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BlogDodd-Frank: Fossil of the Future?
July 23, 2012 There’s a sad truth about the fate of financial regulation: It’s almost certain to be outmoded by the time it’s introduced. This was as true of Glass-Steagall in 1933 as it is of Dodd-Frank today. This month we begin the third year since the Dodd-Frank Wall Street reform act passed, with the struggle over its [...] Blog -
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Can We Afford the Usual?
July 19, 2012 With yesterday’s quarterly BLS data release on “usual weekly earnings” out, I have once again constructed some “alternative” measures of real wages, based on price indexes for food commodities at the wholesale level. The commodity-based indexes are depicted in the figure above with lines in various colors. Compared to the more typical measure of real, [...] Blog -
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What to Say About the Low Yields?
July 18, 2012 Correlation is not causation, of course, but I’m beginning to suspect that there might be some operational relationship between the frequency with which you hear people complaining about the crippling burden of government debt, and a fall in the cost of government borrowing. Last week the Financial Times reported that investors had accepted “the lowest [...] Blog -
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A Debt Jubilee via Eminent Domain?
July 16, 2012 Local government officials in San Bernardino county have apparently heard enough about how the overhang of mortgage debt is holding back the recovery, and they’re considering taking matters into their own hands. Reuters‘ Matthew Goldstein and Jennifer Ablan report on the background discussions leading up to a proposal that is being considered by officials in [...] Blog -
Working Paper No. 728Toward an Understanding of Crises Episodes in Latin America
July 13, 2012 Conventional wisdom about the business cycle in Latin America assumes that monetary shocks cause deviations from the optimal path, and that the triggering factor in the cycle is excess credit...more Publication -
Working Paper No. 728
Η κατανόηση των κρίσεων στη Λατινική Αμερική
July 13, 2012 Η συμβατική σοφία σχετικά με τους επιχειρηματικούς κύκλους στη Λατινική Αμερική υποθέτει ότι οι νομισματικοί κλυδωνισμοί προκαλούν αποκλίσεις από τη βέλτιστη πορεία και ότι ο παράγοντας ενεργοποίησης του κύκλου είναι...more Publication -
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A Keynes-Schumpeter-Minsky Synthesis
July 12, 2012 From the announcement of a new joint research project by Mariana Mazzucato and the Levy Institute’s Randall Wray (“Financing Innovation: an Application of a Keynes-Schumpeter-Minsky Synthesis”): The purpose of this project is to integrate two research paradigms that have strong policy relevance in understanding the degree to which financial markets can be reformed in order [...] Blog -
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The Original Sin
July 11, 2012 When the European Monetary Union was set up, member-states adopted what was essentially a foreign currency (the euro) but were left in charge of their own fiscal policy. Dimitri Papadimitriou and Randall Wray explain in a new Policy Note (“Euroland’s Original Sin“) why this basic structural defect was always bound to tear the eurozone apart. [...] Blog -
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More on Austerity: Fiscal Threats to the Food Safety Net
July 10, 2012 As the Center on Budget and Policy Priorities (CBPP) has reported in several recent postings, cuts to SNAP—formerly known as the food stamp program—now being considered in Washington would impose severe hardship on millions of people who use SNAP benefits to buy groceries in retail stores. For example, the Center released a report a few [...] Blog -
Working Paper No. 727
Simulations of Full-Time Employment and Household Work in the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Argentina, Chile, and Mexico
July 05, 2012 The method for simulation of labor market participation used in the LIMTIP models for Argentina, Chile, and Mexico is described. In each case, all eligible adults not working full-time were...more Publication -
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Defense Department Minskyites
July 02, 2012 A few months ago we wondered why it was that business groups hadn’t been pushing harder for more stimulus. My proposed (unoriginal) explanation had to do with inequality and decoupling; Paul Krugman suggested social pressures might also play a part. But as it turns out, there’s another answer: they are pushing! The National Association of [...] Blog -
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Greenspan and Godley
June 26, 2012 Alan Greenspan is apparently writing a book to determine why economic models (all of them, he says) failed to sniff out the financial crisis and ensuing recession. “While the models themselves capture the nonfinancial part of the economy rather well,” says Greenspan, “they’ve been wholly inadequate in understanding how the complex financial system works, both [...] Blog -
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Next Up for the Broccoli Brigades: The Consumer Financial Protection Bureau
June 25, 2012 Brad Plumer reports that a Texas-based bank and a pair of conservative advocacy groups have filed suit against the Consumer Financial Protection Bureau, claiming that the agency is unconstitutional (the agency was created by the Dodd-Frank Act and was a longtime cause of senatorial candidate Elizabeth Warren, who had a hand in setting it up). [...] Blog -
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So What Exactly Was Robinson’s “Cheap Money Policy”?
June 21, 2012 In my last post, I quoted Joan Robinson, the renowned Cambridge University economist, on the determinants of long-term interest rates. The mention of Robinson was made in the context of a comment on the Fed open market committee meeting earlier this week and Chairman Ben Bernanke’s press conference on Wednesday. For those who might be [...] Blog -
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A Continuation of the Fed’s “Cheap Money Policy”?
June 20, 2012 As I write, markets are wondering what Fed Chairman Ben Bernanke will say about interest rates in a press conference taking place this afternoon. Many economists, including some on the Federal Reserve’s rate-setting committee, are arguing that the Chairman is courting inflation with his policies of keeping interest rates low. He has been using three [...] Blog -
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What Would a Grexit Look Like?
June 19, 2012 Slate‘s Matt Yglesias nicely captures the gap between the reactions of opinion-makers to the Greek election results and the reactions of markets (Sunday’s electoral results point to a coalition government centered around New Democracy and Pasok): “Markets were supposed to be reassured. Instead they’re freaking out. European stock markets are declining, and Spanish bond yields [...] Blog -
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What This Election Isn’t About
June 18, 2012 This received little attention, but President Obama recently sat down for an interview with Mark Halperin of Time magazine. The interview didn’t generate anything you might call “newsworthy,” littered as it was with tired exchanges like this one: Q: “Why not in the first year, if you’re [re-]elected — why not in 2013, go all [...] Blog -
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Some Views on the “Cliff”
June 15, 2012 On the topic of public policy, this Works Progress Administration (WPA) poster from the 1930s seems particularly relevant this year. You may have heard of the “fiscal cliff” that the federal budget will fall off in January, under existing law. It will be quite a fiscal contraction, if it happens as scheduled: about 4 percent [...] Blog -
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Austerity Wars: A New (False) Hope
June 14, 2012 The intensity of the debate over whether the Baltic economies (Estonia, Latvia, and Lithuania) should serve as models for the rest of the eurozone periphery has been raised a couple notches. Last week, Paul Krugman noted that the Estonian recovery, while positive, has not been as remarkable as austerity supporters tend to imply. This prompted [...] Blog -
One-Pager No. 32Η λιτότητα στις χώρες της Βαλτικής—η νέα απατηλή ελπίδα
June 14, 2012 Η Ιρλανδία αποτελούσε κάποτε παράδειγμα επιτυχίας των μέτρων δημοσιονομικής λιτότητας, αλλά οι απογοητευτικές οικονομικές επιδόσεις της χώρας το τελευταίο διάστημα έχουν αναγκάσει τους απολογητές της λιτότητας να αναζητούν νέο μοντέλο,...more Publication -
One-Pager No. 32
Baltic Austerity—the New False Hope
June 14, 2012 Ireland was at one time the poster child for fiscal austerity, but that country’s disappointing economic performance of late has left austerity apologists searching for a new model—and the Baltic...more Publication -
Working Paper No. 726
Time Use of Mothers and Fathers in Hard Times
June 11, 2012 The recession precipitated by the US financial crisis of 2007 accelerated the convergence of women’s and men’s employment rates, as men experienced disproportionate job losses and women’s entry into the...more Publication -
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Help Is Not on the Way
June 11, 2012 An update on the distressing state of fiscal and monetary policy in the United States and Europe: Chairman of the Federal Reserve to Congress: “I’d be much more comfortable, in fact, if Congress would take some of this burden from us ….” Congress to Bernanke: No thanks. And while we’re on the subject, we would [...] Blog -
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Lessons of the JPMorgan Chase Affair: What Is All This Risk For?
June 08, 2012 After the news broke of his firm’s (now $3 billion) loss on a hedge gone awry, Jamie Dimon quipped: “just because we’re stupid doesn’t mean everybody else was.” Stupidity, however, is beside the point. Jan Kregel has pointed out how a lot of the discussion surrounding this episode is designed to give the impression that [...] Blog