Archive

What we’re reading: A weekly scan of published items relevant to the Institute’s work

A major shift is needed in the Econometrics curriculum for both graduate and undergraduate teaching to include modern topics.

The corrosive social and economic effects of what have now become ‘normal’ unemployment levels require new solutions, and tradewithout full employment exacerbates the problem

Any use of money-financed fiscal expansion as a policy tool will require rules to ensure discipline and avoid excess

Five lessons from the last crisis — for managing the next one

Economist James K. Galbraith warns that ‘unrealistic expectations’ by Athens’ creditors is a recipe for turmoil

As empirical evidence continues to roll in, can the theoretical orthodoxy continue to hold their ground?

A new book by economist Julia Cagé offers a participatory business model for independent media.

McCloskey discusses the thesis of her recent trilogy, The Bourgeois Era, which holds that the driving force of economic growth in 17th and 18th century Europe was simply liberal ideas.

Does the technology revolution require a new social policy?

The paper argues that household budgets are the best starting point for investigating a number of big questions related to the evolution of the living standards during the last two-three centuries.

Amid the ongoing research interest in questions of inequality, it is important to examine the question of access to housing — and how that has changed over the decades. The specific question I have sought to answer, here, is whether the real cost (measured against income) of buying the average home has risen.

Capitalism will destroy itself, the former Greek finance minister warns, if economic calculation excludes human needs and ignores democratic verdicts

Benner’s recent work with Manuel Pastor suggests the somewhat counterintuitive result that geographic regions with the most equitable distributions of wealth and influence also tend to have the highest growth.

Keynes passed away 70 years ago today, with his copyright now expiring, there is an opportunity to build a digital archive of all his work

Orthodox macroeconomics has become a place where visions die and hopes are banished, for both liberals and conservatives.

How Gerald Friedman’s assessment of Bernie Sanders economic proposals prompted a rare public political spat among economists.

Axel Leijonhufvud showed economists a promising path forward. They should have taken it. Leijonhufvud passed away on May 5, 2022

Dean Corbae is a leader of the Markets network and Professor of Finance, Investment, and Banking at the Wisconsin School of Business, where he also holds an appointment in the Department of Economics. His current research focuses on consumer credit and bankruptcy, foreclosures, and banking industry dynamics.

Contrary to common belief, this shift is not so much caused by the refugee crisis, but rather by the historical disaster that followed the big financial crisis since 2007.

Anyone watching the stock market has seen this: a post hits Twitter containing old news, and investors react as if it were new.

Struggles over shadow money today echo 19th century struggles over bank deposits.

We have developed over a number of years and now make publicly available a new and unprecedented data resource for understanding levels of living, poverty, inequality and inclusivity of growth and development around the world.

What does the rise of shadow banking mean for monetary theory and practice? (How) should we change our traditional theories of money to capture the complex practices through which money is created in modern financial systems?

Should policymakers rely on domestic macroprudential regulation in their quest for greater financial stability?

The intra-EMU divergences are a feature of the system rather than just a bug.

European Union countries are facing an epic challenge of integrating more than 1 million refugees from conflict zones in the Middle East and beyond.

Industrial journalist Ken Jacobson and economist William Lazonick (both of the Academic-Industry Research Network), call for an end to stock market manipulation through buybacks.

As the European Union Commission readies itself for a new round of budgetary recommendations, INET senior economist Orsola Costantini warns that that the debate over how those harsh fiscal constraints are to be determined is based on a formula that masks political choices as technocratic imperatives.

John Eric Humphries is a member of the Inequality: Measurement, Interpretation, and Policy (MIP) network and a National Science Foundation Graduate Research Fellow in the Department of Economics at the University of Chicago. He is the co-author of the book, The Myth of Achievement Tests, The GED and the Role of Character in American Life, along with James J. Heckman and Tim Kautz. Humphries is also a 2013 alum of the Summer School on Socieconomic Inequality.

Leading expert says Iceland is showing the way on tackling a global peril.

When billionaires pay less, we all pay more.

A new film shows what economic apartheid looks like through the eyes of schoolchildren.

Democratic capitalism is an evolving system that responds to crises by radically transforming both economic relations and political institutions. The time for a new phase has come, regardless of whether “responsible” politicians are prepared to admit it.

Featuring sessions on Oil Shock and the Global Economy, Sovereign Wealth Funds, and the Political Economy of Oil.

A recent policy brief by Blanchard (2016), based on an earlier paper (Blanchard, Cerutti, Summers 2015) raises a number of interesting points concerning the NAIRU and the Phillips Curve, which are further discussed in the comment on the paper by Ball (2015).

This paper provides a careful and synthetic overview of his contributions as well as a reconstruction of Pasinetti’s philosophical approach to economics as a science meant to serve humanity.

This paper proposes a new method to empirically validate simulation models that generate artificial time series data comparable with real-world data.

We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries (and 35 industries) during 1995-2007 from the World Input Output Database (WIOD).

A stark warning from Institute researchers on the probability that ‘2°C capital stock’ will be reached in 2017

The condition of the Chinese economy is increasingly becoming a significant factor exorcising the minds of global policy makers.

Some fundamental Keynesian and Post-Keynesian insights, with an analysis of possible mechanisms to achieve a sustained recovery.

The Institute for New Economic Thinking hosts an exclusive luncheon and conversation with Lynn Parramore, Senior Research Analyst at the Institute and Reuters columnist, and Rana Foroohar, TIME Assistant Managing Editor and Economic Columnist, and Global Economic Correspondent at CNN.

What can we learn from the Vietnamese, Cuban, Rwandan, and Syrian refugees crisis?

It’s no secret that wealth inequality has grown, both in the US and abroad over the past several decades. What has been particularly notable about the work of Emmanuel Saez is the quantification of that inequality.

How excessive debt hurts the economy and why to curb it.

Paying tribute to one of the world’s most distinguished economic historians.

The Haas Institute for a Fair and Inclusive Society’s report analyzes the Trans-Pacific Partnership and examines the widespread global implications in the event of its passage.

Gerald Friedman responds to the Romers on the Sanders Plan.

Jamie Galbraith and I rarely agree. But we agree here.

HCEO’s new three-question series will regularly publish quick Q&As with members who will discuss their work, frontiers in the field of inequality that could use more knowledge, and advice for emerging scholars.

The Romer/Romer letter to Professor Gerald Friedman marks a turning point. It concedes that there are indeed important issues at stake when evaluating the proposed economic policies of Presidential Candidate Bernie Sanders. These issues go beyond the political debate and should be discussed seriously between and among professional economists.

Nobel laureate James Heckman is one of this year’s recipients of the Dan David Prize, an international honor which encourages innovative and interdisciplinary research, for his scholarship on poverty.

Nancy Folbre is an American feminist economist who focuses on economics and the family, non-market work and the economics of care. She is Professor Emirita of economics at the University of Massachusetts Amherst, who has written extensively about the economics of care and reciprocity.

Servaas Storm has conviction, yet his analysis throws the baby out with the bathwater.

More on substance, coherence, and relevance in the Eurozone debate.

The current bout of exchange rate anxiety is really just a symptom of the fact that China’s transition from an export-led growth strategy to one propelled by domestic consumption is proceeding far less smoothly than hoped.

Exploring the genesis of an important work, one that critiques mainstream neoclassical economics and offers an alternative framework for understanding modern economies.

From the very start, the European Monetary Union (EMU) was set up to fail.

Bullet-point financial reform proposals are either too simple or too vague.

This is a response to a critique by Paul Davidson of our 2013 book Keynes: Useful Economics for the World Economy and related work, where we describe, amongst other things, how the Swan diagram can be used to show how economies can use policy tools to achieve internal and external balance.

This paper provides critical comments on the Peter Temin - David Vines promotion of the basic Swan Diagram as (1) a policy tool to encourage any individual debtor nation experiencing balance of payment deficits to reduce its exchange rate in order to expand exports and reduce imports and (2) the Swan Diagram as a simple model for understanding Keynes’s General Theory for an Open Economy.

The world economy is just starting to recover from the most disastrous episode in the history of financial globalisation. Understanding what happened is essential.

On 25 September 2015, the United Nations General Assembly adopted the Sustainable Development Goals (SDGs), an ambitious policy agenda that aims to eradicate poverty, in all its forms and dimensions, by 2030.

It is high time to ditch this myth for at least the following five reasons.

Recently, our analysis has been questioned by Servaas Storm who has claimed that it is untenable to blame neo-mercantilist Germany for driving a wedge into the Eurozone. [i] It is shown below that Storm’s critique has a certain aplomb, but lacks substance.

Today’s richest Americans may soon blow past the tycoons of the Roaring Twenties. Lance Taylor explains why, and what to do about it.

Economic growth and rising prosperity does not happen at the moment of invention. Only an innovation policy aiming to maximise activities throughout the innovation cycle will succeed in capturing economic growth that enhance the welfare of all citizens.

The tragic crisis in Flint, Michigan, where residents have been poisoned by lead contamination, is not just about drinking water. And it’s not just about Flint. It’s about race and class, and the stark contradiction between the American dream of equal rights and opportunity for all and the American nightmare of metastasizing inequality of wealth and power.

We first show that, with a Kaleckian structure that is consistent with Pasinetti (1962), the relationship between distribution and growth is more robust than conventional wisdom suggests. Next, we extend our model by incorporating borrowing and emulation effects into workers’ consumption behavior, under different assumptions about how debt is serviced.

Comments on “German Wage Moderation and the Eurozone Crisis: A Critical Analysis” by Servaas Storm

Trust is an essential part of a functioning economy, yet it is often one of the least understood variables in economics. While trust is difficult to understand and measure in the context of economics, this type of innovative work enables new and important conversations about trust and how it affects the economy.

Lessons Ignored From the 1930s

Professor Casarico explains why her focus on gender and the “glass ceiling” can help us push forward economic thinking.

It is high time to look more closely at the labor cost competitiveness myth.

For most economists and indeed for social scientists in general such a question induces shudders as already asking this seems wrong – aren’t governments more prone to failures than markets, and aren’t governments supposed to provide basic and stable institutions for markets to function?

Join us for a reception at the ASSA conference in San Francisco

This project brings new mathematical tools and ideas from high-dimensional statistics to bear on the problem of creating reliable macroeconomic forecasting models.

This research project creates a new database of international capital flows from the early 19th century, when London became the financial capital of the world, until 1931, when international capital markets collapsed.

This research project explores Chinese economic thought of the 1930s, 1940s, and 1950s, with direct relevance to the present day, and in particular focuses on one specific thinker, Wang Yanan, and the intellectual debates he animated and in which he participated as a major theorist.

This research project examines the role of political and social unrest by analyzing their effects on bond and stock markets over the period 1900-2000.

This research project investigates how economists sought to make their science more relevant to real-world issues and policy design from the mid-1960s on, by becoming “applied economists.”

This research project focuses mainly on whether the wealth of the United States middle class recovered and whether wealth inequality continued to rise or moderated over the years 2010 to 2013 following the financial crisis of 2008.

This research project studies the innovation of mortgage-backed securities in the 18th century in order to understand the effects of securitization on financial and real markets.

This research project develops an intellectual biography of the Hungarian economist Tibor Scitovsky (1910-2002), who is known primarily for his path breaking 1976 book, The Joyless Economy.

This research project investigates whether rising inequality has contributed to the macroeconomic imbalances that erupted in the present crisis, based on a Kaleckian macroeconomic model.

This research project focuses on the sustainability of economic growth and implications for distribution, employment, stability, and economic policy.

This research project formulates a new model of bounded rationality, based on the idea that agents will keep a simple, or “sparse,” model of the world.

Some Fundamental Keynesian and Post-Keynesian Insights, with an Analysis of Possible Mechanisms to Achieve a Sustained Recovery

A budget approach cloaked in the aura of science and technical jargon became a tool of manipulation.

Many Americans have expressed outrage over Pfizer’s plan, through its merger with Allergan, to move its tax home from the United States to Ireland. Now, in a New York Times op-ed, Carl Icahn, the billionaire corporate raider turned hedge fund activist, has joined the chorus. He labels the Pfizer-Allergan deal a “travesty,” blaming the U.S.’s “uncompetitive international tax system.”

Since Aristotle the question about the potential relationship between economic inequality and democratic changes has been studied and debated – but scientifically our ability as researchers to assess and understand how such complex social phenomena may be related is much more limited than recognised.

Patrick Honohan, Governor of the Central Bank of Ireland, discusses the Irish banking crisis.

‘Tis the season to celebrate gift giving. But for big banks Santa Claus comes all the time, in the form of handsomely wrapped subsidies and subtly packaged regulatory nuances worth more more gold than the wildest dreams of the Three Wise Men.

This paper applies Schein’s model of organizational culture to financial firms and their prudential regulators.

With the RMB in the SDR, careful progression in China could balance the international monetary system.

The idea of this blog is to engage current financial news and policy debates from the standpoint of the classics of monetary theory. We ask, “What would Bagehot say?”, “What would Minsky say?”, “What would Fischer Black say?” Like them, our starting point is the idea that capitalism is essentially a financial system, which means that we need to take a money view in order to understand how it works.

Can education stop the country’s backward slide?

Innovation is not a magic pill to solve the current afflictions that ail our 21st century economy.

The Cambridge UK vs USA capital theory debates of the 1960s showed that the workhorse mainstream growth model relies on unsustainable assumptions. Its standard interpretation is not consistent with the last four decades of data.