Summary Fall 2021
This issue of the Summary features two Strategic Analyses, which are focused on the United States and Greece. In the report for the United States the likely impact of President Biden’s infrastructure and families plans is examined to highlight persistent structural weaknesses that continue to threaten the US economy’s stability; the report on the Greek economy examines the Greek experience to analyze its state of acute macrofinancial instability and evaluate different policy scenarios for the near term. A public policy brief urges the Biden administration to reconsider its commitment to the “pay-for” approach to budgeting for its social and physical infrastructure packages, while a policy note explains that corporate taxes are poorly suited to either containing inflationary pressures or reducing inequality. Continuing the Institute’s work on tracing the COVID-19 crisis’s impact on inequality, a second policy note assesses the importance of the “emergency benefit” (Auxílio Emergencial) in containing increases in poverty and extreme poverty in Brazil, and analyzes changes in poverty gaps based on race and gender. Working papers in this issue contribute to the literature on whether utilization is endogenous to demand in the long run by examining the potential determinants of capacity utilization over the period 1989–2019; examine the Keynesian nature of the relationship between the short- and long-term interest rate in new models that incorporate the Keynesian approach while allowing other macroeconomic factors, such as the central bank’s policy rate, inflation targets, and inflation expectations to have a role; compare the trajectory of the Souk al-Manakh, an over-the-counter market in Kuwait, to US markets today, where both featured historically low official interest rates and elevated moral hazard; discuss the important turning points in the evolution of Keynes’s business cycle theory; and assesses the fly-paper effects of ecological fiscal transfers in India.
INSTITUTE RESEARCH
The State of the US and World Economies
DIMITRI B. PAPADIMITRIOU, MICHALIS NIKIFOROS, and GENNARO ZEZZA, The Pandemic, the Stimulus, and the Future Prospects for the US Economy
DIMITRI B. PAPADIMITRIOU, CHRISTOS PIERROS, NIKOLAOS RODOUSAKIS, and GENNARO ZEZZA, Restarting the Greek Economy?
YEVA NERSISYAN and L. RANDALL WRAY, Can Biden Build Back Better?
LUIZA NASSIF PIRES, LUÍSA CARDOSO, and ANA LUÍZA MATOS DE OLIVEIRA,
Gender and Race in the Spotlight during the COVID-19 Pandemic: The Impact of the Emergency Benefit on Poverty and Extreme Poverty in Brazil
MICHALIS NIKIFOROS, The Endogeneity-to-Demand of the National Emergency Utilization Rate
Monetary Policy and Financial Structure
TANWEER AKRAM, Multifactor Keynesian Models of the Long-Term Interest Rate
TANWEER AKRAM, A Keynesian Approach to Modeling the Long-Term Interest Rate
FRANK VENEROSO and MARK PASQUALI, The Souk Al-Manakh: The Anatomy of a Pure Price-Chasing Bubble
PABLO GABRIEL BORTZ, Keynes’s Theories of the Business Cycle: Evolution and Contemporary Relevance
Economic Policy for the 21st Century
EDWARD LANE and L. RANDALL WRAY, Why President Biden Should Eliminate Corporate Taxes to Build Back Better
AMANDEEP KAUR, RANJAN KUMAR MOHANTY, LEKHA CHAKRABORTY, and DIVY RANGAN, Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analyzing the Flypaper Effects
INSTITUTE NEWS
Minsky Conference Video and Audio Available Online
Save the Date: Minsky Summer Seminar
Senior Scholar L. Randall Wray Wins Veblen–Commons Award