Publications
One-Pagers
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One-Pager No. 37 | January 2013
The global financial crisis has generated renewed interest in the 1951 Treasury – Federal Reserve Accord and its lessons for central bank independence. A broader interpretation of the Accord and of Marriner S. Eccles’s role at the Federal Reserve should teach central bankers that independence can be crucial for fighting inflation, but also encourage them to be more supportive of government efforts to fight deflation and mass unemployment.
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One-Pager No. 36 | January 2013
Expansion of Federal Reserve Authority in the Recent Financial Crisis Raises Questions about Governance
View More View LessSeveral years before the onset of the recent financial crisis, ex – Federal Reserve Board Member Lawrence Meyer wrote that the Fed “is often called the most powerful institution in America,” its key decisions made by 19 people whose names are known by few, meeting regularly behind closed doors. Bernard Shull examines the origin and nature of Fed authority and independence, and reviews the impact of Dodd-Frank on our central bank. His conclusion? The new constraints placed on the Fed are modest at best, and its continued expansion inexorably raises questions of governance.
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One-Pager No. 35 | October 2012Should we allow the fiscal cliff, with its across-the-board spending cuts and big tax increases that will affect almost every American, to take effect? Economists have been weighing in on such fiscal policy questions in what seems to be the most intense election-year debate in many years. To help our readers keep track of this debate, we offer a list of some of the specious arguments against fiscal stimulus and for austerity, together with our responses.Download:Associated Program:Author(s):Related Topic(s):
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One-Pager No. 34 | October 2012
The Importance of Time Deficits
Standard poverty measurements assume that all households and individuals have enough time to engage in the unpaid cooking, cleaning, and caregiving that are essential to attaining a bare-bones standard of living. But this assumption is false. With the support of the United Nations Development Programme and the International Labour Organization, Senior Scholars Rania Antonopoulos and Ajit Zacharias and Research Scholar Thomas Masterson have constructed an alternative measure of poverty that, when applied to the cases of Argentina, Chile, and Mexico, reveals significant blind spots in the official numbers.
Download:Associated Program(s):The Distribution of Income and Wealth The Levy Institute Measure of Time and Income Poverty Gender Equality and the EconomyAuthor(s):Related Topic(s): -
One-Pager No. 33 | September 2012
Who’s Afraid of Greece?
As the Greek summer comes to an end, the predatory austerity policies of the second bailout plan are in full swing, while the fiscal consolidation program continues to run its wayward course. Overall, what was once a modern democratic polity is beginning to resemble a feudal state. As the government seeks a broad agreement on its latest spending cuts, the Greek labor movement is set to embark on a new round of paralyzing strikes and demonstrations. This year, the truly hot season in Greece is only just beginning.
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One-Pager No. 32 | June 2012Ireland was at one time the poster child for fiscal austerity, but that country’s disappointing economic performance of late has left austerity apologists searching for a new model—and the Baltic economies appear to be next in line. But Estonia, Latvia, and Lithuania are as unsuited to stand as successful models of expansionary fiscal contraction and “internal devaluation” as their Irish predecessor.
Download:Associated Program:Author(s):Rainer Kattel Ringa RaudlaRelated Topic(s): -
One-Pager No. 31 | May 2012
Is an Austerity-induced Depression about to Bring Down the Final Curtain on the Greek Drama?
View More View LessOn June 17, Greece will hold a second round of elections, the outcome of which might force the European Union to halt all financial assistance to the debt-strapped country. What Greece desperately needs is a leadership with the ability to explore all possible options and to prepare the nation for the tough challenges that may lie ahead—and to make them aware of the opportunities available to a government in charge of its own currency.
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One-Pager No. 30 | May 2012
Hyman Minsky had particular views about how the regulatory system and financial architecture should be reformulated, and one of the many lessons we can learn from his work is that there is an intimate connection between how we think about the prospect of financial market instability and how we approach financial regulation. Regulation cannot be effective if it is simply based on “piecemeal” measures produced in response to the current “moment,” Minsky wrote. It needs to reformulate the structure of the financial system itself.
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One-Pager No. 29 | April 2012
Since last month’s Greek bond swap, various European leaders have declared the eurozone crisis over or “almost over.” But Euroland’s current economic reality begs to differ. No matter how much cheap money the ECB provides or how high the EC “firewall” rises, the region’s economic malaise can’t be cured without massive government intervention—the implementation of strong, proactive economic policies that will put people back to work, increase state revenues, and improve the standard of living.
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One-Pager No. 28 | March 2012
Nearly two years after becoming the first eurozone member-state to be bailed out by the European Union (EU) and International Monetary Fund (IMF), Greece is officially bankrupt. True, there was never any doubt about the outcome, but Greece’s restructuring of nearly 200 billion euros in private debt and the agreement for a new bailout package signify something much bigger—namely, the formal conversion of a sovereign nation into an EU/IMF zombie debtor, and a doomsday scenario that includes its forced exit from the eurozone.
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One-Pager No. 27 | February 2012The coordinated contractionary policy on the part of the European Union is inspired by its belief that this is the most effective way to tackle the eurozone’s “debt crisis.” However, by ignoring the endemic problems of unemployment, poverty, and homelessness—all of which have as their underlying cause the contraction of economic activity—European economic policy reveals a growing gap with the real world.
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One-Pager No. 26 | February 2012
Improving Competitiveness by Reducing Living Standards and Increasing Poverty
Greece’s new EU/IMF bailout package is all about private sector wage cuts and an overhaul of labor rights. In short, it will do absolutely nothing to address the nation’s economic crisis because it is not designed to rescue Greece’s embattled economy. In fact, it will have the unwanted effect of keeping the nation locked in a vicious cycle of debt—and leading, finally, to its exit from the eurozone.Download:Associated Program:Author(s):Related Topic(s): -
One-Pager No. 25 | February 2012The 2007–08 global financial crisis was the second most disastrous global economic event of the last 80 years. Thanks to severe austerity measures and a fanatical commitment to fiscal consolidation, Europe’s overall economy is now close to stagnation and extremely high levels of unemployment prevail in many countries, especially in the eurozone periphery. In Greece, the situation is completely out of control, with the standard of living rapidly declining to 1960s levels and the number of unemployed having reached one in five. The second bailout plan will do nothing more than buy extra time for the European Union to build firewalls to prevent the spread of Greek contagion—and prepare the ground for Greece’s exit from the euro.Download:Associated Program:Author(s):Related Topic(s):
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One-Pager No. 24 | February 2012
It’s a mistake to interpret the unfolding disaster in Europe as primarily a “sovereign debt crisis.” The underlying problem is not periphery profligacy, but rather the very setup of the European Monetary Union (EMU)—a setup that even now prevents a satisfactory resolution to this crisis. The central weakness of the EMU is that it separates nations from their currencies without providing them with adequate overarching fiscal or monetary policy structures—it’s like a United States without a Treasury or a fully functioning Federal Reserve. Without addressing this basic structural weakness, Euroland will continue to stumble toward the cliff—and threaten to pull a tottering US financial system over the edge with it.
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One-Pager No. 23 | December 2011
$29,000,000,000,000: A Detailed Look at the Fed’s Bailout of the Financial System
View More View LessThe extraordinary scope and magnitude of the financial crisis of 2007–09 induced an extraordinary response by the Federal Reserve in the fulfillment of its lender-of-last-resort function. Estimates of the total amount of bailout funding provided by the Fed have ranged from its own lowball claim of $1.2 trillion to Bloomberg’s estimate of $7.7 trillion (just for the biggest banks) to the GAO tally of $16 trillion. But new research conducted as part of a Ford Foundation project directed by Senior Scholar L. Randall Wray finds that the Fed’s commitments—in the form of loans and asset purchases to prop up the global financial system—far exceeded even the highest estimates.
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One-Pager No. 22 | December 2011
As the eurozone crisis continues, and while the US economy continues to muddle through, we need to reexamine what is actually going on, and sharpen our political-economy tools by considering that what may be taking place today in the advanced economies is not just a banking or a financial crisis but a broader crisis of capitalism.
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One-Pager No. 21 | November 2011
The Future of the Eurozone
With the crisis in the eurozone threatening the integrity of the European Union itself. German Chancellor Angela Merkel continues to brush aside calls to permit the European Central Bank to act as lender of last resort, and she remains steadfast against suggestions for the issuing of a eurobond. Yet Germany does have a plan for the eurozone, even if many prefer not to see it—a plan centered on Darwinian biopolitics and neoliberal economics.
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One-Pager No. 20 | November 2011As the crisis in Europe spreads, policymakers trot out one inadequate proposal after another, all failing to address the core problem. The possibility of dissolution, whether complete or partial, is looking less and less farfetched. Alongside political obstacles to reform, there is a widespread failure to understand the nature of this crisis. And without seeing clearly, policymakers will continue to focus on the wrong solutions.
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One-Pager No. 19 | November 2011The European Union’s survival depends on its ability to reform, either through enlargement—greater economic and fiscal coordination in the direction of some sort of federal state—or by getting smaller, with the eurozone becoming a true optimum currency area. Most analysts support the former proposition. But the rush to strengthen and expand the Union is precisely what led to the current crisis in the eurozone.Download:Associated Program:Author(s):Related Topic(s):
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One-Pager No. 18 | November 2011
Twin Strategies to Resolve the Eurozone Crisis—without Debt Buyouts, Sovereign Guarantees, Insurance Schemes, or Fiscal Transfers
View More View LessThe cancellation of the October 26 meeting of the European Union’s council of finance ministers, or Ecofin, has further eroded confidence in its ability to solve the burgeoning sovereign debt crisis in the eurozone. A viable strategy is needed now—and as Stuart Holland illustrates, two viable strategies are even better than one.
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One-Pager No. 17 | November 2011
More Austerity, a Deeper Slump, and the Surrender of National Sovereignty
It is a well-recognized fact that the Greek economy has been going from bad to worse since the first bailout in May 2010, and a leaked document relating to the bailout talks ahead of last week’s EU summit openly admitted that the policy of expansionary fiscal consolidation had been a blatant failure. So why did it take the EU leadership almost two years to recognize the need for a significant haircut on Greek debt?
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One-Pager No. 16 | October 2011
The American Jobs Act now before Congress relies largely on a policy of aggregate demand management, or “pump priming”: injecting demand into a frail economy in hopes of boosting growth and lowering unemployment. But this strategy, while beneficial in setting a floor beneath economic collapse, fails to produce and maintain full employment, while doing little to address income inequality. The alternative? Fiscal policy that directly targets unemployment by providing paid work to all those willing to do their part.
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One-Pager No. 15 | October 2011
The Merkel-Sarkozy Promise to End the Eurozone Crisis
Failure on the part of EU leaders to address the eurozone crisis is in large part due to the fact that Germany and France are at opposite poles—politically, economically, and culturally. In this context, the announcement by Germany’s Angela Merkel and French President Nicolas Sarkozy that they’ve agreed to a comprehensive package of proposals to solve the eurozone debt crisis is definitely a positive development. It indicates that they have set aside their disagreements—surely no small feat, since domestic political concerns have been pulling the two in completely opposite directions—in order to provide the leadership necessary for euro stability.
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One-Pager No. 14 | October 2011
Can the Blind Heal the Crippled?
Whoever said that economic science is free of ideological bias and political prejudice? Three hundred years of financial and economic crises have meant nothing to die-hard neoliberals, who believe in (among other things) self-regulating markets and trickle-down theory. With so many incorrect assumptions guiding market liberalism, it’s no wonder neoliberals have failed to draw the proper lessons from the Great Depression and turned a blind eye to the real causes of the global financial crisis of 2007–08 and the ensuing recession.
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One-Pager No. 13 | September 2011Research Scholar Greg Hannsgen and President Dimitri B. Papadimitriou disprove claims made by Social Security skeptics that the program is nothing more than a “Ponzi scheme.”
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One-Pager No. 12 | August 2011President Dimitri B. Papadimitriou and Research Scholar Greg Hannsgen make the case that the recession has turned into a prolonged and very unusual slump in growth, preventing a labor-market recovery—and the government lags far behind in creating the new jobs needed to deal with this disaster.
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One-Pager No. 11 | August 2011There is little mystery to explaining our current high levels of unemployment. The Bureau of Economic Analysis recently revised its figures on GDP growth, and revealed that not only was the recession worse than we realized, but recent growth rates have been overstated as well. The hole, in other words, was deeper than we thought, and we have been climbing out of it at a slower pace. Simply put, the economy has failed to recover to the point where it can be expected to generate sufficient job growth. In the event that Congress should turn its attention away from the (so far) purely notional dangers of rising debt levels and back toward the immediate and tangible jobs crisis, it might consider a solution that has been overlooked so far: job creation through social care investment.
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One-Pager No. 10 | June 2011With quantitative easing winding down and the latest payroll tax-cut measures set to expire at the end of this year, pressing questions loom about the current state of the US economic recovery and its ability to sustain itself in the absence of support from monetary and fiscal policy.
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One-Pager No. 9 | May 2011
The slow recovery of the job market after the recessions of 2001 and 2007–09 has fostered concerns that the link between output growth and job creation has been severed. Between 2000 and 2010, the employment rate for males plunged from 71.9 to 63.7 percent—a decline that can be accounted for almost entirely by a fall in the employment rate for the disabled members of this group.
Research Scholar Greg Hannsgen examines whether the Great Recession disproportionately affected the job prospects of disabled workers, and whether the long-run fall in employment among the disabled can be blamed largely on the design of Social Security disability insurance. His findings? At least since 2008, the ongoing fall in the probability of being employed has strongly affected the job prospects of both the disabled and the nondisabled, and the accelerated declines since 2007 hint at an important, and negative, role for the recent recession. Hence, a government jobs initiative such as an employer-of-last-resort program, and not just long-term improvements in entitlement programs, is still very much apropos.
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One-Pager No. 8 | February 2011
The economic crisis that has gripped the US economy since 2007 has highlighted Congress’s limited oversight of the Federal Reserve, and the limited transparency of the Fed’s actions. And since a Fed promise is ultimately a Treasury promise that carries the full faith and credit of the US government, the question is, Should the Fed be able to commit the public purse in times of national crisis?
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One-Pager No. 7 | November 2010
The stability of the international reserve currency’s purchasing power is less a question of what serves as that currency and more a question of the international adjustment mechanism, as well as the compatibility of export-led development strategies with international payment balances. Export-led growth and free capital flows are the real causes of sustained international imbalances. The only way out of this predicament is to shift to domestic demand–led development strategies—and capital flows will have to be part of the solution.
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One-Pager No. 6 | November 2010
Before we can reform the financial system, we need to understand what banks do—or, better yet, what banks should do. Senior Scholar L. Randall Wray examines Hyman Minsky’s views on banking and the proper role of the financial system—not simply to finance investment in physical capital but to promote the “capital development” of the economy as a whole and the improvement of living standards, broadly defined.
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One-Pager No. 5 | November 2010
The Need for More Profound Reforms
There is no justification for the belief that cutting spending or raising taxes by any amount will reduce the federal deficit, let alone permit solid growth. The worst fears about recent stimulative policies and rapid money-supply growth are proving to be incorrect once again. We must find the will to reinvigorate government and to maintain Keynesian macro stimulus in the face of ideological opposition and widespread mistrust of government.
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One-Pager No. 4 | November 2010
The Rescue Plan Cannot Address the Central Problem
The trillion-dollar rescue package European leaders aimed at the continent’s growing debt crisis in May might well have been code-named Panacea. Stocks rose throughout the region, but the reprieve was short-lived: markets fell on the realization that the bailout would not improve government finances going forward. The entire rescue plan rests on the assumption that the eurozone’s “problem children” can eventually get their fiscal houses in order. But no rescue plan can address the central problem: that countries with very different economies are yoked to the same currency.
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One-Pager No. 3 | May 2010
A year and a half after the collapse in the financial markets, the debate about necessary “reforms” is still in its early stages, and none of the debaters seriously claims that his solution will in fact prevent a new crisis. The problem is that the proposed remedies deal with superficial matters of industrial organization and regulatory procedure, while the real problems—outsized, ungovernable financial firms and rampant securitization—lie on a more profound level.
Download:Associated Program:Author(s):Martin MayerRelated Topic(s): -
One-Pager No. 2 | May 2010
What We Can Do Today to Straighten Out Financial Markets
Congress is currently debating new regulations for financial institutions in an effort to avoid a repeat of the recent crisis that brought the banking system to the brink. Some of those proposed changes would be valuable. But what nobody seems to have noticed is that the government already has the power to address some of the most important factors that contributed to the crisis. Today, right now, Washington could change a few key rules and prevent a repeat of the rampant speculation, and possible fraud, that led to so much trouble this last time around.
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One-Pager No. 1 | May 2010
How to End America's Trade Deficits
Now that America’s financial institutions have been brought back from the brink, the greatest threat to global economic stability is the gigantic trade imbalance between the United States, China, and other trading partners. A second big threat to economic stability, in the longer run, is global warming. Both problems are related to America’s addiction to cheap imports and foreign oil—bad habits that a clever cap-and-trade system could help us kick at last.
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