I am seriously beginning to think that economists do not understand uncertainty, even what it means. What other conclusion can I draw from responses to my letter to the Financial Times this week? In it, I agree with and applaud a columnist on her jaundiced perspective regarding “expert opinion.” But more to the point, I directly criticize economists’ take on uncertainty by stating: …In my own field, the meaning of “uncertainty” is limited to complete knowledge of all the possible …
True Artificial Intelligence Has Arrived
January 16, 2021Artificial intelligence (AI) is not my area of expertise, but I suppose that being a generalist gives me license to comment on it. And anyway, the implications of AI could be far reaching for economics – and humanity in general, of course. In a liberating or in a very scary way, depending on which path we follow with it. But that’s for another time. Today I want to focus on the technology itself. Progress that we have made with chess …
More Musings on Generalism
January 10, 2021I recently read Yuval Noah Harari’s Sapiens: A Brief History of Humankind. It’s a bit late for a formal review since the book is over five years old. But in case you haven’t read it, the book is fascinating. Harari manages to convey so much historical information in an extraordinarily clear and concise manner. Despite its far-reaching scope, Harari manages to come across as profound and radical. I do not mean radical in the “leftist” or “extreme” sense, rather in …
Paradox of Thrift No Longer
January 7, 2021I want to try to bring together a few points about which I’ve posted previously. My motivation is to address an important article last week in the New York Times (January 1st) by Neil Irwin and Weiyi Cai. Perhaps its early for such a declaration, but the phenomenon they reveal might require a rethinking of Keynes’s celebrated “paradox of thrift.” The authors point out that much of the recent stock market boom can be attributed to an inordinate increase in …
GDP Growth: Seriously Flawed but Not Going Anywhere
December 31, 2020“Where do people earn the Per Capita Income? More than one starving soul would like to know.” (Eduardo Galeano) U.S. GDP plunged in the second quarter of 2020 at an annualized rate of 31.7 percent. From the standpoint of history, the report was shocking (although perhaps not surprising, given the abrupt policy response to the pandemic). Equally shocking (and unsurprising) was the news for the third quarter, which reported an unprecedented growth rate of 33.1 percent. Yet for most people …
Exchange Rates and the Dollar: The Short and Long View
December 23, 2020Last week the U.S. Treasury Department took the unusual step of labeling both Switzerland and Viet Nam currency manipulators. If the accusation stands, the two countries will then need to come to an agreement with the U.S. and the IMF or face possible retaliatory tariffs. The mainstream press has, as always, focused on reasons for, as well as the possible consequences of, the artificial currency deflation by the two countries. And as someone asked by many a puzzled student why …
Technological Complexity: The Next Black Swan?
December 14, 2020A comment in Friday’s Financial Times by John Thornhill caught my eye, although not for the reason you might think. His piece was mostly a warning about how our overreliance on technology could spark the next global crisis. The article elaborated on a number of cyberwar and cybersecurity risks that make our modern society increasingly vulnerable to any number of attacks. And sure enough – would you believe it! – just two days later it appears that some Russians successfully …
The Great Divergence “on Drugs”
December 6, 2020Back in July I wrote about a “great divergence” that has been occurring between the stock market and the real economy. Yet today one might consider that recent developments put the lie to my claim. After all, while stock prices soar, the unemployment rate continues to fall. The November number was 6.7 percent, down from 6.9 percent in October. With imminent release of a new Covid-19 vaccine expected, all the major equity indices appear – almost irrationally – to have …
Could We Have Too Much Fiscal Policy?
December 3, 2020President-elect Biden’s formation of his economic “team” has been dominating the headlines. Unduly, I aver, because there are far more pressing issues than which Wall Street or otherwise pro-business cronies Biden ends up selecting. Most notably, of course, is the matter of another desperately needed stimulus package. Against all odds, it appears that moderate Senate Democrats and Republicans are working together on a compromise bill. Just yesterday the group, led by Senators Collins (R-Maine) and Warner (D-Virginia), proposed a $900 …
The Logistics, Ethics, and Political Economy of a Covid-19 Vaccine
November 29, 2020Recent news about Pfizer’s and Moderna’s progress synthesizing a Covid-19 vaccine has been met by an understandably ebullient global reaction. According to the CDC, the first batch will be available to Americans before the end of 2020. Analysts believe that positive news about the vaccine – and really, how could the news be better? – explains much of the most recent surge in stock prices. More substantively, if the optimism were well founded it would not be unreasonable to expect …