For more than 20 years, economists were enthralled by so-called “rational expectations” models … That such models prevailed bears testimony to a triumph of ideology over science … Good science recognises its limitations, but the prophets of rational expectations have usually shown no such modesty. Joseph Stiglitz The rational expectations hypothesis presupposes — basically for […]
economics
Most mainstream economists seek to explain social phenomena, structures, and patterns on the basis of the assumption that agents act in an optimising — i.e. rational — manner to satisfy given, stable, and well-defined goals. The procedure is analytical: the whole is broken down into its constituent parts in order to explain (or reduce) aggregate […]
Robert Skidelsky joined the University of Warwick in 1978 as Professor of International Studies, and in 1990 he was appointed Professor of Political Economy in the Department of Economics where he worked until his retirement in 2006 after 28 years of teaching and research at Warwick. He was made a member of the House of […]
The recurring pattern in financial crises is broadly the same. For one reason or another, a shift occurs in the economic cycle — such as war, innovation, or new regulation — which alters profit opportunities for banks and firms. Demand and prices rise, drawing ever larger parts of the economy into a state of euphoria. […]
Adam Smith, like the other Scottish Enlightenment philosophers, was strongly influenced by natural rights philosophy. Locke — under the influence of Hugo Grotius and Samuel von Pufendorf — had emphasised people’s natural freedom and right against the state. For Smith, natural freedom meant, among other things, that the individual himself should have the right to […]
One of the limitations of economics is the restricted possibility of performing experiments, forcing it to rely mainly on observational studies for knowledge of real-world economies. But still — the idea of performing laboratory experiments holds a firm grip on our wish to discover (causal) relationships between economic ‘variables’. If only we could isolate and […]
Economics today has — as we all know — become a ‘the model is the message’ discipline. However, as long as it does not seriously examine and evaluate the compatibility between the models and their real‑world target systems, the belief that these models significantly improve our ability to understand or explain what happens in our […]
The increasing use of natural and quasi-natural experiments in economics over the past couple of decades has led some economists to proclaim triumphantly that this development marks a major step along a recent path towards empiricism. According to this view, economics is no longer merely a deductive philosophy; rather, it is increasingly becoming an inductive […]
Det är inte bara den faktiska inkomstutvecklingen som gjort att de ekonomiska klyftorna i Sverige ökat, även skattesystemet och skattepolitiken har bidragit till utvecklingen. När skatterna har sänkts mer för dem med högre inkomster har de fått en starkare inkomstutveckling efter skatt jämfört med grupper som inte fått del av skattesänkningarna. Skattesatsen har sjunkit betydligt […]
. När Karl-Bertil Jonsson i Tage Danielssons klassiska julsaga lägger undan några rika människors julklappar och delar ut dem till fattiga brister han i respekt för den privata äganderätten, skrev Lars Jonung för ett par år sedan på DN:s debattsida. Enligt denna nyliberala Chicagoekonom är det kapitalism och marknadsliberalism som är den ’okände välgöraren’ som gynnat […]