Levy Economics Institute

Displaying 1-40 of 141 results

  • White Papers // Aug 2011

    Infinite-Variance, Alpha-Stable Shocks In Monetary SVAR: Final Working-Paper Version

    This paper adumbrates a theory of what might be going wrong in the monetary SVAR literature and provides supporting empirical evidence. The theory is that macroeconomists may be attempting to identify structural forms that do not exist, given the true distribution of the innovations in the reduced-form VAR. The paper...

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  • White Papers // Aug 2011

    Lessons We Should Have Learned From The Global Financial Crisis But Didn't

    In this paper, the author first quickly recounts the causes and consequences of the Global Financial Crisis (GFC). Of course, the triggering event was the unfolding of the subprime crisis; however, the author argues that the financial system was already so fragile that just about anything could have caused the...

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  • White Papers // Jul 2011

    The Levy Institute Measure Of Economic Well-Being: Estimates For Canada, 1999 And 2005

    This paper presents estimates of the Levy Institute Measure of Economic Well-Being (LIMEW) for a representative sample of Canadian households in 1999 and 2005. The results indicate that there was only modest growth in the average Canadian household's total command over economic resources in the six years between 1999 and...

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  • White Papers // Jul 2011

    The Levy Institute Measure Of Economic Well-Being, France, 1989 And 2000

    The authors construct estimates of the Levy Institute Measure of Economic Well-Being for France for the years 1989 and 2000. They also estimate the standard measure of Disposable cash Income (DI) from the same data sources. They analyze overall trends in the level and distribution of household well-being using both...

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  • White Papers // Jul 2011

    Institutional Prerequisites Of Financial Fragility Within Minsky's Financial Instability Hypothesis: A Proposal In Terms Of "Institutional Fragility

    The relevancy of Minsky's Financial Instability Hypothesis (FIH) in the current (and still unfolding) crisis has been clearly acknowledged by both economists and regulators. While most papers focus on discussing to what extent the FIH or Minsky's Big Bank/Big Government interpretation is appropriate to explain and sort out the crisis,...

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  • White Papers // Jul 2011

    The Global Crisis And The Remedial Actions: A Nonmainstream Perspective

    The global financial crisis has now spread across multiple countries and sectors, affecting both financial and real spheres in the advanced as well as the developing economies. This has been caused by policies based on "Rational expectation" models that advocate deregulated finance, with facilities for easy credit and derivatives, along...

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  • White Papers // Jul 2011

    The Rise And Fall Of Export-Led Growth

    This paper traces the rise of export-led growth as a development paradigm and argues that it is exhausted owing to changed conditions in Emerging Market (EM) and developed economies. The global economy needs a recalibration that facilitates a new paradigm of domestic demand-led growth. Globalization has so diversified global economic...

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  • White Papers // Jul 2011

    Quality Of Match For Statistical Matches Used In The 1989 And 2000 LIMEW Estimates For France

    The quality of match for each of four statistical matches used in the LIMEW estimates for France for 1989 and 2000 is described. The first match combines the 1992 Enqu?te sur les Actifs Financiers with the 1989-90 Enqu?te Budget De Famille (BDF). The second match combines the 1998 General Social...

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  • White Papers // Jul 2011

    What Ended The Great Depression? Reevaluating The Role Of Fiscal Policy

    Conventional wisdom contends that fiscal policy was of secondary importance to the economic recovery in the 1930s. The recovery is then connected to monetary policy that allowed non-sterilized gold inflows to increase the money supply. Often, this is shown by measuring the fiscal multipliers, and demonstrating that they were relatively...

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  • White Papers // Jun 2011

    Effective Demand In The Recent Evolution Of The US Economy

    The authors present strong empirical evidence favoring the role of effective demand in the US economy, in the spirit of Keynes and Kalecki. Their inference comes from a statistically well-specified VAR model constructed on a quarterly basis from 1980 to 2008. US output is their variable of interest, and it...

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  • White Papers // Jun 2011

    Investing In Care: A Strategy For Effective And Equitable Job Creation

    Massive job losses in the USA, over 8 million since the onset of the "Great Recession," call for job creation measures through fiscal expansion. In this paper, the authors analyze the job creation potential of social service delivery sectors - early childhood development and home based health care - as...

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  • White Papers // May 2011

    Income Distribution In A Monetary Economy: A Ricardo-Keynes Synthesis

    The paper provides a novel theory of income distribution and achieves an integration of monetary and value theories along Ricardian lines, extended to a monetary production economy as understood by Keynes. In a monetary economy, capital is a fund that must be maintained. This idea is captured in the circuit...

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  • White Papers // May 2011

    The Product Space: What Does It Say About The Opportunities For Growth And Structural Transformation Of Sub-Saharan Africa?

    In this paper, the authors look at the economic development of Sub-Saharan Africa (SSA) in the context of structural transformation. They use Hidalgo et al.'s (2007) concept of product space to show the evolution of the region's productive structure, and discuss the opportunities for growth and diversification. The majority of...

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  • White Papers // May 2011

    Race, Power, And The Subprime/Foreclosure Crisis: A Mesoanalysis

    Economists' principal explanations of the subprime crisis differ from those developed by noneconomists in that the latter see it as rooted in the US legacy of racial/ethnic inequality, and especially in racial residential segregation, whereas the former ignore race. This paper traces this disjuncture to two sources. What is missing...

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  • White Papers // May 2011

    The Freedom Budget At 45: Functional Finance And Full Employment

    Forty-five years ago, the A. Philip Randolph Institute issued "The Freedom Budget," in which a program for economic transformation was proposed that included a job guarantee for everyone ready and willing to work, a guaranteed income for those unable to work or those who should not be working, and a...

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  • White Papers // May 2011

    Public Job-Creation Programs: The Economic Benefits Of Investing In Social Care Case Studies In South Africa And The United States

    This paper demonstrates the strong impacts that public job creation in social care provisioning has on employment creation. Furthermore, it shows that mobilizing underutilized domestic labor resources and targeting them to bridge gaps in community-based services yield strong pro-poor income growth patterns that extend throughout the economy. Social care provision...

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  • White Papers // Apr 2011

    The Levy Institute Measure Of Economic Well-Being, Great Britain, 1995 And 2005

    The authors construct estimates of the Levy Institute Measure of Economic Well-Being for Great Britain for the years 1995 and 2005. They also produce estimates of the official British measures HBAI (from the Department for Work and Pensions annual report titled "Households below Average Income") and ROI (from the Office...

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  • White Papers // Apr 2011

    Hegemonic Currencies During The Crisis: The Dollar Versus The Euro In A Cartalist Perspective

    This paper suggests that the dollar is not threatened as the hegemonic international currency, and that most analysts are incapable of understanding the resilience of the dollar, not only because they ignore the theories of monetary hegemonic stability or what, more recently, has been termed the geography of money; but...

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  • White Papers // Apr 2011

    Causes Of Financial Instability: Don't Forget Finance

    Given the economy's complex behavior and sudden transitions as evidenced in the 2007-08 crisis, agent-based models are widely considered a promising alternative to current macroeconomic practice dominated by DSGE models. Their failure is commonly interpreted as a failure to incorporate heterogeneous interacting agents. This paper explains that complex behavior and...

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  • White Papers // Mar 2011

    Can Portugal Escape Stagnation Without Opting Out From The Eurozone?

    The creation of the Economic and Monetary Union (EMU) has not brought significant gains to the Portuguese economy in terms of real convergence with wealthier eurozone countries. The authors analyze the causes of the underperformance of the Portuguese economy in the last decade, discuss its growth prospects within the EMU,...

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  • White Papers // Mar 2011

    Quality Of Match For Statistical Matches Used In The 1995 And 2005 LIMEW Estimates For Great Britain

    The quality of match of four statistical matches used in the LIMEW estimates for Great Britain for 1995 and 2005 is described. The first match combines the fifth (1995) wave of the British Household Panel Survey (BHPS) with the 1995-96 Family Resources Survey (FRS). The second match combines the 1995...

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  • White Papers // Mar 2011

    Minsky Crisis

    Stability is destabilizing. These three words concisely capture the insight that underlies Hyman Minsky's analysis of the economy's transformation over the entire postwar period. The basic thesis is that the dynamic forces of a capitalist economy are explosive and must be contained by institutional ceilings and floors. However, to the...

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  • White Papers // Mar 2011

    Keynes After 75 Years: Rethinking Money As A Public Monopoly

    In this paper, the author first provides an overview of alternative approaches to money, contrasting the orthodox approach, in which money is neutral, at least in the long run; and the Marx-Veblen-Keynes approach, or the monetary theory of production. The author then focuses in more detail on two main categories:...

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  • White Papers // Mar 2011

    Measuring Macroprudential Risk: Financial Fragility Indexes

    With the Great Recession and the regulatory reform that followed, the search for reliable means to capture systemic risk and to detect macrofinancial problems has become a central concern. In the United States, this concern has been institutionalized through the Financial Stability Oversight Council, which has been put in charge...

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  • White Papers // Mar 2011

    The Dismal State Of Macroeconomics And The Opportunity For A New Beginning

    The Queen of England famously asked her economic advisers why none of them had seen "It" (the global financial crisis) coming. Obviously, the answer is complex, but it must include reference to the evolution of macroeconomic theory over the postwar period - from the "Age of Keynes," through the Friedmanian...

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  • White Papers // Mar 2011

    Minsky?s Money Manager Capitalism And The Global Financial Crisis

    The world's worst economic crisis since the 1930s is now well into its third year. All sorts of explanations have been proffered for the causes of the crisis, from lax regulation and oversight to excessive global liquidity. Unfortunately, these narratives do not take into account the systemic nature of the...

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  • White Papers // Mar 2011

    What Does Norway Get Out Of Its Oil Fund, If Not More Strategic Infrastructure Investment?

    For the past generation Norway has supplied Europe and other regions with oil, taking payment in euros or dollars. It then sends nearly all this foreign exchange abroad, sequestering its oil-export receipts - which are in foreign currency - in the "Oil fund," to invest mainly in European and US...

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  • White Papers // Mar 2011

    Money In Finance

    This paper begins by defining, and distinguishing between, money and finance, and addresses alternative ways of financing spending. The authors next examine the role played by financial institutions (e.g., banks) in the provision of finance. The role of government as both regulator of private institutions and provider of finance is...

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  • White Papers // Mar 2011

    The Financial Crisis Viewed From The Perspective Of The "Social Costs" Theory

    This paper examines the causes and consequences of the current global financial crisis. It largely relies on the work of Hyman Minsky, although analyses by John Kenneth Galbraith and Thorstein Veblen of the causes of the 1930s collapse are used to show similarities between the two crises. K.W. Kapp's "Social...

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  • White Papers // Mar 2011

    Financial Markets

    This paper provides a brief exposition of financial markets in Post Keynesian economics. Inspired by John Maynard Keynes's path-breaking insights into the role of liquidity and finance in "Monetary production economies," Post Keynesian economics offers a refreshing alternative to mainstream (mis)conceptions in this area. The authors highlight the importance of...

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  • White Papers // Mar 2011

    A Minskyan Road To Financial Reform

    In the aftermath of the global financial collapse that began in 2007, governments around the world have responded with reform. The outlines of Basel III have been announced, although some have already dismissed its reform agenda as being too little (and too late!). Like the proposed reforms in the United...

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  • White Papers // Mar 2011

    Financial Keynesianism And Market Instability

    In this paper, the author will follows Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as "Robust" to one that is "Fragile." While many economists and policymakers have argued that "No one saw it coming,"...

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  • White Papers // Feb 2011

    Unit Labor Costs In The Eurozone: The Competitiveness Debate Again

    Current discussions about the need to reduce unit labor costs (especially through a significant reduction in nominal wages) in some countries of the eurozone (in particular, Greece, Ireland, Italy, Portugal, and Spain) to exit the crisis may not be a panacea. First, historically, there is no relationship between the growth...

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  • White Papers // Jan 2011

    Fiscal Policy: Why Aggregate Demand Management Fails And What To Do About It

    This paper argues for a fundamental reorientation of fiscal policy, from the current aggregate demand management model to a model that explicitly and directly targets the unemployed. Even though aggregate demand management has several important benefits in stabilizing an unstable economy, it also has a number of serious drawbacks that...

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  • White Papers // Jan 2011

    Views Of European Races Among The Research Staff Of The US Immigration Commission And The Census Bureau, Ca. 1910

    This paper discusses support for, and opposition to, racial classification of European immigrants among high-level researchers at both the United States Immigration Commission of 1907-11 (the Dillingham Commission) and the Census Bureau during those same years. A critical distinction must be made between the Commission members - political appointees who...

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  • White Papers // Jan 2011

    Fiscal Policy Effectiveness: Lessons From The Great Recession

    This paper reconsiders fiscal policy effectiveness in light of the recent economic crisis. It examines the fiscal policy approach advocated by the economics profession today and the specific policy actions undertaken by the Bush and Obama administrations. An examination of the labor market renders the contemporary aggregate demand - management...

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  • White Papers // Dec 2010

    A Demographic Base For Ethnic Survival? Blending Across Four Generations Of German-Americans

    New data from the IPUMS (Integrated Public Use Microdata Series) project permit an exploration of the demographic basis for ethnic survival across successive generations. The author first explores the degree of ethnic blending among the grandchildren of early-to mid-19th-century German immigrants; second, these descendants' own marital choices; and third, the...

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  • White Papers // Dec 2010

    Quantitative Easing And Proposals For Reform Of Monetary Policy Operations

    Beyond its original mission to "Furnish an elastic currency" as lender of last resort and manager of the payments system, the Federal Reserve has always been responsible (along with the Treasury) for regulating and supervising member banks. After World War II, Congress directed the Fed to pursue a dual mandate,...

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  • White Papers // Dec 2010

    How Rich Countries Became Rich And Why Poor Countries Remain Poor It's the Economic Structure. Duh!

    Becoming a rich country requires the ability to produce and export commodities that embody certain characteristics. The authors classify 779 exported commodities according to two dimensions: sophistication (measured by the income content of the products exported); and connectivity to other products (a well-connected export basket is one that allows an...

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  • White Papers // Dec 2010

    Disaggregating The Resource Curse: Is The Curse More Difficult To Dispel In Oil States Than In Mineral States?

    The hypothesis of the natural resource curse has captivated the economics profession, and since the mid-1990s has generated a large body of policymaking initiatives aimed at dispelling the curse. In this paper, the authors evaluate how the effect of resource abundance on economic growth has changed since these policies were...

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