Naked Keynesianism

Gabriel Aidar and Julia Braga (Guest Bloggers) We have, in our new paper, gone back to the old pull-push debate on determinants of capital inflows to emerging markets, to look at the behavior of country risk premium spreads. Our Principal Component Analysis of the country-risk spread series of ten emerging economies from 1999 to 2019 revealed that 86% of the total volatility of the original series can be represented by only two components, suggesting the prevalence of common factors in...

The Handbook (subscription required) has been edited by Stefano Battilossi, Youssef Cassis and Kazuhiko Yago. It has many interesting chapters. Barry Eichengreen writes on what determines that a currency is used as an international currency (or even as the predominant currency). While he follows conventional views in suggesting that role of money as a means of exchange and the importance of the country in international transactions, he does also explore the role of power (military power)...

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...

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...

Old paper, presented two years ago in México, and to be published soon by the university press there. In Spanish. For those interested. The model is the same (with minor changes) one used to discuss inflation, in an old paper, eventually published here in a book on Post Keynesian economics edited by Forstater and Wray. Link here.

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...

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,...

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,...

Naked Keynesianism has been featured in the Top 100 Economics Blogs of 2019. I haven't been very active, and appreciate to be included in the company of much more interesting blogs. See all here.

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...