American Recovery and Reinvestment Act of 2009
by Benjamin on February 13, 2009
Since the start of term I have attended quite a few introductory sessions to various economics classes. Here I keep hearing my colleagues telling the students that they are privileged to be living in such exciting times, and to learn economics when it is so topical.
What everyone neglects to tell the students, is that we have no idea what’s going on, while the slides and theories from last years classes – which we may recycle – won’t shed any light on what’s actually going on…
Shame really, because I think it is a great time to be doing economics, but now people are excited about studying the actual economy and not slavishly believing in the complete truth of economics as revealed by standard axioms. So let’s try and reverse the process Leijonhufvud complained about:
Once the Cobb-Douglass production function was invented, no economist has since studied production
-Axel Leijonhufvud (2002: 23-4)
Go on, read (or teach?) the U.S. stimulus package (or maybe our suggested edit to the package), find out how money supply really works in the economy, see what institutions actually do and how the global financial system works (Basel II anyone?), without having to believe in the effective market hypothesis. It’s a brave new world out there – at least for the next few months.
Tags: Basel II, Economics, Economy, Stimulus, Teaching
The system is getting more efficient. What that means, we can only assume through observation as well as the history of economic thought. Large and expensive (land and labor prices high) financial-based cities are losing employment and trade, while monopolistic-like stock-market value deteriorates; and smaller and more efficient local trade and employment communities (cheaper land and labor) emerge based on stronger diversification (Darwin), financed by mini-stockmarkets and powered by more secured renewable energy. We rationally reason to move our human and natural resources to a more sustainable long-term form.