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BlogMinsky in the News
January 25, 2012 The Financial Times has been running a series for some time on “Capitalism in Crisis.” In yesterday’s paper Martin Wolf provided a summary of the discussion and proposed “Seven ways to fix the system’s flaws.” The first and most important task, he notes, is to manage macro instability. In this regard, he pays homage to [...] Blog -
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Another view on “policy pragmatism” in mainstream economics
January 24, 2012 Paul Krugman—orthodox economist? Heterodox economist? Pragmatic economist? New Keynesian economist? Michael Stephens recently commented on an article in the Economist that discussed MMT, as well as two other non-mainstream schools of macroeconomic thought. The article contrasted the three relatively unfamiliar and unorthodox approaches with “[m]ainstream figures such as Paul Krugman and Greg Mankiw[, who] have [...] Blog -
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In What Sense Does Government Debt “Burden”?
January 23, 2012 Robert Skidelsky runs through and corrects five fallacies about debt that one often hears lazily deployed in the public arena. His third correction: …the national debt is not a net burden on future generations. Even if it gives rise to future tax liabilities (and some of it will), these will be transfers from taxpayers to [...] Blog -
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Laughter: The New Financial Instability Index
January 20, 2012 Phil Izzo of the Wall Street Journal points us to the invaluable work of the people at The Daily Stag Hunt, who tallied the number of times that laughter appears in the transcripts of the Fed’s FOMC meetings. Peak laughter, as The Daily Stag points out, corresponds nicely with the height of the housing bubble: [...] Blog -
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Deficit Doves and Owls: How to Worry About Healthcare Costs
January 20, 2012 You may not agree with Alan Blinder when he writes in the Wall Street Journal that the budget deficit should be an issue in the 2012 campaign. But it certainly will be. And Blinder deserves kudos for pointing out that there are no immediate or near-term economic problems stemming from US deficit and debt levels: [...] Blog -
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Who Benefits from Failed Eurozone Policies?
January 19, 2012 As a counterpoint to the last post on the curious dominance of conservative macro policy ideas in Europe, here is Matías Vernengo getting into the political economy of who benefits from these failed policies and why there seems to be no sense of urgency around the fact that the real economy is broken: (This is [...] Blog -
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How Austerity Could Fail Its Way Into US Hearts and Minds
January 18, 2012 Marshall Auerback compares the job numbers in the US to those in Europe and asks why the US is doing so much better (or failing less miserably). One of the differences he highlights is the zealous dedication to fiscal austerity in Europe, compared to the relatively half-hearted, passive observance of doctrine in the US. For [...] Blog -
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The Orthodox Economics “Mafia”
January 13, 2012 Randall Wray passes on this piece by Chris Hayes (of The Nation and MSNBC) on the challenge mounted by heterodox economists to the neoclassical consensus. Reporting from the ASSA, Hayes gets into the ways in which the boundaries of the “mainstream” are policed in economics. It’s really worth reading the whole thing. I particularly liked [...] Blog -
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The Real Problem with the $29 Trillion Bailout of Wall Street
January 12, 2012 I previously summarized research that two of my graduate students, James Felkerson and Nicola Matthews, are conducting on the Fed’s bailout. Using data that the Fed was forced to release, they demonstrated that the cumulative total lent and spent on assets by the Fed was over $29 trillion. (See the first paper here: http://www.levyinstitute.org/publications/?docid=1462) Their [...] Blog -
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MMT as Public Policy
January 12, 2012 First The Economist, now CNBC. CNBC’s Senior Editor John Carney has put together a series of posts on Modern Monetary Theory at his blog. One of Carney’s objections to MMT is this: …my biggest point of departure with the MMTers is they display a political and economic naivete when it comes to the effects of [...] Blog -
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Heterodoxy and the Mainstream(s)
January 11, 2012 Over the break an article appeared in The Economist spotlighting three “schools of macroeconomic thought”: Scott Sumner’s market monetarism, Austrian free banking, and neo-chartalism (MMT). In addition to noting the role of the blogosphere in refining and promoting these heterodoxies, the article elects to use Paul Krugman as a stand-in for the “mainstream” opponent. If [...] Blog -
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A Third Way on Fiscal Policy
January 10, 2012 Courtesy of INET, here is Pavlina Tcherneva explaining her “bottom up” approach to fiscal policy. Notice the way she uses the term “trickle down” to apply also to conventional pump-priming fiscal policy (targeting growth and hoping for the right employment side-effects). We need to move beyond the conventional options on fiscal policy, says Tcherneva; beyond [...] Blog -
Working Paper No. 703A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being
January 06, 2012 We use the Levy Institute Measure of Economic Well-being (LIMEW), the most comprehensive income measure available to date, to compare economic well-being in Canada and the United States in the...more Publication -
Working Paper No. 702
The Euro Imbalances and Financial Deregulation
January 06, 2012 Conventional wisdom suggests that the European debt crisis, which has thus far led to severe adjustment programs crafted by the European Union and the International Monetary Fund in both Greece...more Publication -
Working Paper No. 702
Οι ανισορροπίες του ευρώ και η χρηματοπιστωτική απορρύθμιση
January 06, 2012 Η συμβατική σοφία υπαγορεύει ότι η ευρωπαϊκή κρίση χρέους, η οποία έχει μέχρι στιγμής οδηγήσει σε σκληρά προγράμματα δημοσιονομικής προσαρμογής διαμορφωμένα από την Ευρωπαϊκή Ένωση και το Διεθνές Νομισματικό Ταμείο...more Publication -
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Galbraith in Brazil
January 05, 2012 Via Matías Vernengo, here is the audio of James Galbraith’s keynote address at the ANPEC (Associação Nacional dos Centros de Pós-Graduação em Economia) conference in Brazil. Galbraith addresses the global financial crisis and the intellectual reactions (or non-reactions) to it, dealing both with those who attempted to explain away the crisis and those with a [...] Blog -
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Papadimitriou: To Solve Unemployment, Employ People
January 05, 2012 In an op-ed in today’s LA Times Dimitri Papadimitriou makes the case for a direct job creation program: It’s unreasonable to expect private enterprises to solve these problems. Full employment isn’t an objective of businesses. … There simply isn’t any known automatic mechanism, in the markets or elsewhere, that creates jobs in numbers that match [...] Blog -
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Some pertinent ideas about growth paths, long and short
January 04, 2012 In my last post, I reviewed an enjoyable book about some post-Keynesian economic economic thought and thinkers. To round things out a bit more, I thought I might offer a list of a few more often-overlooked but classical themes from economists who may be obscure to some blog readers or perhaps simply forgotten. Many of [...] Blog -
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Outside the Bubble, Public Investment Is Disappearing
January 03, 2012 These two stories need to get together in a room and talk: 1) Demand for US debt is really high. 2) Government (net) investment is at a 40-year low. Notice that neither of these facts plays any noticeable role in the policy debates that dominate the US political scene. There we’re offered a choice of [...] Blog -
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Review: Some Economic Ideas to Think About in 2012
January 02, 2012 In 2009, the Institute released some careful research on the micro-level effects of the recovery act (one example is at this link). That work helps to answer questions about how the benefits of specific stimulus packages will be spread out among different individuals, and households, and demographic groups in the United States. Increasingly, these and [...] Blog -
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Wray: World Discovers MMT
December 23, 2011 Japan is the champion nation in terms of budget deficits and government debt relative to GDP. Many have long argued (wrongly) that this is because holders happen to have addresses in Japan. Nonsense. A sovereign government that issues its own currency makes interest payments on its debt in exactly the same manner whether the holder [...] Blog -
Working Paper No. 701
Women, Schooling, and Marriage in Rural Philippines
December 23, 2011 Using data from the Bicol region of the Philippines, we examine why women are more educated than men in a rural, agricultural economy in which women are significantly less likely...more Publication -
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A Direct Job Creation Program for Greece
December 22, 2011 The Levy Institute, with underwriting from the Labour Institute of the Greek General Confederation of Workers, has helped design and implement a program of direct job creation throughout Greece. Two-year projects, financed using European Structural Funds, have already begun. This report by Senior Scholar Rania Antonopoulos, President Dimitri B. Papadimitriou, and Research Analyst Taun Toay [...] Blog -
Working Paper No. 700
Is There Room for Bulls, Bears, and States in the Circuit?
December 22, 2011 This paper takes off from Jan Kregel’s paper “Shylock and Hamlet, or Are There Bulls and Bears in the Circuit?” (1986), which aimed to remedy shortcomings in most expositions of...more Publication