Secular stagnation? The Future Challenge for Economic Policy

Five years after the financial collapse, unemployment remains very high in much of the western world. Essentially every major country, with the partial exception of Japan, has tended to leave recovery to private markets and eschewed major fiscal policy initiatives. But increasingly analysts are asking whether this faith in private markets is justified. Read more

Speculation and Innovation

Economic bubbles and the corresponding speculation that accompany them inevitably end in a financial bust. Depending on multiple factors, the consequences of these popped bubbles can be grave or transient.

When specuation infects the credit system that fuels the economy, particularly when its object offers no prospect of increased economic productivity, the outcome of the collape is almost always unequivocally negative, and possibly catastrophic. But when the damge of speculation is limited to the market for equity and debt securities, the adverse economic consequences may be muted. Read more

Leading Economists To Gather In Toronto April 10-12, 2014

A Three-Day Conference Exploring the Impact of Innovation on Society

Larry Summers, Joseph Stigltiz, Andy Haldane, Adair Lord Turner, Michael Sandel

And Many More to Speak

Presented by: Read more

Charles Babbage and the History of Innovative Thinking

The forthcoming Institute for New Economic Thinking conference will focus on innovation and its impact on economics and society. When we think about innovation we tend to imagine the future. But as with so many subjects in economics, it’s also useful to examine the past.

The concept of innovation is generally associated with the Austrian-American economist Joseph Aloïs Schumpeter. At the micro level, Schumpeter’s work shed a brighter light on the relationship between innovation and market structure. At the macro level, he clarified the relationship between technological change and business cycles. Read more

Paul Jenkins: Canada’s Central Banking Lessons For The World

By Marshall Auerback

Last September, the Fed announced full speed ahead with its third round of quantitative easing, also known as QE3.

As the saying goes, three’s a charm, or so they hoped.

At the time, the Fed promised to buy $40 billion worth of mortgage backed securities every month through the end of the year and to keep what is essentially a zero interest policy in place through mid 2015. The Fed also announced that it would purchase other long-maturity assets to bring the total monthly acquisitions up to $85 billion, with the bias toward the long end expected to put downward pressure on long-term interest rates. The Fed made clear that QE3 is open-ended, to continue as long as necessary to stimulate to a robust economic recovery. Read more

Kapital for the Twenty-First Century?

Originally published by Dissent

Full Disclosure: The Institute for New Economic Thinking has extensively supported the the World Top Incomes Database on which the book under review draws extensively.

Capital in the Twenty-First Century
by Thomas Piketty, trans. Arthur Goldhammer
Belknap Press, 2014, 671 pp.

1. Read more

FT Scholarships for Young Scholars to Attend Toronto Conference

The Financial Times is supporting the Young Scholars Initiative by sponsoring scholarships to attend the Institute's Human After All conference in Toronto, April 10-12. Read more

Yide Qiao: Reminbi Liberalization and China's Economic Challenges

The recent events in the Ukraine and Russia have exposed the fragility of emerging markets around the world. Yet, as important as these events are from a geopolitical perspective, looking at the global economy China is still what matters most because it has become such a locomotive for the emerging world. 
 
At the beginning of the year George Soros said that China's economy might be the crisis of 2014. This sentiment took hold in the financial markets, helping to trigger the break in emerging market currencies and stock markets in January and early February, which had a contagious effect on the global financial market as a whole. 
 

The Chartbook of Economic Inequality

By Tony Atkinson and Salvatore Morelli

 USA

Click the image above for an interactive version (UK data available here) Read more

Jean Pisani-Ferry: The Challenges of Europe’s Monetary Union

Jean Pisani-Ferry is a highly influential voice in the European economic debate.

In this discussion, Pisani-Ferry discusses the challenges facing the creation of a common monetary union in the form that was eventually agreed in the 1990s absent a political union. He notes that even now, with that failure for all to see, the same dynamics that predicate against any reforms that might create a strong federal fiscal capacity are present in the discussions surrounding the creation of a “single supervisory mechanism” to regulate banks and protect their depositors. Read more