Summary Vol. 30, No. 1 | February 2021

Summary Winter 2021

This issue features two strategic analyses: the first finds that while the disbursement of EU funds would help hasten Greece’s recovery, getting closer to the pre-pandemic growth trend requires further fiscal action; the second, for Italy, cautions that the government’s seeming commitment to use European funds to reduce public debt through expenditure cuts aims at the wrong target and projects the impact of an alternative scenario that increases Italy’s public sector employment. Public policy briefs consider the moral hazard of leaving federal fiscal aid to state and local governments dependent on shifting political winds and address the interactions between the COVID-19 crisis and overlapping inequalities in Brazil. Policy notes propose an alternative to fiscal stimulus for COVID-19 relief—one centered on direct “social provisioning” to support a strict lockdown—and use the work of Michał Kalecki to develop a framework for analyzing the impact of government debt management to enable more effective fiscal policy.
Working papers in this issue discuss evidence of inequality in the disproportionate burden the government-mandated shutdowns have placed on Black women in the United States; outline a Minskyan approach to the post-pandemic recovery to meet the challenges that still lay ahead; apply network dynamics observed in ecosystems to investigate the role networks play in stabilizing and destabilizing economic systems; describe the evolution of John Maynard Keynes’s analysis of instability, illustrating that the General Theory is indeed a general theory; focus on the implications of Keynes’s “beauty contest” metaphor in the modern economy; trace the “Kansas City” approach to Modern Money Theory (MMT) from its origins in the mid-1990s through today; apply an MMT approach to an open economy to ascertain its effect in non-dollar economies; and apply a Keynesian perspective to an exploration of bond yields in the UK and Japan. Several papers employ methodologies developed at the Levy Institute. The first two evaluate the quality of match used to create synthetic datasets for studying time poverty effects: one for data used in the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) for Ethiopia and South Africa and the second evaluates the match for the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Italy; a third applies a version of the Levy Institute’s macrosimulation method developed for South Africa, Turkey, and the United States to create a macro-micro model for assessing the gendered employment impacts of government expenditure. Two final working papers addressing fiscal issues round out this issue: the first evaluates budget credibility at the subnational level in India and the other advocates for fiscal policies grounded in the principles of functional finance to foster equality in Argentina, Brazil, and Mexico.
Program: The State of the US and World Economies
Strategic Analysis
Strategic Analysis
JAN KREGEL, Alternative Macro Policy Response for a Pandemic Recession
HAROLD M. HASTINGS, TAI YOUNG-TAFT, and CHIH-JUI TSEN, Ecology, Economics, and Network Dynamics
Program: Monetary Policy and Financial Structure
JÖRG BIBOW, The General Theory as “Depression Economics”?: Financial Instability and Crises in Keynes’s Monetary Thought
EMILIO CARNEVALI and MATTEO DELEIDI, The Trade-off between Inflation and Unemployment in an MMT World: An Open Economy Perspective
LORENZO ESPOSITO and GIUSEPPE MASTROMATTEO, In the Long Run We Are All Herd: On the Nature and Outcomes of the Beauty Contest
TANWEER AKRAM and HUIQING LI, The Empirics of UK Gilts’ Yields
LEONARDO BURLAMAQUI and ERNANI T. TORRES FILHO, The COVID-19 Crisis: A Minskyan Approach to Mapping and Managing the (Western?) Financial Turmoil
TANWEER AKRAM and HUIQING LI, Some Empirical Models of Japanese Government Bond Yields Using Daily Data
L. RANDALL WRAY, The "Kansas City" Approach to Modern Money Theory
Program: The Levy Institute Measure of Time and Income Poverty
FERNANDO RIOS-AVILA, Quality of Match for Statistical Matches Used in the Development of the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) for Ethiopia and South Africa
Program: Distribution of Wealth and Income
LUIZA NASSIF PIRES, LAURA CARVALHO, and EDUARDO RAWET, Multidimensional Inequality and COVID-19 in Brazil
ALEX WILLIAMS, Moral Hazard in a Modern Federation
ERICA ALOÈ, Quality of Statistical Match Used in the Estimation of the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Italy 2008 and 2014 and Preliminary Results
Program: Employment Policy and Labor Markets
MICHELLE HOLDER, JANELLE JONES, and THOMAS MASTERSON, The Early Impact of COVID-19 on Job Losses among Black Women in the United States
Program: Gender Equality and the Economy
JEROME DE HENAU and SUSAN HIMMELWEIT, Developing a Macro-Micro Model for Analyzing Gender Impacts of Public Policy
Program: Immigration, Ethnicity, and Social Structure
SAMEH HALLAQ, First Palestinian Intifada and Intergenerational Transmission of Human Capital
Program: Economic Policy for the 21st Century
LEKHA S. CHAKRABORTY, PINAKI CHAKRABORTY, and RUZEL SHRESTHA, Budget Credibility of Subnational Governments: Analyzing the Fiscal Forecasting Errors of 28 States in India
BENDREFF DESILUS, Fiscal Policy in Argentina, Brazil, and Mexico and the 2030 Agenda for Sustainable Development
Program: Federal Budget Policy
JAN TOPOROWSKI, Debt Management and the Fiscal Balance
Upcoming Events
Call for Applications: Virtual Seminar on Gender-Sensitive Macroeconomic Modeling for Policy Analysis
New Research Associates
Appreciation for Donors
Elizabeth Dunn Michael Stephens

Publication Highlight

Public Policy Brief No. 157
Is It Time for Rate Hikes?
The Fed Cannot Engineer a Soft Landing but Risks Stagflation by Trying
Author(s): Yeva Nersisyan, L. Randall Wray
April 2022

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