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How and why economics forgot Keynes’ warnings on panics - FT Alphaville  In a new paper (hat-tip to the University of Washington’s Fabio Ghironi for drawing our attention to it), Nobel Prize winning economist George Akerlof does a brilliant job of explaining how and why, in the decades before the financial crash, macroeconomists failed to include any meaningful role of the financial system in their economic models. The End of Neoliberalism and the Rebirth of History - Joseph E. Stiglitz  For 40 years, elites in rich and poor countries alike promised that neoliberal policies would lead to f ..read more

Manufacturing Ain’t Great Again. Why? - Paul Krugman  When Donald Trump promised to Make America Great Again, his slogan meant different things to different people. For many supporters it meant restoring the political and social dominance of white people, white men in particular. For others, however, it meant restoring the kind of economy we had a generation or two ago, which offered lots of manly jobs for manly men: farmers, coal miners, manufacturing workers. So it may matter a lot, politically, that Trump has utterly failed to deliver on that front — and that workers are noticing. Now, m ..read more

Democracy on a Knife-Edge - Dani Rodrik  The failure to protect minority rights is a readily understood consequence of the political logic behind the emergence of democracy. What requires explanation is not the relative rarity of liberal democracy, but its existence. Economic Incentives Don’t Always Do What We Want Them To - Duflo and Banerjee  On their own, markets can’t deliver outcomes that are just, acceptable — or even efficient. The Phillips curve: Dead or alive - VoxEU  The apparent flattening of the Phillips curve has led some to claim that it is dead. The column uses data from US ..read more

No, We Don’t “Need” a Recession - J. Bradford DeLong I recently received an email from my friend Mark Thoma of the University of Oregon, asking if I had noticed an increase in commentaries suggesting that a recession would be a good and healthy purge for the economy (or something along those lines). In fact, I, too, have noticed more commentators expressing the view that “recessions, painful as they are, are a necessary growth input.” I am rather surprised by it. ... Economics’ Lack of Interest in Gender Proves: the “Dismal Science” Really Is Dismal
 - ProMarket Economists are still in the ..read more

I hope to begin posting again soon. I needed a break ..read more

The Cost of America’s Oligopoly Problem - ProMarket An innovative new study finds substantial, increasing deadweight losses resulting from oligopolistic behavior and points to the important role that startup acquisitions—particularly by large tech firms—played in driving this trend. Helicopter money as a policy option - VoxEU With persistently weak economic conditions becoming the norm in Europe, economists are considering increasingly unconventional policy options. One tool that has yet to be taken out of storage is ‘helicopter money’, i.e. the overt monetary financing of government defic ..read more

How we make decisions depends on how uncertain we are - EurekAlert! A new Dartmouth study on how we use reward information for making choices shows how humans and monkeys adopt their decision-making strategies depending on the uncertainty of information present. The results of this study illustrated that for a simple gamble to obtain a reward, when the magnitude or amount of the reward is known but the probability of the reward is unknown and must be learned, both species will switch their strategy from combining reward information in a multiplicative way (in which functions of reward probab ..read more