Archive
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Working Paper
Working Paper SeriesThe Cold War Hot House for Modeling Strategies at the Carnegie Institute of Technology
Oct 2015
US Military needs during the Cold War induced a mathematical modeling of rational allocation and control processes while simultaneously binding that rationality with computational reality. Modeling strategies to map the optimal to the operational ensued and eventually became a driving force in the development of macroeconomic dynamics.
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Article
The Efficiency of Markets
Sep 30, 2015
A student of microeconomics learns that any competitive equilibrium leads to a Pareto efficient outcome (First Fundamental Theorem of Welfare Economics). What do we mean by the efficiency or inefficiency of markets?
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Working Paper
Working paperNetworks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap
Sep 2015
We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption-smoothing, provided by caste-based rural insurance networks, and the income-gains from migration.
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Working Paper
Working paperReligious Riots and Electoral Politics in India
Sep 2015
The effect of ethnic violence on electoral results provides useful insights into voter behaviour and the incentives for political parties in democratic societies.
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Working Paper
Working Paper SeriesExploring the Concept of Homeostasis and Considering its Implications for Economics
Sep 2015
The reality of human homeostasis expands the views on preferences and rational choice that are part of traditionally conceived Homo economicus and casts doubts on economic models that depend only on an “invisible hand” mechanism.
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Article
The Fairness of Markets
Sep 28, 2015
A student of microeconomics learns that any desirable efficient market allocation can be sustained by a competitive equilibrium (the Second Theorem of Welfare Economics), given appropriate lump-sum wealth redistributions. This is typically understood as a means to correct unfair market outcomes. What are the real world implications of the second theorem? How well does it address distributional concerns?
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Article
Jim Chanos on China: The Emperor is In His Underwear
Sep 28, 2015
The best-known China bear says the emperor is not yet naked, but getting there.
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News
Central Bank & Monetary Policy After the Global Financial Crisis
DebtSep 25, 2015
Join Columbia University Dean Merit E. Janow for a talk by Lord Adair Turner, Chairman, Institute for New Economic Thinking.
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Video
Fiscal Austerity & Greece
Sep 24, 2015
Professor Richard Portes discusses the problems of Europe and then specifically drills down into Greece itself.
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Working Paper
Working paperNonparametric Euler Equation Identication and Estimation
Sep 2015
We consider nonparametric identification and estimation of pricing kernels, or equivalently of marginal utility functions up to scale, in consumption based asset pricing Euler equations. Ours is the first paper to prove nonparametric identification of Euler equations under low level conditions (without imposing functional restrictions or just assuming completeness).
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Article
Mathematics, Models and Reality in Microeconomics
Sep 23, 2015
Have economists fallen in love with an idealized vision of an economy in which rational individuals interact in perfect markets? To what extent is standard microeconomics responsible for this state of affairs?
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Article
Jim Chanos on What Lies Ahead for Greece
Sep 18, 2015
As Greece heads to the polls, a look back at the crisis and what the future will bring.
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Video
Curriculum Reform & Rethinking Economics
Sep 17, 2015
Marc Lavoie discusses the methodological foundations of heterodox economics, and offers a very different model of money and credit, firms and pricing, consumer theory, effective demand and employment and growth theories.
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Research Program News
Creating Flourishing Lives: The Dynamics of Capability Formation
Sep 16, 2015
Professor Heckman was invited to speak at the HDCA 2015 Conference as the keynote speaker for the Amartya Sen Lecture. The presentation offered recent research on the economics of creating flourishing lives, discussing the importance of cognitive skills, character skills and health.
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Article
Max Roser collaborates with Hans Rosling on BBC Documentary
Sep 16, 2015
Institute for New Economic Thinking at Oxford researcher Max Roser recently collaborated with world famous Swedish statistical showman Hans Rosling on the upcoming documentary ‘Don’t Panic: How To End Poverty In 15 Years’.
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Article
Travelling Knowledge and Tools
Sep 15, 2015
News about a wonderful workshop, “Knowledge Transfer and Its Contexts”
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Working Paper
Working Paper SeriesWealth Concentration, Income Distribution, and Alternatives for the USA
Sep 2015
US household wealth concentration is not likely to decline in response to fiscal interventions alone.
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Video
Intersections of Psychology and Economics
Sep 11, 2015
Tania Singer on the key importance of understanding preferences and behavioral change.
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Article
Why Carried Interest is Suddenly the Inequality Flashpoint
Sep 11, 2015
A little-understood rule in the tax code is making headlines. What’s all the fuss?
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Working Paper
Working Paper SeriesAre Low Interest Rates Deflationary? A Paradox of Perfect- Foresight Analysis
Sep 2015
A prolonged period of extremely low nominal interest rates has not resulted in high inflation. This has led to increased interest in the “Neo-Fisherian” proposition according to which low nominal interest rates may themselves cause inflation to be lower.
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Article
Why You Shouldn’t Fear China’s Devaluation
Sep 1, 2015
If anything, it points to a better managed global financial system and a more resilient Chinese economy.
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Video
China and the Challenge of Economic Reform
Aug 27, 2015
Bursting Bubbles leave a mess – in the markets, throughout the real economy, in societies, in politics and with policymaking.
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Article
Feminist Economists Challenge Austerity That Harms Women
Aug 24, 2015
Economist Alicia Girón explains why a feminist perspective is crucial to new economic thinking.
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Video
The Death of Neo-Liberalism
Aug 20, 2015
The financial crisis of 2008 was not a run of the mill recession.
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Working Paper
Working paperTowards a General Theory of Deep Downturns
Aug 2015
This paper, an extension of the Presidential Address to the International Economic Association, evaluates alternative strands of macro-economics in terms of the three basic questions posed by deep downturns: What is the source of large perturbations? How can we explain the magnitude of volatility? How do we explain persistence?
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Article
Joseph Stiglitz: “Deep-seatedly wrong” economic thinking is killing Greece
Aug 19, 2015
The latest austerity deal is terrible for Greece and Europe.
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Video
How do we move beyond the “austerity” debates?
Aug 15, 2015
And how do they relate to our democratic institutions and institutional social relations?
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Article
Is it Just a Greek Problem?
Aug 13, 2015
In the last couple of months, Greece has once again become the center of attention of politicians, academics, and the general public. The debate has, for a large part, focused on Greece’s fiscal deficit as if it were just a self-inflicted Greek problem. But is it?
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Article
Is Financial Success a Product of Inherited Genes?
Aug 9, 2015
Comparing outcomes for biological and adopted children sheds light on the intergenerational transmission of wealth.
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Video
What Can Economists Learn From Literature?
Aug 6, 2015
Literary productions offer illustrations of economic theory in action.
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Article
Economics in the Rear-View Mirror
Aug 6, 2015
Archival artifacts from the history of economics.
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Working Paper
Working Paper SeriesTracking Variation in Systemic Risk at US Banks During 1974-2013
Jul 2015
This paper proposes a theoretically based and easy-to-implement way to measure the systemicrisk of financial institutions using publicly available accounting and stock market data.
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Article
Greece, Goldman Sachs, and the Dark Side of International Finance
Jul 28, 2015
Dubious transactions and flimsy accounting standards need scrutiny.
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Article
So What Can We Do About Inequality?
Jul 24, 2015
Tony Atkinson’s new book points the way forward.
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Article
China’s stock market crash reveals financial policy tensions
Jul 24, 2015
The unprecedented intervention by China’s authorities to backstop China’s stock market reveals widening policy tensions in China’s leaderships financial reform agenda.
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Article
What Happened to China’s Stock Market and Why You Should Care
Jul 23, 2015
The sharp and sudden plunge scared everyone. Can the Chinese government get control of the market?
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Article
Debt-driven Growth: The decade prior to the Great Recession
Jul 22, 2015
The recent financial crisis has impressively illustrated the dangers of rapid credit growth in a painful way.
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Article
EU refuses to acknowledge mistakes made in Greek bailout
Jul 21, 2015
As I write this it would be appear that the Greek crisis is finally coming to an end. In this report I would like to discuss why the negotiations were so fraught and what an agreement actually means. In a nutshell, the EU sought to address matters with the same kinds of measures that had been tried in the past, while Greece argued that doing so would not make things any better—and would in fact make them far worse.
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Video
Tackling the Energy & Environmental Challenges of the 21st Century
Jul 19, 2015
How well do our assumptions about the global challenges of energy, environment and economic development fit the facts?
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Article
Latest Institute Grants Announced
Jul 17, 2015
The Institute for New Economic Thinking has awarded $2 million in grants to fund 21 different projects as part of the latest round of its research grant program.
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Section
Reading Mas-Colell
This blog interprets and presents critical commentary on the textbook “Microeconomic Theory” by Andreu Mas-Colell, Michael Whinston and Jerry Green, which is widely used in Ph.D. programs in economics around the world. The blog initially accompanies the course at the New School For Social Research entitled Advanced Microeconomics I (Fall of 2012, taught by Prof. Sanjay Reddy, with Raphaele Chappe as teaching assistant) and, as such, focuses on particular parts of the textbook which are used in that course. We welcome comments and contributions from interested persons anywhere.
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Article
Rising Inequality is Holding Back the US Economy
Jul 16, 2015
A four percent growth goal for first term of the next president is not only possible, but is what we should strive to achieve.
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Article
How Dated Theories & Underlying Research Misguide Policy
Jul 15, 2015
The financial crisis of 2008 was unforeseen to a significant extent. One reason is that the dominant academic theories influencing political decision makers ignore recent advances and instead rely largely on models and decision science dating back to the Second World War.
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Video
Credit Booms & Credit Busts
Jul 9, 2015
There is now a growing consensus among policymakers and academics that a key element to improve safeguards against financial instability is to strengthen the “macroprudential” orientation of regulatory and supervisory frameworks.
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Working Paper
Conference paperMyths, Mix-ups and Mishandlings: What Caused the Eurozone Crisis?
Jul 2015
The Eurozone crisis has been wrongly interpreted as either a crisis of fiscal profligacy or of deteriorating unit-labour cost competitiveness (caused by rigid labour markets), or a combination of both.
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Article
The Greek Revolt Against Bad Economics Threatens European Elites
Jul 9, 2015
A look behind the scenes of the Greek referendum and what could happen next.
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Article
Greece, Europe, and the Future: The Institute Perspective
Jul 8, 2015
The thunder from the Greek “No” vote in the referendum on Sunday, July 5 continues to roll around the world.
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Article
How German Economists Really Think
Jul 7, 2015
A survey on behalf of the Sueddeutsche Zeitung indicates that German economists are much more American in their thinking than is presumed – with a rising trend.
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Article
Why 'Grexit' could be good for Greece
Jul 7, 2015
It is a shame that Greece was unable to manage its finances and is now slipping into chaos. But this outcome was inevitable and could not be permanently averted with loans from the international community.
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Article
Sinn Advises Greece to Reinstate the Drachma
Jul 6, 2015
It is time for Greece to make a daring leap and adopt its own currency, says Ifo President Hans-Werner Sinn. “The drachma should be introduced immediately as a virtual currency,” Sinn said in Munich.
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Article
Grexit: The Staggering Cost Of Central Bank Dependence
Jul 5, 2015
The ECB has decided to maintain its current level of emergency liquidity to Greece (ECB 2015). By refusing to extend additional emergency liquidity, the ECB has decided that Greece must leave the Eurozone. This may be a legal necessity or a political judgement call, or both. Anyway, it raises a host of unpleasant questions about the treatment of a member country and about the independence of the central bank.
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Working Paper
Partnership PaperIs There a Debt-threshold Effect on Output Growth?
Jul 2015
This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness.
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Video
Fixing the Eurozone
Jul 1, 2015
Greece: reculer pour mieux sauter
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Working Paper
Working paperThe Consumption Response to Liquidity-Enhancing Transfers: Evidence from Italian Earthquakes
Jun 2015
Exploiting three earthquakes in Italy as quasi-experiments, we analyse the response of homeowners’ consumption to transfers targeted to finance housing repair and reconstruction. To the extent that funds are made available up-front, these transfers are akin to loans, mainly affecting the liquidity of households’ wealth
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Working Paper
Working paperIs There a Debt-threshold Effect on Output Growth?
Jun 2015
This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness.
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Article
Europe’s Attack on Greek Democracy
Jun 30, 2015
The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.
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Article
The Charleston shooter has been arrested, but the true killer remains at large
Jun 29, 2015
Inequality, racism, and violence are the real killers in America.
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Working Paper
ReportIMF Country Report 15/165: Greek Debt Sustainability Analysis
Jun 2015
According to Reuters, Eurozone officials attempted to suppress the publication of this report.
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Video
It's Time to Get Radical on Inequality
Jun 25, 2015
America’s economic system has failed by not raising living standards for most.
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Article
Is There a Quantitative Turn in the History of Economics (and how not to screw it up)?
Jun 23, 2015
The (very) recent rise of quantitative analysis in history of economics working papers calls for a closer examination of the prospects and limitations of this approach, and of the impediment to its large-scale development.
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Video
The Death of ‘Homo Economicus’
Jun 18, 2015
Good incentives are no substitute for good citizens.
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Article
Greece Has Made Tough Choices. Now It's the IMF's Turn.
Jun 18, 2015
The International Monetary Fund’s chief economist, Olivier Blanchard, recently asked a simple and important question: “How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?” But that raises two more questions: How much of an adjustment has Greece already made? And have its creditors given anything at all?
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Article
Bankers Think They Have an Ethical Duty to Steal From Taxpayers
Jun 16, 2015
It doesn’t make sense to pay someone to rob you.
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Article
Why This Time Is Different for Ukraine
Jun 15, 2015
The Ukrainian government has committed to implement far-reaching reforms in exchange for the support it is getting from the international community, led by the International Monetary Fund (IMF). Understandably, given Ukraine’s disappointing transition history, there is widespread scepticism on whether the country will live up to its commitments. Three failed IMF programmes later, the fundamental question is: Is it different this time?
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Article
What Even Famous Mainstream Economists Miss About the Cambridge Capital Controversies
Jun 15, 2015
Non-mainstream economists are disputing neoclassical ideas about capital.
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Working Paper
Working paperAggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply
Jun 2015
There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems.
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Article
Fiscal implications of the ECB’s bond-buying program
Jun 14, 2015
The monetary-fiscal policy connection is under scrutiny by the German Constitutional Court in the context of the ECB’s OMT bond-buying programme. This column argues that most analyses are deeply flawed by the misapplication of private-company default principles to the central bank. ECB bond-buying transforms public bonds into monetary base, and sovereign-default risk into inflation risk. The real question is: What is the non-inflationary limit to money-base expansion? This depends upon the economic situation and is much higher in the current liquidity-trap setting.
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Video
How Elite Power Brokers Corrupt our Finances, Freedom, and Security
Jun 14, 2015
Janine Wedel charts the fast–evolving system of power and influence. Who is accountable? What are the remedies available to the average citizen?
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Article
The rise of financialization has led to lower living standards and reduced growth in the U.S.
Jun 12, 2015
The last 30 years has seen a massive rise in the importance of financial instruments in the American economy. But what has been the impact of this shift in corporate investment strategy?
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Article
Thoughts On Skidelsky's Rant Against The Current Economics Curriculum
Jun 9, 2015
The extremely wise Robert Skidelsky has an excellent rant against Anglo-Saxon economics departments
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Article
Fixing The Financial System: Adam Smith Vs. Jeremy Bentham
Jun 9, 2015
How do we create a “change in culture”?
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Section
History of Economics Playground
A blog by young and restless (and good looking) historians of economics.
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Article
History of Economics on the Making
Jun 1, 2015
New topics and approaches make their way into two recent conferences on the history of economics
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Working Paper
Working paperBeyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantage
May 2015
Motivated by the long-standing debate on the pros and cons of competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country’s international competitiveness. We refocus the analysis on the implications of monetary stabilization for a country’s comparative advantage.
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Collection
Realigning Financial Regulation
Has financial reform succeeded in realigning finance with society’s broader public interests? Here’s what several of our top experts have to say.
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Article
America’s Competition Fetish Kills Creativity and Produces Human Sheep
May 28, 2015
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Video
The Long Road Back Toward Ethical Banking Practices
May 20, 2015
How do we rebuild trust in financial services?
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Video
Adair Turner on Debt
May 13, 2015
The former chairman of Britain’s Financial Services Authority and author of the forthcoming book “Between Debt and the Devil” explains why private debt, not banks, deepened the financial crisis and continues to cause trouble today.
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Article
UK Election: A Tale Of Two Nations
May 11, 2015
Yes, it is a tale of two nations, but in a much broader way than you think. Not just England and Scotland, but an equally salient parallel between Great Britain and Canada.
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Working Paper
Working paperContagion Exposure and Protection Technology
May 2015
People adopt diverse measures to protect from contagion. I propose a taxonomy of protection technologies, and present a model to study the implications of the technology on the prevalence of infections and on welfare at different levels of exposure.
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Article
Making Financial Regulations Work for Society
May 8, 2015
Remarks from Finance & Society May 6, 2015
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Conference Session
Welcome Address & Introductory Remarks
May 5, 2015 | 05:00—05:15
Introductory remarks at the 2015 Finance & Society conference in Washington D.C.
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Conference Session
Other People's Money: Governance, Integrity, & Ethics
May 5, 2015 | 06:45—08:00
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Conference Session
A Conversation with Christine Lagarde & Janet Yellen
May 5, 2015 | 05:15—06:15
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Conference Session
Credit Markets: Booms, Busts, & Distortions
May 5, 2015 | 09:15—10:45
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Conference Session
Making Financial Regulation Work for Society
May 5, 2015 | 10:45—11:45
In this session Anat Admati and Brooksley Born discuss their observations about financial regulation needed to make sure the financial system serves society.
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Conference Session
An Interview With Sarah Bloom Raskin
May 5, 2015 | 12:00—12:30
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Conference Session
Concluding Remarks
May 5, 2015 | 12:30—01:00
Closing remarks at the 2015 Finance & Society conference in Washington D.C.
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Article
Want to Take on Financial and Governmental Corruption? Hire Women.
May 5, 2015
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Webinars and Events
Finance & Society
ConferenceMay 5–6, 2015
Senator Elizabeth Warren, Federal Reserve Chairman Janet Yellen, and IMF Managing Director Christine Lagarde joined a renowned group of globally influential women in discussing how the financial system can be re-imagined to truly benefit society.
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Conference Session
Finance & Society
May 4, 2015 | 02:30—05:30
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Video
Breaking the Glass Ceiling
May 3, 2015
Whilst progress has been made, the “glass ceiling” dividing men and women has yet to be broken definitively. Monika Queisser discusses the challenges still facing women in the workplace and beyond.
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Article
How Sociologists Think About Inequality
May 1, 2015
Most sociologists believe that formal and informal institutions are more critical in explaining the rising inequality observed in advanced economies. In this light, changing institutions such as the ascendance of shareholder-centered corporate governance model, finance-friendly policies since the late 70s, credentialism, and deunionization all contribute to the earnings dynamics at different parts of the distribution.
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Working Paper
Working paperInput Diffusion and the Evolution of Production Network
Apr 2015
The adoption and diffusion of inputs in the production network is at the heart of technological progress. What determines which inputs are initially considered and eventually adopted by innovators? We examine the evolution of input linkages from a network perspective, starting from a stylized model of network formation.
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Working Paper
Working paperLaid Low: The IMF, The Eurozone and the First Rescue of Greece
Apr 2015
As Greece descended into a financial maelstrom in the spring of 2010, a small group of staffers at the International Monetary Fund (IMF) held top-secret talks with officials from the German and French finance ministries to discuss the idea of restructuring Greece’s debt.
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Video
Women, Finance & Society
Apr 27, 2015
Gudrun Johnsen on Iceland, “womenomics”, and Finance & Society
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Article
Why journal editors should commission history papers for their anniversary issues
Apr 23, 2015
Writing the history of economic journals is not merely a way to reconstruct the development of new fields and new approaches to economics. It also recasts current debates on peer-review, retractions, open-access, replicability, and bias in scientific publishing in a wider perspective. It answers important questions on the influence of editors, publishers and referees on the development or marginalization of various economic approaches. But such endeavour requires the preservation of journals’ archives, the recognition of historical expertise, and economists’ adoption of a more relaxed and humble approach to their history.
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Article
History as Personal Expression — a personal note
Apr 22, 2015
Economists and historians of economics have constructed different (and sometimes conflicting) narratives about the past of their field. In fact what is history for economists may not be what is history for historians. To celebrate its 125th anniversary, the Economic Journal invited renowned economists to discuss important contributions published in the past by the journal and the works on similar topics by historians of economics are absent from these accounts. History of economics here seems to have the weight of a JEL descriptor attached to an invited contribution, which we ought to agree that it is not much.
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Article
Our Banking System is a Giant House of Cards
Apr 21, 2015
It Could Fall On You.
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Article
New Climate-Economic Thinking
Apr 21, 2015