Archive

There’s no turning back from humanity’s move to high-density living, says Ed Glaeser. The task of the century will be making cities more liveable.

The corporate titans of yore once offered a sizable wage premium over smaller employers—but not anymore. What happened?

A critical analysis of Piketty’s work

The shocking—but illustrative—example of how an Italian government agency concocted statistics to evaluate scholarship, hid them from the public, and masqueraded them as science. It’s a growing phenomenon

Behind towering figures like Rosa Parks and Martin Luther King, Jr. were the taxi dispatchers, pharmacists, grocers, and other small business owners who were instrumental in making civil rights a reality.

A large literature has detailed the seminal roles played in the Civil Rights Movement by activists, new political organizations, churches, and philanthropies. But black-owned businesses also provided a behind-the-scenes foundation for the movement’s success.

China is now the world’s largest greenhouse-gas emitter, accounting for over 25% of the global total. But the country has also demonstrated a growing understanding that a truly green economy promises to improve quality of life and create enormous opportunities for technological and political leadership.

To get justice, targets must show measurable harm. Economists can help

How did globalization create such discontent in developed and developing countries alike? Nobel laureate and INET grantee Joseph Stiglitz explains in this 150th episode of our “New Economic Thinking” video series.

It wasn’t Comey or the Russians. Trump prevailed because his campaign carefully targeted key states with late infusions of big money from private equity, casinos, and other far right contributors, a remarkable wave of donations from small donors, and substantial infusions from the candidate himself.

The U.S. presidential election of 2016 featured frontal challenges to the political establishments of both parties and perhaps the most shocking election upset in American history.

To get justice, targets must show measurable harm: economists can help.

The renowned feminist economist discusses the importance of heterodoxy, radicalism, and social justice to the discipline

Note: As of March 2019, the Imperfect Knowledge Economics(IKE) Program has been re-launched as the INET Program on Knightian Uncertainty Economics (KUE). Please see the KUE page for updates on this body of work.

Sen. Tammy Baldwin features arguments in questions to SEC nominees, pharmaceutical industry witness

Contrary to conventional wisdom, government stimulus can improve the health of the economy for years after, without inflationary side effects 

Forget the myth of a savings glut causing near-zero interest rates. We have a shortage of aggregate demand, and only public spending and raising wages will change that.

Veiling among Muslim women is modeled as a commitment mechanism that limits temptation to deviate from religious norms of behavior. 

Summers discusses inequality, the GOP tax plan, and our economic future

Servaas Storm’s commentary on the papers presented at the secular stagnation conference.

Inequality isn’t driven by taxes—it’s driven by the power of capital in relation to workers

The past 30 years has witnessed a worldwide decrease in real interest rates. We demonstrate that a large part of the fall in interest rates can be explained by changes in demography, which are as the result of a sudden fall in fertility rates across all of the advanced economies in the early 1970s.

We examine the hypothesis that the slowdown in productivity following the Great Recession was in significant part an endogenous response to the contraction in demand that induced the downturn.

The concern that an economy could experience persistent, and in some sense unusual, weakness goes back to Keynes’s General Theory and led Alvin Hansen to coin the term “secular stagnation.”

This paper shows that aging has positive effect on output growth per capital at positive interest rates, due to capital deepening.

We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent, slumps characterized by high unemployment and weak growth.

We explore the transmission mechanism of income inequality to output.

I have read the various conference papers and am struck by the fact that many use the (omnipresent New-Keynesian) model of an aggregate loanable funds market to diagnose secular stagnation and investigate possible remedies.

This paper answers fundamental questions that have preoccupied modern economic thought since the 18th century.

Long-term real interest rates across the world are low, having fallen by about 450 basis points (bps) over the past thirty years.

This paper replaces an earlier version of a paper released in 2014 under the title “A Model of Secular Stagnation.”

Distinguished Scholars Including Larry Summers and Adair Turner Present Evidence of the Trend and Policy Solutions

Skewed measures of “research output” hold back women who think differently or study smaller subfields in economics—and it’s harming the discipline as a whole

A discussion with Steven M. Fazzari, INET Grantee and the Bert A. & Jeanette L. Lynch Distinguished Professor of Economics, Washington University.

The World Economic Roundtable seeks to help the business, investment, and policy communities understand ongoing changes in the world economy and to promote a discussion of ideas that can advance the goal of a widely shared global prosperity.

Two years after the 2015 Paris Agreement, where we stand today is better than you may think 

Austerity measures have battered the region and created instability throughout the Eurozone. Here’s one way out of the mess.

“The stories we tell ourselves about the world are a map of the world as we see it. And if we want to change the world, we have to change the story first.”

Are Falling Interest Rates and Slower Growth the “New Normal”?

Organized by the National Institute of Public Finance and Policy (NIPFP) in collaboration with the Institute for New Economic Thinking (INET), New York, the aim of LEPC 2017 is to bring together legal, economic and public policy thinkers to consider a variety of real world issues in India in a holistic manner.

To commemorate the 150th episode of our video series, “New Economic Thinking,” we are highlighting some of the most compelling content from the series here.

Are regulatory interventions delayed reactions to market failures or can regulators proactively pre-empt corporate misbehavior?

A discussion with Michael Grubb, INET Grantee and Professor of Energy and Climate Change at University College of London.

The History of Economic Thought and the Philosophy of Economics working groups are organising a Young Scholars Workshop on the methods and approaches to the history of economics that have consolidated during the last two decades.  

With unemployment reaching very low levels in major economies, despite low – and slowly rising – inflation, it’s time for central banks to rethink their reliance on the so-called natural rate. No numerical target for this rate can serve as an anchor for monetary policy.

The Implications of Xi’s Belt and Road Initiative for China and the World Economy

From the Rust Belt to Rural America, Economic and Social Distress Helped Shape the 2016 US Presidential Election Outcome

“As chair of Britain’s Financial Services Authority, Adair Turner saw the collapse of the financial system firsthand. In the aftermath of the crisis, he became one of the main advocates of helicopter money – but today he doubts if universal basic income is the best way to address growing inequality. Adair Turner spoke with EURACTIV’s Jorge Valero during INET’s conference held in Edinburgh (Scotland”

The 2008 financial crisis was a shock to faith in entirely free financial markets. But the neoliberal assumptions underlying the previously dominant “Washington Consensus” continue to inform much Western commentary on China’s economy.

The Young Scholars Initiative will be hosting a group of young scholars to attend the meetings and discussions in and around UNCTAD International Debt Management Conference of 2017.

Nicola Sturgeon covers a range of topics including how economists’ work relates to policymaking, the financial crisis and the dangers of groupthink, how dissatisfaction with stagnating wages and rising inequality played into political shocks like Brexit, the legacy of Adam Smith, why new economic thinking is so important, and what her government is doing to foster and apply it. 

Why the solution to global inequality may actually be the revival of old school policies such as public education and organised labour rights.

Why the solution to global inequality may actually be the revival of old school policies such as public education and organised labour rights.

The 21 FMM conference of the The Macroeconomic Policy Institute (IMK) will take place in Berlin on 9-11 November 2017.

As the old lines continue to blur, what does inequality mean in the modern global economy? And, how does the economy need to evolve to address these changes?

Several founding CGET members announce the ambitious project and respond to questions from the press.

How Women Are Forced to Conform to the Research Habits and Interests of Men

How Germany, the EU and the economics field itself suffer from myopia—and what we can do about it

Examining the past is essential to understanding the present

“Economist Steve Keen specializes in researching how private and public debt mountains arise and generate financial crises. In an interview with DW, he explains how the ECB could solve the problem — but probably won’t.”

“Winnie Byanyima believes it is high time to come up with fresh thinking in the world of politics and economy. But first, deeper self-criticism is needed across the board because all fields, including the NGO sector, are affected by a lack of trust from citizens.”

Bloomberg highlights INET’s new Commission for Global Economic Transformation

This article originally appeared on Bloomberg

“Nobel laureate Joseph Stiglitz tells EURACTIV.com that the region would be accepted in the EU and therefore become a viable independent economy if it applied, but the former chair of the UK’s Financial Services Authority Adair Turner disagrees.”

Scottish First Minister Nicola Sturgeon quoted by Bloomberg at INET’s Reawakening conference in Edinburgh

The US federal lobbying industry, based in Washington DC, is major focal point for political money and the exercise of influence, with expenditures peaking at approximately $2.5 billion per annum during the first Obama administration. 

Not just an American dilemma: is political money in dual economies the biggest problem of all?

One might think of the satisfied consensus reigning in macroeconomics before the financial crisis (and still relatively entrenched) as evidence of “Groupthink” in a “Divided State”

The consensus that reigned in macroeconomics before the financial crisis has come under renewed attack.

Macroeconomics and finance beyond DSG

The path to holding fossil fuel producers accountable for climate change & climate damages 

Climate Change and Denial

The deregulatory zeal of the 1990s and 2000s has returned to the US and the post-Brexit plans to protect the City in the UK sound like the pre-crash light-touch mentality that fueled global regulatory arbitrage.  As a result, a foremost “challenge of our time” is to stop “subsidizing more one-way bets” and “doubling down on failure.”

As globalization proceeds rapidly, manufacturing industry in most of developed countries declined steadily. 

The Death of the Seventy-year American Empire  

An Assessment and Some Policy Implications

What economics can – and can’t – tell us about climate change 

One-way bets and bubble machines: How can central banks restrain moral hazard when markets know they bail out big banks in financial crises?

As dual economies transform countries, how does world politics adjust?

We want an economy that generates stable and equitable growth—or what I call “sustainable prosperity.” We want productivity growth that makes it possible for the population to have higher living standards over time. We want an equitable sharing of the gains from productivity growth among those whose work efforts and financial resources contribute to that growth. And we want sufficient job stability to enable workers to remain in productive employment for some four decades at work while providing them with enough savings to provide them with adequate incomes over some two decades of retirement.

Can a Policy of Guaranteed Basic Income Return Mature Market Economies to les Trente Glorieuses?

Building symbiotic public-private partnerships

What can policy do to remedy the spread of dual economies in the developed world?

Decomposition by such an important category as gender helps us understand the economy at the macro level, and design macroeconomic policy, better. It also provides the foundation for advocating equal gender rights and outcomes. But, where gendered policy issues arise in mainstream macroeconomics (income maldistribution, labour market composition, etc.) the subject matter is narrowed by its microfoundations, by focusing on GDP growth and on suboptimal outcomes being explained by market imperfections.

What would it look like if women and other marginalized groups could fully participate in our economy and society?

This article originally appeared on insider.co.uk

Commission on Global Economic Transformation member Joseph Stiglitz argues that an independent Scotland in the EU would “resolve a lot of the uncertainties” of Brexit at INET’s Reawakening conference in Edinburgh

INET Chairman Adair Turner and Grantee Mariana Mazzucato comment on the Friends of the Earth Scotland event and a green economic transition.

Untangling the Facts about Immigration in the World Economy.

Coping with the dysfunction of advanced economies, and developing strategies for economic development.

The Role These Factors Play in Shaping Economic Knowledge and Behavior

This paper examines the value of connections between German industry and the Nazi movement in early 1933. Drawing on previously unused contemporary sources about management and supervisory board composition and stock returns, we find that one out of seven firms, and a large proportion of the biggest companies, had substantive links with the National Socialist German Workers’ Party. Firms supporting the Nazi movement experienced unusually high returns, outperforming unconnected ones by 5% to 8% between January and March 1933. These results are not driven by sectoral composition and are robust to alternative estimators and definitions of affiliation. 

After re-iterating five well-known theorems about the properties of conditional expectations in stationary settings—such as providing unbiased minimum mean square error predictions despite in- complete information, and the law of iterated expectations—we clarify unpredictability and illustrate its prevalence empirically.

In the paper that we present this afternoon, Soren Johansen, Anders Rahbek, Morten Tabor, and I introduce the Qualitative Expectations Hypothesis (QEH) as a new approach to modeling macroeconomic and financial outcomes.