Government & Politics

John Smithin argues that we need to rethink the “consensus” with tools old and new.

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

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.

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 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 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.

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.

How should the Eurozone handle unemployment and other immediate hurdles?

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.

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.

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.

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

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:

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.

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 flummery of capital-requirement repairs undertaken in response to the Great Financial Crisis.

Why do so many people who should know better argue that Neoliberalism ‘does not exist’?

The glass ceiling is typically examined in terms of the distribution of earnings. This column discusses the glass ceiling in the gender distribution of total incomes, including self-employment and capital income. Evidence from Canada and the UK shows we are still far from equality. Though the proportion of women in the top 1% has been rising, the progress is slower, almost non-existent, at the very top of the distribution.

Our welfare depends not only on our actual consumption, but also on alternate choices wedid not make.

India has for the last twenty years been undergoing a rapid and abiding structural shift in its pattern of development. The transformation of the economy from the period of the license raj to the post liberalization era has wrought many changes, with somewhat ambiguous implications.

The president of INET, Johnson(2013) emphasized the importance of Asian tradition for building up the New Economic Thinking. “It ismy sense that the Asian tradition of thought and philosophical perspective are better suited to embracing this radical uncertainty and living in the experimentation of the adaptive complex system that our world appears to resemble than are the Western mindsets that are the product of the Cartesian Enlightenment.” In the summary he argues that “As the Asian societies continue to evolve the architects will be better served by an new economics for Asia and from Asia that is based on the notions of radical uncertainty, complex adaptive systems, mimetic desire, the inseparability of politics and economics, and a vision of a world where policy makers are themselves less knowing and less capable of control than we often yearn to believe is within their power.”

The Arab Spring has been a fundamental event in the Arab world and yet among Middle East scholars, there is great intellectual and analytical debate about the degree of political change or continuity that the Arab Spring had produced. As reverberations of the global economic crisis have continued and the international rules of the game have fundamentally remained unchanged, the demand on post-Arab Spring governments to change policy course is high.

The chief obstacle to transformative change in the contemporary Middle East is the region-wide configuration of social power which was consolidated in the Arab provinces of the Ottoman Empire and which survived the transition from empire to post-Ottoman independent states largely intact.

While successive waves of democratization over the last half century changed the political landscape in various regions of the world, the authoritarian regimes have maintained their hold on power in the Arab region.

Debate about the pension crises has centered on certain questions such as: Are greedy government workers bankrupting states? Arepension-slashing politicians backed by big money saving the day? Or do the budget problems of state and localgovernments have more to do with wasteful corporate subsidies than pensions? What are the real policy solutions to the pressures placed on pensions?”

Cyberwar is very much in the news these days. It is tempting to try to understand the economics of such an activity, if only qualitatively. What effort is required? What can such attacks accomplish? What does this say, if anything,about the likelihood of cyberwar?

Five years after the end of the Great Recession, corporate profits are high and the stock market is booming. Yet most Americans are not sharing in the apparent prosperity.

This article studies the reasons for the under-investment in research vs. development in the decentralized equilibrium and argues that this bias provides a micro-foundation for the government direct involvement in conducting applied research rather than just financing it.

The Institute for New Economic Thinking joined the Centre for International Governance Innovation (CIGI) in holding its fifth Annual Conference from April 10 to April 12, 2014 in Toronto.

Adair Turner at the Institute’s #HumanAfterAll conference in Toronto, CA (2014).

The fall of 2008 was scary. For most people, the aftermath of Lehman Brothers’ bankruptcy resembled a major earthquake with strong aftershocks. Official narratives have promoted the image of the crisis as a rare, unpreventable and unforeseen natural disaster, the “100-year flood.” Policymakers emphasize the extraordinary measures they have taken to prevent the system from collapsing and to support recovery since.

Since the outbreak of the Greek debt crisis at the end of 2009, the Eurozone finds itself in an unprecedented debt crisis.

Owing to its strong dependence on exports, Germany was among the economies hit hardest by the financial crisis.

A showdown has taken place within Italy’s governing coalition.

India’s economic leaders are determined to rein in skyrocketing inflation, but the country’s volatile political landscape may prevent reforms from taking hold.

The Institute will host the Winter School on Law and Finance at Columbia University’s Global Center in Paris on January 6-9, 2014.

What is most demoralizing to participants in the financial markets? Falling prices? Constant volatility? How about a vacuum of trust?

The Bank of England took the first step in putting the brakes on the surging property market as it scrapped the United Kingdom’s flagship initiative that encourages mortgage lending, introduced earlier this year by Treasury minster George Osborne.

Adair Lord Turner, former Chairman of Great Britain’s Financial Services Authority and current Senior Fellow at the Institute for New Economic Thinking, will argue in a keynote address to the Federal Reserve Bank of Chicago on Thursday that central banks must be equipped in future to address the dangers of excessive private sector leverage, using both pre-emptive interest rate policy and macro-prudential policy tools.

When Greece’s sovereign-debt crisis threatened the euro’s survival, U.S. officials called their European counterparts to express bewilderment at their inability to resolve the issue.

If Congress and the White House fail to raise the debt ceiling this week and the United States defaults on its debt, what can we expect and how can we protect ourselves against these events?

“You are now leaving the world as you know it.”

World leaders who are gathering for the APEC summit next week had hoped to be signing the Trans-Pacific Partnership Agreement (TPP). The pact would bring together key Pacific-rim countries into a trading bloc that the United States hopes could counter China’s growing influence in the region.

A look at the large role the trade deficit of the United States has played since the 1980s.

What have we learned about the American political economy from the crisis and its aftermath?

Can China lead the way on innovation?

Every nation faces the challenge of imagining what a good life means. Sound nutrition, shelter, health care, personal safety, social stability, security of savings, clean air and water, and the development of children are among the elements of what many envision as vital to a happy and healthy society.

Recent austerity policies have been guided by ideology rather than research. This column discusses research that reconciles disparate estimates of fiscal multipliers in the literature. It finds that common identification assumptions are problematic. Matching methods based on propensity scores show how contractionary austerity really is, especially in economies operating below potential.

Economic theories are powerful things, to be used and misused. Those who write economic theory and do economic policy need to be aware of the consequences of what they are doing.

Between July 5th and 12th, the second annual summer school in development economics, jointly sponsored by Azim Premji University and the Institute for New Economic Thinking, was held in Bangalore, India.

is the public sector really sclerotic and conservative in contrast with a dynamic and innovative private sector?

How does debt influence growth?

‘Helicopter money’ may in some circumstances be the only certain way to stimulate nominal demand

A minimum wage is a small minnow in an ocean of deficient aggregate demand

These are extraordinary times for central banks. Near zero interest rates and massive liquidity injections are still failing to bring life back to so many economies in the developed world.

In this paper we provide a summary and a guide to the literature for a new line of research which goes under the name of Economic Complexity and is partly performed incollaboration with INET.

“Look! Up there in the sky! What is it? Is it a plane? Is it a bird?” No, it’s a distraction from the robbery that is taking place in broad daylight on the ground.

The exteriors of major central banks may be solid marble and doric columns, but, inside, monetary policy remains a work in progress.

Only a few years ago, comparisons of American politics to opéra bouffe were not outrageously farfetched at least if you were not poor or sick.

Since the dawn of this millennium, and long before the current financial turmoil and the subsequent bitter pill of austerity therapy hit the Untied States and the European Union, the Chinese Communist Government has publicly recognized the monumental challenge of polarity.

There are a number of possible purposes in assessing the level of economic development of a country or part of a country. The assessment may provide an incentive for better development, particularly if it can be compared meaningfully with assessments for other countries.

“Taking advantage of the opportunity offered by the structural adjustments of the global economy…”The decisions on the four modernisations taken at the Third Plenum represented a radical change in Chinese domesticdevelopment strategy.

Political meritocracy is the idea that a political system is designed with the aim of selecting political leaders with above average ability to make morally informed political judgments. That is, political meritocracy has two key components: (1) the political leaders have above average ability and virtue and (2) the selection mechanism is designed to choose such leaders.

The reason why the Euro zone crisis has dragged on for so long is that Europe’s leaders have focused too much on short-term measures to patch up the emergency of the moment, rather than formulating a comprehensive plan.

After the announcement of Mario Draghi, the ECB president, to do “whatever it takes” to preserve the integrity of the European Monetary Union (EMU) in July 2012 and the establishment of the Outright Monetary Transactions (OMT) program in September 2012, the crisis of EMU is far from being resolved.

Mercantilism, Accumulation of Foreign Exchange Reserves, and RMB Internationalization

Regulation and supervision of banks and financial markets are now upgraded in the euro area. Surveillance of macroeconomic performance of all EU countries is also intensified.

Europe can choose its musical accompaniment. In Berlin, 50 Cent’s All Things Fall Apart has just had its premiere. Or go back to Giuseppe Verdi, born two hundred years ago.