On the dismal state of a dismal science?

According to a growing of commentators, the real problem is the dismal state of influential parts of contemporary mainstream economics, especially macroeconomics and financial economics. More particularly, the reference is to the Rational Expectations School in macroeconomics, championed by Robert Lucas jr., Thomas Sargent and Edward Prescott, and the Efficient Markets Hypothesis in financial theory, championed by Eugene Fama. Since major representatives of the two lines of thought teach at the University of Chicago, we may, for short, also speak of the Chicago School. It is also known as New Classical Economics (NCE). However, as we shall see below, NCE and the economics of the old classical economists (and their modern interpretators) are radically different in important respects.

Descargue todo el artículo de Heinz Kurz publicado en Investigación Económica aquí.

Neoclassical Inflation: No theory there

The theoretical generalization that the price level is determined by the quantity of money is commonly employed as a teaching device, in abstract modeling, and as a guide to policy. It represents a profound misunderstanding of inflation. In specific, the famous parable, more money then more inflation, is logically wrong.

Far from the strength of neoclassical economics, its theory of inflation encapsulates and epitomizes its most fatal analytical errors and contradictions. Prominent among these errors and contradictions are the failure to provide a convincing explanation for the existence of money, and the closely related inability to provide a definition of money that makes its supply analytically determinate. These basic problems require the creation of an imaginary economy, the analysis of which results in arbitrary conclusions that cannot be generalized beyond neoclassical Cloud-Cuckoo Land.

Lea todo el resto del artículo de John Weeks aquí

¡Es la deuda privada, estúpidos! Porqué los economistas del sistema se equivocan siempre en sus diagnósticos y en sus pronósticos*

La deuda, el dinero y el propio sistema financiero no desempeñan el menor papel en los modelos económicos neoclásicos convencionales. Muchos legos creen que los economistas son expertos en dinero, pero la creencia de que el dinero es meramente "el velo que cubre el intercambio" –y que, por lo mismo, la economía puede ser modelada sin tomar en cuenta ni el dinero ni la forma en que se crea— es un dogma fundamental de la teoría económica neoclásica. Sólo los economistas disidentes toman el dinero en serio.

Lea todo el ensayo de Steve Keen traducido por Sin Permiso aquí

*NOTA: Originalmente la entrada fue subida al blog Economarx21 (blog que ampliamente se recomienda seguir) por José Sandoval.

Keynesianism and the Crisis

Lance Taylor, Guest Blogger
The only way to understand the Great Crisis and how to deal with it is through the economics of John Maynard Keynes and his closest followers. For the details see my new book, Maynard’s Revenge: The Collapse of Free Market Macroeconomics (Harvard University Press). Three ideas emphasized by Keynes 75 years ago are crucial for understanding the contemporary situation.
The first is that economic actors operate under fundamental uncertainty — at times they cannot predict or even imagine the nature of future developments. In the mid-2000s Federal Reserve Governor Ben Bernanke extolled a “Great Moderation” in macroeconomics. He did not, and probably could not, think about the tsunami that was about to strike. Rather, he accepted widespread market conventions that all was well. Keynes thought that such conventions might persist for a time, but then could rapidly break down.
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Entrevista a Alejandro Valle Baeza

En el marco de las Jornadas de Economía Crítica (JEC) que se desarrollaron en Rosario, el economista marxista mexicano, Alejandro Valle Baeza, profesor de hace más de tres décadas de la UNAM y fundador de la Sociedad de Economía Política de Latinoamérica, habló con Tiempo Argentino acerca de los problemas de la izquierda, la incapacidad de la ortodoxia de solucionar sus propias crisis, el nuevo avance del pensamiento crítico en América Latina y el mundo y la renovada pujanza intelectual de la juventud como base para el avance de la heterodoxia luego del fracaso neoliberal.

Lea toda la entrevista de Tiempo Argentino