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BlogThe 0.2 Percent Solution: Some Advice for Debt Hawks
October 25, 2013 Larry Summers recently noted that the projected long-term budget deficit for the federal government basically disappears if we’re able to achieve annual economic growth rates that are 0.2 percentage points higher than the Congressional Budget Office assumes. The notion that eliminating the budget deficit is a valuable goal in and of itself deserves some pushback. [...] Blog -
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Can R&D Help Get Us Out of this Mess? A New Stock-Flow Analysis
October 23, 2013 Dimitri Papadimitriou, Greg Hannsgen, Michalis Nikiforos, and Gennaro Zezza have just published a new strategic analysis for the US economy, with a baseline projection and alternative policy simulations through the end of 2016. The report takes a closer look at the potential payoff of R&D investment in the context of a US export strategy. As [...] Blog -
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Minsky on Schumpeter, “Dilettantism,” and History
October 18, 2013 As is well known, Hyman Minsky was a student of Joseph Schumpeter’s at Harvard. Minsky’s “stages” theory of capitalist development, fleshed out during the later part of his life while he was here at the Levy Institute, arguably owes something to the influence of his former dissertation adviser. There’s a short paper in the archive [...] Blog -
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Bellofiore on the Socialization of Investment
October 17, 2013 From part four of Mariana Mazzucato’s “Rethinking the State” series, Riccardo Bellofiore discusses Hyman Minsky’s Schumpeterian spin on the “socialization of investment”: [iframe width=”448″ height=”242″ src=”//www.youtube.com/embed/rj8vyzWbZh8?feature=player_detailpage” frameborder=”0″ allowfullscreen] Blog -
Strategic AnalysisRescuing the Recovery: Prospects and Policies for the United States
October 16, 2013 If the Congressional Budget Office’s recent projections of government revenues and outlays come to pass, the United States will not grow fast enough to bring down the unemployment rate between...more Publication -
Strategic Analysis
Η εδραίωση της ανάκαμψης: Προοπτικές και πολιτικές για τις Ηνωμένες Πολιτείες
October 16, 2013 Στην περίπτωση που επαληθευτούν οι προβλέψεις του Γραφείο Προϋπολογισμού του Κογκρέσου για τα κρατικά έσοδα και τις δαπάνες, η οικονομία των Ηνωμένων Πολιτειών δεν θα μπορέσει να αναπτυχθεί αρκετά γρήγορα...more Publication -
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Minsky Does Rio: Notes from a Conference
October 14, 2013 I recently returned from a conference in Brazil jointly sponsored by the Levy Economics Institute, the Ford Foundation, and the Brazilian research group MINDS. It is part of a bigger project to take Hyman P. Minsky global. In my view, Minsky was hands-down the greatest economist of the second half of the twentieth century and [...] Blog -
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Tcherneva on Our Self-Induced Paralysis
October 11, 2013 Pavlina Tcherneva was interviewed yesterday on Los Angeles public radio about the ongoing debt ceiling face-off and government shutdown. She referenced Ben Bernanke’s “self-induced paralysis” phrase (which he used to describe Japan’s lost decade) as an accurate description of the current US situation and expressed concern that shutdown and debt ceiling standoffs may represent the [...] Blog -
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What Happens if We Don’t Raise the Debt Ceiling? A Stock-Flow Analysis
October 10, 2013 Some commentators and members of Congress have insisted that failing to raise the debt ceiling would not necessarily require defaulting on the national debt. The theory is that Treasury could prioritize payments to bond holders while defaulting only on commitments to other payees (say, Social Security recipients). Most of the discussion of what might happen [...] Blog -
Policy Note No. 9A New “Lehman Moment,” or Something Worse?
October 10, 2013 The United States entered the second week of a government shutdown on Monday, with no end to the deadlock in sight. The cost to the government of a similar shutdown...more Publication -
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Reorienting Fiscal Policy and Understanding Currency Sovereignty
October 10, 2013 From Mariana Mazzucato’s “Rethinking the State” video series: Pavlina Tcherneva discusses the implications of the Great Financial Crisis of 2007 for employment outcomes and fiscal policy. She argues that the current view of Keynesian fiscal policies is based on a misreading of Keynes. Simply boosting demand — through what should be understood as trickle-down fiscal [...] Blog -
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Flash from the Past: Why QE2 Wouldn’t Save Our Sinking Ship
October 09, 2013 Here’s a piece I published in HuffPost back on Oct 18, 2010. A flash from the past – three years ago – predicting that QE2 would prove to be as impotent as QE1 had been. And here we are, folks. No recovery in sight–at least once you get off Wall Street. We’re now set–yet again [...] Blog -
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Why Greece Can’t Wait for the Long Run
October 08, 2013 The policies Greece has been implementing as part of the price for its two bailouts are not working the way we were told they would. That’s pretty clear if you look at the troika’s endlessly downgraded projections for key economic indicators. Here, for instance, is actual Greek unemployment, compared to a series of troika projections [...] Blog -
Working Paper No. 777A Simple Model of Income, Aggregate Demand, and the Process of Credit Creation by Private Banks
October 07, 2013 This paper presents a small macroeconomic model describing the main mechanisms of the process of credit creation by the private banking system. The model is composed of a core unit—where...more Publication -
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An Incomplete Defense of UK Austerity
October 06, 2013 Kenneth Rogoff placed an editorial in Wednesday’s Financial Times defending the Cameron government’s austerity policies as a kind of insurance against the possibility of investor flight from UK government debt. He concedes that the specific form of austerity that was implemented in the UK was ill-advised — public investments in infrastructure, he says, can be [...] Blog -
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Post-Keynesians in Paradise
October 03, 2013 We’ve just returned from Rio de Janeiro, where the Levy Institute held a conference cosponsored by the Multidisciplinary Institute for Development and Strategies (MINDS), supported by the Ford Foundation. The two day conference dealt with global financial governance, financial reregulation, and development challenges in a Minskyan context — a lot of discussion of the regulation [...] Blog -
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The GOP Lost the Election but Is Winning Fiscal Policy
October 03, 2013 Congressional Republicans may or may not suffer politically from the government shutdown and upcoming debt ceiling fight, but in terms of policy they have already secured a significant and lopsided victory in the battle over the budget, whether they realize it or not. Repeal of the Affordable Care Act seems pretty unlikely (not just because [...] Blog -
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Are Structural Reforms the Cure for Southern Europe?
September 30, 2013 I have recently signed the “Economists’ Warning” on the situation in the eurozone, which states that It is essential to realise that if the European authorities continue with policies of austerity and rely on structural reforms alone to restore balance, the fate of the euro will be sealed. The Economists’ Warning was published by the [...] Blog -
Working Paper No. 776
Fiscal Policy and Rebalancing in the Euro Area
September 30, 2013 The German debt brake is often regarded as a great success story, and has therefore served as a role model for the Euro area and its fiscal compact. In this...more Publication -
Working Paper No. 776
Δημοσιονομική πολιτική και επανεξισορρόπηση στην ευρωζώνη
September 30, 2013 Το «φρένο χρέους» στη Γερμανία θεωρείται επιτυχημένη πολιτική και ως εκ τούτου λειτουργεί ως πρότυπο για τη ζώνη του ευρώ και το λεγόμενο «δημοσιονομικό σύμφωνο». Στην παρούσα εργασία ασκούμε έντονη...more Publication -
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Euroland’s “Recovery” – Three Cheers for Dr Schäuble!
September 30, 2013 (first appeared in Social Europe) Never miss a party – especially one you’ve been desperately waiting for for so long. This much the authorities in Europe’s currency union clearly understand. As soon as Eurostat had released its first estimate for GDP growth in the spring quarter in mid August (1st estimate here), which was missing [...] Blog -
Working Paper No. 775
Wage and Profit-led Growth
September 26, 2013 We argue that a fundamental difference between Post-Keynesian approaches to economic growth lies in their treatment of investment. Kaleckian-Robinsonian models postulate an investment function dependent on the accelerator and profitability....more Publication -
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Does the Fed Have the Tools to Achieve its Dual Mandate?
September 25, 2013 Stephanie Kelton recently sat down with L. Randall Wray to discuss, among other things, the news that the Federal Reserve will refrain for the time being from tapering its asset purchases (QE). Wray took the occasion to elaborate on his view that quantitative easing is ineffective as economic stimulus and that — given the tools [...] Blog
