• OUT NOW: The Levy Institute Podcast  First episode with John Harvey and James K. Galbraith available on most podcast platforms.   MORE >>
  • Will the US Debt Ceiling Deal Derail the Pandemic Recovery? by Dimitri B. Papadimitriou, Michalis Nikiforos, Giuliano T. Yajima, and Gennaro Zezza  MORE >>
  • 30th Annual Levy Economics Institute Conference Held May 4, 2023 - Videos and recordings have been posted  MORE >>
  • Graduate Programs in Economic Theory and Policy Innovative programs with a professional focus  MORE >>
  • Has the Time Arrived for a Job Guarantee in Europe? by Rania Antonopoulos  MORE >>
  • POLICY NOTE: In Defense of Low Interest Rates           by James K. Galbraith  MORE >>
  • Greece: Time to Reduce the Dependency on Imports  by D.B. Papadimitriou, N. Rodousakis, G. T. Yajima, G. Zezza  MORE >>
  • Impacts of the Global Health Pandemic            MORE >>
  • New Directions in Money, Finance, and Public Policy  MORE >>

Levy Institute Publications

  • Greece: Time to Reduce the Dependency on Imports


    Strategic Analysis, February 2024 | February 2024 | Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, Gennaro Zezza
    In this report, Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano T. Yajima, and Gennaro Zezza investigate the determinants of the recent performance of the Greek economy.
     
    Despite geopolitical instability from the continuing Ukraine-Russia and Israel-Gaza wars and higher-than-expected inflation rates, the country has managed to register the highest growth rates among eurozone member-states in 2021 and 2022.
     
    Yet the authors’ projections, based on 2023Q3 official statistics, show that there will be a deceleration of GDP growth in the upcoming two years. This will be driven mainly by sluggish consumption demand due to the falling trend of real wages and persistent higher imported inflation, coupled with the inability of the government to deploy NGEU funds and a significant loss of production due to climate damage from floods and fires. These dynamics will likely continue the brain drain of skilled workers, who opt to move abroad for better employment opportunities. The overreliance of the Greek economy on tourism is also questioned, given the dependency on foreign industrial inputs.

  • Has the Time Arrived for a Job Guarantee in Europe?


    One-Pager No. 71 | December 2023 | Rania Antonopoulos
    In comparison to the policy responses in the aftermath of the 2008–9 global financial crisis, the reactions of EU policymakers to the combined shocks of the COVID-19 crisis and Ukraine-Russia conflict reveal a greater willingness to deploy public finance in support of the population. Yet, while this display of renewed solidarity is commendable, policymakers have a long way to go in building a more resilient and sustainable EU. A confrontation with long-standing “business as usual” EU rules and policies is necessary, and it is in this context that the job guarantee deserves serious consideration. Acting for the common purpose of reducing and eventually eliminating long-term unemployment would send a clear message that a Social Europe is possible.

  • Effects of Forced Formalization (Demonetization) in the Indian Economy 


    Policy Note 2023/4 | August 2023 | Nischal Dhungel
    Nischal Dhungel examines the impact of India’s demonetization experiment—an effort at “forced formalization” of the economy. He urges a more organic approach to formalization, pairing efforts to bring the unbanked population into the banking system with greater funding and accessibility for India’s signature employment guarantee program.

  • In Defense of Low Interest Rates


    Policy Note 2023/3 | July 2023 | James K. Galbraith
    In recalling John Maynard Keynes’s revolutionary theory of interest, reviewing the doctrines Keynes sought to overthrow, and analyzing the structural transformations of the US economy, James K. Galbraith maintains there is no alternative to a policy of low interest rates. However, such a policy cannot be effective, he argues, without a radical restructuring of the US economy as a whole.

  • Empirical Models of Chinese Government Bond Yields


    Working Paper No. 1044 | February 2024 | Tanweer Akram, Shahida Pervin
    This paper econometrically models the dynamics of long-term Chinese government bond (CGB) yields based on key macroeconomic and financial variables. It deploys autoregressive distributive lag (ARDL) models to examine whether the short-term interest rate has a decisive influence on the long-term CGB yield, after controlling for various macroeconomic and financial variables, such as inflation or core inflation, the growth of industrial production, the percentage change in the stock price index, the exchange rate of the Chinese yuan, and the balance sheet of the People’s Bank of China (PBOC). The findings show that the short-term interest rate has an economically and statistically significant effect on the long-term CGB yield of various maturity tenors. John Maynard Keynes claimed that the central bank’s policy rate exerts an important influence over long-term government bond yields through the short-term interest rate. The paper’s findings evince that Keynes’s claim holds for China, implying that the PBOC’s actions are a driver of the long-term CGB yield. This means that policymakers in China have considerable leeway in fiscal and monetary operations, government deficit finance, and central government debt management.

  • Interest Rate Dynamics: An Examination of Mainstream and Keynesian Empirical Studies


    Working Paper No. 1043 | February 2024 | Tanweer Akram, Khawaja Mamun
    This paper critically reviews both mainstream and Keynesian empirical studies of interest rate dynamics. It assesses the key findings of a selected number of these studies, surveying the debates between the mainstream and the Keynesian schools. It also explores the debates on interest rate dynamics within the Post Keynesian school of thought. Lastly, the paper identifies the critical questions relevant for future empirical research.

  • Saving Social Security


    Working Paper No. 1042 | February 2024 | Edward Lane
    For more than 25 years, the Social Security Trust Fund was projected to run out of money in 2033 (give or take a few years), potentially causing benefits to be severely reduced in the absence of corrective legislative action. Today (February 2024), projections are made by the Social Security Administration that indicate that future benefits will need to be reduced by roughly 25 percent or taxes will need to be increased by about 33 percent, or some combination to avoid benefit curtailment. While Congress will most probably prevent benefits from being reduced for retirees and those nearing retirement, the longer Congress and the president take to address the shortfall, the more politically unpalatable (and possibly draconian) the solutions will be for all others.
     
    Dozens of proposals are being evaluated to address the long-term problem by mainstream benefits experts, economists, think tanks, politicians, and government agencies but, with rare exceptions from a few economists, none address the short-term problem of Trust Fund depletion, provide a workable roadmap for the long-term challenges, or consider fundamental financing differences between the federal government and the private sector.
     
    This paper aims to address these issues by suggesting legislative changes that will protect the Social Security system indefinitely, help ensure the adequacy of benefits for retirees and their survivors and dependents, and remove confusing and misleading legislative and administrative complexity. In making recommendations, this paper will demonstrate that the Social Security Trust Funds, while legally distinct, are essentially an artificial accounting contrivance within the US Treasury that have become a tool to force program changes that, for ideological reasons, will likely shift an increasing financial burden onto those who can least bear it.  Finally, while the focus of this paper is on the Social Security system, it would be incomplete without also addressing, albeit in a limited way, the larger political issue of the nation’s debt and deficit along with the implications for inflation.

  • Amazon Green Recovery and Labor Market in Brazil


    Working Paper No. 1041 | February 2024 | Luiza Nassif Pires, Gilberto Tadeu Lima, Pedro Romero Marques, Tainari Taioka, José Bergamin
    Can Green Spending Reduce Gender and Race Inequalities?
    Announced in June 2021, the never-implemented Green Recovery Plan for the Brazilian Legal Amazon Region (GRP) would be a green transition initiative to be carried out by the state governments of the region. The GRP represented the first large-scale proposal aiming at the transition to a low-carbon economy in Brazil and offered a preliminary framework to evaluate the opportunities and limitations of green development in Global South economies. The GRP's initial phase would provide an investment of 1.5 billion reais (around $315 million in September 2023) in four areas: control of illegal deforestation, sustainable development, green technology, and green infrastructure. This article presents a counterfactual analysis by assessing the impacts of green spending in Amazon on the labor market, quantitatively—in terms of the number of jobs created—and qualitatively—exploring the distribution of those jobs by region and according to gender and race categories. We build synthetic sectors representing each area of investment in a two-region input-output matrix (“Brazilian Amazon” and “Rest of Brazil”). Using employment multipliers, we simulate a demand shock on the Amazonian economy and its impact on job creation in the two regions.  Results suggest that green spending in the Amazon offers good perspectives (but also highlights limitations) for a just transition to a low-carbon economy in Brazil: the effects on employment favored the female workforce (both black and white) relative to the male and black workforce in the Amazon, leading to inequality-reducing composition changes in the Brazilian workforce as whole.
    Download:
    Associated Program(s):
    Author(s):
    Luiza Nassif Pires Gilberto Tadeu Lima Pedro Romero Marques Tainari Taioka José Bergamin
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  • COP28 and Environmental Federalism: Empirical Evidence from an Emerging Economy, India


    Working Paper No. 1040 | February 2024 | Lekha S. Chakraborty, Amandeep Kaur, Ranjan Kumar Mohanty, Divy Rangan, Sanjana Das
    Against the backdrop of COP28, this paper investigates the impact of intergovernmental fiscal transfers (IGFT) on climate change commitments in India. Within the analytical framework of environmental federalism, we tested the evidence for the Environmental Kuznets Curve (EKC) using a panel model covering 27 Indian states from 2003 to 2020. The results suggest a positive and significant relationship between IGFT and the net forest cover (NFC) across Indian states. The analysis also suggests an inverse-U relationship between Gross State Domestic Product (GSDP) and the environmental quality, indicating a potential EKC for India. The findings substantiate the fiscal policy impacts for climate change commitments within the fiscal federal frameworks of India, and the significance of IGFT in increasing the forest cover in India. This has policy implications for the Sixteenth Finance Commission of India in integrating a climate change–related criterion in the tax-transfer formula in a sustainable manner. 
    Download:
    Associated Program(s):
    Author(s):
    Lekha S. Chakraborty Amandeep Kaur Ranjan Kumar Mohanty Divy Rangan Sanjana Das
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  • Can the Philippines attain 6.5–8 Percent Growth During 2023–28?


    Working Paper No. 1039 | February 2024 | Jesus Felipe, Manuel L. Albis
    An Assessment Based on the Estimation of the Balance-of-Payments–Constrained Growth Rate
    We expand the standard balance-of-payments–constrained (BOPC) growth rate model in three directions. First, we take into account the separate contributions of exports in goods, exports in services, overseas remittances, and foreign direct investment (FDI) inflows. Second, we use state-space estimation techniques to obtain time-varying parameters of the relevant coefficients. Third, we test for the endogeneity of output in the import equation. We apply this framework to assess the feasibility of the target set by the new Philippine administration of President Marcos (elected in 2022) to attain an annual GDP growth rate of 6.5–8 percent during 2024–28. We obtain an estimate of the growth rate consistent with equilibrium in the basic balance of the Philippines of about 6.5 percent in 2021 (and declining during the years prior to it). This BOPC growth rate is below the 6.5–8 percent target. We also find that exchange-rate depreciations will not lead to an improvement in the BOPC growth rate. The Philippines must lift the constraints that impede a higher growth of exports. In particular, it must shift its export structure toward more sophisticated products with a higher income elasticity of demand.
    Download:
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    Author(s):
    Jesus Felipe Manuel L. Albis
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  • Economic Possibilities for Our Grandchildren—90 Years Later


    Working Paper No. 1038 | January 2024 | Jörg Bibow
    This paper revisits Keynes’s (1930) essay titled “The economic possibilities for our grandchildren.” We discuss the three broader trends identified by Keynes that he expected would come to characterize the socio-economic evolution of advanced countries under individualistic capitalism: first, continued technological progress and capital accumulation as the main drivers of exponential growth in economic possibilities; second, a gradual general rebalancing of life choices away from work; and third, a change in the code of morals in societies approaching an envisioned stationary state of zero net capital accumulation in which mankind has solved its economic problem and enjoys a lifestyle predominantly framed by leisure rather than disutility-yielding work. We assess actual outcomes by 2023 and attempt to peek into the future economic possibilities for this generation’s grandchildren.

  • Markups, Profit Shares, and Cost-Push-Profit-Led Inflation


    Working Paper No. 1037 | January 2024 | Michalis Nikiforos, Simon Grothe, Jan David Weber
    The post-pandemic surge in inflation was accompanied by a surge in the corporate share of profits. As a result, several economists and policy makers have given to it names such as “profit-led inflation” or “sellers’ inflation.” The present paper discusses the extent to which profit-led inflation, as an explanation for the recent surge in inflation, is compatible with what we know about the price-setting behavior of firms, income distribution, and inflation. We do that in juxtaposition to two recent critiques: that the increase in the profit share is the result of cyclical factors, and that the increase in import prices leads to higher profit shares even under constant markups. We show that there is little evidence that the recent surge in profitability is cyclical in nature. Moreover, after outlining the Structuralist/Kaleckian theories of prices and inflation we argue that profit-led inflation does not require an increase in the markup of the firms and is consistent with these theories. In the face of large import and other price shocks even under constant markups, firms are able to pass the burden of adjustment to real wages. Thus, the term profit-led emphasizes the distributional source and consequences of inflation. We also provide an empirical examination of the markups in the post-pandemic period using data from the Compustat database. We show that, on average, firms were able to increase or maintain their markups, although there is significant heterogeneity across sectors or the position of the firms in the distribution of markups.

  • Will the US Debt Ceiling Deal Derail the Pandemic Recovery?


    Strategic Analysis, July 2023 | July 2023 | Dimitri B. Papadimitriou, Michalis Nikiforos, Giuliano Toshiro Yajima, Gennaro Zezza
    In this Strategic Analysis, Dimitri B. Papadimitriou, Michalis Nikiforos, Giuliano T. Yajima, and Gennaro Zezza discuss how the current state and structural features of the US economy might affect its future trajectory. The recent recovery after the pandemic has been remarkable, when compared to previous cycles, and offers evidence of the efficacy of fiscal policy. Moreover, the inflation rate has been finally decelerating as the problems in global value chains that emerged after the pandemic are resolving and the price of commodities and oil, which spiked after the pandemic and the war in Ukraine, are stabilizing.

    Yet despite the recent success of fiscal policy in promoting output and employment growth, the recent debt ceiling deal—culminating in the 2023 Fiscal Responsibility Act—risks putting the US economy on the austerity path of the previous decade. And given the structural weaknesses of the US economy—including its high current account deficits, high level of indebtedness of firms, and overvalued stock and real estate prices—this projected fiscal policy tightening, combined with the impacts of high interest rates, could lead to a significant slowdown of the US economy.

    The US economy, the authors contend, is in need of a structural transformation toward modernizing its infrastructure, promoting industrial policy, and investing in the greening of its economy and environmental sustainability. A necessary condition for achieving these goals is an increase in government expenditure; they show that such an increase could also have positive demand effects on output and employment. 

  • The Challenges for the New Greek Government


    Policy Note 2023/2 | June 2023 | Dimitri B. Papadimitriou, Nikolaos Rodousakis
    Following the recent (June 25, 2023) elections in Greece, Institute President Dimitri B. Papadimitriou and Research Scholar Nikolaos Rodousakis outline the economic and policy challenges facing the Greek government.

  • Greece: Recovery, or Another Recession?


    Strategic Analysis, October 2022 | October 2022 | Dimitri B. Papadimitriou, Nikolaos Rodousakis, Gennaro Zezza
    In this strategic analysis, Institute President Dimitri B. Papadimitriou, Senior Scholar Gennaro Zezza, and Research Associate Nikolaos Rodousakis discuss the medium-term prospects for the Greek economy in a time of increasing uncertainty—due to the geopolitical turbulence emanating from the Ukraine–Russian conflict, with its impact on the cost of energy, as well as the increase in international prices of some commodities.

    Growth projections for the current year are lower than those recorded in 2021, indicating the economy needs to perform much better if it is to continue on the growth path that began in the pre-pandemic period.  Similarly, growth projections for 2023 and 2024 appear much weaker, denoting serious consequences may be in store.

    With increasing price levels and the euro depreciating, an economy like Greece’s that is highly dependent on increasingly costly imports will become more fragile as the current account deficit widens. In the authors’ view, the continuous recovery of the Greek economy rests with the government’s ability to utilize the NGEU funds swiftly and efficiently for projects that will increase the country’s productive capacity.
     

  • The Causes of Pandemic Inflation


    One-Pager No. 70 | December 2022 | L. Randall Wray
    While the trigger for the Covid recession was unusual—a collapse of the supply side that produced a drop in demand—the inflation the US economy is now facing is not atypical, according to L. Randall Wray. In this one-pager, he explores the causes of the current inflationary environment, arguing that continuing inflation pressures come mostly from the supply side.

    Wray warns that, given federal spending had already been declining substantially before the Fed started raising interest rates, rate hikes make a recession—and potentially stagflation—even more likely. A key part of our fiscal policy response should be focused on well-designed public investment addressing the substantial supply constraints still affecting the US economy—constraints that are not just due to the Covid crisis, but also decades of underinvestment in infrastructure. Such an approach, in Wray's view, would reduce inflationary pressures while supporting growth.
     

  • Is It Time for Rate Hikes?


    Public Policy Brief No. 157 | April 2022 | Yeva Nersisyan, L. Randall Wray
    The Fed Cannot Engineer a Soft Landing but Risks Stagflation by Trying
    Roughly two years into the economic recovery from the COVID-19 crisis, the topic of elevated inflation dominates the economic policy discourse in the United States. And the aggressive use of fiscal policy to support demand and incomes has commonly been singled out as the culprit. Equally as prevalent is the clamor for the Federal Reserve to raise interest rates to relieve inflationary pressures. According to Research Scholar Yeva Nersisyan and Senior Scholar L. Randall Wray, this narrative is flawed in a number of ways. The problem with the US economy is not one of excess of demand in their view, and the Federal Reserve will not be able to engineer a “soft landing” in the way many seem to be expecting. The authors also deliver a warning: excessive tightening, combined with headwinds in 2022, could lead to stagflation. Moreover, while this recovery looks robust in comparison to the jobless recoveries and secular stagnation that have typified the last few decades, in Nersisyan and Wray’s estimation there are few signs of an overheating economy to be found in the macro data. In their view, this inflation is not centrally demand driven; rather dynamics at the micro-level are playing a much more central role in driving the price increases in question, while significant supply chain problems have curtailed productive capacity by disrupting the availability of critical inputs.

    The authors suggest there is a better way to conduct policy—one oriented around targeted investments that would increase our real resource space. This will serve not only to address inflationary pressures, according to Nersisyan and Wray, but also the far more pressing climate emergency.

  • Still Flying Blind after All These Years


    Public Policy Brief No. 156 | December 2021 | Dimitri B. Papadimitriou, L. Randall Wray
    The Federal Reserve’s Continuing Experiments with Unobservables
    Institute President Dimitri B. Papadimitriou and Senior Scholar L. Randall Wray contend that the prevailing approach to monetary policy and inflation is influenced by a set of concepts that are a poor guide to action. In this policy brief, they examine two previous cases in which the Federal Reserve misread the data and raised rates too soon, as well as the evolution of the Fed’s thought and practice over the past three decades—a period in which the central bank has increasingly turned to unobservable indicators that are supposed to predict inflation. Noting that their criticisms have now been raised by the Fed’s own members and research staff, the authors highlight the ways in which we need to rethink our overall framework for monetary and fiscal policy. The Fed has far less control over inflation than is presumed, they argue, and, at worst, might have the whole inflation-fighting strategy backwards. Managing inflation, they conclude, should not be left entirely in the hands of central banks.

  • What Is MMT’s State of Play in Washington?


    e-pamphlet, August 2021 | August 2021 | L. Randall Wray
    Modern Money Theory (MMT) has been frequently mentioned in recent media—first as “crazy talk” that if followed would bankrupt the nation and then, after the COVID-19 pandemic hit, as a way to finance an emergency response. In recent months, however, Washington seems to have returned to the old view that government spending must be “paid for” with new taxes. This raises the question: Has MMT really made headway with policymakers? This e-pamphlet examines the extraordinary interview given recently by Representative John Yarmuth’s (D, KY-03), Chair of the House Budget Committee, in which he explicitly adopts an MMT approach to budgeting. Chairman Yarmuth also lays out a path for realizing the major elements of President Biden’s proposals. Finally, Wray summarizes a recent presentation he gave to the Congressional Budget Office’s Macroeconomic Analysis section that urged reconsideration of the way that fiscal policy impacts are assessed.

  • Statement of Senior Scholar L. Randall Wray to the House Budget Committee, US House of Representatives


    Testimony, November 20, 2019 | November 2019 | L. Randall Wray, Yeva Nersisyan
    Reexamining the Economic Costs of Debt
    On November 20, 2019, Senior Scholar L. Randall Wray testified before the House Committee on the Budget on the topic of reexamining the economic costs of debt:

    "In recent months a new approach to national government budgets, deficits, and debts—Modern Money Theory (MMT)—has been the subject of discussion and controversy. [. . .]

    In this testimony I do not want to rehash the theoretical foundations of MMT. Instead I will highlight empirical facts with the goal of explaining the causes and consequences of the intransigent federal budget deficits and the growing national government debt. I hope that developing an understanding of the dynamics involved will make the topic of deficits and debt less daunting. I will conclude by summarizing the MMT views on this topic, hoping to set the record straight."

    Update 1/7/2020: In an appendix, L. Randall Wray responds to a Question for the Record submitted by Rep. Ilhan Omar

  • Scope and Effects of Reducing Time Deficits via Intrahousehold Redistribution of Household Production


    Research Project Report, July 2021 | July 2021 | Ajit Zacharias, Thomas Masterson, Fernando Rios-Avila, Abena D. Oduro
    Evidence from sub-Saharan Africa
    Gender disparity in the division of responsibilities for unpaid care and domestic work (household production) is a central and pervasive component of inequalities between men and women and boys and girls. Reducing disparity in household production figures as one element of the goal of gender equality enshrined in the United Nations’ Sustainable Development Goals (SDGs) and feminist scholars and political activists have articulated that the redistribution of household production responsibilities from females to males is important for its own sake, as well as for achieving gender equality in labor market outcomes. A cursory examination of available cross-country data indicates that higher per capita GDP—the neoliberal panacea for most societal malaise—provides little bulwark against the gender inequality in household production.
     
    Ajit Zacharias, Thomas Masterson, Fernando Rios-Avila, and Abena D. Oduro contribute to the literature on the intrahousehold distribution of household production by placing the question within a framework of analyzing deprivation, applying that framework to better understand the interactions between poverty and the gendered division of labor in four sub-Saharan African nations: Ethiopia, Ghana, South Africa, and Tanzania. Central to their framework is the notion that attaining a minimal standard of living requires command over an adequate basket of commodities and sufficient time to be spent on home production, where meeting those requirements produces benefits for all—including those beyond the household.
     
    Their findings motivate questions regarding the feasibility and effectiveness of redistribution of household responsibilities to alleviate time deficits and their impoverishing effects. By developing a framework to assess the mechanics of redistribution among family members and applying it to gender-based redistribution, they derive the maximum extent to which redistribution—either among all family members, between sexes, or between husbands and wives—can lower the incidence of time deficits. The conclude with a discussion of alternative principles of distributing household production responsibilities among family members and examine their impact on the Levy Institute Measure of Time and Income Poverty (LIMTCP) and discuss some policy questions in light of their findings.

  • Public Service Employment


    Research Project Report, April 2018 | April 2018 | L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, Stephanie A. Kelton
    A Path to Full Employment
    Despite reports of a healthy US labor market, millions of Americans remain unemployed and underemployed, or have simply given up looking for work. It is a problem that plagues our economy in good times and in bad—there are never enough jobs available for all who want to work. L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton examine the impact of a new “job guarantee” proposal that would seek to eliminate involuntary unemployment by directly creating jobs in the communities where they are needed.
     
    The authors propose the creation of a Public Service Employment (PSE) program that would offer a job at a living wage to all who are ready and willing to work. Federally funded but with a decentralized administration, the PSE program would pay $15 per hour and offer a basic package of benefits. This report simulates the economic impact over a ten-year period of implementing the PSE program beginning in 2018Q1.
     
    Unemployment, hidden and official, with all of its attendant social harms, is a policy choice. The results in this report lend more weight to the argument that it is a policy choice we need no longer tolerate. True full employment is both achievable and sustainable.

  • The Macroeconomic Effects of Student Debt Cancellation


    Research Project Report, February 2018 | February 2018 | Scott Fullwiler, Stephanie A. Kelton, Catherine Ruetschlin, Marshall Steinbaum
    Among the more ambitious policies that have been proposed to address the problem of escalating student loan debt are various forms of debt cancellation. In this report, Scott Fullwiler, Research Associate Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum examine the likely macroeconomic impacts of a one-time, federally funded cancellation of all outstanding student debt.

    The report analyzes households’ mounting reliance on debt to finance higher education, including the distributive implications of student debt and debt cancellation; describes the financial mechanics required to carry out the cancellation of debt held by the Department of Education (which makes up the vast majority of student loans outstanding) as well as privately owned student debt; and uses two macroeconometric models to provide a plausible range for the likely impacts of student debt cancellation on key economic variables over a 10-year horizon.

    The authors find that cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates, and inflation (while state budgets improve). These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of US higher education policy.
     

  • Time to Celebrate Modern Money Theory?


    One-Pager No. 69 | February 2022 | Yeva Nersisyan, L. Randall Wray
    A recent article in the New York Times asks whether Modern Money Theory (MMT) can declare victory after its policies were (supposedly) implemented during the response to the COVID-19 pandemic. The article suggests yes, but for the high inflation it sparked. In the view of Yeva Nersisyan and Senior Scholar L. Randall Wray, the federal government’s response largely validated MMT’s claims regarding public debt and deficits and questions of sovereign government solvency—it did not, however, represent MMT policy.

  • A Great Leap Forward


    Book Series, January 2020 | January 2020 | L. Randall Wray
    Heterodox Economic Policy for the 21st Century
    A Great Leap Forward: Heterodox Economic Policy for the 21st Century investigates economic policy from a heterodox and progressive perspective. Author Randall Wray uses relatively short chapters arranged around several macroeconomic policy themes to present an integrated survey of progressive policy on topics of interest today that are likely to remain topics of interest for many years.

    Published by: Elsevier Press
Ford-Levy Institute Projects
 
Levy Institute Publications in Greek

From the Press Room

Read Senior Scholar James K. Galbraith's article, "Entropy, the Theory of Value and the Future of Humanity" featured by the Economic Democracy Initiative. 


Bard College’s Levy Economics Institute Receives $500,000 Hewlett Grant for its Gender Equality and the Economy Program

Listen to Levy Scholar Pavlina Tcherneva on Back Ground Briefing with Ian Masters, "The Disconnect Between Biden’s Great Economic Numbers and How Voters Feel about the Economy"


William Waller, Senior Scholar at the Levy Economic Institute, Mary Wrenn, Senior Lecturer at University of the West of England, and Matthew Watson, Professor of Political Economy at Warwick University discussed Thorstein Veblen’s book, The Theory of the Leisure Class on In Our Times with Melvyn Bragg on BBC4 on Thursday, November 9th


Institute Scholar Michalis Nikiforos and Simon Grothe's article "Markups, Profit Shares, and Cost-Push-Profit-Led Inflation" was featured by the Institute for New Economic Thinking 


Rania Antonopoulos spoke in support of a European Job Guarantee during the 15th Congress of the European Trade Union Confederation


Levy Economics Institute of Bard College Receives $211,000 to Continue Study of Potential Impacts of Policies that Expand Care Services in Mexico

Read Yeva Nersisyan and L. Randall Wray's latest op-ed on SVB and the Fed


Institute Scholar Yeva Nersisyan's op-ed "Lowering inflation isn't a job for a one-trick pony" featured in The Hill