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BlogGreenspan and Godley
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
Next Up for the Broccoli Brigades: The Consumer Financial Protection Bureau
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). [...] -
Euro : Intransigência Alemã vai Prevalecer
Valor Econômico, June 22, 12. All rights reserved. Durou pouco o alívio do mercado financeiro com o resultado da eleição grega de domingo, que resultou na formação de um governo favorável ao pacote de resgate das finanças públicas do país. Não há dúvida de que a crise da dívida prossegue na Europa, atacando diretamente a […] -
Blog
So What Exactly Was Robinson’s “Cheap Money Policy”?
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 [...] -
Economists Find Another Good Moment to Consider Minsky
American Banker, June 1, 2012. © 2012 American Banker and SourceMedia, Inc. All Rights Reserved. Hyman Minsky was a maverick economist in his day. He theorized about the inherent instability of financial markets, and viewed the Federal Reserve as the author of both the permission slip and the prescription for economic crises. None of it […] -
Jan Kregel: Banche, deregulation, et le regole del mercato
In audio clips from a forthcoming interview, Senior Scholar Jan Kregel argues that, to address the current crisis, there is a need for regulations that place limits on the activities of financial institutions. The market does not adjust by itself, says Kregel—it needs rules to function efficiently. Radio Audizioni Italiane. Clip 1. Clip 2. -
Blog
A Continuation of the Fed’s “Cheap Money Policy”?
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
What Would a Grexit Look Like?
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 [...] -
Policy Notes No. 7
The Greek Crisis
The European Union’s (EU) handling of the Greek crisis has been an unmitigated disaster. In fact, EU political leadership has been a failure of historic proportions, as its myopic, neoliberal bent and fear-driven policies have brought the eurozone to the brink of collapse. After more than two years of a “kicking the can down the […] -
Blog
What This Election Isn’t About
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 [...] -
Book SeriesContributions in Stock-flow Modeling: Essays in Honor of Wynne Godley
In the 1970s, at a time of shock, controversy and uncertainty over the direction of monetary and fiscal policy, Wynne Godley and the Cambridge Department of Applied Economics rose to prominence, challenging the accepted Keynesian wisdom of the time. This collection of essays brings together eminent scholars who have been influenced by Godley’s enormous contribution […] -
Blog
Some Views on the “Cliff”
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 [...]