Naked Keynesianism

By Lance TaylorCan America recover ideal rates of growth through interest-rate policies? This important analysis suggests that most economists misunderstand the issue. Updating Keynes, the analysis suggests that fiscal stimulus, labor union bargaining power, and more progressive income taxes are needed to support growth. (The article includes some algebra, which some readers may choose to skip.)The main points of this paper are that loanable-funds macroeconomic models with their “natural”...

This is a review of this edited book that was just published in the Review of Political Economy.This substantial volume provides an interesting and exhaustive discussion of the theories of business cycles as presented in the main economic dictionaries and encyclopedias over a period of almost two centuries. For the most part the content corresponds to the views of key authors who contributed to the development of the theories of fluctuations. Some major authors are nevertheless not directly...

This Friday for those in New York, during the Meeting of the Eastern Economic Association.<Friday, February 24, 1:00-2:20>Roundtable on The Future of Neoliberalism (JEL Code B)Session Chair:  Esteban Pérez-Caldentey, ECLAC ChileRoundtable Panelists:Robert Blecker, American University Orsola Costantini, INET Kim Phillips-Fein, New York University Matías Vernengo, Bucknell UniversityMark Weisbrot, CEPR

Why You Should Never Use a Supply and Demand Diagram for Labor Markets -- by Peter Dorman at Econospeak. And you shouldn't, but the reasons given here are not the best (more on this on later post) Declining US Investment, Gross and Net -- Tim Taylor just show the data really (nope, no accelerator story, or any for that matter). Particularly worrisome is the decline in infrastructure investment, even after a recession What’s behind the decline in U.S. interest rates? -- Nick Bunker at the...

GDP has collapsed by a bit more than 7% in real terms over the last two years in Brazil (graph below show more recent data). This constitutes the worst crisis in recorded macroeconomic history, worse than the debt crisis of the early 1980s, and even the Great Depression. The reasons for this crisis are entirely self-inflicted. I discussed those issues before here (and here). The problem is not fiscal, which resulted from the crisis, nor external, since there was no real issue in financing...

As a followed up on my recent discussion on Dani Rodrik's paper, below Tom Palley's critique of Rodrik's trilemma between globalization, national sovereignty, and democratic politics. Tom argues that there is no trilemma, only a dilemma, and that democracy is not on the same plane. From his paper "A Theory of Economic Policy Lock-in and Lock-out via Hysteresis: Rethinking Economists’ Approach to Economic Policy."Rodrik (2011) has argued that globalization poses a trilemma between...

This paper was published by Latin American Policy last year, co-authored by my ex-student Carlos Schönerwald Silva. From the abstract: Several political and academic circles have considered microfinance to be an important tool to promote economic development and the reduction of poverty. It became a worldwide phenomenon, and the practice disseminated in many developing countries such as Brazil. Even as many authors sing the praises of microfinance—in particular the success in developing...

So I have discussed this before. The idea that the Great Depression bears a resemblance to the Great Recession, in that in both cases income inequality increased in the previous period, and went hand in hand with debt accumulation. I cited the Barba and Pivetti paper for the more recent event, and the work by my student Ahmad Borazan on the previous case (see also this post). Now I've been reading Matthew Drennan's book on Income Inequality, and he shows the following figure. In the same...

I discussed long ago what it means to be heterodox in economics. Bob Kuttner, who I once saw giving a talk at the New School (in the 1990s), a very sharp journalist that knows quite a bit about economics, sings the praises of Dani Rodrik as an heterodox economist. I discussed Rodrik before, in particular his notion that there is only one economics (neoclassical, of course as in the title of his book One Economics, Many Recipes). And he is not subtle about it either. As I noted back then, in...

Introduction to Economics and Global Capitalism Syllabus -- Mike Isaacson's syllabus, with no textbook. Good choice The U.S. Tax Code Actually Doesn’t “Soak the Rich” -- Nick Buffi at the CEPR blog. I sort of discussed that here Three reasons we’re not yet at full employment -- Jared Bernstein. He's right