Archive

The Brexit referendum is nothing less than an earthquake. But when an earthquake happens, seismologists try to understand how and why the tectonic plates had been shifting, and the pressures that had been building to bring about the event. The causes underlying every earthquake are specific in how they come together, even if they are seen in different places.

New perspectives on Europe’s unfolding financial, economic and political crises

Several days ago, we woke up to a new world. Britain had voted to leave the European Union. Some were pleased, many were deeply concerned. What is likely is that many will be affected. Some wonder if the EU will survive. It will take months if not years to fully understand the ramifications.

What fraction of total economic growth accrues to the top 10%, top 1%, etc.? How does growth per capita of the bottom 90% compare to overall growth? Zucman discusses his research and efforts to bring more hard data into the inequality dialogue.

The National Institute of Public Finance and Policy (NIPFP) in collaboration with the Institute of New Economic Thinking (INET) are organising India’s first “Law Economic Policy Conference (LPEC 2016)”. The aim is to bring together economic, legal and policy thinkers together to consider policy issues in a holistic manner.

The BIS offers a comprehensive picture of the state of the world economy, and of dysfunctional policies holding it back

The European Union is headed for a disorderly disintegration, and can only be saved if it is reconstructed to satisfy citizens’ needs and aspirations

It would be a tragic mistake to read anti-E.U. sentiment across Europe as simple bigotry — racism and xenophobia are being nurtured by the economic pain produced by prevailing economic policies

The deadline for submission of paper proposals and complete sessions for the 20th FMM conference is approaching: 30 June 2016. Proposals (extended abstracts, max. 400 words) have to be submitted electronically via this web application. Please find more information in the Call for Papers.

Frank Dikötter explores previously classified Chinese leadership documents, and attempts to set the record straight.

Why a British vote to leave the European Union would have consequences far larger than the UK’s proportional share of the global economy might suggest

Remarks at a memorial service for pioneering financial analyst Jack Treynor Memorial, MIT Chapel, June 19, 2016

Some predict global economic catastrophe if Britain votes to leave the EU, others foresee a more limited set of consequences — and some see a telling trend in the public ignoring economists’ warnings

Globalisation was once considered a doctrine of salvation - but it has produced too many losers and created a breeding ground for heralds of simplistic truths. It is high time for a new doctrine.

A dollar-denominated global economy means the Fed is at once the bankers bank and government bank, as well as both U.S. central bank and global central bank — managing that hybrid is the challenge of our time

What we’re reading: Recent statements from the IMF and the OECD highlight a growing call for new economic policy thinking in response to the specter of long-term stagnation

Technology will ruin America if we don’t compensate for its impact, warns Andy Stern.

Pernicious cultural norms inside American banks and regulatory agencies have crowded out fundamental moral principles. Ed Kane proposes an antidote.

A response to Arjun Jayadev’s argument about the impact of automation on our work and life

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

Book review: Michel De Vroey and the problems of macroeconomics

The company’s focus on stock buybacks to increase shareholder value is a reminder of why so much of the value created daily by millions of workers ends up in the hands of the billionaires

Anxiety over human labor being replaced by cyborgs may be in vogue, but it’s overblown — machines may help us achieve healthier and more meaningful lives

The Institute is proud to welcome the revival of an indispensable resource for those seeking to understand the evolution of economics in context

Neither the Rational Expectations Hypothesis nor behavioral finance approaches alone provides an adequate predictor of investor behavior, argues Roman Frydman

New economic thinking has the potential to make political debates far more productive

Why most economists did not see the 2008 crash coming

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

The recent growth in the scale and different forms of shadow banking and alternative finance mechanisms in China poses many questions of understanding, from its sustainability; different forms of credit growth; to the role of local government financing, and; the tensions between financial reform policy and practice.

Is Neoliberalism a fixed set of ideas, or even an identifiable political movement?

A debate over definitions of Neoliberalism from different historical and philosophical approaches.

Company law in the US and UK fails to acknowledge that authorities’ propensity to rescue giant banks from the consequences of insolvency assigns taxpayers a coerced and badly structured equity stake in too-big-to-fail institutions.

A meditation on Vercelli, Vernengo and Levitt & Seccareccia

Professor Wendy Brown engages in an in-depth exploration of the corrosive effect of approaching education, law, politics and governance through the lens of neoliberal economic rationality.

While the Neoliberal movement’s concerns extend into a broad political reorganization of society, it remains intimately connected with neoclassical economic thought.

Eight years after the 2008 crisis the global economy is still stuck with low growth, too low inflation, and rising debt burdens. Massive monetary stimulus has failed to generate adequate demand, and some commentators suggest that we are “out of ammunition” with which to counter deflationary pressures.

Mass protests challenging the government to focus on job-creation rather than on market liberalization and trade deals may carry a cautionary message to Western policy makers, too.

From 1958 onward, the back cover of Paul Samuelson’s bestselling textbook, Economics, showed a family-tree of economists. The diagram’s evolution, in particular its use of the term “mainstream economics,” reflected, and, I speculate, influenced how economists came to perceive the structure of their discipline.

If the government/CB together finance an increased fiscal deficit with permanent non-interest-bearing fiat money, then some private sector agents have to hold non-interest-bearing monetary base, and must continue to do so even when policy and market interest rates have moved away from the ZLB. How is this possible in an environment where most bank deposit money is potentially interest-bearing?

In the growing debate about the pros and cons of a monetary financed fiscal stimulus (a.k.a. helicopter money) it is argued by some participants that a money-financed stimulus will have no more effect than a debt financed stimulus since:

I am pleased to announce that the History of Economic Thought Website is back. I am thankful for the assistance of the Institute for New Economic Thinking (INET), which has supported its revival and made it possible.

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

Spanning centuries, this website concentrates information and resources on the history of economic thought for students, researchers and all those who are interested in learning about economics from a historical perspective.

The shift toward applied economics in the last 40 years is usually associated with the development of computers and datasets. Yet, the success of computer-based approaches is highly selective, and what computerization failed to change in economics is equally remarkable.

Renewed interest by policymakers in the challenges of long-term slow economic growth highlights the importance of the Institute’s research

Behavioral finance views stock-market investors’ expectations as largely unrelated to fundamental factors. Relying on survey data, this paper presents econometric evidence that fundamentals are a major driver of investors’ expectations.

Julia Cage warns that a media ravaged by market forces cannot serve democracy’s need for an informed citizenry.

Karl Polanyi demonstrated that Classical Liberalism and current Neoliberalism were organized political movements, but their successes sparked political backlashes against laissez-faire economics — a dialectic that continues to shape politics to this day.

Author Rana Foroohar explains why the economic policies being touted by both presidential frontrunners offer none of the new thinking necessary to drive a policy response to revitalize the economy

The SPD, the Social Democratic Party of Germany, has been collapsing in the popularity polls ever since they in 2003 launched the reform Agenda. What would have come of the party if it had not been for this insane rush to reform? Possibly Gerhard Schroeder could even still be chancellor today. A case for the time machine.

Despite using different methodologies, a number of scholars agree that most of the ‘bailout’ money is going to Greece’s foreign creditors

The following is based on Chapter 1 of my forthcoming book, Crisis and Sustainability. The Delusion of Free Markets.

Peter Conti Brown’s new book explores and debunks a powerful meme shaping public understanding of the role of the Fed

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

A major shift is needed in the Econometrics curriculum for both graduate and undergraduate teaching to include modern topics.

The corrosive social and economic effects of what have now become ‘normal’ unemployment levels require new solutions, and tradewithout full employment exacerbates the problem

Any use of money-financed fiscal expansion as a policy tool will require rules to ensure discipline and avoid excess

Five lessons from the last crisis — for managing the next one

Economist James K. Galbraith warns that ‘unrealistic expectations’ by Athens’ creditors is a recipe for turmoil

As empirical evidence continues to roll in, can the theoretical orthodoxy continue to hold their ground?

A new book by economist Julia Cagé offers a participatory business model for independent media.

McCloskey discusses the thesis of her recent trilogy, The Bourgeois Era, which holds that the driving force of economic growth in 17th and 18th century Europe was simply liberal ideas.

Does the technology revolution require a new social policy?

The paper argues that household budgets are the best starting point for investigating a number of big questions related to the evolution of the living standards during the last two-three centuries.

Amid the ongoing research interest in questions of inequality, it is important to examine the question of access to housing — and how that has changed over the decades. The specific question I have sought to answer, here, is whether the real cost (measured against income) of buying the average home has risen.

Capitalism will destroy itself, the former Greek finance minister warns, if economic calculation excludes human needs and ignores democratic verdicts

Benner’s recent work with Manuel Pastor suggests the somewhat counterintuitive result that geographic regions with the most equitable distributions of wealth and influence also tend to have the highest growth.

Keynes passed away 70 years ago today, with his copyright now expiring, there is an opportunity to build a digital archive of all his work

Orthodox macroeconomics has become a place where visions die and hopes are banished, for both liberals and conservatives.

How Gerald Friedman’s assessment of Bernie Sanders economic proposals prompted a rare public political spat among economists.

Axel Leijonhufvud showed economists a promising path forward. They should have taken it. Leijonhufvud passed away on May 5, 2022

Dean Corbae is a leader of the Markets network and Professor of Finance, Investment, and Banking at the Wisconsin School of Business, where he also holds an appointment in the Department of Economics. His current research focuses on consumer credit and bankruptcy, foreclosures, and banking industry dynamics.

Contrary to common belief, this shift is not so much caused by the refugee crisis, but rather by the historical disaster that followed the big financial crisis since 2007.

Anyone watching the stock market has seen this: a post hits Twitter containing old news, and investors react as if it were new.

Struggles over shadow money today echo 19th century struggles over bank deposits.

We have developed over a number of years and now make publicly available a new and unprecedented data resource for understanding levels of living, poverty, inequality and inclusivity of growth and development around the world.

What does the rise of shadow banking mean for monetary theory and practice? (How) should we change our traditional theories of money to capture the complex practices through which money is created in modern financial systems?

Should policymakers rely on domestic macroprudential regulation in their quest for greater financial stability?

The intra-EMU divergences are a feature of the system rather than just a bug.

European Union countries are facing an epic challenge of integrating more than 1 million refugees from conflict zones in the Middle East and beyond.

Industrial journalist Ken Jacobson and economist William Lazonick (both of the Academic-Industry Research Network), call for an end to stock market manipulation through buybacks.

As the European Union Commission readies itself for a new round of budgetary recommendations, INET senior economist Orsola Costantini warns that that the debate over how those harsh fiscal constraints are to be determined is based on a formula that masks political choices as technocratic imperatives.

John Eric Humphries is a member of the Inequality: Measurement, Interpretation, and Policy (MIP) network and a National Science Foundation Graduate Research Fellow in the Department of Economics at the University of Chicago. He is the co-author of the book, The Myth of Achievement Tests, The GED and the Role of Character in American Life, along with James J. Heckman and Tim Kautz. Humphries is also a 2013 alum of the Summer School on Socieconomic Inequality.

Leading expert says Iceland is showing the way on tackling a global peril.

When billionaires pay less, we all pay more.

A new film shows what economic apartheid looks like through the eyes of schoolchildren.

Democratic capitalism is an evolving system that responds to crises by radically transforming both economic relations and political institutions. The time for a new phase has come, regardless of whether “responsible” politicians are prepared to admit it.

Featuring sessions on Oil Shock and the Global Economy, Sovereign Wealth Funds, and the Political Economy of Oil.

A recent policy brief by Blanchard (2016), based on an earlier paper (Blanchard, Cerutti, Summers 2015) raises a number of interesting points concerning the NAIRU and the Phillips Curve, which are further discussed in the comment on the paper by Ball (2015).

This paper provides a careful and synthetic overview of his contributions as well as a reconstruction of Pasinetti’s philosophical approach to economics as a science meant to serve humanity.

This paper proposes a new method to empirically validate simulation models that generate artificial time series data comparable with real-world data.

We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries (and 35 industries) during 1995-2007 from the World Input Output Database (WIOD).

A stark warning from Institute researchers on the probability that ‘2°C capital stock’ will be reached in 2017

The condition of the Chinese economy is increasingly becoming a significant factor exorcising the minds of global policy makers.

Some fundamental Keynesian and Post-Keynesian insights, with an analysis of possible mechanisms to achieve a sustained recovery.

The Institute for New Economic Thinking hosts an exclusive luncheon and conversation with Lynn Parramore, Senior Research Analyst at the Institute and Reuters columnist, and Rana Foroohar, TIME Assistant Managing Editor and Economic Columnist, and Global Economic Correspondent at CNN.

What can we learn from the Vietnamese, Cuban, Rwandan, and Syrian refugees crisis?

It’s no secret that wealth inequality has grown, both in the US and abroad over the past several decades. What has been particularly notable about the work of Emmanuel Saez is the quantification of that inequality.

How excessive debt hurts the economy and why to curb it.

Paying tribute to one of the world’s most distinguished economic historians.