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  Working Paper No. 460

  How the Maastricht Regime Fosters Divergence As Well As Fragility

  This paper investigates the phenomenon of persistent macroeconomic divergence that has occurred across the eurozone in recent years. Optimal currency area theory would point toward asymmetric shocks and structural factors as the foremost candidate causes. The alternative hypothesis pursued here focuses on the working of the Maastricht regime itself, making it clear that the regime […]
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  Working Paper No. 459

  Banking, Finance, and Money

  This paper briefly summarizes the orthodox approach to banking, finance, and money, and then points the way toward an alternative based on socioeconomics. It argues that the alternative approach is better fitted to not only the historical record, but also sheds more light on the nature of money in modern economies. In orthodoxy, money is […]
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  Working Paper No. 458

  Dissent and Discipline in Ben Gurion’s Labor Party, 1930–32

  This paper describes a small opposition group that functioned during 1930–33 on the left fringes of Ben Gurion’s Mapai party in Palestine. Mapai dominated Jewish Palestine’s politics, and later the politics of the young State of Israel; it lives on today in Israel’s Labor Party. The opposition group, probably no more than a dozen active […]
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  Book Series

  The Distributional Effects of Government Spending and Taxation

  This book focuses on the distributional consequences of the public sector. It examines and documents, both theoretically and empirically, the effects of government spending and taxation on personal distribution, that is, on families and individuals. In addition, it investigates the relationship between the public sector and the functional distribution of national income. In this respect, […]
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  Policy Notes No. 5

  The Burden of Aging

  Demographers and economists agree that we are aging—individually and collectively, nationally and globally. An aging population results from the twin demographic forces of fewer children per family and longer lives. Most experts recognize the burden that aging causes as the number of retirees supported by each worker rises. This trend is reinforced by the graying […]
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  Report No. 3

  Report July 2006

  Can the growth in the current account deficit be sustained? A new Strategic Analysis by President Dimitri B. Papadimitriou and Research Scholars Edward Chilcote and Gennaro Zezza focuses on net income as an important component of the deficit, particularly the interest paid by the United States on American debt held abroad. Contents: NEW STRATEGIC ANALYSIS […]
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  Working Paper No. 457

  Why Central Banks (and Money) “Rule the Roost”

  Some have argued that a significant decrease in the demand for money, due to financial innovations, could imply that central banks are unable to implement effective monetary policies. This paper argues that central banks are always able to influence the economy’s interest rates, because their liability is the economy’s unit of account. In this sense, […]
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  Working Paper No. 456

  Asset Prices, Financial Fragility, and Central Banking

  The paper reviews the current literature on the subject in both the New Consensus and Post Keynesian frameworks. It shows that both approaches give to central banks a wrong goal (inflation, distribution, curbing speculation, and so on) and a wrong instrument (interest rate rule). The paper claims that central banks should focus their attention on […]
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  Working Paper No. 455

  The Minskyan System, Part III

  This is the last part of a three-part analysis of the Minskyan Framework. The paper presents a model that studies some of the features presented in Parts I and II. The model is Post-Keynesian in nature and puts a large emphasis on the role of conventions and the importance of the financial side. In doing […]
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  Working Paper No. 454

  How Does Household Production Affect Earnings Inequality?

  Although income inequality has been studied extensively, relatively little attention has been paid to the role of household production. Economic theory predicts that households with less money income will produce more goods at home. Thus extended income, which includes the value of household production, should be more equally distributed than money income. We find this […]
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  Public Policy Brief No. 85

  The Fallacy of the Revised Bretton Woods Hypothesis

  The stability of the international financial system is in doubt. Analysis of the system has focused mainly on the sustainability of financing the American trade deficit and has failed to understand the microeconomics of transactions within the system. According to this brief by Thomas I. Palley, the international financial system is unsustainable for reasons of […]
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  Working Paper No. 453

  The Minskyan System, Part II

  This is the second part of a three-part analysis of the Minskyan framework. It studies in detail the dynamics at the root of the endogenous financial weakening of capitalist economic systems. This part combines the properties presented in part I with other important concepts, such as the paradox of leverage and conventional expectations, to explain […]