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by Ana Luíza Matos de Oliveira Brazil is a highly unequal country — so is the access to its higher education system. However, in the beginning of the 21st century (2001-2015), there was a convergence between the profile of Brazilian higher education students and the Brazilian population in terms of income, race, and region, although many inequalities still exist. Now, this process might be at risk. From 2001 to 2015, economic growth and improvements in the labor market affected families’ spending decisions. Also, the budget for higher education presented significant growth and many programs aiming at democratizing access to higher education in Brazil — such as Reuni (expansion of the federal higher education system), Prouni (offer of scholarships in private institutions), loan schemes for students, affirmative action, and student assistance — were created or broadened. Policies in partnership with the private sector were put in place and are related to a significant growth in enrollment in private institutions in this period. This led to greater social inclusion in higher education, as Graph 1 demonstrates.[1] It is also important to state that during this period there was a policy of increasing the value of the minimum wage (MW), which in 2020 is now R$ 1045 (USD 205). Graph 1 – Students in Higher Education according to per capita income – Brazil… Read More

by Harikrishnan S and Lekha Chakraborty As predictable as it can be, the Indian Prime Minister announced lockdown at 8 PM on March 24th 2020, giving the country and its 1.3 billion people all of four hours to get ready, evoking memories of the demonetisation announcement and the midnight launch of the GST! This was done by invoking the National Disaster Management Act of 2005. While many analysts lauded the communication strategy of the leader “directly” speaking to the people as political decisiveness, our contention is that it was a clear case of using a “command and control” strategy instead of co-operative federalism, which the government had been taking pains to highlight that it believed in. The manner in which we are getting out of the lockdown, with an ad hoc and arbitrary exit strategy, at a time when the number of COVID cases reported daily has seen a mountainous surge (almost every other day previous records are being broken), shows a clear lack of any sort of planning and sadly reeks of cluelessness. While the obvious intent of the lockdown policy was “to flatten the curve” and control the spread of the pandemic, almost irreversible economic disruption has resulted in many sectors and a mounting humanitarian crisis through the unprecedented exodus of migrant labour is staring at us with… Read More

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by Yeva Nersisyan and L. Randall Wray As MMT has been thrust into the spotlight, misrepresentations and misunderstanding have followed. MMT supposedly calls for cranking up the printing press, engaging in helicopter drops of cash or having the Fed finance government spending by engaging in Quantitative Easing. None of this is MMT. Instead, MMT provides an analysis of fiscal and monetary policy applicable to national governments with sovereign, non-convertible currencies. It concludes that the sovereign currency issuer: i) does not face a “budget constraint” (as conventionally defined); ii) cannot “run out of money”; iii) meets its obligations by paying in its own currency; iv) can set the interest rate on any obligations it issues. Current procedures adopted by the Treasury, the central bank, and private banks allow government to spend up to the budget approved by Congress and signed by the President. No change of procedures, no money printing, no helicopter drops are required.

Luiza Nassif-Pires, Laura de Lima Xavier, Thomas Masterson, Michalis Nikiforos, and Fernando Rios-Avila   Disproving the belief that the pandemic affects us all equally, data collected by New York City Department of Health and Mental Hygiene and a piece published today in the New York Times shows that the novel coronavirus is “hitting low-income neighborhoods the hardest.”[1] In a forthcoming policy brief, we share evidence that this pattern would be the case and provide a solid explanation as to why (Nassif-Pires et al., forthcoming). Moreover, as we argue, the death tolls are also likely to be higher among poor neighborhoods and majority-minority communities. This inequality in health costs is in addition to an unequal distribution of economic costs. In short, poor and minority individuals are disproportionately feeling the impacts of this crisis. A concise version of our evidence is presented here. The toll of social inequality in healthcare is well known. A clear relationship has been repeatedly demonstrated between social determinants — such as income, education, occupation, social class, sex, and race/ethnicity — and the incidence and severity of many diseases. This association holds true for infectious respiratory illnesses such as influenza, SARS and also for COVID-19, as figure 1 shows. The consequences of this imbalance are particularly catastrophic when there is a massive disease outbreak. The precise mechanisms by… Read More

As the coronavirus pandemic rages on, the US Congress appropriated a whopping $2 trillion budget to tackle it (about 10% of GDP). The focus was on expanded unemployment benefits and cash assistance to families, as well as grants and loans to small firms and large corporations in hopes that they will halt the torrent of layoffs. Across the ocean, Denmark took a different approach. The Danish government announced that it would cover 75–90% of certain worker salaries for the next 3 months. However remote the possibility here in the US, it still inspires the question: Could we have followed suit? How shall we think about such a policy? The Danish approach only covers workers in virus-hit jobs. However, suppose the US government decided to pay the entire wage bill for the economy during the months of radical social distancing. This would amount to an effective nationalization of the payroll, making the government an employer of first resort.

by Ana Luíza Matos de Oliveira, Lygia Sabbag Fares, Gustavo Vieira da Silva, and Luiza Nassif Pires Even though Covid-19 has already killed thousands worldwide and is paralyzing global economic activity, President Jair Bolsonaro insists on referring to it as a “little flu.” Despite the president’s efforts to avoid a halt to the economic activity in Brazil, the rhythm in the country has slowed down and people who can afford to stay confined at home are doing so. This week, several cities and states implemented mandatory shut downs on non-essential commerce and services. Given this new scenario, with still very uncertain impacts, we would like to raise a concern with a problem that has been reported in other countries: the increase in domestic violence.

In the last 24 hours, two big news stories regarding the economic impact of the Covid-19 pandemic have broken. The first is news that the Senate has passed a $2 trillion stimulus package that legislators claim is intended to alleviate the economic damage caused by the responses to the unfolding pandemic: closures of schools and businesses as well as the social isolation of much of the population. The second–a reported 3 million new unemployment claims in the last week alone–is a direct result of the aforementioned responses, as businesses close, events and travel plans are canceled and those who can remain isolated in their homes wondering which will run its course first: the supply of binge-able content on Netflix or the pandemic.

Pavlina Tcherneva recently participated in a hearing before a parliamentary group (La France insoumise) of France’s National Assembly on the subject of the Green New Deal and the job guarantee (the intro is in French; Tcherneva’s testimony is in English): [iframe width=”485″ height=”274″ src=”https://www.youtube.com/embed/csyE46OeS8Q” frameborder=”0″ allow=”accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe]

In this rare video from 1987 (there is very little surviving footage of Minsky discussing his work), Hyman Minsky summarizes his theory of the financial fragility at the heart of modern capitalist economies: [iframe width=”486″ height=”364″ src=”https://www.youtube.com/embed/9mHBrixVarU” frameborder=”0″ allow=”accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe] This was part of an event in Bogotá, Colombia (which is discussed in this working paper by Iván D. Velasquez).

The Hyman P. Minsky Summer Seminar Levy Economics Institute of Bard College Blithewood Annandale-on-Hudson, N.Y. June 7–13, 2020 The Levy Economics Institute of Bard College is pleased to announce the 11th Minsky Summer Seminar will be held from June 7–13, 2020. The Seminar will provide a rigorous discussion of both the theoretical and applied aspects of Minsky’s economics, with an examination of meaningful prescriptive policies relevant to the current economic and financial outlook. It will also provide special sessions introducing the theory and applications of Wynne Godley’s stock-flow consistent modeling methods, supported by hands-on workshops. The Summer Seminar will be of particular interest to graduate students, recent graduates, and those at the beginning of their academic or professional careers. The teaching staff will include international economists working in the theory and policy tradition of Hyman Minsky and Wynne Godley. Applications may be made to Kathleen Mullaly at the Levy Institute ([email protected]), and should include a letter of application and current curriculum vitae. Admission to the Summer Seminar will include provision of room and board on the Bard College campus. The registration fee for the Seminar will be $375. Due to limited space availability, the Seminar will be limited to 30 participants; applications will be reviewed on a rolling basis starting in January 2019.

Bloomberg Businessweek‘s Cristina Lindblad and Peter Coy sat down with L. Randall Wray for an in-depth interview on Modern Monetary Theory: [iframe src=”https://www.bloomberg.com/multimedia/api/embed/iframe?id=081295ee-e45c-4dae-a380-2989a5ad4c23″ allowscriptaccess=”always” frameborder=”0″></iframe]