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