In 2003, billionaire investor Warren Buffett suggested an incentive-based intervention to narrow the U.S. trade deficit, whereby import certificates (ICs) would be granted to exporting firms by the federal government and traded to importing firms in organized markets. Using the Levy Institute macroeconomic model, the authors evaluate the impact of the Buffett plan and find that it would initially raise the price of (non-oil) imports by about 9 percent and reduce the current account deficit to 2 percent of GDP more quickly than existing policies. The overall market value of the ICs would translate into greater value added for the export sector.

Although Buffett’s proposal has several advantages over other protectionist responses to the current account deficit, the authors have serious concerns that it might not work well in practice: there would be instability and uncertainty regarding the prices of the ICs; the plan would require the creation of liquid markets, including other complex financial arrangements; there could be an adverse reaction from the World Trade Organization and possible retaliation by U.S. trading partners; and there would be an increase in exporters’ profits at the expense of workers and firms in industries that rely on imported inputs.

The authors present an alternative method whereby ICs would be auctioned by the government directly to importers and the proceeds used to offset reductions in payroll taxes (a revenue-neutral plan). Their approach would reduce the financial complexities of the Buffett plan, leave the proceeds of IC sales in the pockets of workers, be less vulnerable to fraud and less costly to administer, and enhance economic growth over the short term.

Neoclassical economists seem to prefer the use of long-run models to describe markets, while post-Keynesian economists tend to favor short-run models. The authors argue that stock-flow consistent (SFC) models describe short-period behaviors as well as balance sheet dynamics from one period to the next. These models are compatible with the views of John Maynard Keynes on the macroeconomic dynamics of capitalist economies, so they are ideal tools for consolidating and presenting the post-Keynesian research program as a real alternative to the dominant short-run paradigm.

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Using time-budget data, this paper provides new evidence on the link between public infrastructure and time allocation related to the water sector in India. The author’s work represents the first attempt to use a major macro-level time-use survey for a developing country.

Chakraborty hypothesizes that increased investment in water infrastructure will release rural women’s allocation of time to market work. She finds that arguments against gender budgeting and the notion that public infrastructure expenditures are nonrival in nature are refuted by the time-budget statistics. There is a negative relationship between infrastructure access and time allocation, and women spend much more time on unpaid work than men do. Time poverty affects income poverty, but time poverty is often overlooked when framing macro policies. Therefore, infrastructure investment using gender-sensitive policies can benefit women by allowing them to spend more time on market-oriented activities.

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