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Working Paper No. 483Fisher’s Theory of Interest Rates and the Notion of “Real”
By providing five different criticisms of the notion of real rate, the paper argues that this concept, as Fisher defined it or as a definition, is not relevant to economic analysis. Following Keynes and other post-Keynesians, the article shows that the notion of real rate is microeconomically and macroeconomically unfounded. Adjusting interest rates for inflation […] -
Public Policy Brief No. 87Maastricht 2042 and the Fate of Europe
Unemployment in the European Union (EU) is a serious problem that threatens to disrupt the integration of accession countries, the character of individual countries, and the continued existence of the EU. European integration poses a huge conundrum for European employment because the conventional theory explaining unemployment in Europe—labor market rigidities—is wrong. According to Senior Scholar […] -
Working Paper No. 482
Net Intergenerational Transfers from an Increase in Social Security Benefits
When the age of death is uncertain, individuals will leave bequests–even if they have no desired bequests–simply because they will hold wealth against the possibility of living longer. Bequests are accidental. Starting from a baseline level of Social Security benefits, an increase in benefits will cause consumption to increase. However, consumption may not increase by […] -
Working Paper No. 481
An Inquiry into the Nature of Money
The paper argues that the functional approach of money does not provide a good method to study monetary history and monetary mechanisms. An alternative approach is developed and illustrated by analyzing the role of tobacco and cowry shells in past monetary systems. It is shown that any monetary system has specific properties that most students […] -
Working Paper No. 480
Methodology and Microeconomics in the Early Work of Hyman P. Minsky
This paper reviews the recently published doctoral thesis of Hyman P. Minsky, summarizing its main contributions to methodology and microeconomics. These were aspects of economics with which Minsky is not usually associated, but which lie at the foundation of his later work. They include critical remarks on Cambridge economics. The paper then draws out some […] -
Working Paper No. 479
European Welfare State Regimes and Their Generosity toward the Elderly
This paper examines the generosity of the European welfare state toward the elderly. It shows how various dimensions of the welfare regimes have changed during the past 10 to 15 years and how this evolution is related to the process of economic integration. Dimensions include general generosity toward the elderly and, more specifically, generosity toward […] -
Strategic AnalysisCan Global Imbalances Continue?
In this new Strategic Analysis, we review what we believe is the most important economic policy issue facing policymakers in the United States and abroad: the prospect of a growth recession in the United States. The possibility of recession is linked to the imbalances in the current account, government, and private sector deficits. The current […] -
Working Paper No. 478
On Lower-bound Traps
We present a simple theoretical framework that integrates the notion of the natural or neutral interest rate, liquidity preference theory, and the monetary policy practice by modern central banks. We claim that this theory explains the conditions under which an economy will experience an aggregate demand deficiency problem within a modern institutional setting. Contrary to […] -
Public Policy Brief Highlight No. 88US Household Deficit Spending
Over the past decade, deficit spending by consumers has supported the United States economy. Research Associate Robert Parenteau analyzes the financial balance of American households and finds that the pace of deficit spending is likely to stall and, possibly, reverse course. This reversion will jeopardize US profit and economic growth, as well as the growth […] -
Public Policy Brief Highlight No. 87
Maastricht 2042 and the Fate of Europe
Unemployment in the European Union (EU) is a serious problem that threatens to disrupt the integration of accession countries, the character of individual countries, and the continued existence of the EU. European integration poses a huge conundrum for European employment because the conventional theory explaining unemployment in Europe—labor market rigidities—is wrong. According to Senior Scholar […] -
Report No. 4
Report October 2006
Most people are not accustomed to thinking of taxation as a gender issue. But research presented at the recent Levy Institute conference on gender equality, tax policies, and tax reform, summarized in this issue, show that taxes affect men and women quite differently. Contents: CONFERENCE Gender Equality, Tax Policies, and Tax Reform in Comparative Perspective […] -
Working Paper No. 477
When Knowledge Is an Asset
We study the economics of employment relationships through theoretical and empirical analyses of an unusual set of firms, large law firms. Our point of departure is the “property rights” approach that emphasizes the centrality of ownership’s legal rights to control important, nonhuman assets of the enterprise. From this perspective, large law firms are an interesting […]