Archive

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.

“The Failure of Democracy” – “The weaknesses of Weimar” Do headlines such as these suggest that the whole architecture of the first German republic was wrong, that it was doomed right from the start, that the “collapse” was unavoidable?

Stock Market Returns and Corporate Networks 

A look at how liberal democracies have disintegrated amid economic crises. Speakers: Thomas Ferguson, Tiziana Foresti, Nadia Garbellini, Peter Langer, Joachim Voth, Ariel Wirkierman Discussant: James Kurth Chair: Thomas Ferguson

How we can create useful economic theory that recognizes that the future is radically uncertain?

On 23 June 2016, the British electorate voted to leave the European Union (EU). We analyse vote and turnout shares across 380 local authority areas in the United Kingdom.

Different accounts trace populism to cultural reactions, racial or gender animosity, and/or economics. What does the empirical evidence suggest?

This paper discusses household debt as a long term phenomenon that influences economies beyond crises.1 In other words, rather than look at how household indebtedness can lead to crises, I will focus on its surprising persistence at very high levels, and its interactions along the way with other key variables, such as public policies and spending. The first section describes some stylized facts and the final section explores the macroeconomic consequences.

Support for populism is often attributed to xenophobia, racism, sexism; to anger and resentment at immigrants, racial or ethnic minorities, or “uppity” non-traditional women. According to these accounts , people who feel socially resentful may reject established politicians as favoring those “others” over people like themselves, and turn to outsider populistic leaders.

The debt-growth relationship is complex, varying across countries and being affected by global factors. While there is no simple universal threshold above which debt-to-GDP becomes a significant brake on growth, based on data from the last four decades we show that high and rising public debt burdens slow down growth in the long term.

Unpacking the Effect of Trade on Workers and Voters 

This paper discusses what we have learned about the debt build-up in advanced societies over the past century. It shows that the extraordinary growth of aggregate debt in the past century was driven by the private sector.

What role does debt play in triggering economic crises, and is the problem principally public or private sector debt?

A better set of approaches for the 21st century.

The contemporary literature on neoliberalism has grown so large as to be unwieldy. For some on the left, this has presented an occasion to denounce it altogether.

How far are economists implicated in the rise of ‘fake experts’ and ‘fake news’?

Fake news, propaganda, and “expertise”: What has happened to information in the information age?

Is Comparative Advantage the Ideology of the Comparatively Advantaged? 

The Electoral Consequences of Rising Trade Exposure

Especially in the wake of the Great Recession, calls for more diversity within economics are usually limited to appealing for greater diversity in the economists’ backgrounds, while diversity of opinion and approaches is often neglected.

The Academic and Professional Performance of the Chicago School, 1960-1985

What Do Citations Actually Measure in Economics and How Should Economic Journals and Department Review Committees Use This Data? 

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

Joseph Stiglitz, Michael Spence and a global team of leading thinkers are calling for new thinking & new rules for the world economy

This article originally appeared in The Sunday Times of London

Stiglitz speaks to Bloomberg about INET’s Commission on Global Economic Transformation

“First Minister Nicola Sturgeon opened a conference attended by some of the world’s leading economists in Edinburgh earlier today explaining some of the economic challenges Scotland faces”