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BlogRedistribution of Wealth, Foreclosure Style
March 21, 2012 Matthew Goldstein and Jennifer Ablan report on the latest US investment craze: buying up large bundles of foreclosed homes from Fannie Mae and renting them out to take advantage of the hot rental market. Randall Wray is among the critics quoted in the article who contend that, as Goldstein and Ablan put it, “the federal [...] Blog -
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To Help Address Inequality, Reinvent Fiscal Stimulus
March 20, 2012 In 2010, the first year of the economic recovery, 93 percent of all income growth in the US was captured by the top 1 percent, according to Emmanuel Saez. There are a whole host of reasons for the stubborn persistence of corrosive levels of inequality, but one of the surprising contributing factors may be found [...] Blog -
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What a Real Fiscal Crisis Looks Like
March 19, 2012 It says something about how badly the battle for public opinion on budget matters has been lost when a headline about a “fiscal cliff” the US is about to fall over in 2013 leaves you grimly expecting a pile of words dedicated to the poorly articulated threat of near-term public debt and deficits. But in [...] Blog -
Policy Note No. 2Full Employment through Social Entrepreneurship
March 19, 2012 The conventional approach of fiscal policy is to create jobs by boosting private investment and growth. This approach is backward, says Research Associate Pavlina R. Tcherneva. Policy must begin by...more Publication -
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Opinions on Modern Monetary Systems Not Sharply at Odds
March 15, 2012 The Nation notes that austerity policies in Europe have proved to be very damaging to economic growth in the region, and points out that after adhering to IMF and EU austerity programs since last May, Portugal is “even deeper in the hole. The austerity has only increased its debt, as it has spread more suffering.” [...] Blog -
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Greece’s Pyrrhic Victories
March 14, 2012 C J Polychroniou explains how the latest pair of efforts aimed at addressing the Greek crisis, the newest bailout package and the bond swap, create tremendous complications down the road even if they may offer a temporary respite. As you know, the bailout money was shackled to a series of grim austerity measures that will [...] Blog -
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Why Haven’t Business Groups Pushed Harder for Stimulus?
March 13, 2012 Although recent employment numbers seem to have set off a fresh round of complacency, the December Strategic Analysis from the Levy Institute makes it pretty clear that more fiscal stimulus is necessary if the economy is going to reach decent levels of growth and employment anytime soon. However, there’s very little reason to think that [...] Blog -
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Money and Self-Justifying Economic Models
March 13, 2012 Philip Pilkington shares a discussion he had with Dean Baker about, among other things, the Post-Keynesian take on the limitations of some conventional economic models (of the “LM” part of IS-LM, in particular. And if that just looks like an arbitrary string of letters to you, Pilkington has an accessible explanation at the beginning of [...] Blog -
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Healthcare and the Budget Forecast: Don’t Think of the Children
March 09, 2012 Medicare cost growth has been slowing down, and according to research published in the New England Journal of Medicine there may be more going on here than just a temporary reaction to the recession. This is just one analysis of course, but if it pans out, if it marks the beginning of a sustained trend, [...] Blog -
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“What Manner of Union Is This?”
March 08, 2012 The title of C. J. Polychroniou’s latest policy note, “Neo-Hooverian Policies Threaten to Turn Europe into an Economic Wasteland,” gives you a pretty good idea of where he’s coming from: There can be no denying that, despite the experiences provided by the Great Depression and the numerous financial crises that have taken place since 1973, [...] Blog -
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Wray on the Burden of Social Security
March 07, 2012 Randall Wray has been engaged in a back-and-forth with John Carney of CNBC. Their latest exchange touched on the question of the “real” economic burdens of Social Security (distinct from issues of affordability). Wray responds: “John Carney agrees with me that supporting our elderly is not an ‘affordability’ problem, but he claims that I fail [...] Blog -
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“I Happen to Have Mr. McLuhan Right Here,” Wonk Edition
March 07, 2012 It won’t be quite as satisfying as having Marshall McLuhan stashed in a corner to back up your argument, but for the next time you find yourself in a real-time wonkfight, FRED (the go-to database of the St. Louis Fed) is now available as a mobile app. Blog -
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Minsky Explains Bank Management Motivation
March 02, 2012 Your Minsky quotation of the day: The rise in bank share prices that follows a growth in profitability is particularly important in a world of professionally managed institutionalized banks. The typical professional bank president is not a rich man when he starts his career. As a bank president he is a hired hand trying to [...] Blog -
Working Paper No. 710The European Central Bank and Why Things Are the Way They Are
March 02, 2012 Not since the Great Depression have monetary policy matters and institutions weighed so heavily in commercial, financial, and political arenas. Apart from the eurozone crisis and global monetary policy issues,...more Publication -
Working Paper No. 710
Η Ευρωπαϊκή Κεντρική Τράπεζα και γιατί έχουν έτσι τα πράγματα
March 02, 2012 Με δεδομένη τη κλίμακα και το εύρος της κρίσης στην ευρωζώνη, η πολιτική και τα μέτρα που λαμβάνονται (ή δεν λαμβάνονται) από την Ευρωπαϊκή Κεντρική Τράπεζα (ΕΚΤ) έχουν ουσιαστικό αντίκτυπο...more Publication -
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EU Anorexia
March 01, 2012 C. J. Polychroniou surveys the distressing results, in terms of unemployment (and particularly youth unemployment), of the “neo-Hooverism” and obsession with price stability that permeate European Union policymaking and explains that a fundamental change in approach is needed: Europe is in dire need of an economic and political revolution. It needs an immediate return to [...] Blog -
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Greece and Misleading Fables
February 29, 2012 Yanis Varoufakis, former adviser to the Greek Prime Miniser and co-author of “A Modest Proposal,” delivers this special report for Channel 4 News on the situation in Greece: (credit to Naked Keynesianism) A quick comparison of working hours for supposed Greek “grasshoppers” and German “ants,” or of the generousness of their governments’ respective social welfare [...] Blog -
Working Paper No. 709
Too Big to Fail
February 28, 2012 Government forbearance, support, and bailouts of banks and other financial institutions deemed “too big to fail” (TBTF) are widely recognized as encouraging large companies to take excessive risk, placing smaller...more Publication -
Working Paper No. 709
«Πάρα πολύ μεγάλες για να καταρρεύσουν»
February 28, 2012 Οι κρατικές πολιτικές χαλαρής αντιμετώπισης, στήριξης και διάσωσης των τραπεζών και άλλων χρηματοπιστωτικών οργανισμών που θεωρούνται «πολύ μεγάλοι για να καταρρεύσουν» αναγνωρίζονται ευρέως ως πολιτικές που ενθαρρύνουν τις μεγάλες επιχειρήσεις...more Publication -
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A Cycle to Watch Out For
February 27, 2012 Perhaps we’re back to our old ways. For many moons, the household savings rate has again been falling, though it is still above the levels reached in the years leading up to the home loan crisis of 2007–2009. There are even some signs of a resurgence of the mortgage-backed securities industry. Could the economy be [...] Blog -
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Will the Central Bank Bailouts Ever End?
February 24, 2012 (cross posted at EconoMonitor) Guess which US bank holds assets equal to a fifth of US GDP. Now guess what percent of its assets have extremely long maturities, greater than ten years: a) 10%; b) 20%; c) 30%; d) 40%; e) 50%. Answer: The Fed, and e) 50% of its assets have ten years or [...] Blog -
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Papadimitriou on Cross Talk
February 23, 2012 Everyone from Amity Shlaes to Mitt Romney and the European Commission has been telling us lately that slashing government spending under current economic conditions will depress growth. On “Cross Talk” Dimitri Papadimitriou debates the merits (or lack thereof) of austerity and explains why the United States of Europe needs to become more like the United [...] Blog -
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Reader’s Guide to the Limitations of Orthodoxy
February 22, 2012 Matías Vernengo does a quick review of “Getting Up to Speed on the Financial Crisis,” which is a survey of work on the global financial crisis that will be published in the Journal of Economic Literature. “Getting Up to Speed” is intended as a “one-weekend-reader’s guide” to the crisis. It offers, says Vernengo, a fine [...] Blog -
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Fiddling in Euroland
February 21, 2012 The Financial Times got its hands on a confidential “debt sustainability analysis” that was circulated among eurozone finance ministers. The gist of the analysis is that the austerity measures being imposed on the Greek population will depress growth so brutally that the government will almost certainly not meet its debt reduction targets: …even under the [...] Blog