tag:blogger.com,1999:blog-4900303239154048192.post2657538654066501623..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Introductory Econ Textbooks: A Different Take on the IssuesUnknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-4900303239154048192.post-81626623753043655392019-03-21T10:49:15.387-04:002019-03-21T10:49:15.387-04:00You're not going to see any pedagogical innova...You're not going to see any pedagogical innovation, content innovation, or flipped classrooms in intro econ when it's exclusively taught by underpaid sessionals teaching 4 sessions of 100 per semester.<br /><br />PS so obviously I'm one of the guys who would like to see practical political economy in intro econ.I Will Never Accept The Terms of Servicehttps://www.blogger.com/profile/09422355923256894207noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-48089422258711099722019-03-19T13:23:16.563-04:002019-03-19T13:23:16.563-04:00Actually Principles level textbooks sometimes are ...Actually Principles level textbooks sometimes are more realistic about certain issues than textbooks at higher levels. in recent years this has been notoriously true for macro, where intermediate level textbooks largely adopted teaching students about microfoundations and a more or less new classical approach tending to DSGE. Principples textbooks have tended not to emphasize the micreofoundations approach to macro.Barkley Rosserhttps://www.blogger.com/profile/17456034324768715935noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-79265891840890195682019-03-19T04:35:27.508-04:002019-03-19T04:35:27.508-04:00Barkley Rosser
Above, Peter Dorman recounts: “We ...Barkley Rosser<br /><br />Above, Peter Dorman recounts: “We just saw a ‘Nobel’ prize awarded to an economist, Bill Nordhaus, whose primary claim to fame is an application of the welfare framework to climate change. Nearly every economist working on climate issues adopts the same approach. It would not be an exaggeration, however, to say that the vast majority of climate scientists regard their work as nuts.”<br /><br />It is a plain fact that economics textbooks are the main medium for the faithful reproduction of nutters.#1<br /><br />Everybody who ever accepts microfoundations#2 and supply-demand-equilibrium proves conclusively his scientific incompetence.<br /><br />As Hahn put it in 1980: “I often wonder whether other subjects suffer as much from textbook writers.” Certainly not, because in the genuine sciences nutty textbook writers like Samuelson are not awarded fake Nobels.<br /><br />Egmont Kakarot-Handtke<br /><br />#1 Fact of life: your econ prof is scientifically incompetent<br />http://axecorg.blogspot.com/2017/08/fact-of-life-your-econ-prof-is.html<br /><br />#2 Microfoundations are given with this or a similar behavioral axiom set: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)AXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-19676725589887457962019-03-19T00:25:04.628-04:002019-03-19T00:25:04.628-04:00An important aspect of the textbook market was enu...An important aspect of the textbook market was enunciated by successful textbook author, David Colander, some years ago: the 15% rule. He claims that a new textbook will not be successful if it deviates from the leading previous textbook(s) by more than 15%. That is because profs indeed decide whivh books to use and do not like to change their class notes all that much. This may be unreasonable, unfair, unwise, and so on, but is probably true.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-56439359313040522752019-03-18T19:45:37.105-04:002019-03-18T19:45:37.105-04:00It surprises me that economist seldom note key fea...It surprises me that economist seldom note key features of the textbook market. The ones who pick the books don't pay for 'em; and the guys that write the books benefit hugely from their high prices. That sure seems like a recipe for abusive pricing to me.Jim Harrisonhttps://www.blogger.com/profile/16986759089669331171noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-9278217905521800102019-03-18T17:31:13.795-04:002019-03-18T17:31:13.795-04:00Part 2
(i) The elementary production-consumption ...Part 2<br /><br />(i) The elementary production-consumption economy is given by three macroeconomic axioms: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.<br /><br />(ii) The focus is here on the nominal/monetary balances. For the time being, real balances are excluded, i.e. X=O.<br /><br />(iii) The monetary profit of the business sector is defined as Q≡C−Yw,<br /><br />(iv) The monetary saving of the household sector is defined as S≡Yw−C.<br /><br />(v) Ergo Q+S=0 or Q=−S.<br /><br />The balances add up to zero. The counterpart of household sector saving S is business sector loss −Q. The counterpart of household sector dissaving (-S) is business sector profit Q. Both Q and S are measurable with the precision of two decimal places.<br /><br />For the elementary investment economy holds Q=I−S. For the elementary investment economy plus government holds Q=(I−S)+(G−T). And so on with growing complexity.<br /><br />In sum: (1) profit is NOT income, i.e. a flow, but a balance, i.e. the difference of flows,#6 (2) distributed profit Yd is income and adds up with wage income Yw to total income, (3) total income is NEVER equal to total spending, (4) in the most elementary case, the difference between total spending of the household sector C and total wage income Yw is saving/dissaving, (5) profit/loss of the business sector is the mirror image of dissaving/saving of the household sector, i.e Q=−S, (6) saving and investment are causally INDEPENDENT and NEVER equal, (7) all I=S/IS-LM models are false since Keynes/Hicks, (8) Keynesianism, Post-Keynesianism, New Keynesianism and all variants are scientifically worthless, (9) the foundational MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 is false because it lacks the balance of the business sector Q, (10) because profit is false, the whole of MMT is false, (11) because the theory is false, MMT policy guidance has no sound scientific foundations.<br /><br />What holds for the new MMT Textbook holds mutatis mutandis for all predecessors including Peter Dorman’s Microeconomics and Macroeconomics: A Fresh Start.<br /><br />Egmont Kakarot-Handtke<br /><br />#1 New Economic Thinking: The 10 crucial points<br />https://axecorg.blogspot.com/2017/07/new-economic-thinking-10-crucial-points.html<br /><br />#2 The father of modern economics and his imbecile kids<br />http://axecorg.blogspot.com/2016/11/the-father-of-modern-economics-and-his.html<br /><br />#3 There is NO such thing as “smart, honest, honorable economists”<br />https://axecorg.blogspot.com/2019/01/there-is-no-such-thing-as-smart-honest.html<br /><br />#4 The problem with macro in two words<br />https://axecorg.blogspot.com/2016/04/the-problem-with-macro-in-two-words.html<br /><br />#5 William Mitchell, L. Randall Wray and Martin Watts, Macroeconomics<br />https://www.macmillanihe.com/companion/Mitchell-Macroeconomics/<br /><br />#6 The Profit Theory is False Since Adam Smith<br />https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2511741AXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-1010537902468917162019-03-18T17:27:17.975-04:002019-03-18T17:27:17.975-04:00To this day, economists have produced NOT ONE text...To this day, economists have produced NOT ONE textbook that satisfies scientific standards<br />Comment on Peter Dorman on ‘Introductory Econ Textbooks: A Different Take on the Issues’<br /><br />Peter Dorman summarizes: “Mankiw lays out three alternatives, teaching the mainstream and suppressing your own views, teaching minority or fringe views (i.e. your own), or not teaching introductory econ at all. … Whenever possible, I point out where other disciplines differ, and while I encourage students to judge for themselves, I don’t pressure them into adopting any one point of view. This is called critical thinking, and it barely exists in the world of economics textbooks, which proselytize shamelessly.”<br /><br />No, this is NOT critical thinking. This is post-modern anything-goes, i.e. the pluralism of provably false theories. Economics is scientifically indefensible: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)<br /><br />And this is the crux of the matter: economists do not have the true theory. This is where we stand today: provably false<br />• profit theory, for 200+ years,<br />• microfoundations, for 140+ years,<br />• macrofoundations, for 80+ years,<br />• the application of elementary logic and mathematics since the founding fathers.<br /><br />Economics is what Feynman called a cargo cult science and the textbooks reflect this. Economics is in need of a Paradigm Shift.#1 Since Samuelson started the textbook industry in 1948, economists have produced NOT ONE textbook that satisfies scientific standards.#2 Since generations, economics students swallow proto-scientific garbage without batting an eyelid. Not very smart, these folks.#3<br /><br />Needless to emphasize that there have been multiple attempts to improve the situation. The latest initiative comes from MMT. MMT claims to be the new approach that beats failed Orthodoxy. This is accurate with regard to the long overdue shift from microfoundations to macrofoundations. Microfounded approaches are dead already since Walras/Jevons/Menger.#4 The problem is that economists messed up the shift from microfoundations to macrofoundations.<br /><br />MMT is NO exception. And the proof is in the new MMT Textbook, more specifically in the premises of MMT.#5 The premises are laid out on pp. 13-16 and pp. 83-86.<br /><br />“One of the most basic propositions in macroeconomics that MMT emphasizes is is the notion that at the aggregate level, total spending equals total income and total output.” (p. 14)<br /><br />Unfortunately, the most basic proposition in macroeconomics is false since Keynes, and MMTers have not realized it to this day. Here is the short proof that economists in general and MMTers, in particular, get the elementary mathematics that underlies macroeconomics wrong.<br /><br />See part 2AXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-63014215479161283792019-03-18T15:02:16.165-04:002019-03-18T15:02:16.165-04:00There's a huge critical literature on cost ben...There's a huge critical literature on cost benefit analysis which economists mostly shrug off: "some" sort of decision is necessary, and this is the most rigorous, objective way to do it, based on the "preferences" of those involved. As you can tell, I don't agree. <a href="http://econospeak.blogspot.com/2010/08/problem-with-welfare-economics.html" rel="nofollow">Here</a> and <a href="http://econospeak.blogspot.com/2018/05/economics-view-from-35000-feet.html" rel="nofollow">here</a> are a couple of posts that reflect the evolution of my thinking. One of my goals over the next few years is to put this argument into long form.Peter Dormanhttps://www.blogger.com/profile/00093399591393648071noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-89152568543329326722019-03-18T14:54:54.574-04:002019-03-18T14:54:54.574-04:00The INET CORE project is definitely a worthy endea...The INET CORE project is definitely a worthy endeavor.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-71710980844744444582019-03-18T14:37:48.450-04:002019-03-18T14:37:48.450-04:00I can imagine that other disciplines have other me...I can imagine that other disciplines have other methods for looking at the cost and benefits of policies but that they consider cost benefit analysis nuts? That would be worth a post.Thaomashttps://www.blogger.com/profile/14747215297590200584noreply@blogger.com