Publications

1711 publications found

• Working Paper No. 1064
  December 06, 2024

  Seismic Shifts in Economic Theory and Policy from the Bernanke Doctrine to Modern Money Theory

  Pavlina R. Tcherneva and Éric Tymoigne
  Abstract

  Originally issued as EDI Working Paper No. 08, 2022  This paper evaluates the relationship between monetary and fiscal policy and the relative effectiveness of macroeconomic stabilization through the lens of…more

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• 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…more

  Download Working Paper No. 1063 PDF (1.71 MB)
• Working Paper No. 1062
  December 03, 2024

  The Value of Money

  L. Randall Wray
  Abstract

  This paper examines heterodox theories of the determinants of the value of money. Orthodox approaches that tie money’s value to relative scarcity of money or to the price level are…more

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• Working Paper No. 1061
  November 26, 2024

  Modern Money Theory on Fiscal and Monetary Policies

  Éric Tymoigne
  Abstract

  Originally issued as EDI Working Paper No. 04, 2022 Drumetz and Pfister make several claims about the inadequacy and fallacies of Modern Money Theory (MMT) and conclude that MMT is…more

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• Working Paper No. 1060
  November 26, 2024

  The Job Guarantee

  Pavlina R. Tcherneva
  Abstract

  Originally issued as EDI Working Paper No. 02, 2022 Orthodox economic theory presents the policy maker with an impossible choice: eradicate unemployment at the cost of undesirable inflation or keep…more

  Download Working Paper No. 1060 PDF (995.69 KB)
• Working Paper No. 1059
  November 26, 2024

  Three Lessons from Government Spending and the Post-Pandemic Recovery

  Pavlina R. Tcherneva
  Abstract

  Originally issued as EDI Working Paper No. 01, 2021 The central lesson of the COVID-19 fiscal response is that money is not scarce. Without delay, governments around the world appropriated…more

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• Working Paper No. 1058
  November 20, 2024

  The Origins of the Platonic Approach to Monetary Systems

  Éric Tymoigne
  Abstract

  A monetary approach that combines Chartalism, Nominalism, and Command origins of monetary systems is often deemed to have emerged only recently, while the Aristotelian approach (Commodity, Metallism, and Market origins…more

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• Policy Note
  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…more

  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.

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• Policy Note
  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…more

  Download Policy Note 2024/2 PDF (562.43 KB)
• Policy Note No. 1
  October 11, 2024

  The Boy Who Cried Wolf About Government Debt

  Yeva Nersisyan and L. Randall Wray
  Abstract

  In a New York Times editorial, David Leonhardt recounts Aesop’s apocryphal story about the boy and the wolf, warning that while deficit hawks have so far been wrong, the growing government debt will eventually bite. He reports the economic plans of both presidential candidates would add to the debt that will soon exceed GDP and grow to 130 percent of annual output under a President Harris, or 140 percent with a Trump presidency.

  The story of the boy and the wolf was a fable, although it was within the realm of possibility. The fable of the debt wolf is not. While there are real world wolves—Leonhardt mentions climate catastrophe and autocratic leaders, and the authors would add rising inequality and the concentration of economic and political power in the hands of billionaires—authors Yeva Nersisyan and L. Randall Wray assert, federal debt is not one of them.

  Download Policy Note 2024/1 PDF (368.08 KB)
• Working Paper No. 1057
  October 09, 2024

  Rise and Fall of Mexican Super Peso: Heterodox Perspective versus Orthodoxy

  Laura Lisset Montiel-Orozco
  Abstract

  This working paper contrasts the neo-Keynesian and post-Keynesian theories of monetary policy for an open economy, highlighting the irrelevance of the orthodox theory and the explanatory capacity of heterodoxy for…more

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• Working Paper No. 1056
  October 07, 2024

  Federal Tax Transfers and Demographic Transition: Balancing Equity and Efficiency

  Lekha S. Chakraborty and Yadawendra Singh
  Abstract

  Against the backdrop of demographic transition in India, the study highlights the necessity of integrating the elderly population as a critical factor in formula-based intergovernmental fiscal transfers. The demographic transition,…more

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• Working Paper No. 1055
  September 18, 2024

  The Relation Between Budget Deficits and Growth: Complicated but Clear

  L. Randall Wray and Eric Lin
  Abstract

  This paper looks at the relationship between government budget deficits and the growth rate of GDP. While orthodox economic theory offers several reasons to believe that growing deficits might be…more

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• Working Paper No. 1054
  June 28, 2024

  Gender-Responsive Public Financial Management: The Indian Chronology of Gender Budgeting

  Lekha S. Chakraborty
  Abstract

  Gender budgeting is a public financial management (PFM) tool, used to ensure accountability mechanisms. The analysis of “process” indicators of gender-responsive PFM (GRPFM) reveals that India has been successful in…more

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• 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…more

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• Working Paper No. 1052
  June 05, 2024

  Exchange-Rate Stability Causes Deterioration of the Productive Sphere and Destabilizes Developing Economies

  Arturo Huerta G.
  Abstract

  For Matías Vernengo and Esteban Pérez Caldentey (2020), the MMT literature overemphasizes the choice of the exchange rate regime and the relevance of a flexible exchange rate regime, as well…more

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• 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….more

  Download Strategic Analysis, June 2024 PDF (981.17 KB)
• Working Paper No. 1051
  May 10, 2024

  Euro Interest Rate Swap Yields: Some ARDL Models

  Tanweer Akram and Khawaja Mamun
  Abstract

  This paper examines the dynamics of euro-denominated (EUR) long-term interest rate swap yields. It shows that the short-term interest rate has an economically and statistically significant effect on EUR swap…more

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• One-Pager No. 72
  May 10, 2024

  If Government Can Print Money, Why Does It Borrow?

  L. Randall Wray
  Abstract

  Recently, the neglected question of why the US government borrows, given that it can print money, has arisen in the context of discussions surrounding a new documentary, Finding the Money. As L. Randall Wray observes in this one-pager, Modern Money Theory has been providing answers to this question for some time; and, he argues, it is a topic that mainstream economists are ill-equipped to address, since very few concern themselves with the monetary operations that underlie the question of why a currency-issuing government issues debt.

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• Working Paper No. 1050
  May 07, 2024

  Macroeconomic Effects of a Government Overdraft on Its Central Bank Account

  Tarron Khemraj
  Abstract

  The Guyana government, from 2015 to 2021, accumulated a large overdraft on its central bank account. It owed this overdraft to a binding debt ceiling limit and fractious political environment…more

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• 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)…more

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• Working Paper No. 1048
  April 19, 2024

  An Empirical Analysis of Swedish Government Bond Yields

  Tanweer Akram and Mahima Yadav
  Abstract

  This paper econometrically models the dynamics of Swedish government bond (SGB) yields. It examines whether the short-term interest rate has a decisive influence on long-term SGB yields, after controlling for…more

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• 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…more

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