Commentary

This memo estimates the annual statewide cost of implementing the Student Voter Empowerment Act (A.3954–A/S2056-A). The Act requires every public and private college or university campus in New York State to designate a Student Voting Coordinator and maintain a baseline set of nonpartisan voter outreach, voter education, and annual reporting activities. Since the enactment of the 26th Amendment in 1971, which lowered the voting age from 21 to 18, colleges and universities have been important venues for voter registration and voting. There are particular barriers to registration and voting for college students, many of whom are voting for the first time and reside away from home. This is reflected in voter data for youth voters, who, as a whole, consistently vote less frequently. According to the US Census Bureau, in 2024, voter turnout among 18–24 year olds was only 47.7%, 27 points behind the 65+ group (74.7%). In the 2022 midterms, there was an even greater gap, with only 27.6% of 18-24 year olds voting, nearly 40 points fewer than the turnout of the 65+ group (66.8%). New York State does not fare well in the youth voter category. According to data compiled by Tufts University’s Center for Information and Research on Civic Learning & Engagement, in the 2024 general election, New York had the lowest youth voter turnout rate…more

The return of Judy Shelton to the center of the monetary policy debate has been greeted by the financial press with a mixture of alarm and condescension. While critics fixate on her affinity for the gold standard (and with good reason), they are missing the more profound shift her presence represents: a long-overdue challenge to the Federal Reserve’s failing operational framework. At the Levy Economics Institute, we have spent decades arguing that the Fed’s “orthodoxy”, i.e., the belief that interest rates are a precise tool for managing the macroeconomy, is a dangerous myth. Shelton’s recent advocacy for a “wholesale rethink” of the Fed’s model is a welcome development and hardly “nutty.” It also aligns with several core critiques we have developed at Levy regarding inflation targeting and bank subsidies. The Demand-Side Delusion The Fed’s current playbook is built on a 1970s-era preoccupation with suppressing incomes, employment and overall demand to tame inflation. As we have argued in our Levy Institute Capitol Hill series, this is a fundamental category error. Inflationary bouts in the postwar were not driven by “excess demand” but by supply-side disruptions: energy shocks, logistical bottlenecks, and geopolitical shifts. The Fed cannot drill for oil or build clean energy and microchips by raising the federal funds rate. In fact, by making the cost of capital more expensive, the…more

A PDF of this document can be found here. “Congress retains the ultimate authority to instruct, to direct, and to even redefine the Federal Reserve’s objectives” — Pavlina Tcherneva, President, Levy Economics Institute   As the independence of the Federal Reserve is publicly under threat from the Trump White House, the Levy Economics Institute brought together leading economic thinkers to discuss the important role Congress must play in preserving the independence of the Federal Reserve. Levy Scholar L. Randall Wray made the important distinction that the Federal Reserve is a creature of Congress that is “independent within government,” not independent from it. It is up to Congress to make sure that the Federal Reserve follows its mandate through strong oversight. Three main takeaways on Federal Reserve independence: The Federal Reserve is a creature of Congress and should be responsible to Congress, not the executive branch. An openly political Federal Reserve that is controlled by the White House would compromise trust in the institution. Congress should instruct the Federal Reserve to pursue achievable goals: stability, regulation, and maintaining the payment system. The Fed’s flawed, inflation-targeting framework and limited tools: The Fed consistently raises interest rates not in response to inflation but when the unemployment rate hits cyclical lows—effectively tightening policy to discipline the labor market. US inflation has historically been supply-side…more

This article has been cross-posted from its original appearance in the Indian Express (published December 20, 2025). Please read the open letter to the Indian Government in Support of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and add your name to the list of experts calling for the preservation of the NREGA law. The VB-G RAM G Bill is all set to sink India’s employment guarantee in the guise of revamping it. Twenty years ago, India acted as a viswaguru (world teacher) of sorts by launching the National Rural Employment Guarantee Act. The idea was not entirely new – Maharashtra had already shown the way with its own employment guarantee scheme from the early 1970s onwards. But NREGA took the idea much further, and became an inspiration for the world. The Act was the culmination of a year-long process of public deliberation involving social movements, workers’ organisations, the National Advisory Council, the Prime Minister’s Office, several Ministries, and of course the Parliament, including an active Standing Committee chaired by Member of Parliament Kalyan Singh from the Bharatiya Janata Party (BJP). This was a national initiative beyond party lines, with unanimous support in Parliament at decision time. Six years later, in 2011-12, important evidence emerged that the programme was doing quite well. At that time, MGNREGA (as it was…more

Two crucial questions drive our recently published working paper: (1) how is it possible to have trends in income and consumption inequality as divergent as those observable in the US in the last decades; and (2) what happens when households spend more than their income by borrowing, largely because they want to “keep up” with others? As we will argue, the answers are strictly interwoven. Over the last three decades, the US economy has exhibited a heavily skewed distribution of income and wealth. The bottom 20 percent of households consistently receives only around 5 percent of total disposable income, while the top quintile captures about half of disposable income and an increasing share of total net wealth—currently around 70 percent. Income inequality, measured as the ratio of top-to-bottom quintile disposable income, has steadily risen, as the sum of the top 20 percent households’ incomes has risen over 16 times the sum of incomes earned by the lowest 20 percent. By contrast, the top quintile’s consumption relative to the bottom has remained lower and relatively stable. The bottom 20 percent have historically carried the highest debt-to-income ratios, peaking during the Great Recession at just under 140 percent, while their liabilities have grown faster than those of the other quintiles over the past 20 years, highlighting the critical role of borrowing in…more

Back in the early 2000s, financial market participants would wisecrack that unlikely events that should happen once in 10,000 years were occurring every month. We know where that led—to the Global Financial Crisis. Everything crashed. The Fed had to spend and lend $29 trillion to bail out the world’s financial system. It took economies a decade to recover. Today we read in the press that the frequencies of floods, droughts, glaciers melting, coral bleaching, heat records, severe hurricanes, and tornadoes have all jumped outside several standard deviations of the possible. Even aside from the threat to life and limb, the risk to property is becoming uninsurable and the coming hit to finance is unbearable. The evidence that we face immense and complex challenges related to climate catastrophe is overwhelming. Not in the near future, but now. And, yet, with the second coming of Trump, the USA is undoing the few positive steps that have been taken over the past couple of decades. There is no need to recount the details here—Trump’s attack on anything that smells of greening is in the news every day. Any talk of “environmental sustainability” is subversive, cancelled, and scrubbed off government and corporate websites. The reception that Trump received on his recent trip to Scotland reminded me of a documentary that I reviewed back in…more

On July 19, 2025, the Seminar on Modern Monetary Theory and the Launch of New Macroeconomics was held in the main hall of the Mingde Building (明德楼) at Renmin University （人民大学）of China. The event was jointly hosted by the School of Economics at Renmin University, the Central Compilation and Translation Press, and the Ministry of Education’s “101 Project” virtual teaching and research office for economic history and history of economic thought, with co-organization by the School of Economics at Beijing Institute of Technology. Over 40 scholars, experts, and students from more than 10 universities and research institutions—including Renmin University, Peking University, the Party School of the Central Committee of CPC (National Academy of Governance), Beijing Institute of Technology, Capital University of Economics and Business, Chinese Academy of Sciences, Chinese Academy of Social Sciences, University of Chinese Academy of Social Sciences, Central University of Finance and Economics, Nankai University, Tianjin University of Finance and Economics, and Nanjing University of Posts and Telecommunications, as well as the Agricultural Bank of China and China Construction Bank—participated in the event. The discussions centered around Modern Monetary Theory (MMT) and current issues in the Chinese economy. First Session: Book Launch The book launch was chaired by Professor Fan Zhiyong, Deputy Party Secretary of the School of Economics at Renmin University and professor of macroeconomics. Opening…more

Attempts to undermine Social Security have been ongoing since its enactment in 1935. As the Social Security Administration projects trust fund insolvency by 2033 and Congress looks for deep spending cuts, the pressure is mounting for Social Security benefit cutbacks, despite promises from President Trump and House Speaker Johnson not to reduce benefits. While extending the full retirement age is a focus for benefit cutbacks, some are advocating for a form of privatization (i.e., individual accounts). Elon Musk’s reference to Social Security as a Ponzi scheme only serves to undermine the current system and give weight to this ill-conceived idea. As a former consulting actuary, consultant to the Office of Personnel Management (OPM) during the 1980s studying replacement plans for the Civil Service Retirement System with the private sector in mind, and a consultant to and observer of many corporations’ revisions of defined benefit pension plans in favor 401(k) savings or hybrid individual account (“cash balance”) plans, I have not observed a single instance when the motivation for program change was to increase benefits for employees. The goal was always to reduce the sponsor cost and/or shift the investment risk to employees. The reason is simple: replacing all or a portion of a defined benefit program with an individual account plan (without substantially increasing employer cost) shifts financial burden and…more

On June 16, 2025, I will welcome colleagues and friends to the 32nd Annual Conference of the Levy Economics Institute—our first in-person gathering since the pandemic, convening at a moment of extraordinary economic upheaval. The challenges before us are among the most consequential in a century: a global trade order in disarray, deepening economic insecurity for working families, a financial sector growing more complex and opaque, and the urgent need for climate finance and new development paradigms. We are navigating yet another phase of global economic turmoil—one that demands the bold, innovative thinking the Levy Institute has championed for decades. The Levy Impact Our research on financial instability became the definitive analysis during and after the Global Financial Crisis. More recently, our work on modern money and public finance reshaped debates around the necessary—and unprecedented—fiscal responses to the COVID crisis. Our job guarantee proposal has influenced global policy discussions, offering a viable alternative to means-tested welfare and punitive “workfare” systems. Despite the post-COVID rebound, deep structural fissures in the American economy persist, fueling voter discontent and reshaping political landscapes. Against this backdrop, this year’s conference examines four critical themes: The evolution—and vulnerabilities—of the financial sector since the Global Financial Crisis, including climate finance and emergent risks through a Minskyan lens; The promise and limits of crisis response tools, assessing fiscal/monetary…more

Our eminent French economist colleague, Edwin Le Héron, passed away on 23 April 2025 in Bordeaux. A professor at Sciences Po Bordeaux since 1987, he was the founder and long-standing president of the Association pour le Développement des Études Keynésiennes (ADEK), established in 2000. ADEK has brought together French-speaking post-keynesian economists and organized major international post-keynesian conferences in Dijon, Grenoble, and Lille. A committed Keynesian, Edwin Le Héron collaborated with Alain Barrère in the 1980s and played a pivotal role in advancing pluralism in French academic economics. He consistently supported the recruitment and integration of heterodox economists. He was a member of the Board of Directors of both the Association Française d’Économie Politique (AFEP) and the collective “Économistes Atterrés.” In recognition of his academic and civic contributions, he was named Chevalier de la Légion d’honneur – one of the highest honors awarded by the French Government – in 2017. He served on the editorial boards of the Brazilian Journal of Political Economy, the European Journal of Economics and Economic Policies, and Économie Appliquée. He was also an associate editor of the Journal of Post Keynesian Economics. Edwin Le Héron played a central role in the theoretical debate surrounding the endogenous money hypothesis in the 1990s, helping to reconcile it with Keynes’s notion of liquidity preference. This led to a pragmatic…more

According to my vita, my first paper for the Levy Economics Institute, “Unemployment, Inflation, and the Job Structure,” was first published almost exactly thirty years ago, in May 1995.[1]  It was a categorical dissent from the micro-market framework, dominant then and still, of mainstream economics. The abstract reads: In this working paper, James K. Galbraith rejects the analytical construct within which many economists currently operate – that is, the construct in which, in the extreme, macroeconomic behavior is identical to the behavior reflected in microeconomic demand and supply curves.  He rejects it on the theoretical and practical grounds microeconomic categories (supply, demand, prices, quantities) “have little bearing on important policy questions.” The markets that have a bearing on policy either are asset markets (for which the rules are dramatically different from those for flow markets) or are not really markets at all, but rather a set of deeply structural social relations. I mention this not to exaggerate my role but to illustrate how the Levy Institute has nurtured, over four decades since its founding in 1986, critical alternatives to the entrenched 18th century worldview of academic economics. Over the years, Levy has offered a home to major intellects otherwise shunned – Hyman Minsky, Wynne Godley, Jan Kregel. It has fostered entire movements that would otherwise have had little institutional foothold…more

What if Household Production is recognized as a necessity? Imagine if unpaid work done at home—cooking, cleaning, childcare, eldercare[1]—were recognized as part of basic needs as, for example, a minimal quantity of food and clothing? Would it change how much poverty we find? An upcoming study by the Levy Economics Institute suggests it absolutely would. The study augments the traditional poverty line by considering the minimal time required for unpaid work. Families that do not have enough available time to set aside for unpaid work requirements will have to purchase market substitutes to maintain a budget reflected in the traditional poverty line. Adding the cost of such market substitutes to the standard poverty line results in a time-adjusted poverty line which underpins our flagship metric the Levy Institute Measure of Time and Income Poverty (LIMTIP). Through a series of studies, we have developed LIMTIP estimates for Argentina (2005), Chile (2006), Ghana (2012–13), Korea (2009), Mexico (2008), Tanzania (2011–12), Turkey (2006), Ethiopia (2015), and South Africa (2015). We estimate LIMTIP for the United States for the first time and the measure reveals that poverty in the U.S. is far more widespread than conventional, official poverty measures suggest, and in fact exposes inequality across multiple dimensions: gender, race, class, and family structure. What is Time Poverty — and Why Does It Matter?…more