Naked Keynesianism

The talk here. Recording is not the best, and the Power Point cannot be seen. It is available here for those interested. [embedded content]Paper is here. From the abstract:In the overlapping global emergencies of the pandemic, climate change and geopolitical confrontations, supply shocks have become frequent and inflation has returned. This raises the question how sector-specific shocks are related to overall price stability. This paper simulates price shocks in an input-output model to...

Students will have a midterm soon. There will be some questions on the very likely shutdown (using the ISLM) and the minimum wage. The figure below shows the real (deflated with CPI) and nominal minimum wage for the US since 1939.No surprises in the story. Minimum wage in real terms peaked in 1969, a culmination of an expansion that started in the 1950s. It fell significantly starting in 1979, with the Volcker shock and the fixed nominal minimum wage during the Reagan years, and never...

The dollar's hegemony rests on the economic, military, and international political power of the USA. There have been two eras of dollar hegemony which were characterized by different models. Dollar hegemony 1.0 corresponded to the Bretton Woods era (1946-1971). Dollar hegemony 2.0 corresponds to the Neoliberal era (1980-today). The deep foundation of both models is USA power, but the two models have different economic operating systems. The articles in this book explore this and consider two...

[embedded content]A demand-led growth perspective of Indian development. Book available here. Comments by Alex Thomas.

By Thomas PalleySeptember 11, 2023, marks the fiftieth anniversary of General Pinochet’s military coup against Chilean President Salvador Allende. While it is now widely recognized that Pinochet authorized large-scale human rights abuses, there is an accompanying narrative that he also unleashed an economic miracle via embrace of Milton Friedman’s “Chicago Boys” vision of a market economy.The “Pinochet economic miracle” narrative is profoundly misleading. Worse yet, it is a political menace...

[embedded content] Roundtable with Esteban, and Carlos Bastos Pinkusfeld on Structuralism, Classical Political Economy and Demand-led Growth at the Instituto de Economia, at my alma matter earlier this summer.

 Hysteresis, not hysteria New paper by Thomas Palley. From the abstract:This paper argues for broadening the application of hysteresis to institutions, policy lock-in, psychology, identity, and economic ideas. Hysteresis is an element of historical processes, and the real world is historical. That explains why hysteresis is pervasive and important. Hysteresis should be a fundamental building block of political economy. Expanding its application in economics is both an opportunity and a...

[embedded content]Must see video (but I'm sorry to say in Portuguese). The talk at the last Demand-led Growth conference not yet available was in English, but much shorter. Once that is published I'll link it here.

Lula da Silva’s return to the presidency in Brazil has opened up the possibility of deepening democracy and expanding the scope of egalitarian advance for the Brazilian working class. In what ways might his administration pursue expansionary fiscal and redistributive policies that would improve the conditions of his political base?In the latest print issue of Catalyst, Matías Vernengo explores the historical and contemporary contours of Brazil’s political economy and outlines how the Lula...

 Sturzenegger thanks Milei for his support while he was at the BCRA Javier Milei's victory in the primary election has set alarms in Argentina. Many suggest that this was unexpected, and in a sense, given the more recent polls, it was. Also, many have suggested that his strong showing represents a protest vote, since he is a complete outsider, and that this is a repeat of the 2001/2 protests that demanded that all established politicians were ousted (que se vayan todos). But these are at...