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BlogPrivate-sector debt ratios still high by historical standards
With all the recent coverage of the federal government’s debt-limit impasse, it has been some time since the private sector’s financial picture has received much attention in the popular press. Nonetheless, there seems to be little news, as the most recent flow-of-funds data release from the Fed depicts a continuation of trends that have held [...] -
Working Paper No. 680The Levy Institute Measure of Economic Well-Being: Estimates for Canada, 1999 and 2005
This report 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 2005. Although inequality in economic […] -
Working Paper No. 679
The Levy Institute Measure of Economic Well-Being, France, 1989 and 2000
We construct estimates of the Levy Institute Measure of Economic Well-Being for France for the years 1989 and 2000. We also estimate the standard measure of disposable cash income (DI) from the same data sources. We analyze overall trends in the level and distribution of household well-being using both measures for France as a whole […] -
Working Paper No. 678
What Ended the Great Depression?
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 small. This paper shows that […] -
Blog
Do we need federal debt at all?
(Click figure to enlarge.) Could the government loan the money to itself? The federal government is expected reach its debt limit of $14.29 trillion early next month. Normally, the government more or less indirectly sells a large amount of Treasury securities to the Fed, which is technically a private entity, separate from the familiar government [...] -
Working Paper No. 677
The Global Crisis and the Remedial Actions
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 with globalized exposures for financial […] -
Working Paper No. 676
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 Enquête sur les Actifs Financiers with the 1989–90 Enquête Budget de Famille (BDF). The second match combines the 1998 General Social Survey (EDT) with the 1989–90 […] -
Working Paper No. 675
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 activity that no country or […] -
Working Paper No. 674
Institutional Prerequisites of Financial Fragility within Minsky’s Financial Instability Hypothesis
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, some authors have also emphasized […] -
Blog
Should the Dollar Remain Independent of Gold?
(Click figure to enlarge it.) Some “gold bugs” advocate a return to the gold standard, which the United States officially abandoned in the early 1970s. The annual data in the chart above show that the price of gold has risen sharply in both euros and yen since 1999. Meanwhile, the dollar itself has fallen against [...] -
One-Pager No. 10Will the Recovery Continue?
With quantitative easing winding down and the latest payroll tax-cut measures set to expire at the end of this year, pressing questions loom about the current state of the US economic recovery and its ability to sustain itself in the absence of support from monetary and fiscal policy. -
Working Paper No. 673
Effective Demand in the Recent Evolution of the US Economy
We present strong empirical evidence favoring the role of effective demand in the US economy, in the spirit of Keynes and Kalecki. Our inference comes from a statistically well-specified VAR model constructed on a quarterly basis from 1980 to 2008. US output is our variable of interest, and it depends (in our specification) on (1) […]