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30th Annual Levy Economics Institute Conference
Held May 4, 2023 - Videos and recordings will be posted soon  MORE >>



LEVY INSTITUTE PUBLICATIONS

 * THE CHALLENGES FOR THE NEW GREEK GOVERNMENT
   
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   Policy Note 2023/2 | June 2023 | Dimitri B. Papadimitriou, Nikolaos
   Rodousakis
   Following the recent (June 25, 2023) elections in Greece, Institute President
   Dimitri B. Papadimitriou and Research Scholar Nikolaos Rodousakis outline the
   economic and policy challenges facing the Greek government.
   Download:
   Policy Note 2023/2
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Dimitri B. Papadimitriou Nikolaos Rodousakis
   Related Topic(s):
   Great Recession Greece Greek economic crisis
   
   
   

 * GREECE: HIGHER GDP GROWTH AT WHAT COST?
   
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   Policy Note 2023/1 | May 2023 | Dimitri B. Papadimitriou, Giuliano Toshiro
   Yajima, Gennaro Zezza
   In 2022, Greek GDP grew at a higher rate than the eurozone average as the
   nation’s economy rebounded from the COVID-19 shock.
   
   However, it was not all welcome news. In particular, Greece registered its
   largest current account deficit since 2009. Despite a widespread focus on
   fiscal profligacy, it is excessive current account and trade deficits—largely
   caused by private sector imbalances—that are at the root of Greece’s multiple
   economic challenges. This policy note identifies the major determinants
   causing the deterioration of the current account balance in order to devise
   appropriate corrective policies.
   Download:
   Policy Note 2023/1
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Dimitri B. Papadimitriou Giuliano Toshiro Yajima Gennaro Zezza
   Related Topic(s):
   COVID-19 Current account imbalances Deficits Eurozone Greece Greek economic
   crisis Sectoral balances
   
   
   

 * CAN IT BE PREVENTED THIS TIME?
   
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   Working Paper No. 1021 | June 2023 | Lorenzo Esposito, Giuseppe Mastromatteo
   
   THE ROLE OF PROFITS IN BANKING REGULATION
   
   Since the nineties, crises have punctuated financial markets, shattering the
   conventional wisdom about how these markets work and how to regulate them,
   and forcing a deep rethinking of the supervisory framework that, however, did
   not change much of the banks’ behavior and incentives. In particular, banking
   regulation did not face the nexus profitability-riskiness. Based on Minsky’s
   financial instability hypothesis, we discuss the literature on banks’
   profitability and its relation to the originate-to-distribute model. We also
   propose a different strategy for banking regulation, based on a profitability
   cap that prevents financial innovation from overwhelming supervision.
   Finally, we discuss the data for the US case, confirming the importance of
   profitability as a signal of incoming troubles and the possibility of using
   the profitability cap to greatly simplify banking regulation.
   Download:
   Working Paper No. 1021
   Associated Program:
   Monetary Policy and Financial Structure
   Author(s):
   Lorenzo Esposito Giuseppe Mastromatteo
   Related Topic(s):
   Banking regulation Basel III Financial fragility Financial stability Minsky
   moment Profitability
   
   
   

 * THE MACRODYNAMICS OF INDIAN RUPEE SWAP YIELDS
   
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   Working Paper No. 1020 | June 2023 | Tanweer Akram, Khawaja Mamun
   This paper econometrically models the dynamics of Indian rupee (INR) swap
   yields based on key macroeconomic factors using the autoregressive
   distributive lag (ARDL) approach. It examines whether the short-term interest
   rate has a decisive influence on long-term INR swap yields after controlling
   for other factors, such as core inflation, the growth of industrial
   production, the logarithm of the equity price index, and the logarithm of the
   INR exchange rate. The estimated models show that the short-term interest
   rate has an important influence on the swap yields. This implies that the
   Reserve Bank of India (RBI) can sway borrowing and lending rates not just on
   Indian government bonds but also INR-denominated private-market financial
   instruments, such as swaps and swaptions.
   Download:
   Working Paper No. 1020
   Associated Program:
   Monetary Policy and Financial Structure
   Author(s):
   Tanweer Akram Khawaja Mamun
   Related Topic(s):
   India Inflation Interest rate swaps Swap yields
   
   
   

 * AN INQUIRY CONCERNING JAPANESE YEN INTEREST RATE SWAP YIELDS
   
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   Working Paper No. 1019 | May 2023 | Tanweer Akram, Khawaja Mamun
   This paper econometrically models Japanese yen (JPY)–denominated interest
   rate swap yields. It examines whether the short-term interest rate exerts an
   influence on the long-term JPY swap yield after controlling for several key
   macroeconomic variables, such as core inflation, the growth of industrial
   production, the percentage change in the equity price index, and the
   percentage change in the exchange rate. It also tests whether there are
   structural breaks in the dynamics of Japanese swap yields and related
   variables. The estimated econometric models show that the short-term interest
   rate exerts an important influence on the long-term swap yield in some
   periods but not in other periods in which core inflation exerts a marked
   influence on the swap yield. The findings from the econometric models reveal
   a discernable relationship between the call rate and the swap yield of
   different maturity tenors clearly held prior to April 2014 but did not in the
   subsequent period. These findings highlight the limits and scope of John
   Maynard Keynes’s contention that the central bank’s policy rate commands a
   decisive influence over the long-term market rate through the short-term
   interest rate. The policy implications of the estimated models’ results are
   discussed.
   Download:
   Working Paper No. 1019
   Associated Program:
   Monetary Policy and Financial Structure
   Author(s):
   Tanweer Akram Khawaja Mamun
   Related Topic(s):
   Inflation Interest rate swaps Interest rates Japan Long-term interest rates
   Swap yields
   
   
   

 * THE UNBEARABLE WEIGHT OF AGING
   
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   Working Paper No. 1018 | April 2023 | Yeva Nersisyan, Xinhua Liu, L. Randall
   Wray
   
   HOW TO DEAL WITH THE “DEMOGRAPHIC TIME BOMB”
   
   The aging of the global population is in the headlines following a report
   that China’s population fell as deaths surpassed births. Pundits worry that a
   declining Chinese workforce means trouble for other economies that have come
   to rely on China’s exports. France is pushing through an increase of the
   retirement age in the face of what is called a demographic “time bomb” facing
   rich nations, created by rising longevity and low birthrates. As we approach
   the debt limit in the US, while President Biden has promised to protect
   Social Security, many have returned to the argument that the program is
   financially unsustainable. This paper argues that most of the discussion and
   policy solutions proposed surrounding aging of populations are misfocused on
   supposed financial challenges when they should be directed toward the
   challenges facing resource provision. From the resource perspective, the
   burden of caring for tomorrow’s seniors seems far less challenging. Indeed,
   falling fertility rates and an end to global population growth should be
   welcomed. With fewer children and longer lives, investment in the workers of
   the future will ensure growth of productivity that will provide the resources
   necessary to support a higher ratio of retirees to those of working age.
   Global population growth will peak and turn negative, reducing demands on
   earth’s biosphere and making it easier to transition to environmental
   sustainability. Rather than facing a demographic “time bomb,” we can welcome
   the transition to a mature-aged profile.
   Download:
   Working Paper No. 1018
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Yeva Nersisyan Xinhua Liu L. Randall Wray
   Related Topic(s):
   Birth rate Demographic trends Population control policy Social Security
   Unpaid care work Unpaid labor
   
   
   

 * GREECE: RECOVERY, OR ANOTHER RECESSION?
   
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   Strategic Analysis, October 2022 | October 2022 | Dimitri B. Papadimitriou,
   Nikolaos Rodousakis, Gennaro Zezza
   In this strategic analysis, Institute President Dimitri B. Papadimitriou,
   Senior Scholar Gennaro Zezza, and Research Associate Nikolaos Rodousakis
   discuss the medium-term prospects for the Greek economy in a time of
   increasing uncertainty—due to the geopolitical turbulence emanating from the
   Ukraine–Russian conflict, with its impact on the cost of energy, as well as
   the increase in international prices of some commodities.
   
   Growth projections for the current year are lower than those recorded in
   2021, indicating the economy needs to perform much better if it is to
   continue on the growth path that began in the pre-pandemic period. 
   Similarly, growth projections for 2023 and 2024 appear much weaker, denoting
   serious consequences may be in store.
   
   With increasing price levels and the euro depreciating, an economy like
   Greece’s that is highly dependent on increasingly costly imports will become
   more fragile as the current account deficit widens. In the authors’ view, the
   continuous recovery of the Greek economy rests with the government’s ability
   to utilize the NGEU funds swiftly and efficiently for projects that will
   increase the country’s productive capacity.
    
   Download:
   Strategic Analysis, October 2022
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Dimitri B. Papadimitriou Nikolaos Rodousakis Gennaro Zezza
   Related Topic(s):
   COVID-19 Current account imbalances Greece Inflation Stock-flow consistent
   (SFC) modeling
   
   
   

 * RENTIERS, STRATEGIC PUBLIC GOODS, AND FINANCIALIZATION IN THE PERIPHERY
   
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   Working Paper No. 1017 | April 2023 | Gabriel Porcile, Gilberto Tadeu Lima
   This paper revisits a traditional theme in the literature on the political
   economy of development, namely how to redistribute rents from traditional
   exporters of natural resources toward capitalists in technology-intensive
   sectors with a higher potential for innovation and the creation of
   higher-productivity jobs. Porcile and Lima argue that this conflict has been
   reshaped in the past three decades by two major transformations in the
   international economy. The first is the acceleration of technical change and
   the key role governments play in supporting international competitiveness.
   This role provides the strategic public goods to foster innovation and the
   diffusion of technology (what Christopher Freeman called “technological
   infrastructure”). The second is the impact of financial globalization in
   limiting the ability of governments in the periphery to tax and/or issue debt
   to finance those public goods. Capital mobility allows exporters of natural
   resources to send their foreign exchange abroad to arbitrate between domestic
   and foreign assets, and to avoid taxation. Using a macroeconomic model for a
   small, open economy, the authors argue that in this more complex
   international context, the external constraint on output growth assumes
   different forms. They focus on two polar cases: the “pure financialization”
   case, in which legal and illegal capital flights prevent the government from
   financing the provision of strategic public goods; and the “trade deficit”
   case, in which private firms in the more technology-intensive sector cannot
   import the capital goods they need to expand industrial production.
   Download:
   Working Paper No. 1017
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Gabriel Porcile Gilberto Tadeu Lima
   Related Topic(s):
   Capital mobility Center-periphery structural symmetries Development
   Globalization Technology
   
   
   

 * THE CAUSES OF PANDEMIC INFLATION
   
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   One-Pager No. 70 | December 2022 | L. Randall Wray
   While the trigger for the Covid recession was unusual—a collapse of the
   supply side that produced a drop in demand—the inflation the US economy is
   now facing is not atypical, according to L. Randall Wray. In this one-pager,
   he explores the causes of the current inflationary environment, arguing that
   continuing inflation pressures come mostly from the supply side.
   
   Wray warns that, given federal spending had already been declining
   substantially before the Fed started raising interest rates, rate hikes make
   a recession—and potentially stagflation—even more likely. A key part of our
   fiscal policy response should be focused on well-designed public investment
   addressing the substantial supply constraints still affecting the US
   economy—constraints that are not just due to the Covid crisis, but also
   decades of underinvestment in infrastructure. Such an approach, in Wray's
   view, would reduce inflationary pressures while supporting growth.
    
   Download:
   One-Pager No. 70
   Associated Program(s):
   The State of the US and World Economies Monetary Policy and Financial
   Structure Federal Budget Policy
   Author(s):
   L. Randall Wray
   Related Topic(s):
   COVID-19 Fiscal policy Inflation Modern Money Theory (MMT) Monetary policy
   Supply chains
   
   
   

 * MONETARY POLICY AND THE GENDER AND RACIAL EMPLOYMENT DYNAMICS IN BRAZIL
   
   View More View Less
   
   Working Paper No. 1016 | February 2023 | Patricia Couto, Clara Brenck
   Monetary policy has been historically concerned with controlling inflation,
   using the interest rate as its main tool. However, such policies are not
   gender- or race-neutral. This paper explores econometrically the effect of
   changes in the interest rate for female and black employment creation in
   Brazil. We conduct a panel data fixed effects analysis for 13 states between
   2012 and 2021 to estimate the effects of changes in interest rates on
   unemployment, separating the data by gender and race. Our results show that
   the real interest rate has a positive effect on the relative unemployment of
   black men to white men, no effect on the relative unemployment of black women
   to white men, and a negative effect on the relative unemployment of white
   women to white men. These effects are intensified in regions where the black
   population ratio is lower. This paper contributes to understanding the
   challenges to closing gender and racial gaps, particularly in developing
   economies. We conclude that social stratification, if not considered, can
   lead to misleading policies that perpetuate unequal socioeconomic outcomes.
   Download:
   Working Paper No. 1016
   Associated Program:
   Gender Equality and the Economy
   Author(s):
   Patricia Couto Clara Brenck
   Related Topic(s):
   Brazil Gender Gender economics Gender equality Gender inequality Monetary
   policy Racial inequality
   
   
   

 * CBDC NEXT-LEVEL: A NEW ARCHITECTURE FOR FINANCIAL “SUPER-STABILITY” 
   
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   Working Paper No. 1015 | February 2023 | Biagio Bossone, Michael Haines
   Fractional reserve regimes generate fragile banking, and full reserve regimes
   (e.g., narrow banking) remove fragility at the cost of suppressing the role
   of banks as lenders. A Central Bank Digital Currency (CBDC) could provide
   safe money, but at the cost of potentially disrupting bank lending. Our aim
   is to avoid this potential disruption. Building on the recent literature on
   CBDCs, in this study we propose what we call the “CBDC next-level model,”
   whereby the central bank creates money by lending to banks, and banks on-lend
   the proceeds to the economy. The proposed model would allow for deposits to
   be taken off the balance sheet of banks and into the balance sheet of the
   central bank, thereby removing significant risk from the banking system
   without adversely impacting banks’ basic business. Once CBDC is injected in
   the system, irrespective of however it is used, wherever it accumulates, and
   whoever holds and uses it, it will always represent central bank equity, and
   no losses or defaults by individual banks or borrowers can ever dent it or
   weaken the central bank’s capital position or hurt depositors. Yet,
   individual borrowers and banks would still be required to honor their debt in
   full, lest they would be bound to exit the market or even be forced into
   bankruptcy. The CBDC next-level model solution would eliminate the threat of
   bank runs and system collapse and induce a degree of financial stability
   (“super-stability”) that would be unparalleled by any existing banking
   system.
   Download:
   Working Paper No. 1015
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Biagio Bossone Michael Haines
   Related Topic(s):
   Banking Banks Central bank policy Central banking Commercial banking Currency
   issuers vs. currency users Full-reserve banking Monetary policy Money and
   banking Money creation Seigniorage Stability
   
   
   

 * AVOIDING A RECESSION
   
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   Strategic Analysis, August 2022 | August 2022 | Dimitri B. Papadimitriou,
   Michalis Nikiforos, Gennaro Zezza
   
   THE FED CONUNDRUM
   
   In this report, Institute President Dimitri B. Papadimitriou, Research
   Scholar Michalis Nikiforos, and Senior Scholar Gennaro Zezza analyze how and
   why the US economy has achieved a swift recovery in comparison with the last
   few economic cycles.
   
   This recovery has nevertheless been accompanied by significant increases in
   the trade deficit and inflation. Papadimitriou, Nikiforos, and Zezza argue
   that the elevated rate of inflation has been largely unrelated to the level
   of demand or the pace of the recovery, and has more to do with
   pandemic-related disruptions, the war in Ukraine, and the beginning of a new
   commodity super cycle.
   
   The authors also identify persistent Minskyan processes that mean the US
   economy remains fundamentally unstable, with a risk of financial crisis and
   potentially severe consequences in terms of output and employment—a risk
   heightened by the reversal of the loose monetary policy that has prevailed
   over the last decade and a half. In their first scenario, they simulate the
   macroeconomic impact of such a financial crisis and private sector
   deleveraging. In two additional scenarios, the authors analyze the likely
   effects of a new round of fiscal stimulus that would be necessary in case of
   a crisis: a deficit-financed expenditure boost with no offsetting revenue
   increases, and a deficit-neutral scenario in which taxation of high-income
   households increases by an amount equivalent to the expansion of public
   expenditure.
   Download:
   Strategic Analysis, August 2022
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Dimitri B. Papadimitriou Michalis Nikiforos Gennaro Zezza
   
   
   

 * IS IT TIME FOR RATE HIKES?
   
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   Public Policy Brief No. 157 | April 2022 | Yeva Nersisyan, L. Randall Wray
   
   THE FED CANNOT ENGINEER A SOFT LANDING BUT RISKS STAGFLATION BY TRYING
   
   Roughly two years into the economic recovery from the COVID-19 crisis, the
   topic of elevated inflation dominates the economic policy discourse in the
   United States. And the aggressive use of fiscal policy to support demand and
   incomes has commonly been singled out as the culprit. Equally as prevalent is
   the clamor for the Federal Reserve to raise interest rates to relieve
   inflationary pressures. According to Research Scholar Yeva Nersisyan and
   Senior Scholar L. Randall Wray, this narrative is flawed in a number of ways.
   The problem with the US economy is not one of excess of demand in their view,
   and the Federal Reserve will not be able to engineer a “soft landing” in the
   way many seem to be expecting. The authors also deliver a warning: excessive
   tightening, combined with headwinds in 2022, could lead to stagflation.
   Moreover, while this recovery looks robust in comparison to the jobless
   recoveries and secular stagnation that have typified the last few decades, in
   Nersisyan and Wray’s estimation there are few signs of an overheating economy
   to be found in the macro data. In their view, this inflation is not centrally
   demand driven; rather dynamics at the micro-level are playing a much more
   central role in driving the price increases in question, while significant
   supply chain problems have curtailed productive capacity by disrupting the
   availability of critical inputs.
   
   The authors suggest there is a better way to conduct policy—one oriented
   around targeted investments that would increase our real resource space. This
   will serve not only to address inflationary pressures, according to Nersisyan
   and Wray, but also the far more pressing climate emergency.
   Download:
   Public Policy Brief No. 157
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Yeva Nersisyan L. Randall Wray
   
   
   

 * STILL FLYING BLIND AFTER ALL THESE YEARS
   
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   Public Policy Brief No. 156 | December 2021 | Dimitri B. Papadimitriou, L.
   Randall Wray
   
   THE FEDERAL RESERVE’S CONTINUING EXPERIMENTS WITH UNOBSERVABLES
   
   Institute President Dimitri B. Papadimitriou and Senior Scholar L. Randall
   Wray contend that the prevailing approach to monetary policy and inflation is
   influenced by a set of concepts that are a poor guide to action. In this
   policy brief, they examine two previous cases in which the Federal Reserve
   misread the data and raised rates too soon, as well as the evolution of the
   Fed’s thought and practice over the past three decades—a period in which the
   central bank has increasingly turned to unobservable indicators that are
   supposed to predict inflation. Noting that their criticisms have now been
   raised by the Fed’s own members and research staff, the authors highlight the
   ways in which we need to rethink our overall framework for monetary and
   fiscal policy. The Fed has far less control over inflation than is presumed,
   they argue, and, at worst, might have the whole inflation-fighting strategy
   backwards. Managing inflation, they conclude, should not be left entirely in
   the hands of central banks.
   Download:
   Public Policy Brief No. 156
   Associated Program:
   Monetary Policy and Financial Structure
   Author(s):
   Dimitri B. Papadimitriou L. Randall Wray
   Related Topic(s):
   Central banking Inflation Monetary policy
   
   
   

 * CHILE: THE ROAD TO JOY IS PAVED WITH OBSTACLES
   
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   Policy Note 2022/3 | May 2022 | Giuliano Toshiro Yajima
   In the second round of the Chilean presidential elections, the coalition led
   by Gabriel Boric secured a victory under the premise of delivering
   long-awaited reforms to a financially volatile, structurally fragile, and
   deeply unequal economic structure. In this policy note, Giuliano Toshiro
   Yajima sheds light on these three aspects of the Chilean economy, showing
   that its external and internal fragility feeds back on the excessive
   specialization and heterogeneity of the productive sectors, which in turn
   influence income and wealth distribution.
   Download:
   Policy Note 2022/3
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Giuliano Toshiro Yajima
   
   
   

 * A RACE TO THE BOTTOM
   
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   Policy Note 2022/2 | April 2022 | Vlassis Missos, Nikolaos Rodousakis, George
   Soklis
   
   MEASURING INCOME LOSS AND POVERTY IN GREECE
   
   More than a decade after the 2009 crisis, the standards of living of the
   Greek population are still contracting and the prospects are gloomy. In this
   policy note, Vlassis Missos, Research Associate Nikolaos Rodousakis, and
   George Soklis deal with how to approach the measurement of income loss and
   poverty in Greece and argue for the use of household disposable income (HDI)
   in estimating adjustments, which offers a more accurate appreciation of the
   burden falling on the Greek population. They underline the significance of
   replacing a “southern-European model” of social protection with a passive
   safety net model—and the centrality to the latter model of embracing ideas of
   internal devaluation and fiscal consolidation—and suggest a better measure of
   poverty, for the case of Greece specifically and in general for developed
   economies in which front-loaded neoliberal policies are imposed. Finally,
   they comment on the sacrifice that would be required if fiscal discipline
   were to return in the aftermath of the COVID-19 pandemic lockdowns.
   Download:
   Policy Note 2022/2
   Associated Program:
   The State of the US and World Economies
   Author(s):
   Vlassis Missos Nikolaos Rodousakis George Soklis
   Related Topic(s):
   Fiscal consolidation Greece Household income Internal devaluation Poverty
   
   
   

 * WHAT IS MMT’S STATE OF PLAY IN WASHINGTON?
   
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   e-pamphlet, August 2021 | August 2021 | L. Randall Wray
   Modern Money Theory (MMT) has been frequently mentioned in recent media—first
   as “crazy talk” that if followed would bankrupt the nation and then, after
   the COVID-19 pandemic hit, as a way to finance an emergency response. In
   recent months, however, Washington seems to have returned to the old view
   that government spending must be “paid for” with new taxes. This raises the
   question: Has MMT really made headway with policymakers? This e-pamphlet
   examines the extraordinary interview given recently by Representative John
   Yarmuth’s (D, KY-03), Chair of the House Budget Committee, in which he
   explicitly adopts an MMT approach to budgeting. Chairman Yarmuth also lays
   out a path for realizing the major elements of President Biden’s proposals.
   Finally, Wray summarizes a recent presentation he gave to the Congressional
   Budget Office’s Macroeconomic Analysis section that urged reconsideration of
   the way that fiscal policy impacts are assessed.
   Download:
   e-pamphlet, August 2021
   Associated Program(s):
   Monetary Policy and Financial Structure Economic Policy for the 21st Century
   The State of the US and World Economies
   Author(s):
   L. Randall Wray
   Related Topic(s):
   Federal budget policy Fiscal policy Functional finance Modern Money Theory
   (MMT)
   
   
   

 * STATEMENT OF SENIOR SCHOLAR L. RANDALL WRAY TO THE HOUSE BUDGET COMMITTEE, US
   HOUSE OF REPRESENTATIVES
   
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   Testimony, November 20, 2019 | November 2019 | L. Randall Wray, Yeva
   Nersisyan
   
   REEXAMINING THE ECONOMIC COSTS OF DEBT
   
   On November 20, 2019, Senior Scholar L. Randall Wray testified before the
   House Committee on the Budget on the topic of reexamining the economic costs
   of debt:
   
   "In recent months a new approach to national government budgets, deficits,
   and debts—Modern Money Theory (MMT)—has been the subject of discussion and
   controversy. [. . .]
   
   In this testimony I do not want to rehash the theoretical foundations of MMT.
   Instead I will highlight empirical facts with the goal of explaining the
   causes and consequences of the intransigent federal budget deficits and the
   growing national government debt. I hope that developing an understanding of
   the dynamics involved will make the topic of deficits and debt less daunting.
   I will conclude by summarizing the MMT views on this topic, hoping to set the
   record straight."
   
   Update 1/7/2020: In an appendix, L. Randall Wray responds to a Question for
   the Record submitted by Rep. Ilhan Omar
   Download:
   Testimony, November 20, 2019
   Associated Program(s):
   Monetary Policy and Financial Structure Economic Policy for the 21st Century
   Author(s):
   L. Randall Wray Yeva Nersisyan
   Related Topic(s):
   Debt reduction Fiscal deficit Fiscal policy Modern Money Theory (MMT)
   Monetary policy National debt
   
   
   

 * SCOPE AND EFFECTS OF REDUCING TIME DEFICITS VIA INTRAHOUSEHOLD REDISTRIBUTION
   OF HOUSEHOLD PRODUCTION
   
   View More View Less
   
   Research Project Report, July 2021 | July 2021 | Ajit Zacharias, Thomas
   Masterson, Fernando Rios-Avila, Abena D. Oduro
   
   EVIDENCE FROM SUB-SAHARAN AFRICA
   
   Gender disparity in the division of responsibilities for unpaid care and
   domestic work (household production) is a central and pervasive component of
   inequalities between men and women and boys and girls. Reducing disparity in
   household production figures as one element of the goal of gender equality
   enshrined in the United Nations’ Sustainable Development Goals (SDGs) and
   feminist scholars and political activists have articulated that the
   redistribution of household production responsibilities from females to males
   is important for its own sake, as well as for achieving gender equality in
   labor market outcomes. A cursory examination of available cross-country data
   indicates that higher per capita GDP—the neoliberal panacea for most societal
   malaise—provides little bulwark against the gender inequality in household
   production.
    
   Ajit Zacharias, Thomas Masterson, Fernando Rios-Avila, and Abena D. Oduro
   contribute to the literature on the intrahousehold distribution of household
   production by placing the question within a framework of analyzing
   deprivation, applying that framework to better understand the interactions
   between poverty and the gendered division of labor in four sub-Saharan
   African nations: Ethiopia, Ghana, South Africa, and Tanzania. Central to
   their framework is the notion that attaining a minimal standard of living
   requires command over an adequate basket of commodities and sufficient time
   to be spent on home production, where meeting those requirements produces
   benefits for all—including those beyond the household.
    
   Their findings motivate questions regarding the feasibility and effectiveness
   of redistribution of household responsibilities to alleviate time deficits
   and their impoverishing effects. By developing a framework to assess the
   mechanics of redistribution among family members and applying it to
   gender-based redistribution, they derive the maximum extent to which
   redistribution—either among all family members, between sexes, or between
   husbands and wives—can lower the incidence of time deficits. The conclude
   with a discussion of alternative principles of distributing household
   production responsibilities among family members and examine their impact on
   the Levy Institute Measure of Time and Income Poverty (LIMTCP) and discuss
   some policy questions in light of their findings.
   Download:
   Research Project Report, July 2021
   Associated Program:
   The Levy Institute Measure of Time and Income Poverty
   Author(s):
   Ajit Zacharias Thomas Masterson Fernando Rios-Avila Abena D. Oduro
   Related Topic(s):
   Gender disparities Levy Institute Measure of Time and Consumption Poverty
   (LIMTCP) Sub-Saharan Africa Time poverty Time use
   
   
   

 * PUBLIC SERVICE EMPLOYMENT
   
   View More View Less
   
   Research Project Report, April 2018 | April 2018 | L. Randall Wray, Flavia
   Dantas, Scott Fullwiler, Pavlina R. Tcherneva, Stephanie A. Kelton
   
   A PATH TO FULL EMPLOYMENT
   
   Despite reports of a healthy US labor market, millions of Americans remain
   unemployed and underemployed, or have simply given up looking for work. It is
   a problem that plagues our economy in good times and in bad—there are never
   enough jobs available for all who want to work. L. Randall Wray, Flavia
   Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton
   examine the impact of a new “job guarantee” proposal that would seek to
   eliminate involuntary unemployment by directly creating jobs in the
   communities where they are needed.
    
   The authors propose the creation of a Public Service Employment (PSE) program
   that would offer a job at a living wage to all who are ready and willing to
   work. Federally funded but with a decentralized administration, the PSE
   program would pay $15 per hour and offer a basic package of benefits. This
   report simulates the economic impact over a ten-year period of implementing
   the PSE program beginning in 2018Q1.
    
   Unemployment, hidden and official, with all of its attendant social harms, is
   a policy choice. The results in this report lend more weight to the argument
   that it is a policy choice we need no longer tolerate. True full employment
   is both achievable and sustainable.
   Download:
   Research Project Report, April 2018
   Associated Program:
   Employment Policy and Labor Markets
   Author(s):
   L. Randall Wray Flavia Dantas Scott Fullwiler Pavlina R. Tcherneva Stephanie
   A. Kelton
   Related Topic(s):
   Economic policy Employer of Last Resort (ELR) policy Employment guarantee Job
   guarantee
   
   
   

 * THE MACROECONOMIC EFFECTS OF STUDENT DEBT CANCELLATION
   
   View More View Less
   
   Research Project Report, February 2018 | February 2018 | Scott Fullwiler,
   Stephanie A. Kelton, Catherine Ruetschlin, Marshall Steinbaum
   Among the more ambitious policies that have been proposed to address the
   problem of escalating student loan debt are various forms of debt
   cancellation. In this report, Scott Fullwiler, Research Associate Stephanie
   Kelton, Catherine Ruetschlin, and Marshall Steinbaum examine the likely
   macroeconomic impacts of a one-time, federally funded cancellation of all
   outstanding student debt.
   
   The report analyzes households’ mounting reliance on debt to finance higher
   education, including the distributive implications of student debt and debt
   cancellation; describes the financial mechanics required to carry out the
   cancellation of debt held by the Department of Education (which makes up the
   vast majority of student loans outstanding) as well as privately owned
   student debt; and uses two macroeconometric models to provide a plausible
   range for the likely impacts of student debt cancellation on key economic
   variables over a 10-year horizon.
   
   The authors find that cancellation would have a meaningful stimulus effect,
   characterized by greater economic activity as measured by GDP and employment,
   with only moderate effects on the federal budget deficit, interest rates, and
   inflation (while state budgets improve). These results suggest that policies
   like student debt cancellation can be a viable part of a needed reorientation
   of US higher education policy.
    
   Download:
   Research Project Report, February 2018
   Associated Program(s):
   Economic Policy for the 21st Century The State of the US and World Economies
   Author(s):
   Scott Fullwiler Stephanie A. Kelton Catherine Ruetschlin Marshall Steinbaum
   Related Topic(s):
   Consumer spending Debt cancellation Education Government intervention
   Household debt
   
   
   

 * TIME TO CELEBRATE MODERN MONEY THEORY?
   
   View More View Less
   
   One-Pager No. 69 | February 2022 | Yeva Nersisyan, L. Randall Wray
   A recent article in the New York Times asks whether Modern Money Theory (MMT)
   can declare victory after its policies were (supposedly) implemented during
   the response to the COVID-19 pandemic. The article suggests yes, but for the
   high inflation it sparked. In the view of Yeva Nersisyan and Senior Scholar
   L. Randall Wray, the federal government’s response largely validated MMT’s
   claims regarding public debt and deficits and questions of sovereign
   government solvency—it did not, however, represent MMT policy.
   Download:
   One-Pager No. 69
   Associated Program(s):
   The State of the US and World Economies Federal Budget Policy Economic Policy
   for the 21st Century
   Author(s):
   Yeva Nersisyan L. Randall Wray
   
   
   

 * A GREAT LEAP FORWARD
   
   View More View Less
   
   Book Series, January 2020 | January 2020 | L. Randall Wray
   
   HETERODOX ECONOMIC POLICY FOR THE 21ST CENTURY
   
   A Great Leap Forward: Heterodox Economic Policy for the 21st Century
   investigates economic policy from a heterodox and progressive perspective.
   Author Randall Wray uses relatively short chapters arranged around several
   macroeconomic policy themes to present an integrated survey of progressive
   policy on topics of interest today that are likely to remain topics of
   interest for many years.
   
   Published by: Elsevier Press
   Associated Program:
   Economic Policy for the 21st Century
   Author(s):
   L. Randall Wray
   Related Topic(s):
   Heterodox macroeconomics Macroeconomic policy
   




CURRENT RESEARCH TOPICS

 * COVID-19
 * Greek economic crisis
 * Labor force participation
 * Income inequality
 * Job guarantee
 * Employment policy
 * Financial instability
 * Stock-flow consistent (SFC) modeling
 * Time deficits
 * Fiscal austerity


View All

 




FROM THE PRESS ROOM

WE MOURN THE UNTIMELY PASSING OF THE LEVY INSTITUTE'S LONG-SERVING RESEARCH
ASSOCIATE NILÜFER ÇAGATAY, A BRIGHT AND ENGAGING SCHOLAR, A LEADER IN FEMINIST
ECONOMICS, AND A VERY DEAR FRIEND AND COLLABORATOR FROM THE VERY EARLY YEARS OF
THE INSTITUTE.

LEVY ECONOMICS INSTITUTE OF BARD COLLEGE RECEIVES $211,000 TO CONTINUE STUDY OF
POTENTIAL IMPACTS OF POLICIES THAT EXPAND CARE SERVICES IN MEXICO

pr_5_30_23.pdf

READ YEVA NERSISYAN AND L. RANDALL WRAY'S LATEST OP-ED ON SVB AND THE FED

View More >>


INSTITUTE SCHOLAR YEVA NERSISYAN'S OP-ED "LOWERING INFLATION ISN'T A JOB FOR A
ONE-TRICK PONY" FEATURED IN THE HILL

View More >>


SENIOR SCHOLAR AJIT ZACHARIAS DISCUSSES HOW THE LIMEW HIGHLIGHTS ASPECTS OF
INEQUALITY AND WELLBEING THAT ARE NEGLECTED BY CONVENTIONAL MEASURES.

View More >>


SENIOR SCHOLAR RANIA ANTONOPOULOS WAS INVITED BY THE UNITED NATIONS ECONOMIC
COMMISSION FOR LATIN AMERICA AND THE CARIBBEAN (ECLAC) TO SPEAK AT A HIGH LEVEL
PANEL OF THE "XV REGIONAL CONFERENCE ON WOMEN IN LATIN AMERICA AND THE
CARIBBEAN" ON THE TOPIC OF FINANCING THE CARE ECONOMY.


Download Remarks PDF

INSTITUTE PRESIDENT DIMITRI B. PAPADIMITRIOU DISCUSSES CURRENT CONDITIONS OF THE
GREEK ECONOMY AND RECENT STRATEGIC ANALYSIS.

View More >>


INSTITUTE SCHOLARS YEVA NERSISYAN AND L. RANDALL WRAY'S NEW OP-ED FEATURED IN
THE HILL

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LEVY BLS GRANT FEATURED IN FINANCIAL TIMES OP-ED

View More >>


NEW US CONSUMPTION GAUGE TO INCLUDE UNPAID WORK, HOUSING

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UPCOMING EVENTS




PRESS RELEASES

 * Levy Economics Institute of Bard College Receives $211,000 to Continue Study
   of Potential Impacts of Policies that Expand Care Services in Mexico
 * Levy Institute Receives $90,000 to Study Potential Impacts of Policies that
   Expand Care Services in Mexico




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