Summary Spring 2020

This issue of the Summary features two Strategic Analyses. The first assesses the trends impacting the US economy’s sectoral balances in the context of overvalued asset markets and overleveraged corporate balance sheets; the second, for Greece, identifies the necessary conditions for achieving the government’s campaign promise of 4 percent GDP growth in 2020 and 2021, forecasting that even with an improvement in global conditions, Greece would still need private expenditure to surge to make more meaningful progress toward restoring household economic well-being to its precrisis levels. A policy brief presents an alternative approach to budgeting for the Green New Deal, much like the one outlined in John Maynard Keynes’s 1940 pamphlet, How to Pay for the War, that contrasts traditional questions about the program’s financial affordability with an approach that asks whether there are sufficient real resources that can be marshalled for its implementation.
 
Working papers included in this issue addresses how Germany’s social and cultural values have affected European integration, while leaving them better able to weather the asymmetric effects of the eurocrisis they played a part in creating; examine four decades of demand shocks and their effect on output and productivity growth to ascertain if the recovery fits Alvin Hansen’s definition of “secular stagnation”; respond to a critique of a 2016 Cambridge Journal of Economics article on utilization in Kaleckian models of growth and distribution; explore two periods of financial instability associated with financial globalization in the modern era and how institutions meant to control financial fragility instead contributed to its development; investigate the Keynesian nature of the relationship between short- and long-term interest rates using data on daily yields of Canadian government securities; present an empirical stock-flow model for Denmark using data for 1995–2016 to demonstrate the effects of real economic behavior on balance sheets and vice versa; extend the Levy Institute’s model for Greece (LIMG) to assess the effectiveness of Greece’s internal devaluation policy; empirically model the wage differential between Palestinians in the West Bank and Gaza Strip based on refugee status; consider previous investigations of the impact of technical progress on employment growth; and question the origin of China’s low fertility rate in an attempt to disentangle the impacts of population control policies from the socioeconomic changes that accompany economic development.
 
 
INSTITUTE RESEARCH
 
Program: The State of the US and World Economies
Strategic Analysis

• DIMITRI B. PAPADIMITRIOU, MICHALIS NIKIFOROS, and GENNARO ZEZZA, Prospects and Challenges for the US Economy: 2020 and Beyond
• DIMITRI B. PAPADIMITRIOU, MICHALIS NIKIFOROS, and GENNARO ZEZZA, Greece: In Search of Investors
• YEVA NERSISYAN and L. RANDALL WRAY, Can We Afford the Green New Deal?
• GEORGE ZESTOS and RACHEL N. COOKE, Challenges for the EU as Germany Approaches Recession
• MICHALIS NIKIFOROS, Demand, Distribution, Productivity, Structural Change, and (Secular?) Stagnation
• MICHALIS NIKIFOROS, On the “Utilization Controversy”: A Rejoinder and Some Comments

 
Program: Monetary Policy and Financial Structure

• MARIO TONVERONACHI, Ages of Financial Instability
• TANWEER AKRAM and ANUPAM DAS, The Empirics of Canadian Government Securities Yields
• MIKAEL RANDRUP BYRIALSEN and HAMID RAZA, An Empirical Stock-Flow Consistent Macroeconomic Model for Denmark

 
Program: Employment Policy and Labor Markets

• CHRISTOS PIERROS, A Labor Market–Augmented Empirical Stock-Flow Consistent Model Applied to the Greek Economy
• JESUS FELIPE, DONNA FAYE BAJARO, GEMMA ESTRADA, and JOHN MCCOMBIE, The Relationship between Technical Progress and Employment: A Comment on Autor and Salomons
• SAMEH HALLAQ, Wage Differential between Palestinian Non-refugees and Palestinian Refugees in the West Bank and Gaza

 
Program: Explorations in Theory and Empirical Analysis

• LIU QIANG, FERNANDO RIOS-AVILA, and HAN JIQIN, Is China’s Low Fertility Rate Caused by the Population Control Policy?