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Rethinking Dutch Economics Education

Last week, the Dutch branch of Rethinking Economics published a study on the build-up of  Dutch economics curricula (bachelor’s). Rethinking Economics is an international network of students, academics and professionals whose goal it is to diversify and renew contemporary economic thinking. The major conclusion this study draws is that Dutch economics education is dominated by the study of market mechanisms among rational, utility-maximising actors. This stems from the supremacy of neoclassical economics in Dutch economics education, with 86% of the theory course time assigned to that economic school. None of the other schools of economic thought have more than 4% of course time. Another area the study focuses on, as seen in the figures, is research methods. Rethinking Economics NL criticises the lack of qualitative analysis, and conclude that ‘students are effectively blinded by to all aspects of the economy which cannot be expressed in numbers’. Lastly, another big complaint is that three-quarters of the curriculum is dominated by abstract theory and methods, and not by real world economics. (source)

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Seven Centuries of Declining Interest Rates

A new working paper by Paul Schmelzing presents a fantastic dataset for interest rates, dating back to the 13th century, and shows that real rates have een dropping. The all-time real rate average has been 4.78%, but the average over the last tow centuries stands at 2.6%. Schmelzing shows the interest Arte has been dropping by an average 1.6 basis points (0,016%) per year. (source)

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Tension in GE Pensions

The Wall Street Journal opened this Sunday with a story about General Electric (GE), one of the US’ biggest companies. In the story, they talked about an alarming development: pension plans being under water and stock options from retirees. These stock options have lost so much value over the last decade, that multiple retirees have had to go back to work, just to afford retirement. GE’s market capitalization has fallen more than $460 billion since its 2000 peak, and according to the article, this can mostly be attributed to poor decision-making from above. (source)

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A Painful Poverty Line?

This picture on Reddit caused quite a discussion. It would painfully show the poverty line between the Brazilian elite and the favelas. This building is in a neighbourhood called Morumbi, one of the most expensive areas in the city. However, the photograph turns out to be old, and popping up from time to time. Also, as commentators mention, only 7% of the Brazilian population live in favelas, and the rest in the high rises, such a the one in the picture. “Favelas are talked about a lot because they’re highly visible displays of abject poverty in a wealthy nation, but they don’t represent the “average” Brazilian lifestyle”, says one of then. (source)

 

 

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Overfishing in the Mekong

In the just published report ‘From Sea to Source 2.0’, on the migration of fish, we come across this graph. It shows the consequences of overfishing of the giant catfish in the Mekong, based on a study in BioScience by J.D. Allan. It shows fish catches (yield) as a function of effort for the Mekong giant catfish fishery in Chiang Khong, Thailand. The initial increase in boats employed results in higher yields, but is then followed by a crash of the fish stocks. According to ‘From Sea to Source 2.0’, not only overfishing, but also industrialisation, climate change, water quality deterioration, and other threats have seriously hampered fish migration, that is needed for many fish to to fulfil their entire lifecycle. (source)

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The Wholesome Version of Monopoly

Everybody knows Monopoly, the family-separating, relationship-breaking and sometimes fun board game. The way it is played now, is not the way it was necessarily supposed to be. Creator Elizabeth Magie was a disciple of economist Henry George, who believed that landowners grew rich at the expense of their non-landowning tenants who slid further into poverty. This believe was captured in the original boardgame, which featured a double set of rules for two different games on the same board: anti-monopolist and monopolist. The monopolist rules are comparable to the contemporary form of Monopoly, whereas the anti-monopolist rules are the complete opposite:  these rules reward all players during wealth creation.  A win in the anti-monopolist version could be achieved when the player having the lowest monetary amount had doubled his or hers original stake. (source)

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Labour Participation: Return of the Older Workers

This week, the International Monetary Fund (IMF) published their World Economic Outlook, April 2018. They discuss labour participation in the second chapter and discuss policies to encourage and enable work in advanced economies. One of the developments they highlight is the ageing population: in 2050 the dependency ratio (people of the ages 65 and older as a percent of those ages 20–64) would be 55%. Interestingly, the amount of working ‘old’ people has grown considerably since the financial crisis: from around 30% of 55+ workers, to 35%, whereas the amount of young workers has plummeted in the same period of time. (source)

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Capitalism lost its popularity among American youth

‘The Conversation’ journal has published an article regarding the youth, age 18-29, perception towards capitalism in the US, especially political and economic systems. It states that the youngsters are disappointed the way how the world is run by the elders. In the manifestation on 24 March a lot of people declared their opinion on the gun restriction. According to the Harvard University survey in 2016, 51% of young Americans do not support capitalism, 42% claimed to back it and 19% were willing to be called ‘capitalists’. As it is seen from the graph, the negative regard towards capitalism is increasing steadily among young Americans.  (source)

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Gender Wage Gap Because of Children?

Although the difference in gender inequality has become less big over time, there is still a gap to be discussed.  The National Bureau of Economic Research conducted research into gender inequality and came to the conclusion that the difference in earnings is due to children. The arrival of children creates a gender gap (in favour of men) in earnings of around 20% in the long run, driven in roughly equal proportions by labor force participation, hours of work, and wage rates. (source, graph by Vox)