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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 economics of New Developmentalism: a critical assessment

July 1, 2021

This paper critically assesses the economics of New Developmentalism (ND). It begins by identifying and formalizing the principal components of ND which are identified as neutralizing Dutch disease, ending growth with foreign saving, development driven by a technologically advanced and internationally competitive manufacturing private sector, and getting macroeconomic prices right. It then examines four strands …

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The Macroeconomics of Government Spending: Distinguishing Between Government Purchases, Government Production, and Job Guarantee Programs

June 14, 2021

This paper reconstructs the Keynesian income – expenditure (IE) model to include distinctions between government purchases of private sector output, government production, and government job guarantee program (JGP) employment. Analytically, including those distinctions transforms the model from a single sector model into a multi-sector model. It also surfaces the logic behind the automatic stabilizer property …

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Obamacare With a Public Option: Fool Me Twice Shame on Me

March 3, 2020

There is an old saying “Fool me once shame on you, fool me twice shame on me.” That saying is relevant for the current healthcare debate in which former Vice-President Biden and elite Democrats are touting a reheated version of Obamacare with a public option. It is a case of trying to fool the American …

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Bernie Sanders: Nothing to Fear Except Fear Itself

February 18, 2020

“The only thing we have to fear is fear itself.” Eighty-seven years ago those were the words of Franklin Delano Roosevelt in his 1933 inaugural speech. Today, they resonate with Senator Bernie Sanders’ presidential campaign, which confronts a barrage of attack aimed at frightening away voters. Fear is the enemy of change and the friend …

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Do current times vindicate Keynes and is New Keynesian macroeconomics Keynesian?

February 8, 2020

Thomas I. Palley, Esteban Pérez Caldentey, and Matias Vernengo, Review of Keynesian Economics, January 2020. Professor Robert Rowthorn delivered the second annual Godley-Tobin lecture in New York City on March 1, 2019. The title of his lecture was “Keynesian economics: back from the dead?” and it is published in this issue of the Review of …

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A Stock Market Boom is Not the Basis of Shared Prosperity

January 22, 2020

The US is currently enjoying another stock market boom which, if history is any guide, also stands to end in a bust. In the meantime, the boom is having a politically toxic effect by lending support to Donald Trump and obscuring the case for reversing the neoliberal economic paradigm. For four decades the US economy …

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The economics of negative interest rates: editors’ introduction

December 19, 2019

Thomas Palley, Louis-Philippe Rochon, Guillaume Vallet , Review of Keynesian Economics, April 2019. The Great Recession (2008/9) triggered by the financial crisis of 2008 has had considerable impact on the conduct of monetary policy. Before the recession, monetary policy was largely based on a New Consensus-type macroeconomic model and it targeted inflation via a Taylor …

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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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