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BlogBibow: German Policy Bears Foremost Responsibility for the Euro Crises
November 05, 2013 In advance of this week’s Ford–Levy Institute conference in Athens, Greece (Nov. 8–9), Jörg Bibow gave an interview with George Papageorgiou, senior editor of newmoney.gr, on the role German policy has played (and still plays) in generating and exacerbating many of the problems plaguing the eurozone periphery — something Bibow was warning about back in [...] Blog -
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What Do Banks Do? What Should Banks Do? A Minskyan View
November 05, 2013 A new issue of Accounting, Economics and Law has published a series of articles (open access) on Minsky and banking. In addition to my contribution, you can find some nice pieces by Thorvald Moe, Yuri Bondi, and Robert Boyer. According to Minsky, “A capitalist economy can be described by a set of interrelated balance sheets [...] Blog -
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An Omnibus Reply to MMT Critics
November 01, 2013 Randall Wray and Éric Tymoigne just released a new working paper that rounds up and responds to various critiques of Modern Money Theory (MMT); critiques they organize into five categories: One of the main contributions of Modern Money Theory (MMT) has been to explain why monetarily sovereign governments have a very flexible policy space that [...] Blog -
Working Paper No. 778Modern Money Theory 101
November 01, 2013 One of the main contributions of Modern Money Theory (MMT) has been to explain why monetarily sovereign governments have a very flexible policy space that is unencumbered by hard financial...more Publication -
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A Minsky Conference in Athens
October 30, 2013 The next Minsky conference in the Levy Institute’s international series is taking place in Athens next week, November 8-9. The central theme, as you can probably guess from the location, is the ongoing eurozone crisis. This conference is organized as part of the Levy Institute’s international research agenda and in conjunction with the Ford Foundation [...] Blog -
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Monetary and Fiscal Operations in China, an MMT Perspective
October 28, 2013 Here’s a piece I wrote with Yolanda Fernandez for the Asian Development Bank: Monetary and Fiscal Operations in the People’s Republic of China: An Alternative View of the Options Available You’ve no doubt read various analyses predicting the impending collapse of the Chinese financial sector, and arguments that China cannot continue to grow at a [...] Blog -
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The 0.2 Percent Solution: Some Advice for Debt Hawks
October 25, 2013 Larry Summers recently noted that the projected long-term budget deficit for the federal government basically disappears if we’re able to achieve annual economic growth rates that are 0.2 percentage points higher than the Congressional Budget Office assumes. The notion that eliminating the budget deficit is a valuable goal in and of itself deserves some pushback. [...] Blog -
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Can R&D Help Get Us Out of this Mess? A New Stock-Flow Analysis
October 23, 2013 Dimitri Papadimitriou, Greg Hannsgen, Michalis Nikiforos, and Gennaro Zezza have just published a new strategic analysis for the US economy, with a baseline projection and alternative policy simulations through the end of 2016. The report takes a closer look at the potential payoff of R&D investment in the context of a US export strategy. As [...] Blog -
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Minsky on Schumpeter, “Dilettantism,” and History
October 18, 2013 As is well known, Hyman Minsky was a student of Joseph Schumpeter’s at Harvard. Minsky’s “stages” theory of capitalist development, fleshed out during the later part of his life while he was here at the Levy Institute, arguably owes something to the influence of his former dissertation adviser. There’s a short paper in the archive [...] Blog -
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Bellofiore on the Socialization of Investment
October 17, 2013 From part four of Mariana Mazzucato’s “Rethinking the State” series, Riccardo Bellofiore discusses Hyman Minsky’s Schumpeterian spin on the “socialization of investment”: [iframe width=”448″ height=”242″ src=”//www.youtube.com/embed/rj8vyzWbZh8?feature=player_detailpage” frameborder=”0″ allowfullscreen] Blog -
Strategic AnalysisΗ εδραίωση της ανάκαμψης: Προοπτικές και πολιτικές για τις Ηνωμένες Πολιτείες
October 16, 2013 Στην περίπτωση που επαληθευτούν οι προβλέψεις του Γραφείο Προϋπολογισμού του Κογκρέσου για τα κρατικά έσοδα και τις δαπάνες, η οικονομία των Ηνωμένων Πολιτειών δεν θα μπορέσει να αναπτυχθεί αρκετά γρήγορα...more Publication -
Strategic Analysis
Rescuing the Recovery: Prospects and Policies for the United States
October 16, 2013 If the Congressional Budget Office’s recent projections of government revenues and outlays come to pass, the United States will not grow fast enough to bring down the unemployment rate between...more Publication -
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Minsky Does Rio: Notes from a Conference
October 14, 2013 I recently returned from a conference in Brazil jointly sponsored by the Levy Economics Institute, the Ford Foundation, and the Brazilian research group MINDS. It is part of a bigger project to take Hyman P. Minsky global. In my view, Minsky was hands-down the greatest economist of the second half of the twentieth century and [...] Blog -
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Tcherneva on Our Self-Induced Paralysis
October 11, 2013 Pavlina Tcherneva was interviewed yesterday on Los Angeles public radio about the ongoing debt ceiling face-off and government shutdown. She referenced Ben Bernanke’s “self-induced paralysis” phrase (which he used to describe Japan’s lost decade) as an accurate description of the current US situation and expressed concern that shutdown and debt ceiling standoffs may represent the [...] Blog -
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What Happens if We Don’t Raise the Debt Ceiling? A Stock-Flow Analysis
October 10, 2013 Some commentators and members of Congress have insisted that failing to raise the debt ceiling would not necessarily require defaulting on the national debt. The theory is that Treasury could prioritize payments to bond holders while defaulting only on commitments to other payees (say, Social Security recipients). Most of the discussion of what might happen [...] Blog -
Policy Note No. 9A New “Lehman Moment,” or Something Worse?
October 10, 2013 The United States entered the second week of a government shutdown on Monday, with no end to the deadlock in sight. The cost to the government of a similar shutdown...more Publication -
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Reorienting Fiscal Policy and Understanding Currency Sovereignty
October 10, 2013 From Mariana Mazzucato’s “Rethinking the State” video series: Pavlina Tcherneva discusses the implications of the Great Financial Crisis of 2007 for employment outcomes and fiscal policy. She argues that the current view of Keynesian fiscal policies is based on a misreading of Keynes. Simply boosting demand — through what should be understood as trickle-down fiscal [...] Blog -
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Flash from the Past: Why QE2 Wouldn’t Save Our Sinking Ship
October 09, 2013 Here’s a piece I published in HuffPost back on Oct 18, 2010. A flash from the past – three years ago – predicting that QE2 would prove to be as impotent as QE1 had been. And here we are, folks. No recovery in sight–at least once you get off Wall Street. We’re now set–yet again [...] Blog -
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Why Greece Can’t Wait for the Long Run
October 08, 2013 The policies Greece has been implementing as part of the price for its two bailouts are not working the way we were told they would. That’s pretty clear if you look at the troika’s endlessly downgraded projections for key economic indicators. Here, for instance, is actual Greek unemployment, compared to a series of troika projections [...] Blog -
Working Paper No. 777
A Simple Model of Income, Aggregate Demand, and the Process of Credit Creation by Private Banks
October 07, 2013 This paper presents a small macroeconomic model describing the main mechanisms of the process of credit creation by the private banking system. The model is composed of a core unit—where...more Publication -
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An Incomplete Defense of UK Austerity
October 06, 2013 Kenneth Rogoff placed an editorial in Wednesday’s Financial Times defending the Cameron government’s austerity policies as a kind of insurance against the possibility of investor flight from UK government debt. He concedes that the specific form of austerity that was implemented in the UK was ill-advised — public investments in infrastructure, he says, can be [...] Blog -
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Post-Keynesians in Paradise
October 03, 2013 We’ve just returned from Rio de Janeiro, where the Levy Institute held a conference cosponsored by the Multidisciplinary Institute for Development and Strategies (MINDS), supported by the Ford Foundation. The two day conference dealt with global financial governance, financial reregulation, and development challenges in a Minskyan context — a lot of discussion of the regulation [...] Blog -
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The GOP Lost the Election but Is Winning Fiscal Policy
October 03, 2013 Congressional Republicans may or may not suffer politically from the government shutdown and upcoming debt ceiling fight, but in terms of policy they have already secured a significant and lopsided victory in the battle over the budget, whether they realize it or not. Repeal of the Affordable Care Act seems pretty unlikely (not just because [...] Blog
