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  Public Policy Brief Highlight No. 44

  The Asian Disease: Plausible Diagnoses, Possible Remedies

  Asia presents a cumulation of apparently rational decisions that produced disastrous results—a textbook illustration of “financial instability” developing from the economics of euphoria. A combination of factors produced the crisis as enormous capital inflows were drawn to the “Asian miracle”-pegged exchange rates with fluctuating interest rates, integrated economies, moral hazard created by central banks, and […]
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  Public Policy Brief Highlight No. 43

  How Big Should the Public Capital Stock Be?

  Investment in infrastructure is necessary for a strong, flexible, and growing economy. However, the relationship between public capital and economic growth is not linear. At a certain level, the tax burden associated with financing and maintaining public capital reduces the returns to private industry, which in turn reduces growth; also, different types of spending have […]
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  Working Paper No. 252

  Modern Money

  All modern economies have a “chartalist” or “state” money, as acknowledged by Friedrich Knapp and John Maynard Keynes. In this paper, I examine the “history” of money to shed light on its origins. I also examine in detail the views of those who accepted the chartalist, or state, approach to money, from Adam Smith to […]
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  Working Paper No. 251

  Paul Davidson’s Economics

  Paul Davidson is one of the best known and most influential post-Keynesian economists. He has insisted throughout his career that economists should focus on real-world problems and that the purpose of economic policy is to help society become more humane and civilized. He is also known for his insistence on adhering to the words and […]
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  Working Paper No. 250

  Explaining Long-Term Exchange Rate Behavior in the United States and Japan

  Conventional exchange rate models are based on the fundamental hypothesis that, in the long run, real exchange rates will move in such a way as to make countries equally competitive. Thus they assume that, in the long run, trade between countries will be roughly balanced. The difficulty in assessing expectations about the consequences of trade […]
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  Public Policy Brief No. 42

  Automatic Adjustment of the Minimum Wage

  The fact that every change in the minimum wage requires an act of Congress means that debate over the wisdom of having a minimum is repeatedly returned to the political arena. As inflation continues to erode the value of the minimum wage, each legislative delay means that a larger increase is required. The larger the […]
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  Public Policy Brief Highlight No. 42

  Automatic Adjustment of the Minimum Wage

  The fact that every change in the minimum wage requires an act of Congress means that debate over the wisdom of having a minimum is repeatedly returned to the political arena. As inflation continues to erode the value of the minimum wage, each legislative delay means that a larger increase is required. The larger the […]
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  Working Paper No. 249

  The American Wage Structure, 1920–1947

  This paper uses industrial wage data and a systematic if unconventional selection of methods to examine changes in the inter-industry structure of wages between 1920 and 1947. We first sort among the available data on wage change by industry and occupation for blocs that exhibit common patterns of wage changes over time, reducing the 83 […]
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  Working Paper No. 248

  Can Expenditure Cuts Eliminate a Budget Deficit?

  Australian governments since the late 1970s have attempted to eliminate the fiscal deficit through reductions in expenditure. These efforts have failed. With each successive business cycle the federal government’s budget outcome has been an ever-growing deficit. This paper explains the failure of the government to achieve its balanced budget objective through expenditure reductions. It argues […]
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  Working Paper No. 247

  “Inability to Be Self-Reliant” As an Indicator of US Poverty

  The official poverty measure is based on the premise that all families should have sufficient income from either their own efforts or government support to boost them above a family-size-specific threshold. Given the current policy emphasis on self-reliance and a smaller role for government, this measure appears to have less policy relevance now than in […]
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  Working Paper No. 246

  Derivatives and Global Capital Flows

  Four factors in the current financial crisis in Asia have surprised observers. First, although capital flows in Asia appeared stable, the crisis was precipitated by the reversal of the very large proportion of short-term lending. Second, although Asia appeared to be an example of the maxim that capital flows to the region with the highest […]
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  Report No. 3

  Report August 1998

  In this issue, Senator Daniel Patrick Moynihan talks with Sanjay Mongia about Social Security, tax reform, income inequality, and trade. Moynihan argues that Social Security should return to a pay-as-you-go system that allows participants to invest part of their contribution in a savings plan.   Contents: Symposium on Employment Policy and Labor Markets: Is There […]