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Policy Notes No. 1

The Boy Who Cried Wolf About Government Debt

In a New York Times editorial, David Leonhardt recounts Aesop’s apocryphal story about the boy and the wolf, warning that while deficit hawks have so far been wrong, the growing government debt will eventually bite. He reports the economic plans of both presidential candidates would add to the debt that will soon exceed GDP and grow to 130 percent of annual output under a President Harris, or 140 percent with a Trump presidency. The story of the boy and the wolf was a fable, although it was within the realm of possibility. The fable of the debt wolf is not. While there are real world wolves—Leonhardt mentions climate catastrophe and autocratic leaders, and the authors would add rising inequality and the concentration of economic and political power in the hands of billionaires—authors Yeva Nersisyan and L. Randall Wray assert, federal debt is not one of them.

Working Paper No. 1057

Rise and Fall of Mexican Super Peso: Heterodox Perspective versus Orthodoxy

This working paper contrasts the neo-Keynesian and post-Keynesian theories of monetary policy for an open economy, highlighting the irrelevance of the orthodox theory and the explanatory capacity of heterodoxy for an emerging economy such as Mexico. It focuses on the role of the central bank and the case of the Mexican currency during the economic […]

Working Paper No. 1056

Federal Tax Transfers and Demographic Transition: Balancing Equity and Efficiency

Against the backdrop of demographic transition in India, the study highlights the necessity of integrating the elderly population as a critical factor in formula-based intergovernmental fiscal transfers. The demographic transition, characterized by an increasing elderly population, imposes unique fiscal challenges on states, necessitating a revision of transfer formulas to ensure equitable and efficient resource distribution. […]

Wray on DemystifySci: “Tally Sticks, Central Banks, Evolution of Money”

Listen to Senior Scholar L. Randall Wray on Demystify Sci Podcast #288. L. Randall Wray is a long-term proponent of Modern Monetary Theory, a heterodox macroeconomic theory that teaches that the government should not worry about accruing debt, because it is always able to print more money to service that debt.

Tcherneva on Marketplace: “Automation on the Waterfront”

Be sure to check out Institute President Pavlina R. Tcherneva‘s interview with Marketplace Morning Report, where she discusses the recent job openings and labor turnover data on the episode “Automation on the Waterfront.”  

Now Available Worldwide: Finding the Money

Now available worldwide, Finding the Money explores ideas and principles of MMT, following Scholar Stephanie Kelton. The documentary features other Levy Scholars, including L. Randall Wray, Matthew Forstater, Fadhel Kaboub, Pavlina R. Tcherneva, and others. An intrepid group of economists is on a mission to flip our understanding of the national debt – and the nature of […]

Tcherneva on WAMC Northeastern Public Radio: The 2024 Election and the Economy

The Roundtable Panel: a daily open discussion of issues in the news and beyond. Today’s panelists are Aaron Pacitti is Professor of Economics at Siena College, Pavlina Tcherneva is an American economist, working as professor of economics at Bard College. She is President of the Levy Economics Institute and an expert at the Institute for […]

Scholar Stephanie Kelton on The Weekly Show with Jon Stewart

On September 27, Levy Scholar Stephanie Kelton appeared on The Weekly Show Podcast with Jon Stewart to discuss government spending and deficits.  

New Scholarship in Institutional Economics

The Scholarship in Institutional Economics, established in memory of John F. Henry, is awarded to a student interested in research in political economy, historical and evolutionary analysis of modern market economies, and history of economic thought. Made possible by the generous donation of Charlene Heinen

New Scholarship in Gender Studies

The Scholarship in Gender Studies is awarded to a student showing academic promise and interest in incorporating gender awareness in the study of the macroeconomy. Awarded in memory of Nilüfer A. Cagatay.

Working Paper No. 1055

The Relation Between Budget Deficits and Growth: Complicated but Clear

This paper looks at the relationship between government budget deficits and the growth rate of GDP. While orthodox economic theory offers several reasons to believe that growing deficits might be associated with slower growth, and would ultimately be unsustainable, Keynesians assert that deficits could stimulate growth—at least in the short run—implying the relation between deficits […]

Recap: A Path to Inclusive Development, A Levy Institute Workshop in Gender Studies

On September 11–13, the Levy Institute, with generous support from The William and Flora Hewlett Foundation, convened A Path to Inclusive Development: Unpacking Gender Inequalities in Economic Theory and Policies. This was the fifth workshop in a series that began in 2016 exploring the integration of gender into economic analysis. Gathering 40 speakers from 17 countries, with […]