Economics @ ITT

Our Most Widely Ignored Public Intellectuals

Why don’t those in power listen to economists Joseph Stiglitz and Paul Krugman?

More fundamental to their marginalization is the relative radicalism of what Krugman and Stiglitz are advocating in our conservative era, one in which even Democratic presidents have done little to reverse unconstrained finance, shrunken government, and deepening inequality. To embrace their wisdom would require something close to a political revolution. So two of our most lauded economists remain prophets with little power to change events. America would be a far healthier country if they broke through.

via Our Most Widely Ignored Public Intellectuals.

Advertisements

Keynes and Hayek, the Great Debate (Part 3)

Posted in economics, Keynesian Economics, macroeconomics by ittecon on October 10, 2011

By the early 1940s, the Keynesian Revolution in America was in full swing. Fast-moving events in Germany obliged Franklin D. Roosevelt to spend on the vast scale that John Maynard Keynes prescribed. Despite the president’s assurances during the 1940 presidential campaign — “I have said this before, but I shall say it again and again and again: Your boys are not going to be sent into foreign wars” — he ordered a gargantuan rearmament program. In 1940, the annual defense expenditure was $2.2 billion; the following year it reached a sizzling $13.7 billion.

via Keynes and Hayek, the Great Debate (Part 3): Nicholas Wapshott – Bloomberg.

Keynes and Hayek, the Great Debate (Part 2)

Posted in economics, Keynesian Economics, macroeconomics by ittecon on October 10, 2011

Part two of a multi-part discussion of Keynes and Hayek. It is telling  to me when people place Keynes and an also-ran like Hayek on the same plane.

Friedrich Hayek arrived in London in January 1931 to take up an invitation to participate in the most telling duel in the history of economics. His aim, in four lectures at the London School of Economics: Overturn the theories of John Maynard Keynes, and prove that recessions were not caused by a lack of desire from customers to buy goods.

via Keynes and Hayek, the Great Debate (Part 2): Nicholas Wapshott – Bloomberg.

Keynes and Hayek, the Great Debate Part 1

Posted in economics, Keynesian Economics, macroeconomics by ittecon on October 10, 2011

The first of a multi-part series about Keynes and Hayek.

Keynes and Hayek, the Great Debate Part 1: Nicholas Wapshott – Bloomberg.

The Wrong Solutions to Fixing our Economy

Posted in economics, Keynesian Economics, macroeconomics, Policy Issues by ittecon on August 18, 2011

James K. Galbraith is spot on.

First, the economic models in use were obviously faulty. Why? Because they had assumed a “natural rate of unemployment” to which the economy will return whatever happens. This idea originated with Milton Friedman as part of his attack on John Maynard Keynes — who had argued, based on the stark evidence of the Great Depression, that mass unemployment can persist indefinitely. An economist who builds the natural rate into a model is like a doctor who assumes that her patient will always get better eventually, even without treatment. No such doctors exist, of course; that so many economists think this way is just strange.

via The wrong solutions to fixing our economy – latimes.com.

The President Surrenders on Debt Ceiling

Posted in economics, Keynesian Economics, macroeconomics, Policy Issues by ittecon on August 2, 2011

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

via The President Surrenders on Debt Ceiling – NYTimes.com.

Fight of the Century: Keynes vs. Hayek Round Two

Posted in economics, Keynesian Economics, macroeconomics by ittecon on April 29, 2011

A follow up to the first Keynes vs. Hayek video.

The Demand-Side Temptation

Posted in economics, Keynesian Economics, macroeconomics by ittecon on January 25, 2011

Nick Rowe makes a good point: most of the time, in market economies, sellers feel constrained while buyers don’t. I’m somewhat surprised that he doesn’t mention why: it’s because perfect competition is actually rare, because oligopoly or monopolistic competition — in which prices exceed marginal cost — is actually the norm.

via The Demand-Side Temptation – NYTimes.com.

“Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem

Posted in class materials, economics, Humour, Keynesian Economics, macroeconomics by ittecon on May 5, 2010

This has been around for a bit, but it is topical to this week’s material.

US May Consider Wages in Awarding Government Contracts

This proposal aims to give more contracts to companies with generous pay plans. Should government uses its influence to strengthen the middle class and promote higher labor standards?