Macroeconomics

Contrary to the New Keynesian paradigm, long-term unemployment can be reversed without a significant uptick in inflation

Mortality and economic data show how constraints to government spending and a skepticism of redistributive policies have made the pandemic far worse

Mortality and economic data show how constraints to government spending and a skepticism of redistributive policies have made the pandemic far worse

How to Get Relief to Those Who Need It. Gosia Glinska in Conversation with Anton Korinek

There are several reasons why unprecedentedly low interest rates will probably not stimulate demand and may even threaten financial stability

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

Revival of failed austerity policies of the past is simply not an option

Comment on Paul Krugman’s recent observations on US inflation

Developments in the real economy have persistently challenged central tenets of older economic thinking, such as the supposed close connection between the money supply and inflation.

The Challenge to Bidenomics

Recognizing that inflation of the value of output and its costs of production must be equal, we focus on a cost-based macroeconomic structuralist approach in contrast to micro-oriented monetarist analysis.

The economy is likely to be crippled for months and fiscal rescue on a large scale, once again, is very much necessary.

On the occasion of the ASSA 2021 Virtual Annual Meeting (Jan. 3-5), Peter Bofinger presents a “10 Best of” Mankiw list

Individual EU member states ought to issue perpetual bonds

Lance Taylor and Özlem Ömer respond to Andrew Smithers’s final comment on their working paper

The third and final round of response from Andrew Smithers on Lance Taylor’s INET working paper on the alleged “global savings glut.”

Human societies have always coevolved with technology, but how can we think of technology? Is it an external force outside our control, or do we have a say in its direction, development and deployment?

A discussion with Lance Taylor and Özlem Ömer, authors of INET’s new book Macroeconomics Inequality from Reagan to Trump

In a new book from Cambridge University Press, Lance Taylor reveals that wage repression — far more than monopoly power, offshoring or technological change — is driving rising inequality.

Financial commentator Andrew Smithers responds to Lance Taylor’s INET working paper. You may also read Taylor’s response to Smithers’s comment here.

Lance Taylor responds to Andrew Smithers’s comment on his INET working paper, “Germany and China Have Savings Gluts, the USA Is a Sump: So What?”

A “global saving glut” was invented by Ben Bernanke in 2005 as a label for positive net lending (imports exceeding exports) to the American economy by the rest of the world. However, there is a more plausible explanation for the persistent trade imbalance between the US and its major trading partners.

An alternative look at the “global savings glut”

The Fed is taking an aggressive approach to put out the economic fires of the pandemic. But it needs to allow for flexibility as some business models irreparably change.

The speed and duration of COVID-19 economic recovery will depend on how the government will finance emergency programs.

COVID has meant unemployment for the many and a corporate profit-fueled windfall for the few.

What counts as work and what doesn’t?

The Calamity of Germany’s Distorted Perception of Italy

How the fear-of-the-new transformed a “miracle” into an aborted attempt at catching-up

A Report From the Front Line

A call to action for a world economy in crisis

IMPORTANT: Due to growing concerns around the coronavirus, the INET Conference, as well as these workshops will be postponed. Applicants will soon be provided further information.

Austerity policies will slow recovery and should be rejected

Much historical commentary emphasizes how pandemics restructure long-standing social and political arrangements. The observation applies to macroeconomics as well.

What ails the EU Green Deal is exactly what troubles the Union in general — an absence of social democracy at work

Effective and quick federal policy response is critical to create conditions for a quick recovery.

Incomes Destroyed at the Bottom, Profits Supported at the Top

If the European Central Bank does not jump to the aid of peripheral countries weakened by the pandemic, the Eurozone could collapse.

The central bank today is not just the government’s bank, but also a bankers’ bank, a truly hybrid institution

The central bank today is not just the government’s bank, but also a bankers’ bank, a truly hybrid institution

Without new economic thinking, macro policy will retain its deflationary biases and secular stagnation remains the ‘normal’.

This paper argues that it is a mistake to dismiss secular demand stagnation as main cause of declining potential growth in the OECD.

The European Commission, the European Central Bank, and the IMF are the continent’s austerity police

A critique of Mankiw’s Macroeconomics

The INET Taskforce in Macroeconomic Efficiency and Stability, chaired by Professor Joseph Stiglitz, focuses on the inefficiencies and instabilities that arise from the interaction of agents and institutions operating in networks and from pervasive macro-economic externalities, as well as on the macroeconomic inconsistencies that may result from those interactions.

Repeat after me: How much pipe should Fed plumbers lay if Fed plumbers like to lay pipe?

National States and Conflicting Economic Priorities in the Making of the European Monetary System

This paper analyzes the early stages of the formation of the Common Market.

This essay deals with the contradictory dynamics that engulfed Europe from 1959 to 1979, the year of the launching of the European Monetary System.

This essay deals with the EMS experience and its failure, with the Maastricht Treaty, and with the interregnum leading to the formation of the EMU in 1999.

Policy hype but vintage fiscal economics from Godley, Lerner, and Keynes

Policy hype but vintage fiscal economics from Godley, Lerner, and Keynes

GDP doesn’t tell the whole story—Robert McMaster explains the Economic Democracy Index

Summers and Stansbury mark a dramatic shift from New Keynesian orthodoxy, but only make it halfway to understanding the demand-driven nature of stagnant growth

Mott walks us through answers many careful readers of Kalecki, Keynes, Steindl, and Minsky knew all along.

Many indicators say the US is close to full employment: Hours of work tell a different story.

A Comment on Summers and Stansbury

Why Pushing on a String Has Never Worked

Summers and Stansbury Get It Half Right

Inadequate demand and climate change require a global green new deal

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.

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

Richard Vague and Rob Johnson discuss the role of excessive lending in causing financial crises throughout history

As the maladies of modern capitalism have multiplied, fundamental questions about the future of the world’s dominant economic model have become impossible to ignore. But in the absence of viable alternatives, the question is how to reform a system that is increasingly at odds with democracy.

Steven Pressman says in the next few years, we could see rising interest rates bring about a recession

Returns on wealth exceed growth for more countries, more years, and more dramatically than Piketty has found

For all the talk of Modern Monetary Theory representing a brave new frontier, it is easy to forget that the United States has gone down this road before, when the US Federal Reserve financed the war effort in the 1940s. Then, as now, the question is not about government debt, but about the debt’s purpose and justification.

A report of the Commission on Global Economic Transformation’s subcommittee on Macroeconomics & Finance

A collection of our research on populism, globalization and nationalism

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

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

The implications of rising inequality are massive. Economists need to tackle it together.

Lance Taylor, Emeritus Professor of Economics at The New School for Social Research, delivers the annual Heilbroner Memorial Lecture on the Future of Capitalism.

Modern Monetary Theory is problematic. Launching large scale fiscal programs that rely on it would be skating on thin ice.

Italy’s austerity-fueled crisis is a warning to the Eurozone

Why Italy’s woes are a warning to the whole Eurozone

Central bankers pursue a “neutral” rate that doesn’t exist

Chaired by Nobel laureates Joseph Stiglitz and Michael Spence, INET has assembled a global team of leaders and scholars calling for new thinking & new rules for the world economy

Despite disparate policy beliefs, MMT and orthodox macro rely on many of the same theoretical foundations

James Galbraith says academic economics is in need of radical reform

YSI is hosting sessions at the 2018 STOREP conference.

Fred Block says capitalism is not an unchanging monolith—which means we can make it better

In a complex world, we’ll experience more “black swans”, and the things that standard economic models assumed away will matter much more.

What 200 Years of Government Interventions in Financial Markets Can Tell Us

In the face of  laissez-faire capitalism at home and resurgent nationalism across the globe, INET offers an innovative look at the causes of—and solutions for—the problems that ail a fissuring world economy.