Macroeconomics

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.

Banks have long had undue influence in society. But with the rapid expansion of a financial sector that transforms all debts and assets into tradable commodities, we are faced with something far worse: financial markets with an only abstract, inflated, and destabilizing relationship with the real economy. To prevent another crisis, finance must be domesticated and turned into a useful servant of society. 

Contrary to the neoclassical model’s assumptions, shifts in aggregate demand have persistent effects on GDP

The prevailing wisdom that aggregate demand ‘shocks’ determine short-run cyclical fluctuations around a supply-determined equilibrium growth rate and an associated equilibrium unemployment rate (or NAIRU) has been called into question by various streams of literature in the last decades. Specifically, a recently revived literature on hysteresis finds significant persistence in the effects of recessions and negative aggregate demand shocks (Blanchard et al. 2015; Martin et al. 2015).

Contrary to conventional wisdom, government stimulus can improve the health of the economy for years after, without inflationary side effects 

Forget the myth of a savings glut causing near-zero interest rates. We have a shortage of aggregate demand, and only public spending and raising wages will change that.

Servaas Storm’s commentary on the papers presented at the secular stagnation conference.

The past 30 years has witnessed a worldwide decrease in real interest rates. We demonstrate that a large part of the fall in interest rates can be explained by changes in demography, which are as the result of a sudden fall in fertility rates across all of the advanced economies in the early 1970s.