Publications

353 publications found, searching for 'The State of the US and World Economies '

• One-Pager No. 73 May 05, 2025

  The Incoming Recession: Are Imports the Real Culprit?

  Dimitri B. Papadimitriou, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  The preliminary estimates for real GDP growth in the first quarter of 2025 show an annualized contraction rate of 0.28 percent, along with an extraordinary increase in imports of 41.3 percent. Most commentators rushed to indicate that the contraction was due to the rise in imports, as, for instance, with the recent Reuters headline stating […]

• Policy Notes April 21, 2025

  Trump’s Tariffs: Ending Globalization

  Dimitri B. Papadimitriou, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  The Trump administration is reintroducing a number of 40-year-old, Reagan-era economic and military policies, but is particularly preoccupied with the imposition of tariffs for all of the country’s imports. Trump, in his inaugural address, placed significant emphasis on what the imposition of tariffs would represent, in his view: “Instead of taxing our citizens to enrich […]

  Download Policy Note 2025/1 PDF (877.05 KB)
• Strategic Analysis March 26, 2025

  Greece: Growing on an Unsustainable Path

  Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  Greece has been among the fastest growing economies among the EU member states in the post-COVID-19 period. However, in a previous (February 2024) report, Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza raised serious concerns regarding Greece’s dependency on imports. In their latest report, the authors argue that these problems have worsened, and the […]

  Download Strategic Analysis, March 2025 PDF (1.07 MB)
• Working Paper No. 1077 February 11, 2025

  A Critical Examination of the “China Collapse” Narrative

  Yan Liang
  Abstract

  Western media and academia have heralded the China collapse narrative. This paper provides a critical and balanced examination of the four challenges facing the Chinese economy—namely, deflation, debt, demographics, and de-coupling/de-risking. It argues that while deflationary pressure is present, consumer demand has been improving as the property market stabilized and policies to bolster domestic demand […]

  Download Working Paper No. 1077 PDF (366.56 KB)
• Working Paper No. 1075 January 23, 2025

  The High Cost of the Strong Peso and Its Temporary Nature: The Case of Mexico

  Arturo Huerta G.
  Abstract

  The article analyzes why exchange rate stability has been prioritized in Mexico and why the national currency has appreciated; which policies and factors have made this possible, the costs and consequences of the strong peso, and its sustainability and temporality are also examined. Mexico’s economy does not have the endogenous conditions necessary to maintain such […]

  Download Working Paper No. 1075 PDF (344.12 KB)
• Working Paper No. 1063 December 03, 2024

  Fiscal and Monetary Policy in an SFC Model of the Italian Economy

  Francesco Zezza
  Abstract

  Following the Great Financial Crisis of 2008–9, there has been a shift in mainstream economic policy modeling toward “realism,” with dynamic stochastic general equilibrium (DSGE) models partly diverging from the representative agent framework, and large-scale, New-Keynesian structural models addressing real-financial interactions in greater detail. Still, the need for tractability of the former, and the lack […]

  Download Working Paper No. 1063 PDF (1.71 MB)
• Policy Notes November 07, 2024

  Trump Wins While Americans Vote for Progressive Policies

  Pavlina R. Tcherneva
  Abstract

  On November 5, 2024, American voters sent Donald Trump back to the White House. In 2020, he lost his bid for reelection to Joe Biden, after winning in 2016 against Hillary Clinton (but only thanks to the electoral college). This time, however, Trump won the popular vote. All the new energy that surrounded the Harris-Walz campaign […]

  Download Policy Note 2024/3 PDF (182.86 KB)
• Strategic Analysis November 05, 2024

  Economic Challenges of the New U.S. Administration

  Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  On the eve of the 2024 US presidential election, the authors share their latest macroeconomic projections using the Levy Institute’s tailored stock-flow consistent model and evaluate two alternative policy scenarios, depending upon the next occupant of the White House: (1) a significant increase in import tariffs and decrease in the marginal tax rate, and (2) a substantial increase in government expenditure paired with an increase in the marginal tax rate.

  Download Strategic Analysis November 2024 PDF (673.85 KB)
• Policy Notes November 04, 2024

  Inflation

  Edward Lane
  Abstract

  Edward Lane surveys some of the main potential contributors to the recent period of elevated inflation rates in the US economy—focusing on supply disruptions, inflation-adjusted consumer spending, and consumer spending attributable to price markups—­and outlines prominent proposals being made by the 2024 presidential candidates that may have an impact on inflation.

  Download Policy Note 2024/2 PDF (562.43 KB)
• Working Paper No. 1053 June 07, 2024

  Foreign Deficit and Economic Policy: The Case of Mexico

  Arturo Huerta G.
  Abstract

  The article analyzes Mexico under globalization, particularly on the free mobility of capital. It argues that globalization has detrimentally impacted the productive and external sectors, causing the economy to become excessively reliant on volatile capital inflows from abroad. The Mexican government—instead of undoing the structural problems that lead to external deficits—implements policies that resolve the […]

  Download Working Paper No. 1053 PDF (3.66 MB)
• Strategic Analysis June 04, 2024

  U.S. Economic Outlook: Prospects for 2024 and Beyond

  Dimitri B. Papadimitriou, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  In this report, Institute President Dimitri B. Papadimitriou, Research Scholar Giuliano T. Yajima, and Senior Scholar Gennaro Zezza discuss the rapid recovery of the US economy in the post-pandemic period. They find that robust consumption and investment and a relaxation of fiscal policy were the key drivers of accelerated GDP growth—however, the signs that the […]

  Download Strategic Analysis, June 2024 PDF (981.17 KB)
• Working Paper No. 1049 May 07, 2024

  Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades

  Nikolaos Rodousakis, Giuliano Toshiro Yajima, and George Soklis
  Abstract

  We argue that the US trade and industry sector has experienced several unsustainable sectoral processes, including (i) a fall in the trade balance in machinery and equipment and high-tech (HT) industries, (ii) a rise in import multipliers in machinery and equipment and HT industries, (iii) a fall in the manufacturing share of GDP in machinery […]

  Download Working Paper No. 1049 PDF (533.85 KB)
• Working Paper No. 1047 April 08, 2024

  “Just Transition” in India and Fiscal Stance: Analyzing the Tax Buoyancy of the Extractive Sector

  Lekha S. Chakraborty, and Emmanuel Thomas
  Abstract

  Against the backdrop of fiscal transition concomitant to energy transition policies with climate change commitments, revenue from the extractive sector needs a recalibration in the subnational fiscal space. Extractive tax is the payment due to the government in exchange for the right to extract the mineral substance. Extractive tax has been fixed and paid in […]

  Download Working Paper No. 1047 PDF (457.86 KB)
• Strategic Analysis February 15, 2024

  Greece: Time to Reduce the Dependency on Imports

  Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza
  Abstract

  In this report, Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano T. Yajima, and Gennaro Zezza investigate the determinants of the recent performance of the Greek economy. Despite geopolitical instability from the continuing Ukraine-Russia and Israel-Gaza wars and higher-than-expected inflation rates, the country has managed to register the highest growth rates among eurozone member-states in 2021 and […]

  Download PDF (3.38 MB)
• Working Paper No. 1042 February 13, 2024

  Saving Social Security

  Edward Lane
  Abstract

  For more than 25 years, the Social Security Trust Fund was projected to run out of money in 2033 (give or take a few years), potentially causing benefits to be severely reduced in the absence of corrective legislative action. Today (February 2024), projections are made by the Social Security Administration that indicate that future benefits […]

  Download Working Paper No. 1042 PDF (2.11 MB)
• Working Paper No. 1040 February 02, 2024

  COP28 and Environmental Federalism: Empirical Evidence from an Emerging Economy, India

  Lekha S. Chakraborty, Amandeep Kaur, Ranjan Kumar Mohanty, Divy Rangan, and Sanjana Das
  Abstract

  Against the backdrop of COP28, this paper investigates the impact of intergovernmental fiscal transfers (IGFT) on climate change commitments in India. Within the analytical framework of environmental federalism, we tested the evidence for the Environmental Kuznets Curve (EKC) using a panel model covering 27 Indian states from 2003 to 2020. The results suggest a positive […]

• Working Paper No. 1039 February 02, 2024

  Can the Philippines attain 6.5–8 Percent Growth During 2023–28?

  Jesus Felipe, and Manuel L. Albis
  Abstract

  We expand the standard balance-of-payments–constrained (BOPC) growth rate model in three directions. First, we take into account the separate contributions of exports in goods, exports in services, overseas remittances, and foreign direct investment (FDI) inflows. Second, we use state-space estimation techniques to obtain time-varying parameters of the relevant coefficients. Third, we test for the endogeneity […]

• Working Paper No. 1031 October 09, 2023

  A Stock-Flow Ecological Model from a Latin American Perspective

  Lorenzo Nalin, Giuliano Toshiro Yajima, Leonardo Rojas Rodriguez, Esteban Pérez-Caldentey, and José Eduardo Alatorre
  Abstract

  This study aims to develop an ecological stock-flow consistent (SFC) model based on the Latin American–stylized facts regarding economic, financial, and environmental features. We combine the macro-financial theoretical framework by Pérez-Caldentey et al. (2021, 2023) and the ecological modeling of Carnevali et al. (2020) and Dafermos et al. (2018). We discuss two scenarios that test […]

  Download Working Paper No. 1031 PDF (1.59 MB)
• Working Paper No. 1030 October 09, 2023

  Economic Transformation and Growth in the Philippines

  Jesus Felipe, Edgar Desher Empeño, and Brendan Miranda
  Abstract

  The main gateway for the Philippines to develop and become an upper-middle-income economy—and eventually, a high-income economy—is to expedite the shift of workers out of agriculture and to produce and export more complex products with a higher income elasticity of demand. The actual growth rate is constrained by the balance-of-payments equilibrium growth rate, about 6 […]

  Download Working Paper No. 1030 PDF (1.75 MB)
• Working Paper No. 1029 September 07, 2023

  Is Anything Left of the Debate about the Sources of Growth in East Asia Thirty Years Later?

  Jesus Felipe, and John McCombie
  Abstract

  The year 2023 commemorates the 30th anniversary of the publication of the influential, yet controversial, study The East Asian Miracle report by the World Bank (1993). An important part of the report’s analysis was concerned with the sources of growth in East Asia. This was based on the neoclassical decomposition of growth into productivity and […]

  Download Working Paper No. 1029 PDF (5.52 MB)
• Policy Notes No. 4 August 23, 2023

  Effects of Forced Formalization (Demonetization) in the Indian Economy 

  Nischal Dhungel
  Abstract

  Nischal Dhungel examines the impact of India’s demonetization experiment—an effort at “forced formalization” of the economy. He urges a more organic approach to formalization, pairing efforts to bring the unbanked population into the banking system with greater funding and accessibility for India’s signature employment guarantee program.

  Download Policy Note 2023/4 PDF (388.60 KB)
• Strategic Analysis July 20, 2023

  Will the US Debt Ceiling Deal Derail the Pandemic Recovery?

  Dimitri B. Papadimitriou, Gennaro Zezza, Michalis Nikiforos, and Giuliano Toshiro Yajima
  Abstract

  In this Strategic Analysis, Dimitri B. Papadimitriou, Michalis Nikiforos, Giuliano T. Yajima, and Gennaro Zezza discuss how the current state and structural features of the US economy might affect its future trajectory. The recent recovery after the pandemic has been remarkable, when compared to previous cycles, and offers evidence of the efficacy of fiscal policy. […]

  Download Strategic Analysis, July 2023 PDF (1.54 MB)
• Working Paper No. 1018 April 21, 2023

  The Unbearable Weight of Aging

  L. Randall Wray, Yeva Nersisyan, and Xinhua Liu
  Abstract

  The aging of the global population is in the headlines following a report that China’s population fell as deaths surpassed births. Pundits worry that a declining Chinese workforce means trouble for other economies that have come to rely on China’s exports. France is pushing through an increase of the retirement age in the face of […]

  Download Working Paper No. 1018 PDF (665.40 KB)
• Working Paper No. 1017 April 12, 2023

  Rentiers, Strategic Public Goods, and Financialization in the Periphery

  Gabriel Porcile, and Gilberto Tadeu Lima
  Abstract

  This paper revisits a traditional theme in the literature on the political economy of development, namely how to redistribute rents from traditional exporters of natural resources toward capitalists in technology-intensive sectors with a higher potential for innovation and the creation of higher-productivity jobs. Porcile and Lima argue that this conflict has been reshaped in the […]

  Download Working Paper No. 1017 PDF (512.24 KB)