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BlogEnd the Fed and Old Hickory
Randall Wray kicks off a discussion of the movement to reform or eliminate the Federal Reserve with a look at Andrew Jackson’s 1832 refusal to extend the charter of the Second Bank of the United States (effectively forestalling the creation of a central bank in the US): The basis of his objection to the US [...] -
One-Pager No. 20
Confusion in Euroland
As the crisis in Europe spreads, policymakers trot out one inadequate proposal after another, all failing to address the core problem. The possibility of dissolution, whether complete or partial, is looking less and less farfetched. Alongside political obstacles to reform, there is a widespread failure to understand the nature of this crisis. And without seeing […] -
One-Pager No. 20
Σύγχυση στην Ευρωχώρα
Καθώς η κρίση στην Ευρώπη επεκτείνεται, οι διαμορφωτές πολιτικής ξεφουρνίζουν τη μία ανεπαρκή πρόταση μετά την άλλη, ενώ καμία δεν αντιμετωπίζει το κύριο πρόβλημα της κρίσης. Η πιθανότητα μιας διάλυσης της ευρωζώνης, είτε εξ΄ολοκλήρου είτε μερικώς, μοιάζει όλο και λιγότερο εξωφρενική. Εκτός από τα πολιτικά εμπόδια που πρέπει να ξεπεραστούν, επικρατεί μεγάλη αδυναμία κατανόησης της […] -
Blog
Solvency First: A Workable Solution
In a new policy note Marshall Auerback argues that discussions of how to solve the euro crisis often conflate two distinct issues: solvency and insufficient demand. “Policymakers want the ECB to do both,” he writes, “but in fact, the ECB is only required to deal with the solvency issue. When you do that in a [...] -
Policy Notes No. 6Toward a Workable Solution for the Eurozone
Although it didn’t originate with an economist, the malaprop “It’s déjà vu all over again” is invariably what springs to mind in the aftermath of virtually any euro summit of the past few years, all of which seem to end with the requisite promise of a so-called “final solution” to the problems posed by the […] -
Policy Notes No. 6
Προς μια εφαρμόσιμη λύση για την ευρωζώνη
Αν και δεν προήλθε από οικονομολόγο, η άκαιρη έκφραση «déjà vu ξανά από την αρχή» έρχεται πάντα στο μυαλό με το τέλος σχεδόν κάθε Συνόδου Κορυφής της ΕΕ τα τελευταία χρόνια, οι οποίες ολοκληρώνονται πάντα με την υπόσχεση ότι θα δοθεί μια «τελική λύση» στα προβλήματα που προκαλούνται από μια ολοένα και περισσότερο προβληµατική νομισματική […] -
Working Paper No. 697Distribution and Growth
This paper studies the effects of an (exogenous) increase of nominal wages on profits, output, and growth. Inspired by an article by MichaÅ‚ Kalecki (1991), who concentrated on the effects on total profits, the paper develops a model that explicitly considers the dynamics of demand, prices, profits, and investment. The outcomes of the initial wage […] -
Blog
1967 Census of the West Bank and Gaza Strip: Digitized
[The following is from Joel Perlmann, Senior Scholar and Director of the Immigration, Ethnicity, and Social Structure program at the Levy Institute] In the summer of 1967, just after the Six-Day War brought the West Bank and Gaza Strip under Israel’s control, the Israeli Central Bureau of Statistics conducted a census of the occupied territories. [...] -
Blog
A Public Option for Banking?
In the course of an interview by Alan Minsky from a couple of weeks ago, Michael Hudson discussed a proposal for setting up a public option for banking (following the “Chicago Plan” of the 1930s and, says Hudson, Dennis Kucinich’s recent NEED Act): Instead of relying on Bank of America or Citibank for credit cards, [...] -
Blog
A Miserable but Revealing Online Game
The European Central Bank has finally responded to overwhelming public demand and created an online game, €conomia, in which you get to direct monetary policy for the eurozone. The game appears to reward achievement in a distressingly instructive manner. According to Matt Yglesias: …they grade you on the basis of a pure inflation targeting regime [...] -
Blog
Is the ECB Really Powerless? (Part III)
(Update added below) In our last post on this topic, we found the head of the Bundesbank citing legal obstacles (Article 123 of the EU treaty) as the reason why the European Central Bank cannot step up as lender of last resort. Can the ECB work around that Article 123 restriction? In the last couple [...] -
Blog
The Future of the Eurozone
It has become a cliché that the survival of the European Union (EU) depends on its ability to reform, either through enlargement—greater economic and fiscal coordination in the direction of some sort of federal state—or by getting smaller, with the eurozone becoming a true optimum currency area. Surprisingly enough, most analysts, including leading EU officials, [...]