Teaching economics — a £9,000 lobotomy


all too relevant – change is going to be slow…

Originally posted on LARS P. SYLL:

In their battle to open up economics, [students] have one hell of a fight on their hands, for the same reason that it has proved so hard to democratise so many aspects of the post-crash order: the forces of conservatism are just too powerful. To see how fiercely the academics fight back, take a look at the University of Manchester.

Since last autumn, members of the university’s Post-Crash Economics Society have been campaigning for reform of their narrow syllabus. They’ve put on their own lectures from non-mainstream, heterodox economists, even organising evening classes on bubbles, panics and crashes. Trickle-downYou might think academics would be delighted to see such undergraduate engagement, or that economists would be swift to respond to the market.

Not a bit of it. Manchester’s economics faculty recently announced that it wouldn’t renew the contract of the temporary lecturer of the bubbles course, and that students who wanted…

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Is the Speculative or the Precautionary Demand for Money More Important in Real World Capital Markets?

Originally posted on Fixing the Economists:


In Keynes’ General Theory is is famously stated that the demand for money relies on three distinct functions. These are: the transactions demand for money; the precautionary demand for money; and the speculative demand for money. Or, more formally:

M = Mt + Mp + Ms

In that work Keynes — as he regularly did in his monetary theories — laid rather a lot of emphasis on the speculative demand for money and not a great deal of emphasis on the precautionary demand for money. In chapter 13 of his General Theory he wrote,

It may illustrate the argument to point out that, if the liquidity-preferences due to the transactions-motive and the precautionary-motive are assumed to absorb a quantity of cash which is not very sensitive to changes in the rate of interest as such and apart from its reactions on the level of income, so that the total quantity…

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How Not to Do Macroeconomics

Originally posted on Unlearning Economics:

A frustrating recurrence for critics of ‘mainstream’ economics is the assertion that they are criticising the economics of bygone days: that those phenomena which they assert economists do not consider are, in fact, at the forefront of economics research, and that the critics’ ignorance demonstrates that they are out of touch with modern economics – and therefore not fit to criticise it at all.

Nowhere is this more apparent than with macroeconomics. Macroeconomists are commonly accused of failing to incorporate dynamics in the financial sector such as debt, bubbles and even banks themselves, but while this was true pre-crisis, many contemporary macroeconomic models do attempt to include such things. Reputed economist Thomas Sargent charged that such criticisms “reflect either woeful ignorance or intentional disregard for what much of modern macroeconomics is about and what it has accomplished.” So what has it accomplished? One attempt to model the ongoing crisis using modern macro is…

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Bad economics affects us all

Originally posted on LARS P. SYLL:

Reform of economics teaching is resisted so strongly by mainstream economists because they find it threatening. It is like asking the medieval Catholic clergy to teach their new recruits different interpretations of Christianity, to stop teaching them exclusively in Latin and teach more in the local vernacular, and to encourage them to challenge the intellectual and the moral authority of the Holy See. No wonder it is so strongly resisted by most mainstream economists, even by those who claim to be interested in reform.

economistsBut what does this have to do with everyone outside the academic bubble? Why does it matter that those nerds doing economics degrees are made to jump through one set of hoops rather than another?

Reform of economics education is not just a matter for university economists. The current curriculum frustrates thousands of bright young students who started studying economics thinking that they would learn something…

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Paradigm Lost?

Originally posted on Real-World Economics Review Blog:

from Peter Radford

The story so far:

Robert Locke asserts that neoclassical economics never attained paradigm status and thus cannot be seen as about to be dethroned from its exalted perch. He also decries the failure of mainstream economics to discuss its failures. This only a few months after an interview conducted by Paul Rosenberg with Edward Fullbrook in the RWER issue #66 in which he discussed the contrast between new and old paradigms in economics, and I may have stirred things up when I used a Thomas Kuhn quote to begin one of my own articles earlier this month.

So is there? Or isn’t there?

Let me try to square the circle.

Clearly there exists in economics some center of gravity. Indeed this center is so large that it appears to engulf most else around it. Economists either acknowledge that the discipline is rife with many voices – these…

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The Real Problem with High-Frequency Trading

Originally posted on Uneasy Money:

Everybody seems to be talking about Michael Lewis’s new book (Flash Boys), which has been featured on 60 Minutes and reviewed twice by the New York Times. The book is about something called high-frequency trading, which, I will admit, with some, but not too much, embarrassment, I know almost nothing about. Actually, the first time I heard of the existence of high-frequency trading was from a commenter on a post I wrote almost two years ago, about which I will have something more to say in a moment. Michael Lewis’s book is a polemic against high-frequency trading, alleging that it enables high-frequency traders to rig the stock market and exploit ordinary traders. Lewis makes his case by telling the story of a group of hedge-funds that have banded together to create an alternative trading platform IEX, thereby avoiding contact with the high-frequency platforms, which, according to Lewis…

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The Virtual Genius of Oculus Rift


Long piece but very worth it…

Originally posted on TIME:

To understand why Oculus Rift matters, it helps to know who John Carmack is. You already know his work, even if you don’t know his name: Carmack is the programmer who in the early 1990s cracked the problem of how to write a video game that takes place in three-dimensional space. He’s the reason that when you play a state-of-the-art game, you’re not leaping from platform to platform or wandering through a two-dimensional dungeon, you’re running and jumping around in proper space-time, all six axes in play, backward and forward, side to side, up and down. He’s responsible for Quake, the first true 3-D game, which begat Halo and Call of Duty and all the rest of it. Carmack did for computer games what Masaccio did for painting: he turned a plane into a space.

As such, he’s the principal architect of a medium that has generated literally billions of…

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