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Thomas Palley

Thomas Palley

Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University.

Articles by Thomas Palley

The Fallacy of the Natural Rate of Interest and Zero Lower Bound Economics: Why Negative Interest Rates May not Remedy Keynesian Unemployment

May 9, 2019

This paper provides a critique of zero lower bound (ZLB) economics which has become the new orthodoxy for explaining stagnation. ZLB economics is an extension of pre-Keynesian economics which attributes macroeconomic dysfunction to rigidities and market imperfections. The ZLB is the latest rigidity in that pre-Keynesian tradition. The paper argues negative nominal interest rates, even …

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What’s Wrong With Modern Money Theory (MMT): A Critical Primer

April 10, 2019

Recently, there has been a burst of interest in modern money theory (MMT). The essential claim of MMT is sovereign currency issuing governments do not need taxes or bonds to finance government spending and are financially unconstrained. MMT rests on a triad of arguments concerning: (i) the macroeconomics of money financed budget deficits, (ii) the …

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Macroeconomics vs. Modern Money Theory: Some Unpleasant Keynesian Arithmetic

April 4, 2019

The last decade has witnessed a significant revival of belief in the efficacy of fiscal policy and mainstream economics is now reverting to the standard positions of mid-1970s Keynesianism. On the coattails of that revival, increased attention is being given to the doctrine of Modern Money Theory (MMT) which makes exaggerated claims about the economic …

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Inequality and Stagnation by Policy Design: Mainstream Denialism and its Dangerous Political Consequences

January 30, 2019

This paper argues the mainstream economics profession is threatened by theories of the financial crisis and ensuing stagnation that attribute those events to the policies recommended and justified by the profession. Such theories are existentially threatening to the dominant point of view. Consequently, mainstream economists resist engaging them as doing so would legitimize those theories. …

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Brazil is Falling Under an Evil Political Spell

October 12, 2018

Brazil is falling under an evil political spell. The leading candidate in the presidential election is Jair Bolsonaro, an extreme right-wing politician. It is as if voters are sleepwalking their way to destruction of Brazilian democracy. Under the spell’s influence, they have become blind to the truth about Brazilian politics and blind to their better …

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Job Guarantee Programs: Careful What You Wish For

September 14, 2018

Some progressive economists are now arguing for the idea of a Job Guarantee Program (JGP), and their advocacy has begun to gain political traction. For instance, in the US, Bernie Sanders and some other leading Democrats have recently signaled a willingness to embrace the idea. In a recent research paper I have examined the macroeconomics …

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Government Spending in the Income-Expenditure Model: Spending Composition, the Multiplier, and Job Guarantee Programs

September 14, 2018

This paper reconstructs the income – expenditure (IE) model to include a distinction between government purchases of output versus government production. The distinction has important consequences for output and employment multipliers. The paper also extends the IE model to incorporate a government job guarantee program (JGP), and the extended model illuminates the automatic stabilizer properties …

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Self Plagiarism Dissertation on Essay Writing Service

July 31, 2018

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Scholarship Essay Contests 2011 For College Students

July 30, 2018

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how to write critical analytical essay

May 19, 2018

how to write critical analytical essay Essay 4 Tips.The rest of the essay explores what it means for bestessayswriter Meghan to constantly see this reminder of failure and to transform it into a sense of acceptance of her imperfections.Jennifer holds a PhD and a master’s in library and information studies (MLIS) from the University of …

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Negative interest rate policy (NIRP) and the fallacy of the natural rate of interest: Why NIRP may worsen Keynesian unemployment

May 16, 2018

NIRP has quickly become a consensus policy within the economics establishment. This paper argues that consensus is dangerously wrong, resting on flawed theory and flawed policy assessment. Regarding theory, NIRP draws on fallacious pre-Keynesian classical economic logic that asserts there is a natural rate of interest which can ensure full employment. That pre-Keynesian logic has …

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Modern Money Theory (MMT) vs. Structural Keynesianism

April 6, 2018

1. What are the major flaws you see within Modern Monetary Theory? (A) I like to say that MMT is a mix of “old” and “new” ideas. The old ideas are well known among Keynesian economists and are correct, but the new ideas are either misleading or wrong. The essential old idea, which everybody knows, …

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Is the US hypocritical to Criticize Russian Election Meddling?

March 26, 2018

Thomas Carothers has recently written an article in Foreign Affairs, the prestigious elite journal published by the US based Council on Foreign Relations. The article asks is the US hypocritical for criticizing Russian election medlling? Given the place of publication, the unsurprising conclusion is it is not. The problem is the US is a champion …

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The General Theory at 80: Reflections on the History and Enduring Relevance of Keynes’ Economics

October 27, 2017

This paper reflects on the history and enduring relevance of Keynes’ economics. Keynes unleashed a devastating critique of classical macroeconomics and introduced a new replacement schema that defines macroeconomics. The success of the Keynesian revolution triggered a counter-revolution that restored the classical tradition and now enforces a renewed classical monopoly. That monopoly has provided the …

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A Theory of Economic Policy Lock-in and Lock-out via Hysteresis: Rethinking Economists’ Approach to Economic Policy

July 4, 2017

This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy’s structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that block policy reversals also cause lock-in. Conventional thinking treats policy as a dial …

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Trump and the Neocons: Doing the Unilateralist Waltz

May 29, 2017

The neocon factor dramatically changes the interpretation of the Trump administration’s unilateralist international economic policy chatter. Donald Trump’s first one hundred days have revealed his inclination for unilateralism in international relations. That inclination reflects his opportunistic and bullying disposition, and it also fits well with his anti-globalization pose. Trump’s unilateralism has also spawned a dangerous …

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The Real Reasons for Trump’s Anti-Globalization Circus

May 24, 2017

Trumponomics: How Trump skillfully used anti-globalization as bait to cover up his extremely neoliberal switch. A key element of Trump’s political success has been his masquerade of being pro-worker, which includes posturing as being anti-globalization. However, his true economic interests are the exact opposite. That creates conflict between Trump’s political and economic interests. For political …

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Trumponomics:NeoconNeoliberalism Camouflaged with Anti-Globalization Circus

April 20, 2017

A key element of Trump’s political success has been his masquerade of being pro-worker, which includes posturing as anti-globalization. However, his true economic interest is the exact opposite. That creates conflict between Trump’s political and economic interests. Understanding the calculus of that conflict is critical for understanding and predicting Trump’s economic policy, especially his international […]

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Fixing the Euro’s Original Sins: The Monetary – Fiscal Architecture and Monetary Policy Conduct

April 5, 2017

The euro zone (EZ) was created in January 1999. Its weak economic performance is significantly due to the euro’s neoliberal monetary architecture and the design of monetary policy. Those features undermine national political sovereignty and consign the EZ to severe economic under-performance, which in turn fosters political demands for exit from the euro. Escaping this […]

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Are Negative Interest Rates Dangerous?

January 19, 2017

A debate on negative interest rates.
YES, Thomas Palley: “One can have too much of a good thing”.
NO, Adam Posen: “Negative interest rates have proved useful”.

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The Federal Reserve Raising Interest Rates is Unwelcome and Unnecessary

December 16, 2016

Wednesday’s decision by the Federal Reserve to raise interest rates is unwelcome and unnecessary. As admitted in its statement, investment remains soft, growth is only moderate, and inflation expectations are little changed. Moreover, the economy confronts financial headwinds from the recent jump in long term interest rates and an even stronger dollar.
The Federal Reserve seems […]

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To President Obama and Secretary Clinton: In the name of god, go

November 15, 2016

Dear Secretary Clinton and President Obama:
On April 20, 1653, Oliver Cromwell spoke these words to the Long Parliament:
“You have sat here too long for any good you have been doing… Depart, I say, and let us have done with you. In the name of god, go.”
Secretary Clinton, you are rightly being blamed for the electoral […]

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James Tobin

October 30, 2016

James Tobin was a leading – perhaps the leading – American neo-Keynesian macroeconomist in the era of Keynesian dominance after World War II that extended through to the early 1970s. Along with growth theorist Robert Solow and micro and trade theorist Paul Samuelson, the three substantially shaped what became known as the neoclassical synthesis which […]

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A Theory of Economic Policy Lock-in and Lock-out via Hysterisis: Rethinking Economists’ Approach to Economic Policy

October 22, 2016

This paper explores lock-in and lock-out via economic policy. It argues policy decisions may near-irrevocably change the economy’s structure, thereby changing its performance. That causes changed economic outcomes concerning distribution of wealth, income and power, which in turn induces locked-in changes in political outcomes. That is a different way of thinking about policy compared to […]

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