Macroeconomics
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Working Paper Series
The Cyclically Adjusted Budget: History and Exegesis of a Fateful Estimate
Oct 2015
This paper traces the evolution of the concept of the cyclically adjusted budget from the 1930s to the present.
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Matching the Moment, But Missing the Point?
Oct 19, 2015
This essay critically evaluates the benefits and costs of the dominant methodology in macroeconomics, the DSGE approach. Although the approach has led to great progress in some areas, it has also created biases and blind spots in the profession that hold back our understanding and our ability to govern the macroeconomy. There is great scope for progress in macroeconomics by judiciously pushing the boundaries of some of the methodological restrictions imposed by the DSGE approach.
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Working Paper Series
The Cold War Hot House for Modeling Strategies at the Carnegie Institute of Technology
Oct 2015
US Military needs during the Cold War induced a mathematical modeling of rational allocation and control processes while simultaneously binding that rationality with computational reality. Modeling strategies to map the optimal to the operational ensued and eventually became a driving force in the development of macroeconomic dynamics.
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Working paper
Towards a General Theory of Deep Downturns
Aug 2015
This paper, an extension of the Presidential Address to the International Economic Association, evaluates alternative strands of macro-economics in terms of the three basic questions posed by deep downturns: What is the source of large perturbations? How can we explain the magnitude of volatility? How do we explain persistence?
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How do we move beyond the “austerity” debates?
Aug 15, 2015
And how do they relate to our democratic institutions and institutional social relations?
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Debt-driven Growth: The decade prior to the Great Recession
Jul 22, 2015
The recent financial crisis has impressively illustrated the dangers of rapid credit growth in a painful way.
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Credit Booms & Credit Busts
Jul 9, 2015
There is now a growing consensus among policymakers and academics that a key element to improve safeguards against financial instability is to strengthen the “macroprudential” orientation of regulatory and supervisory frameworks.
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Conference paper
Myths, Mix-ups and Mishandlings: What Caused the Eurozone Crisis?
Jul 2015
The Eurozone crisis has been wrongly interpreted as either a crisis of fiscal profligacy or of deteriorating unit-labour cost competitiveness (caused by rigid labour markets), or a combination of both.
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How German Economists Really Think
Jul 7, 2015
A survey on behalf of the Sueddeutsche Zeitung indicates that German economists are much more American in their thinking than is presumed – with a rising trend.
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Partnership Paper
Is There a Debt-threshold Effect on Output Growth?
Jul 2015
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.
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Working paper
Is There a Debt-threshold Effect on Output Growth?
Jun 2015
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.
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The Death of ‘Homo Economicus’
Jun 18, 2015
Good incentives are no substitute for good citizens.
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What Even Famous Mainstream Economists Miss About the Cambridge Capital Controversies
Jun 15, 2015
Non-mainstream economists are disputing neoclassical ideas about capital.
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Fiscal implications of the ECB’s bond-buying program
Jun 14, 2015
The monetary-fiscal policy connection is under scrutiny by the German Constitutional Court in the context of the ECB’s OMT bond-buying programme. This column argues that most analyses are deeply flawed by the misapplication of private-company default principles to the central bank. ECB bond-buying transforms public bonds into monetary base, and sovereign-default risk into inflation risk. The real question is: What is the non-inflationary limit to money-base expansion? This depends upon the economic situation and is much higher in the current liquidity-trap setting.
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Working paper
Beyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantage
May 2015
Motivated by the long-standing debate on the pros and cons of competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country’s international competitiveness. We refocus the analysis on the implications of monetary stabilization for a country’s comparative advantage.