Wednesday , June 19 2019
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Naked Keynesianism

Catching up and falling behind in historical perspective

The figure below, from a recent piece in the Wall Street Journal, shows the catching up of the South. Note that most occurs after the New Deal, and up to the 1980s. The piece emphasizes the reversal, with divergence since the last recession. This suggests that the New Deal and the period in which the segregationist policies were eliminated were a period of prosperity for the South. The catching up story is one associated mostly to State action, since the New Deal in many ways was a sort...

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Argentina, Financial Times and the next default

It's been a while since I wrote about Argentina. In all fairness, because it is difficult given all the mistakes of the last few years since Macri's victory. I discussed the prospects of what to expect back then. Since then I posted here and here on the supposed improvement in 2017, and the beginning of the still unfolding crisis in 2018. And this could simply be an "I told you so post," since I did warn about most things that would happen. But there are important and interesting news about...

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Forget the Natural Rate, says the Head of the Minneapolis Fed

Low rates are here to stay The head of the Minneapolis Fed agrees with something that I discussed several times here (or here for the use of alternative unemployment measures like U6) in the blog, that the unemployment level (U3) is not a good measure of the slack in the labor market. Neel Kashkari says: No one knows how many more Americans want to work. But if the job market continues to improve with only modest wage growth and below-target inflation, it can be safely assumed that...

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On Karl Polanyi and the labor theory of value

The other great transformation I have discussed Polanyi on the blog before, but not in great detail (see this video posted a few years back from Fred Block for a more in depth discussion). However, writing about Bob Heilbroner's views of economics, and in particular the labor theory of value, reminded me why I have reservations about Polanyi, something that often surprises my friends, since I often cite some of his ideas, and I did put his book on the Top 10 list.Polanyi has been,...

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The New School for Social Research at 100: A view from the Econ. Dept.

From a late 1990s catalogue; Lance Taylor (center), and also in no particular order and from what I can remember (Ellen Houston, Adalmir Marquetti, myself (with goaty on the left side), Margaret Duncan, Josh Bivens and Carlos Pinkusfeld (Orozco Room) The New School for Social Research was founded 100 years ago by a group of academics dissatisfied with the direction of American high education. Economics was central to the early history of the New School, and my brief, very incomplete,...

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Bernie and AOC are Functional Finance (and Socialists) but not necessarily MMT

Might not be MMT, but it isn't Socialism So there has been a lot written on Modern Money Theory lately. There is this piece by The Economist, Jerry Epstein's paper, and Lance Taylor's one, more on the Democratic Socialist ideas than MMT per se (here). There was also this op-ed by Robert Shiller in the NYTimes, and the two posts by Tom Palley, that I reposted here on the blog. Finally, Christine Lagarde also commented on MMT during the World Bank/IMF Spring Meetings.I can and I will not...

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Interview on Central Bank’s exchange rate policy in Argentina

My interview with Nicolás Fiorentino and Cecilia Camarano from Led.fm yesterday (in Spanish) on the Argentinian situation and the new central bank policy. I basically suggest that the new policy to control exchange rates using the IMF loans (with IMF authorization) might control the exchange rate, but will finance essentially capital flight, and tries to interfere with the elections later this year.

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Structural Change in China and India: External Sustainability and the Middle-Income Trap

Shouldn't listen to the IMF anyway New working paper co-authored with Suranjana Nabar-Bhaduri, and published by the Political Economy Research Institute (PERI) from UMass-Amherst. From the abstract:This paper focuses on the different development strategies of China and India, particularly regarding the role of manufacturing and services for long-run productivity growth, external competitiveness and financial fragility. The findings appear to support the argument that productivity...

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