Ninety years ago Keynes could congratulate Great Britain on finally having got rid of the biggest ”barbarous relic” of his time — the gold standard. He lamented that advocates of the ancient standard do not observe how remote it now is from the spirit and the requirement of the age … [T]he long age of […]
economics
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in […]
Behavioral economics is still ‘in a relationship’ with orthodox economics and, in a relationship, one makes compromises … We all know how stubborn the other side in this relationship is: standard economics will always ‘rationalize’ behavior wherever it can and will only recognize ‘irrationality’ when there is clear and convincing evidence of it. Understandably, behavioral […]
During the recent inflationary episode, the RBA relentlessly pursued the argument that they had to keep hiking interest rates, and then, had to keep them at elevated levels, well beyond any reasonable assessment of the situation, because wage pressures were set to explode. They claimed their business liaison panel was telling them that wages were…
Jonung är professor i nationalekonomi och borde vilja få igång hjulen i Sverige. Men istället ägnar han sig åt märklig historieskrivning. I en rad artiklar och föredrag (DN 8/5) menar han att socialdemokratin har förstört landet … 1980-talet, när vi börjar avreglera bankerna, var vi inte liberala, menar han. Liberalismen börjar, passande nog enligt Jonung, […]
Mercantilist ideas still resonate in current economic practices. Modern ‘management’ of exchange rates by governments, trying to steal a competitive advantage for exports and accumulate foreign exchange reserves, harks back to mercantilist notions of boosting exports to accumulate gold and silver. Tariffs, import quotas and other measures to control trade and support domestic enterprises are […]
Economic theory is built on equilibrium assumptions. Perhaps this term once connoted the rest point of a dynamic process. But in modern parlance, an equilibrium assumption posits a relation between the beliefs and behavior of different agents without explicitly describing a process which causes this relation to hold. Competitive equilibrium assumes prices clear markets, without […]
Från näringslivshåll påpekas ofta att Sverige har mycket höga skatter. Särskilt marginalskatten, som i genomsnitt uppgår till som mest 52,7 procent, brukar vara föremål för kritik. Med tanke på allmänhetens låga kunskap om vad marginalskatt är, har det fått en förvånansvärt stor spridning. Det har sannolikt lett till en felaktig uppfattning om hur höga inkomstskatterna […]
Ricardo’s little example, splendid in its simplicity, ignores all sorts of real-world grittiness that needs to be taken onto account before the benefits, or downsides, of tariffs can be fully thought through. This is, as we all know, typical of economics. Ignoring the messiness of reality is a hallmark of economic theorizing. The world is […]