Archive

How can we better protect Main Street from the externalities of Wall Street?

As you may remember, I had decided to cease contributing to this blog a few months ago. Nevertheless, I thought I could use my completely illegitimate administrator rights to post one last piece dealing with the recent events in France

The turmoil of Brexit and the populist challenge across Europe are consequences of austerity policies that have brought misery to millions of ordinary voters. In this interview first published last January, Servaas Storm warned of the dangers of economic decision making divorced from democracy and from the social consequences of its prescriptions

Private data is leaked more and more in our society. Wikileaks, Facebook, and identity theft are just three examples. Network defenses are constantly under attack from cyber criminals, organized hacktivists, and even disgruntled ex-employees.

Repression in China today is at its most severe point since the aftermath of 1989. David Wu discusses the tensions inherent in a one-party state which is struggling to aspire toward a more predictable rule of law.

This research project posits that increasing income concentration and erosion of the middle class are interrelated results of a change in the dominant corporate resource-allocation regime from “retain-and-reinvest” to “downsize-and-distribute,” manifested by massive distributions to shareholders and the disappearance of “collective and cumulative” careers.

This research project studies the evolution of monetary policy since the financial crisis, as regards to changes in implementation mechanisms and use of conventional/unconventional instruments of monetary policy, as well as its mpact on macroeconomic variables, including income distribution.

The objective of this proposal is to build distributional statistics of income and wealth consistent with national accounts aggregates for the United States.

This research project improves our understanding of the effects of intellectual property rights—and in particular copyrights—on creativity and innovation.

This research project develops a “Money View” analysis of the recent evolution of China’s financial system.

This research project explores the process of modern (shadow) money creation in hierarchical and interconnected monetary systems. In theorizing the dynamic instability of shadow money, it provides a comparative account of the structural and institutional specifics of shadow money in the US, Eurozone and China, and the policy challenges thereof.

This research project studies the macroeconomic effects of rising inequality by focusing not on top incomes but instead on the economics of the “bottom 99%” which has been squeezed out by rising inequality and falling labor shares.

This research project explores the underlying limits—especially of the social and economic sciences—in identifying causalities including, among other aspects, the strong epistemological and statistical limitations of and assumptions behind the methods applied.

This research project addresses the problem of inferring causal relationships in economics. It investigates the philosophical roots of the problem and develops econometric tools which take into account the complexity of economic systems.

This research project proposes to revise common interpretations of 20th-century economic history by unearthing the often overlooked story of tax havens and offshore finance, Eurodollars, and export processing zones between the 1870s and 1980s.

Recent work has highlighted the need for innovation investments to be understood through a mission oriented approach rather than a market failure one (Foray et al. 2012). However, this work has only focused on state agencies, such as DARPA, overlooking the role of public financial institutions such as state investment banks.

This research project models financial interdependencies in the form of dynamic networks and propose policy and risk measurement tools to pre-identify contagion.

This research project uses information from digitized Google books and library catalogues to create new measures of technological innovation and diffusion for OECD countries from 1850 to the present.

This research project offers a historical taxonomy of organizational ways that governments fund and implement industrial and innovation policy as well as a taxonomy of contemporary implementation practices.

This research project provides guidance to policymakers for designing policies that are able to bring economies out of recessions by identifying the best policies to fight unemployment and stabilize the business cycle while alleviating inequality.

This research project provides a better understanding of the processes that accompanied the reforms of the Austrian schilling in 1947 and the birth of the deutschmark in 1948 by merging archival sources with financial data from banks and markets and comparing the two reforms.

This research project brings together ideas from the literature on robustness in macroeconomics, network theory, and evolutionary game theory to study the way in which perceptions of safe asset status evolve among financial market participants.

This research project explores the causes and consequences of the rise of China’s shadow banks based on the Modern Money Theory and its extension on the analysis on modern financial systems.

This research project develops a theoretical framework to examine the relation between arbitrage capital and the price properties of different asset markets.

This research project combines interdisciplinary expertise with a wholly unique database on hedge funds compiled by the Foundation for Fund Governance to examine the organization and governance of the offshore hedge fund industry.

This research project employs a new theory and innovative empirical analysis as a new lens for understanding financial instability and financial crises, focusing on the Great Depression.

This research project investigates the rise of federal credit programs in the United States, leading to a better understanding of the development of federal credit programs.

This research project rescues the work of the London and Cambridge Economic Service, arguably the first body in Britain to collect and disseminate economic statistics.

This research project explores the origins of covered mortgage bonds and tests for the impact of financial development on economic growth by analyzing the Prussian Landschaften.

This research project re-examines the debates around the time of the Great Depression and compares them with those before and since the start of the Long Recession in 2007/8, focusing on Keynes, Hayek, and their followers.

This research project explores whether the financialization of the US economy has contributed to rising income inequality through complementary analyses at the individual, firm and industry levels.

This research project formulates a normative theory of learning both preferences and probabilities that explains a broad spectrum of economic behavior heretofore judged irrational.

This research project develops a new behavioral paradigm of heterogeneous expectations that can help explain the sources of financial and macroeconomic instability and find possible policy remedies.

This research project develops tools that allow social scientists to understand how and when social factors, such as peer influences, role models, or norms, affect individual choices.

This research project studies how the Basel Committee on Banking Supervision and the International Swaps and Derivatives Association operate and the factors that help shape the extent to which they are able to ensure financial stability from a public-interest standpoint.

This research project establishes the conditions under which international capital flows are a force for stability, thereby improving the capacity for macroeconomic policy to avoid large boom-bust cycles.

This research project develops a rigorous new theoretical way to study controls of international capital flows and determine their optimal magnitude using a promising new empirical methodology.

This research project commences work on a supplementary edition covering much of John Maynard Keynes’s significant writings on economics, philosophy, and politics that remain unpublished.

This research project aims at analyzing the role of economic models in economic policy-making. Specifically, we investigate the impact of CGE models, related to the TTIP debate, and potential output models, related to fiscal policy in the EU, on politicial decision-making and public debate.

This research project will study the long-run interactions between transport infrastructure and economic development using spatially-disaggregated data for England and Wales over the period c.1817—2011. It will look to inform policy toward large investments in physical infrastructures.

This research project traces the history of German energy policy from 1945 to the present. It explores the political economy behind Germany’s transition from coal, to oil, to green energy, the crises driving these shifts, and the evolving efforts to balance affordability with security and environmental protection.

This research project investigates the air quality co-benefits of climate policy. Reduced burning of fossil fuels curbs not only CO2 emissions but also emissions of hazardous co-pollutants, such as particulate matter. The extent of air quality co-benefits relative to CO2 reduction varies across regions and pollution sources, and hence the distribution of emissions reductions matters for both efficiency and equity.

This research project uses macroeconomic data going back to the mid-19th century to analyze issues such as the relation between income distribution and economic growth; and how debt, asset prices, and growth moved together the last 160 years.

This research project examines the long process of innovation at Fair Isaac, the analytics firm behind the FICO scoring system.

This research project lays a foundation for new and better long-run estimates of poverty and inequality around the world through the collection, digitisation, and harmonisation of household budget data.

This research project explores how genomic data can inform the understanding of social science questions. The genomic revolution means that social scientists are able to correlate a range of outcomes and behaviors with genes. This research studies what these correlations mean.

This research project deepens our understanding of labor market conditions during the Great Depression by assemling data at the national, state, and industry level for jobs created, jobs destroyed, unemployment, employment, and the labor force.

This research project examines how the spatial pattern of inequality in US cities shapes the provision of public transit and more broadly the prospects for a more equitable and sustainable transportation policy.

This research project shows the European origins of development economics between the late 1930s and the early 1960s and describes how the postwar global challenge of development took shape.

This research project investigates how gender and race affect the earnings of African American, Latina, and Asian American women in the United States over five decades, from 1970 to 2010.

This research project explores the causes and consequences of the way countries innovate and the economic foundations for the government’s direct involvement in conducting innovation.

This research project constructs a broad set of software tools designed to better facilitate the understanding and comparative features of various types of agent-based finical markets.

This research project improves the mathematical capabilities of non-Neoclassical economics and uses modern techniques from nonlinear dynamical systems to model the expansion and contraction of credit and its effect on real economic output and asset prices.

This research project employs ideas from statistical physics to deal with income and wealth inequality, financial instability, and the distribution of energy consumption around the world.

This research project investigates the impact of the new style of central banking on the bank’s solvency, its ability to control inflation, and on economic stability.

This research project builds a new generation of models fit to analyze and manage the challenges of governing globalized and interconnected economies.

This research project combines 140 years of economic history with state-of-the-art econometric methods to gain new insights into the relationship between finance, growth, and crises.

This research project examines the informational inefficiency of market prices in the presence of Knightian uncertainty or ambiguity by modeling the decision making of financial market traders.

The tension between efficiency and equilibrium is a central feature of economic systems. In many contexts, social networks mediate this trade-off: an individual’s network position determines equilibrium play, and social relations allow coordination on an efficient norm.

The economics of religion is a relatively new field of research in economics. This survey serves two purposes – it is backward-looking in that it traces the historical and sociological origins of this field, and it is forward-looking in that it examines the insights and research themes that are offered by economists to investigate religion globally in the modern world.

Bill Mitchell presents a coherent analysis of how money is created, how it functions in global exchange rate regimes, and how the mystification of the nature of money has constrained governments, and prevented states from acting in the public interest.

Full paper is here. Comments are much welcome.And because it’s an epic story (and because I suck at writing abstracts), here is an audio trailer. I thank Paul for his beautiful Memphis accent.

How should the Eurozone handle unemployment and other immediate hurdles?

A more realistic version of how people “maximize utility”

The recently observed surge in wealth doesn’t equate to growth of productive capital. Joseph E. Stiglitz, Branko Milanovic, Paul Krugman and Duncan Foley discuss these issues and more.

This paper examines the effects of intra-financial lending – claims between financial institutions – on aggregate investment and credit to the non-financial sector in the United States.

Few would argue that America’s fortunes rise and fall on its ability to generate technological innovations — to put bold ideas to work and then bring them to market.

One of the earliest attempts to tackle the problem of multiple equilibria in Macroeconomics was a byproduct of David Cass and Karl Shell’s engagement with Robert Lucas’s 1972 paper on ‘Expectations and the Neutrality of Money.’

There is widespread and growing concern about the availability of good jobs in the U.S. economy. Inequality has been growing for thirty years and is now at levels not seen since the 1920s. Stable and remunerative employment has become harder for U.S. workers to find.

How can we better integrate history into economic analysis?

This paper examines the evolution of intra-financial sector lending in the United States, 1950- 2012, presenting estimates constructed from the Federal Reserve’s Flow of Funds Accounts.

Bill Black knows banks.

How can the state manage its central role in the innovation economy if the state itself has become an instrument for facilitating corporate predation?

How should the government recoup the benefits from the fruits of its research? And what role should the government play going forward in important areas such as clean tech?

Household economic surveys, such as the German Socio-Economic Panel, notoriously underestimate the degree of income and wealth inequality at the upper end of the distribution.

Rising inequality reduced income growth for the bottom 95 percent of the US personal income distribution beginning about 1980.

The “keys under the streetlight story” is well known among economists, but in case you haven’t heard it, it goes like this.

In the wake of World War II, much of the western world, particularly the United States, adopted a new form of capitalism called “managerial welfare-state capitalism.”

An Open Letter to Tim Cook, CEO of Apple

I was going to call this blog post ‘Utility maximising agents in Adam Smith’s Theory of Moral Sentiments’ but realised that was much too dull - even if it accurately describes my bedtime reading at the present moment.

Apple should be returning profits to workers who have invested their time and effort into generating its products and to taxpayers who have funded the investments in the physical infrastructure and human knowledge so critical to Apple’s success.

The paper referenced in this post, “Financialization and U.S. Income Inequality, 1970–2008,” recently was awarded the 2014 Outstanding Article Award from the Inequality, Poverty, and Mobility section of the American Sociological Association.

These videos cover not only Dr. de Cecco’s seminal research on the international gold standard, but his views on the international monetary system between the wars, the formation of the Bretton Woods system, and its breakdown – all topics on which Dr. de Cecco has written copiously.

In the spring of 1940, as the war in Europe escalated and the likelihood of American involvement grew greater and greater, scientists understood that they would soon be drafted to help national defense planning.

The International Monetary Fund and the World Bank celebrate their 70th anniversary this year, yet few countries have been eager to join the festivities.

Last Spring Larry Summers wounded Thomas Piketty in a friendly embrace.

Has the euro experiment largely failed to meet the needs of the people who use it? If so, what can be done? Andrea Terzi suggests innovative ways to repair the Eurozone’s flawed fiscal architecture.

The question of underdevelopment and development policies in postwar Europe will be the theme of a workshop organized by Michele Alacevich, Sandrine Kott, and Mark Mazower, at Columbia University, the Heyman Center for the Humanities, Friday, October 10, 2014. The program is available here. Below are some of Alacevich’s insights on the issue leading up the event:

Peter Victor challenges the basis of our obsession with economic growth

Anyone who has spent time in a developing country knows the importance of social connections. Among their many roles, these connections help individuals land jobs, and provide them with credit and other forms of support.

Employment as University Professor is by comparison with the grind of the professional world a peaceful, perhaps even relaxing, assignment.

Fred Block discusses his book, “The Power of Market Fundamentalism”.

Government safety nets give protected institutions an implicit subsidy and intensify incentives for value-maximizing boards and managers to risk the ruin of their firms. Standard accounting statements do not record the value of this subsidy and forcing subsidized institutions to show more accounting capital will do little to curb their enhanced appetite for tail risk.

The New York Times is having a “Room For Debate” discussion on its Opinion Page about how corporations should handle profits based on the Harvard Business Review article “Profits Without Prosperity” by William Lazonick of the University of Massachusetts Lowell, who is a grantee of the Institute for New Economic Thinking. The discussion features contributions by Bruce Greenwald, Peter Thiel, and Lazonick, among others. Lazonick argues that the capital being used for stock buybacks would be better spent on investment. Lazonick’s “Room For Debate” piece is below. To read the full discussion on The New York Times, click here.