So much for the reduction of inequality

According to the FT, bankers' salaries in Latin America (particularly Brazil) are growing rapidly and are higher than in many other countries. This surely will have impacts on inequality; in fact, exploring what is happening with income at the top is key if we want to understand how the Latin American model is evolving.

The evolution of macroeconomics

Mankew offers an interesting account of the evolution of Macroeconomics. He argues that the discipline is divided between engineers and scientists; the former want to develop tools to intervene in policies while the latter want to understand how the economy really operate. In many ways, the engineers continue to operate with a IS-LM model that is useful for policy but was developed a long time a go. New Classical and New Keynesian theory has influenced little the policy debates (and the teaching at the undergraduate level).

This is an interesting point, but one that fails to tackle a key point: why should we consider new classical and new Keynesian models "good" science? At the end, it seems to be because they have higher levels of mathematical sophistication and clearer roots in individual maximization. But at this point in history, we need to go back to the question of why we need to build Economics (and social science more generally) around methodological individualism and rational choice. In fact, the crisis (and even globalization more generally) is a clear demonstration of the importance of structural processes and factors, no?

At the end, then, New Classical Macro was both bad policy but also bad science...

Inflation fundamentalism

Good news! More criticisms of inflation fundamentalism and more calls for a more expansionary monetary policy... and for the obvious political reasons!

Robin Hood Tax

Here you can find a great video in defence of the so called "Robin Hood Tax". Doesn´t it really make sense? What would be the arguments against it?