INET–Levy Institute Project
The purpose of this project is to integrate two research paradigms that have strong policy relevance in understanding the causes of the recent financial crisis, and also the path to a postcrisis long-run recovery. The first might be called the Keynes-Minsky vision that puts effective demand front and center in economic analysis, and the second is the Schumpeter-Minsky vision that focuses on innovation and competition. The aim of the project is to bring these two visions together to provide rigorous analysis of innovation and competition in the financial sphere and how it interacts with innovation and competition in the industrial sphere.
The Financing Innovation project is a joint research effort by the Levy Economics Institute of Bard College and the University of Sussex Science Policy Research Unit (SPRU). It is co-led by Levy Institute Senior Scholar L. Randall Wray and Mariana Mazzucato (SPRU), with a joint team of researchers. The project is funded in part through a grant from the Institute for New Economic Thinking (No. IN012-00036).
Related publications
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Working Paper No. 837May 06, 2015
Financing the Capital Development of the Economy
L. Randall Wray and Mariana MazzucatoAbstractThis paper discusses the role that finance plays in promoting the capital development of the economy, with particular emphasis on the current situation of the United States and the United…more
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Working Paper No. 831January 30, 2015
Beyond Market Failures
Mariana Mazzucato and Caetano C.R. PennaAbstractRecent decades witnessed a trend whereby private markets retreated from financing the real economy, while, simultaneously, the real economy itself became increasingly financialized. This trend resulted in public finance becoming…more
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Working Paper No. 827January 09, 2015
Minsky on Banking
L. Randall WrayAbstractIn this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work—at the time that he was first developing his financial instability approach. In…more
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Working Paper No. 825January 02, 2015
Why Does Brazil’s Banking Sector Need Public Banks?
Felipe RezendeAbstractThe 2007–8 global financial crisis has shown the failure of private finance to efficiently allocate capital to finance real capital development. The resilience and stability of Brazil’s financial system has received…more
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Working Paper No. 824January 02, 2015
Building the Entrepreneurial State
Mariana MazzucatoAbstractToday, countries around the world are seeking “smart” innovation-led growth, and hoping that this growth is also more “inclusive” and “sustainable” than in the past. This paper argues that such…more
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Working Paper No. 823December 19, 2014
The State and National Systems of Innovation
Giovanna VertovaAbstractThis paper starts with a review of the literature about National Systems of Innovation (NSI), by linking the origin of the concept to the evolutionary theory of the firm and…more
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Working Paper No. 822December 16, 2014
The Socialization of Investment, from Keynes to Minsky and Beyond
Riccardo BellofioreAbstractAn understanding of, and an intervention into, the present capitalist reality requires that we put together the insights of Karl Marx on labor, as well as those of Hyman Minsky…more
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Working Paper No. 821December 12, 2014
Outside Money
L. Randall WrayAbstractOver the past two decades there has been a revival of Georg Friedrich Knapp’s “state money” approach, also known as chartalism. The modern version has come to be called Modern…more
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One-Pager No. 47October 06, 2014
Growth for Whom?
Pavlina R. TchernevaAbstractIn the postwar period, income growth has become more inequitably distributed with virtually every subsequent economic expansion. From 2009 to 2012, while the economy was recovering from one of the…more
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Working Paper No. 792March 05, 2014
From the State Theory of Money to Modern Money Theory
L. Randall WrayAbstractThis paper explores the intellectual history of the state, or chartalist, approach to money, from the early developers (Georg Friedrich Knapp and A. Mitchell Innes) through Joseph Schumpeter, John Maynard…more
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Working Paper No. 789March 03, 2014
Full Employment
Pavlina R. TchernevaAbstractIt is common knowledge that John Maynard Keynes advocated bold government action to deal with recessions and unemployment. What is not commonly known is that modern “Keynesian policies” bear little,…more
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Policy Note No. 1January 30, 2014
The Social Enterprise Model for a Job Guarantee in the United States
Pavlina R. TchernevaAbstractThe job guarantee is a proposal that provides greater macroeconomic stability and secures a fundamental human right. Despite the economic and moral merits of this policy, often the program is…more
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Working Paper No. 783January 10, 2014
Options for China in a Dollar Standard World
L. Randall Wray and Xinhua LiuAbstractThis paper examines the fiscal and monetary policy options available to China as a sovereign currency-issuing nation operating in a dollar standard world. We first summarize a number of issues…more
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Working Paper No. 772August 29, 2013
Reorienting Fiscal Policy
Pavlina R. TchernevaAbstractThe present paper offers a fundamental critique of fiscal policy as it is understood in theory and exercised in practice. Two specific demand-side stabilization methods are examined here: conventional pump…more
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Working Paper No. 732September 26, 2012
Beyond Full Employment
Pavlina R. TchernevaAbstractOver the past decade and a half the ability of the employer-of-last-resort (ELR) proposal to deliver full employment and price stability has been discussed at length in the literature. A…more
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Working Paper No. 719May 09, 2012
Reorienting Fiscal Policy after the Great Recession
Pavlina R. TchernevaAbstractThe paper evaluates the fiscal policy initiatives during the Great Recession in the United States. It argues that, although the nonconventional fiscal policies targeted at the financial sector dwarfed the…more
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Working Paper No. 717May 03, 2012
Introduction to an Alternative History of Money
L. Randall WrayAbstractThis paper integrates the various strands of an alternative, heterodox view on the origins of money and the development of the modern financial system in a manner that is consistent…more
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Policy Note No. 2March 19, 2012
Full Employment through Social Entrepreneurship
Pavlina R. TchernevaAbstractThe conventional approach of fiscal policy is to create jobs by boosting private investment and growth. This approach is backward, says Research Associate Pavlina R. Tcherneva. Policy must begin by…more
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Working Paper No. 706February 08, 2012
Inflationary and Distributional Effects of Alternative Fiscal Policies
Pavlina R. TchernevaAbstractThis paper augments the basic Post-Keynesian markup model to examine the effects of different fiscal policies on prices and income distribution. This is an approach à la Hyman P. Minsky,…more
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Working Paper No. 705February 03, 2012
What Do Poor Women Want? Public Employment or Cash Transfers?
Pavlina R. TchernevaAbstractThe literature on public employment policies such as the job guarantee (JG) and the employer of last resort (ELR) often emphasizes their macroeconomic stabilization effects. But carefully designed and implemented…more
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Working Paper No. 661March 26, 2011
Minsky’s Money Manager Capitalism and the Global Financial Crisis
L. Randall WrayAbstractThe world’s worst economic crisis since the 1930s is now well into its third year. All sorts of explanations have been proffered for the causes of the crisis, from lax…more
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Working Paper No. 656March 05, 2011
Money in Finance
L. Randall WrayAbstractThis paper begins by defining, and distinguishing between, money and finance, and addresses alternative ways of financing spending. We next examine the role played by financial institutions (e.g., banks) in…more
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Working Paper No. 653March 02, 2011
Financial Keynesianism and Market Instability
L. Randall WrayAbstractIn this paper I will follow Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as…more
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Working Paper No. 650January 19, 2011
Fiscal Policy: Why Aggregate Demand Management Fails and What to Do about It
Pavlina R. TchernevaAbstractThis paper argues for a fundamental reorientation of fiscal policy, from the current aggregate demand management model to a model that explicitly and directly targets the unemployed. Even though aggregate…more
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Working Paper No. 649January 18, 2011
Fiscal Policy Effectiveness: Lessons from the Great Recession
Pavlina R. TchernevaAbstractThis paper reconsiders fiscal policy effectiveness in light of the recent economic crisis. It examines the fiscal policy approach advocated by the economics profession today and the specific policy actions…more
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Working Paper No. 636November 11, 2010
Bernanke’s Paradox: Can He Reconcile His Position on the Federal Budget with His Recent Charge to Prevent Deflation?
Pavlina R. TchernevaAbstractThis paper examines Federal Reserve Chairman Ben Bernanke’s recipe for deflation fighting and the specific policy actions he took in the aftermath of the 2008 financial crisis. Both in his…more
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Policy Note No. 1January 22, 2009
Obama’s Job Creation Promise
Pavlina R. TchernevaAbstractJob creation is once again at the forefront of policy action, and for advocates of pro-employment policies, President Obama’s Keynesian bent is a most welcome change. However, there are concerns…more
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Working Paper No. 542August 07, 2008
Keynes’s Approach to Full Employment
Pavlina R. TchernevaAbstractThis paper argues that John Maynard Keynes had a targeted (as contrasted with aggregate) demand approach to full employment. Modern policies, which aim to “close the demand gap,” are inconsistent…more
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Working Paper No. 539July 14, 2008
The Return of Fiscal Policy
Pavlina R. TchernevaAbstractThe monetarist counterrevolution and the stagflation period of the 1970s were among the theoretical and practical developments that led to the rejection of fiscal policy as a useful tool for…more
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Public Policy Brief No. 94April 01, 2008
Financial Markets Meltdown
L. Randall WrayAbstractIn this new Public Policy Brief, Senior Scholar L. Randall Wray explains today’s complex and fragile financial system, and how the seeds of crisis were sown by lax oversight, deregulation,…more
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Working Paper No. 275July 01, 1999
Minsky’s Analysis of Financial Capitalism
Dimitri B. Papadimitriou and L. Randall WrayAbstractIn this paper, the authors discuss Minsky’s analysis of the evolution of one variety of capitalism—financial capitalism—which developed at the end of the nineteenth century and was the dominant form…more
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Working Paper No. 99October 01, 1993
Government Deficits, Liquidity Preference, and Schumpeterian Innovation
L. Randall WrayAbstractWray asserts that rigorous analyses of the role played by innovation in economic development must acknowledge the contribution of Joseph Schumpeter. However, the author suggests that the current stagnation confronting…more
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