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BlogHow BIG is BIG Enough: Would the Basic Income Guarantee Satisfy the Unemployed?
July 10, 2013 (This is a prequel, Part 1 on BIG; I already did Part 2. Sorry it is longish, but not technical.) Last week I criticized an article by Allan Sheahan who argued that “Jobs Are Not the Answer” to America’s unemployment problem. The thesis was based on two propositions. First, labor productivity has grown so we’d [...] Blog -
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A New Stock-Flow Model for Greece Shows the Worst Is Yet to Come
July 09, 2013 Dimitri Papadimitriou, Gennaro Zezza, and Michalis Nikiforos have put together a stock-flow consistent model for Greece in order to analyze the path of that nation’s struggling economy and assess alternatives to reigning austerity policies. This is a macroeconomic model based on the New Cambridge approach of Wynne Godley and is the same sort of model [...] Blog -
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Deficit Lovers?
July 05, 2013 Here’s a piece from yesterday’s NYTimes by Annie Lowrey: “Warren Mosler, a Deficit Lover With a Following.” In the piece, Lowrey quotes blogger Mark Thoma as follows: “They [followers of MMT] deny the fact that the government use of real resources can drive the real interest rate up,” said Mark Thoma, an economics professor and [...] Blog -
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Papadimitriou: Layoffs of Public Employees “Only the Tip of the Iceberg” (Greek)
July 03, 2013 Segment (in Greek) begins at 49:35. Blog -
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Papadimitriou: Wide-ranging Measures Needed to Tackle Unemployment in the Southern Eurozone (Greek)
July 03, 2013 In this Skai TV interview, Dimitri Papadimitriou focuses on the eurozone banking crisis and rising unemployment in the southern tier, arguing that the approval of 200 million euros to combat unemployment in Greece is far too small to reach the desired outcome. (Segment, in Greek, begins at 23:30) Blog -
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An Exception to a Keynesian Rule?
July 02, 2013 Paul Krugman warns against “caricaturing” Keynesian economics, and in particular the General Theory (GT), Keynes’s best known work. One caricature heard from time to time is that the book is not mathematically tractable. The caricature also claims that no one has succeeded in fitting such a contradictory and confusing bunch of arguments into a clear, [...] Blog -
Working Paper No. 768Evaluating the Gender Wage Gap in Georgia, 2004–2011
July 02, 2013 This paper evaluates the gender wage gap among wage workers along the wage distribution in Georgia between 2004 and 2011, based on the recentered influence function (RIF) decomposition approach developed...more Publication -
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Are More Jobs the Answer? The “BIG” Bait and Switch
July 01, 2013 Last week Allan Sheahan published a piece arguing that “Jobs Are Not the Answer” to America’s unemployment problem. Here’s his reasoning: “The current unemployment rate of 7.5% percent means close to 20 million Americans remain unemployed or underemployed. Nobody states the obvious truth: that the marketplace has changed and there will never again be enough [...] Blog -
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Germany and the Euro: Paragon or Parasite?
June 28, 2013 The French and German governments recently issued a joint statement titled “Together for a stronger Europe of Stability and Growth.” The communiqué emphasizes strengthened policy coordination and the use of indicators in establishing a common assessment of economic conditions in the currency union as a whole, member states, and particular markets. The new push for [...] Blog -
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Euro Crisis Sees Reloading Of Germany’s Current Account Surplus
June 26, 2013 Who is running the largest current account surplus in the world? China? Saudi Arabia? Both wrong! These are only the number two and three countries. China had a record $420bn surplus in 2008, but that imbalance has more than halved since. As a share of GDP China’s external imbalance is down from ten to two-and-a-half [...] Blog -
Working Paper No. 767
Germany and the Euroland Crisis
June 21, 2013 This paper investigates Germany’s vulnerability to the ongoing Euroland crisis. In 2010–11, Germany experienced a strong rebound from the global financial crisis of 2008–09. The Euroland crisis then meant record...more Publication -
Working Paper No. 767
Η Γερμανία και η κρίση στην ευρωζώνη
June 21, 2013 Η εργασία αυτή διερευνά την ευπάθεια της Γερμανίας στη συνεχιζόμενη κρίση της ευρωζώνης. Την περίοδο 2010–11, η Γερμανία ανέκαμψε από την παγκόσμια οικονομική κρίση του 2008-09. Η κρίση της ευρωζώνης...more Publication -
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Fed Tapering and Bullard’s Dissent
June 20, 2013 (Updated) Here’s what’s new from yesterday’s FOMC statement and Bernanke’s press conference: the Fed has indicated that asset purchases (QE) will end when unemployment hits 7 percent. (Note that that’s different from the point at which the Fed will begin considering raising short-term interest rates — previously linked to a threshold of 6.5 percent unemployment.) [...] Blog -
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Coming Soon: Another London Whale Shocker?
June 19, 2013 Remember last summer? The London Whale, that blockbuster adventure thriller, triggered one chill after another as the high-risk action at JPMorgan Chase was revealed. Today, the threats posed by megabanks remain just below the surface — no crisis at the moment — but they’re equally dangerous. A major sequel this year cannot be ruled out. [...] Blog -
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Galbraith on the Greek Crisis and the “Very Patient and Stubborn Profession”
June 18, 2013 Last week, James Galbraith was supposed to be interviewed by ERT, the public broadcaster in Greece. Events intervened when the Greek government ordered that ERT be shut down, and so instead of sitting for the interview, Galbraith delivered this speech in Thessaloniki in front of a large gathering assembled in response to the closure (ERT [...] Blog -
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A Fiscal Fallacy?
June 17, 2013 We have been advocates of the theory that fiscal tightening is threatening economic recovery (last week, for example). John Taylor objects to the view that fiscal tightness has been the key to the slowness of growth in the recovery. In his blog, he states, “As a matter of national income and product accounting, it is true [...] Blog -
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New Book: The Rise and Fall of Money Manager Capitalism
June 17, 2013 A new book by the Levy Institute’s Randall Wray and Éric Tymoigne (release date July 31): The Rise and Fall of Money Manager Capitalism: Minsky’s half century from World War Two to the Great Recession The book studies the trends that led to the worst financial crisis since the Great Depression, as well as the [...] Blog -
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End of Week Links
June 14, 2013 Boston Fed’s Eric Rosengren on the risk of financial runs and the implications for financial stability* 22nd Annual Minsky Conference (video) *(Link has changed: see below the fold of this post for Rosengren video) Paying Paul and Robbing No One: An Eminent Domain Solution for Underwater Mortgage Debt New York Fed ‘Financialization’ as a Cause [...] Blog -
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Papadimitriou: No End in Sight for Greece’s Economic Crisis (Greek)
June 13, 2013 In the context of the IMF’s latest release in its mea culpa series, this time on the problems with the Greek bailout plan (pdf), Dimitri Papadimitriou appeared on Skai TV to discuss the worsening crisis in Greece, the failure of austerity, and the need to renegotiate the bailout deal. Segment (in Greek) begins at 9:35 [...] Blog -
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Has There Been a Fiscal Shock in the United States Recently?
June 12, 2013 I used a figure like the one above in a talk that I gave at the Eastern Economic Association 39th Annual Conference last month on the topic “Heterodox Shocks.” (The diagram above incorporates data released at the end of last month.) Total government spending in the US, shown in red, continues to fall as a [...] Blog -
Working Paper No. 766
Heterodox Shocks
June 11, 2013 Should shocks be part of our macro-modeling tool kit—for example, as a way of modeling discontinuities in fiscal policy or big moves in the financial markets? What are shocks, and...more Publication -
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Why Is the Federal Reserve Talking about “Tapering”?
June 11, 2013 Ryan Avent wonders why, with unemployment too high and inflation too low — even by the Federal Reserve’s own previously articulated standards — there is so much talk of “tapering” coming from members of the Open Market Committee (talk of slowly drawing down the Fed’s asset purchases). Avent mentions the possibility that considerations other than [...] Blog -
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UK Debate and the Facts Moving in Opposite Directions
June 07, 2013 Today in the Guardian, Philip Pilkington notices the British Labour party potentially inching away from their scaled-down proposal for a “job guarantee,” an idea fleshed out by Hyman Minsky: Minsky’s theories of financial instability suggested that capitalist economies were prone to serious downturns in which huge amounts of the labour force would find themselves unemployed. [...] Blog
