Archive

Why the E-DSGE Framework Is Not Fit for Purpose and What to Do About It

A major factor in the decline of inflation is the simple fact that America’s workers were, in general, unable to raise their nominal wages in line with the rise in the cost of living

The current paper returns to the key questions of wages and incomes and how wealth effects cripple reliance on interest rates to control inflation.

How convincing is the model analysis by Bernanke and Blanchard? How empirically relevant are their mechanisms causing inflation – and how robust and plausible are their econometric findings?

The re-emergence of inflation threw the ‘science of monetary policy’ off the rails. Do the new tweaks to the theory work?

Were the sharp increases in prices during 2020-2022 due to fundamental shifts in supply and demand or are they attributable to excessive market speculation?

A critical reappraisal of the case in favor of monetary tightening pressed by inflation hawks is overdue.

Fears of ‘stagflation’ have come back to haunt macroeconomic policy makers all over the globe

Are there alternative, less socially costly, ways to bring inflation down?

Contrary to the neoclassical loanable funds theory, historical bond yields show Keynes was right that “convictions” anchor long-term interest rates

The popular discontent and rise of ‘populist’ political parties is closely related to the failure of New Labor to navigate social democracy’s dilemma.

This paper considers the ambition, scale, substance and strategy of the European Union’s Green Deal

Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world

We adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual US firms: the share of their quarterly earnings conference calls that they devote to political risks.

It was too good to be true: Another effort to vindicate austerity falls victim to flawed methodology.

Everyone is waking up to the fact that estimates of what is possible in the economy are way off: this paper explains why

This paper analyzes the performative impact of the European Commission’s model for estimating ‘potential output’, which is used as a yardstick for measuring the ‘structural budget balance’ of EU countries and, hence, is crucial for coordinating European fiscal policies.

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

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

The impact of the post-meltdown Federal Reserve policy of ultra-low interest rates and Quantitative Easing (QE) on income and wealth inequality has become an important policy and political issue.

This paper traces the evolution of the concept of the cyclically adjusted budget from the 1930s to the present.

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.

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

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.

This memo outlines key concepts and the methodological approach involved in a recently funded Institute for New Economic Thinking project. Our aim is to pinpoint the relationship between the reception of academic ideas, traced by citation networks with qualitative coding, and positions of institutional and political power.

This work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables (GDP growth, unemployment, etc.) on the grounds of an agent-based Keynesian model.

We investigate the effects of government spending on U.S. economic activity using a threshold version of a structural vector autoregressive model.

Central to John Maynard Keynes (1941) original Bretton Woods proposal was an international clearing union that would issue a new international currency by fiat called bancor. Among other functions, this international central bank would finance the stabilization of individual commodity prices through commodity buffer stocks.