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Tag Archives: The dismal science

Kalecki, Minsky, and “Old Keynesianism” Vs. “New Keynesianism” on the Effect of Monetary Policy

By Tracy Mott, Professor, University of Denver. Originally published at the Institute for New Economic Thinking website In a postco-authored with Anna Stansbury, Larry Summers repudiates economic orthodoxy in regard to whether interest rate cuts suffice to restore full employment and looks at a more “original” Keynesianism to find adequate responses to secular stagnation. Tracy Mott walks us through answers many careful readers of Kalecki, Keynes, Steindl, and Minsky knew all along. A version...

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Is it Really “Full Employment”? Margins for Expansion in the US Economy in the Middle of 2019

Yves here. This post is particularly timely given the seeming disconnect between weak job creation but headline unemployment holding rock steady. We’ve described some of factors that make employment conditions less rosy than they seem, such as that job creation has overwhelmingly been in relatively low-skill, poorly paid positions, and that the level of involuntary part-time employment is high. But get a cup of coffee. This is a very readable but also comprenensive treatment of this topic. By...

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The Sacrificial Rites of Capitalism We Don’t Talk About

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website Every society has at least one dominant story. Think of it as the official line: Here’s who we are, what we’re doing and why. But if you pay attention, you may notice other stories, too. Stories that circulate below the radar — and sometimes right out in the open — contradicting the official narrative. Most people don’t openly...

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Ideology is Dead! Long Live Ideology!

Yves here. Quelle surprise! Economists engage in groupthink, which sounds a little less bad if you call it “ideology”. By Mohsen Javdani, Associate Professor of Economics, University of British Columbia – Okanagan Campus and Ha-Joon Chang, Professor, University of Cambridge. Originally published at the Institute for New Economic Thinking website Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the discipline, characterizing economists and...

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How Richard Vague Discovered Gravity: An Interview + Book Review of A Brief History of Doom: Two Hundred Years of Financial Crises

Yves here. As John Siman describes below, Richard Vague, who has done considerable work on the economic damage done by high levels of private debt, extended it by making an in-depth study of financial crises. Vague documents that private debt growth over time exceeds GDP growth, creating the need for writeoffs. If they don’t come voluntarily or through state-mediated processes like bankruptcy, they come involuntarily, via crises. By John Siman I do not doubt the existence of God, nor that...

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No, Productivity Does Not Explain Income

Yves here. Even though the mere use of the word “productivity” might lead readers to expect a wonky post, this is a highly accessible treatment when the argument is clearly stated. More like this, please. Mind you, that does not mean I find all elements of author Blair Fix’s argument equally convincing but the spare exposition is commendable. By Blair Fix,  a PhD student at the Faculty of Environmental Studies at York University in Toronto, Canada. His PhD work focuses on the development of...

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Keeping the Oil in the Soil

By James Boyce, Professor of Economics, University of Massachusetts Amherst. Originally published at the Institute for New Economic Thinking website Efforts to reduce demand for fossil fuels by promoting energy efficiency and clean energy can do a lot. But to meet the Paris Agreement target of holding the rise in average surface temperatures to 1.5-2 °C, we need to curtail the supply of fossil fuels, too. This means capping the total quantity of fossil carbon that we allow into the economy...

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China: The Covert Credit Superpower

An new working paper by Sebastian Horn, Carmen Reinhart and Christoph Trebesch on China’s foreign lending has some important findings, such as that China accounts for more than 40% of the external debt of 50 developing countries. We’ve embedded the document at the end of this post. The study is an ambitious undertaking, seeking to track China’s foreign lending from the start of the current regime, in 1949 to 2017. They identified 1,974 loans and 2,947 grants to 152 countries totaling...

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Taxes for Revenue Are Obsolete

UserFriendly chided me for not having reproduced this classic, as I did for Michal Kalecki’s 1943 essay on the obstacles to reaching full employment. Apparently this classic article by Beardsley Ruml on why what we would now call a sovereign currency issuer doesn’t need taxes in order to spend doesn’t show up well on the Internet (for instance, links to full versions don’t have a preview, which is an impediment to sharing it on Twitter). So to encourage you to read and share it, we’re...

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Is Industrial Policy Finally Legitimate?

Yves here. It’s become more and more respectable in development economic circles to acknowledge that formerly taboo ideas like trade barriers and other forms of support to emerging industries are sound policy. The reversal by the IMF on the value of industrial policy is nevertheless significant. And that’s before you get to the fact that countries that lack explicit industrial policy wind up having ones by defaul By Jomo Kwame Sundaram, a former economics professor, was Assistant...

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