New Levy Institute Publications
Research Project Report, July 2013 | July 2013 | Dimitri B. Papadimitriou, Gennaro Zezza, Michalis Nikiforos
Technical PaperIn this report Levy Institute President Dimitri B. Papadimitriou and Research Scholars Gennaro Zezza and Michalis Nikiforos present the technical structure of the Levy Institute's macroeconomic model for the Greek economy (LIMG). LIMG is a stock-flow consistent model that reflects the “New Cambridge” approach that builds on the work of Distinguished Scholar Wynne Godley and the current Levy Institute model for the US economy. LIMG is a flexible tool for the analysis of economic policy alternatives for the medium term and is also the analytic framework for a forthcoming Strategic Analysis series focusing on the Greek economy.Download:Associated Program:Author(s):Related Topic(s):
Strategic Analysis, October 2013 | October 2013 | Dimitri B. Papadimitriou, Greg Hannsgen, Michalis Nikiforos, Gennaro ZezzaIf the Congressional Budget Office’s recent projections of government revenues and outlays come to pass, the United States will not grow fast enough to bring down the unemployment rate between now and 2016. The public sector deficit will decline from present levels, endangering the sustainability of the recovery. But as this new Strategic Analysis shows, a public sector stimulus of a little over 1 percent of GDP per year focused on export-oriented R & D investment would increase US competitiveness through export-price effects, resulting in a rise of net exports, and slowly lower unemployment to less than 5 percent by 2016. The improvement in net export demand would allow the US economy to enter a period of aggregate-demand rehabilitation—with very encouraging consequences at home.Download:Associated Program:Author(s):Related Topic(s):
Strategic Analysis, July 2013 | July 2013 | Dimitri B. Papadimitriou, Michalis Nikiforos, Gennaro Zezza
A Strategic AnalysisDownload:Associated Program:Author(s):Related Topic(s):
Public Policy Brief No. 129, 2013 | April 2013 | Jan KregelThis policy brief by Senior Scholar and Program Director Jan Kregel builds on an earlier analysis (Policy Note 2012/6) of JPMorgan Chase and the actions of the “London Whale,” and what this episode reveals about the larger risks inherent in the financial system. It is clear that the Dodd-Frank Act failed to prevent massive losses by one of the world’s largest banks. This is undeniable evidence that work remains to be done to reform the financial system. Toward this end, Kregel reviews the findings of a recent report by the Senate Permanent Subcommittee on Investigations and expands on the lessons that we can draw from the evolution of the London Whale episode.Download:Associated Program:Author(s):Related Topic(s):
Public Policy Brief No. 128, 2013 | April 2013 | Rania Antonopoulos
Is There Space to Promote Gender Equality in the Evolution of Social Protection?Social protection systems comprise public policies designed to prevent or alleviate economic insecurity and poverty. Throughout the developing world, social protection strategies and the dialogue surrounding them have recently been undergoing an important evolution. In this policy brief, Senior Scholar and Director of the Gender Equality and the Economy program Rania Antonopoulos highlights the opportunities and challenges for promoting gender equality and empowerment within this shifting policy landscape. Developed with financial support from the United Nations Development Programme, this brief is intended as an advocacy tool in the service of amplifying gender-informed policy considerations in country-level social protection debates.Download:Associated Program:Author(s):Related Topic(s):
Policy Note 2013/10 | December 2013 | Philip Pilkington
In a policy note published last year by the Levy Institute, Philip Pilkington and Warren Mosler argued that the eurozone sovereign debt crisis could be solved by national governments without the assistance of the European Central Bank (ECB) and without their leaving the currency union, through the issuance of a proposed financial innovation called “tax-backed bonds.” These bonds would be similar to standard government bonds except that, should the country issuing the bonds not make its payments, the tax-backed bonds would be acceptable to make tax payments within the country in question, and would continue to earn interest.
In the current policy note, Pilkington examines the continued relevance of the bond proposal in light of changes that have taken place with respect to ECB policy since the original proposal was made, as well as the case made by Ireland’s finance minister that tax-backed bonds would violate current Irish law (and, by implication, the law in other eurozone countries). He also outlines some changes made to the initial proposal in response to constructive criticisms received since its publication, and briefly notes another area in which the proposal might be utilized—outside the eurozone. His conclusion? That tax-backed bonds remain a valid policy tool, one that can be implemented at the national rather than at the federal level, and a stepping stone to solving the eurozone’s economic problems.Download:Associated Program:Author(s):Philip PilkingtonRelated Topic(s):
Policy Note 2013/9 | October 2013 | Michalis Nikiforos
A Scenario of Hitting the Debt Ceiling
The United States entered the second week of a government shutdown on Monday, with no end to the deadlock in sight. The cost to the government of a similar shutdown in 1995–96 amounted to $2.1 billion in today’s dollars. However, the cost and broader consequences of today’s shutdown are not yet clear—especially since the US economy is in the midst of an anemic recovery from the biggest economic crisis of the last eight decades.Download:Associated Program:Author(s):Related Topic(s):
One-Pager No. 43 | September 2013 | C. J. Polychroniou
Unemployment in Greece has climbed to a new record of 27.9 percent and the country is headed toward a third bailout. The obsession with reducing the budget deficit is crippling the Greek economy. Extreme fiscal consolidation in the midst of a major depression can only have extreme effects on output, leading to greater unemployment, widening poverty, massive loss of faith in political and social institutions, and the potential for political violence. This is precisely what has been taking place in Greece since 2010, as fiscal brutality intensifies from one year to the next. Offering Greece yet another bailout package is not the answer.Download:Associated Program:Author(s):Related Topic(s):
One-Pager No. 42 | September 2013 | Robert J. BarberaPerhaps the most indictable offense that mainstream economists committed, from 1988 through 2008, was to retrace Keynes’s path of discovery from 1924 (A Tract on Monetary Reform) through 1936 (The General Theory). Wholesale deregulation of finance and categorical confidence in a reductionist role for central banks came into being as the conventional wisdom embraced the 1924 view that free markets and stable prices alone give us the best chance for economic stability. In the aftermath of the grand asset market boom-and-bust cycle of 2008–9, we are jettisoning Keynes circa 1924 for the Keynes of 1936. In effect, we study business cycles but seem incapable of extricating the economics profession from reciting its assigned lines as the play unfolds.Download:Associated Program:Author(s):Robert J. BarberaRelated Topic(s):
Working Paper No.780 | November 2013 | Jörg Bibow
The Euro Needs a Euro Treasury
The euro crisis remains unresolved even as financial markets may seem calm for now. The current euro regime is inherently flawed, and recent reforms have failed to turn this dysfunctional regime into a viable one. Our investigation is informed by the “cartalist” critique of traditional “optimum currency area” theory (Goodhart 1998). Various proposals to rescue the euro are assessed and found lacking. A “Euro Treasury” scheme operating on a strict rule and specifically designed not to be a transfer union is proposed here as a condition sine qua non for healing the euro’s potentially fatal birth defects. The Euro Treasury proposed here is the missing element that will mend the current fiscal regime, which is unworkable without it. The proposed scheme would end the currently unfolding euro calamity by switching policy from a public thrift campaign that can only impoverish Europe to a public investment campaign designed to secure Europe’s future. No mutualization of existing national public debts is involved. Instead, the Euro Treasury is established as a means to pool eurozone public investment spending and have it funded by proper eurozone treasury securities.Download:Associated Program:Author(s):Related Topic(s):
Working Paper No. 779 | November 2013 | Aurélie Charles
An Application to the Labor Market
This paper argues that a hierarchy of ideals exists in market interactions that sets the benchmark on the norm of fairness associated with these interactions, thus affecting pricing decisions associated with market exchange. As norms emerge, an ideal determines the criteria of optimal behavior and serves as a basis for market exchange. Norms homogenize the diversity of commodities in market interactions according to a hierarchy of norms and values. The paper then goes on to illustrate how this hierarchy of ideals works in the labor market, leading to inequality of access to jobs and wages between groups of individuals. Groups socially perceived to be diverging from the context-dependent dominant ideal are likely to suffer most in market interactions.Download:Associated Program:Author(s):Aurélie CharlesRelated Topic(s):
Book Series, April 2013 | April 2013 | Hyman P. Minsky
By Hyman P. Minsky | Preface by Dimitri B. Papadimitriou | Introduction by L. Randall WrayAlthough Hyman P. Minsky is best known for his ideas about financial instability, he was equally concerned with the question of how to create a stable economy that puts an end to poverty for all who are willing and able to work. This collection of Minsky’s writing spans almost three decades of his published and previously unpublished work on the necessity of combating poverty through full employment policies—through job creation, not welfare. Minsky was an American economist who studied under Joseph Schumpeter and Wassily Leontief. He taught economics at Washington University, the University of California–Berkeley, Brown University, and Harvard University. Minsky joined the Levy Economics Institute of Bard College as a distinguished scholar in 1990, where he continued his research and writing until a few months before his death in October 1996. His two seminal books were Stabilizing an Unstable Economy and John Maynard Keynes, both of which were reissued by the Levy Institute in 2008. Minsky held a B.S. in mathematics from the University of Chicago (1941) and an M.P.A. (1947) and a Ph.D. in economics (1954) from Harvard. He was a recipient in 1996 of the Veblen-Commons Award, given by the Association for Evolutionary Economics in recognition of his exemplary standards of scholarship, teaching, public service, and research in the field of evolutionary institutional economics.
This book was made possible in part through the generous support of the Ford Foundation and Andrew Sheng of the Fung Global Institute.
Published By: Levy Economics Institute of Bard College
Book Series | June 2012 | Dimitri B. Papadimitriou, Gennaro Zezza
Edited by Dimitri B. Papadimitriou and Gennaro Zezza
In the 1970s, at a time of shock, controversy and uncertainty over the direction of monetary and fiscal policy, Wynne Godley and the Cambridge Department of Applied Economics rose to prominence, challenging the accepted Keynesian wisdom of the time. This collection of essays brings together eminent scholars who have been influenced by Godley's enormous contribution to the field of monetary economics and macroeconomic modeling.
Godley's theoretical, applied and policy work is explored in detail, including an analysis of the insightful New Cambridge 'three balances' model, and its use in showing the progression of real capitalist economies over time. Godley's prescient concerns about the global financial crash are also examined, demonstrating how his work revealed structural imbalances and formed the foundations of an economics relevant to the instability of finance.
Published By: Palgrave MacMillan