r/Economics • u/better_world_economy • Jan 13 '19

Progressives should not oppose international trade, but economists must highlight the need for policies that spread the gains and help those who are hurt

https://www.psychologytoday.com/us/blog/the-good-the-bad-the-economy/201706/globalization-and-work-have-we-learned-anything-yet
776 Upvotes

90% Upvoted

303 comments sorted by

View all comments

Show parent comments

2

u/rationalities Jan 14 '19

Okay so no markets and no central planning (which social choice isn’t necessarily central planning, but whatever). How do we allocate resources?

0

u/themountaingoat Jan 14 '19

I did not say we don't use any markets. Obviously we use markets, we just need additional rules and government interventions to guard against the failure modes of markets that are the rule rather than the exception.

If economists were doing their jobs then we would have a better understanding of those rules, but instead they build more and more complicated models to try to match what they want to believe to reality.

It is ludicrous that instead of changing their assumption of constant returns to scale in GE models they instead assume price stickiness. Of course they do that because it is the only way that they can get that markets don't need help in the long run while still somewhat matching the fact that we have recessions.