`

Search by

  • Report No.1 01 February 2003

    Report February 2003

    Levy Blog
    Abstract

    Despite the collapse in stock prices, consumers have taken advantage of rising property values and low interest rates to continue borrowing and spending; debt in the personal sector now stands at nearly 130 percent of disposable income. What will happen to the economy when this buildup comes to an end? Our latest Strategic Analysis assesses the ways in which the economy will be affected in future years by its burden of debt.

    Contents: Strategic Analysis: Is Personal Debt Sustainable? * Policy Note: The Big Fix: The Case for Public Spending. * New Working Paper topics include: Financial Policies and the Aggregate Productivity of the Capital Stock; Does the Stock of Money Have Any Causal Significance?; “New Consensus,” New Keynesianism, and the Economics of the “Third Way”; Is There an American Way of Aging?; Why the Tobin Tax Can Be Stabilizing; and the Persistence of Hardship over the Life Course. In Institute News: Announcement of a new research director and the Institute’s publication of Leon Levy’s The Mind of Wall Street.

    Download Volume 13, No. 1 PDF (183.86 KB)
  • Public Policy Brief Highlight No.71 04 January 2003

    Can Monetary Policy Affect the Real Economy?

    Philip Arestis and Malcolm Sawyer
    Abstract

    Central bankers and many economists have abandoned “activist” policies and monetarism and adopted in their place a new view of the role of monetary policy. This view draws on many of the tenets of more traditional theories of money—monetarism’s emphasis on inflation control and skepticism about the use of easy-money policies to permanently increase output, and the Keynesian view that the total stock of money is not an important driving force behind either inflation or unemployment—yet it also takes a dim view of democratic input to the policymaking process. This brief evaluates a premise subscribed to by most central bankers: that monetary policy can be effectively used to control inflation without any permanent sacrifice in the form of reduced income or job opportunities.

    Download Public Policy Brief Highlights No. 71A, 2003 PDF (114.37 KB)
  • Summary No.4 01 January 2003

    Summary Fall 2003

    W. Ray Towle
    Abstract

    A new Policy Note summarized under the Financial Markets and Monetary Policy program outlines Germany’s poor economic record since unification. Author J�rg Bibow warns that the "German disease" (protracted policy-inflicted domestic demand stagnation) and the threat of a deflationary spiral are spreading throughout the Economic and Monetary Union (EMU).

     

    Contents: Institute ResearchProgram: Distribution of Income and Wealth – Household Wealth, Public Consumption, and Economic Well-Being in the United States; Program: Financial Markets and Monetary Policy – Pushing Germany Off the Cliff Edge · Finance and Development: Institutional and Policy Alternatives to Financial Liberalization Theory · Is Europe Doomed to Stagnation? An Analysis of the Current Crisis and Recommendations for Reforming Macroeconomic Policymaking in Euroland · Financial Sector Reforms in Developing Countries, with Special Reference to Egypt · Macroeconomic Policies of the Economic and Monetary Union: Theoretical Underpinnings and Challenges; Program: Federal Budget Policy – The Conditions for a Sustainable US Recovery: The Role of Investment · How Long Can US Consumers Carry the Economy on Their Shoulders? · Reinventing Fiscal Policy · The Case for Fiscal Policy; Explorations in Theory and Empirical Analysis – Minsky’s Acceleration Channel and the Role of Money; Publications and Presentations – Publications and Presentations by Levy Scholars · Recent Levy Institute Publications

    Download Volume 12, No. 4 PDF (467.60 KB)
  • Summary No.3 01 January 2003

    Summary Summer 2003

    W. Ray Towle
    Abstract

    In a new Strategic Analysis, Distinguished Scholar Wynne Godley argues that personal debt levels in the United States cannot continue and that the country’s balance of payments deficit has largely been ignored by both the government and the public. Godley foresees an era of growth recession characterized by rising unemployment—and the risk of financial implosion.

    Contents:

    Information on the upcoming "International Perspectives on Household Wealth," a conference of The Levy Economics Institute of Bard College · The most recent Strategic Analysis ("The US Economy: A Changing Strategic Predicament," Wynne Godley) · Conference summary: "13th Annual Hyman P. Minsky Conference on the State of the US and World Economies." Working paper topics include The Levy Institute Measure of Economic Well-Being; Does Trade Promote Gender Wage Equity?; USWorkers’ Investment Decisions for Participant-Directed Defined Contribution Pension Assets; Mexicans Now, Italians Then: Intermarriage Patterns; The Nature and Role of Monetary Policy When Money Is Endogenous · Policy Note topics include Caring for a Large Geriatric Generation: The Coming Crisis in USHealth Care; Reforming the Euro’s Institutional Framework.

    Download Volume 12, No. 3 PDF (532.74 KB)
  • Summary No.2 01 January 2003

    Summary Spring 2003

    Levy Blog
    Abstract

    The latest Strategic Analysis by the Institute’s Macro-Modeling Team shows that the growth rate of private sector debt is unsustainable. The domestic economy is headed for a period of growth recession that can be offset only by a fiscal stimulus from the government sector, the authors say, and by increasing net export demand.

    Contents: The most recent Strategic Analysis (Dimitri B. Papadimitriou, Anwar M. Shaikh, Claudio H. Dos Santos, and Gennaro Zezza) · New Working Paper topics include: Income Dynamics of the Elderly, the Persistence of Hardship, the Causal Significance of the Stock of Money, the Economics of the “Third Way,” the Tobin Tax, Equity Prices under Asset and Debt Deflation, the Effectiveness of Monetary and Fiscal Policies, Testing for Financial Contagion, the Credibility of Monetary Policy · New Policy Note: The Case for Public Spending · New Research Associate

    Download Volume 12, No. 2 PDF (156.84 KB)
  • Summary No.1 01 January 2003

    Summary Winter 2003

    W. Ray Towle
    Abstract

    In this issue: Senior Scholar James K. Galbraith, in a new Policy Note, argues that conditions attached to an International Monetary Fund loan to Brazil are a form of blackmail that will deflate the Brazilian economy and lead to further loans until the private foreign sector is safely divested of its Brazilian holdings.

     

    Contents: Conference summary: "Economic Mobility in America and Other Advanced Countries" · Policy Note topics: Brazil and the Larger International Monetary Problem; European Integration and the "Euro Project" · Working paper topics include Inflation and Output-Gap Variability in the EMU, Financial Globalization, Credibility of EMS Interest Rate Policies, Threshold Effects in the US Budget Deficit · New Research Staff · Levy Institute-Shanghai Exchange · Upcoming Conference

    Download Volume 12, No. 1 PDF (121.14 KB)
  • Report No.4 01 December 2002

    Report December 2002

    Levy Blog
    Abstract

    An overview of the Institute’s recent conference “Economic Mobility in America and Other Advanced Countries” leads off this issue of the Report. The conference encompassed sessions on a range of issues, from the effect of education on intergenerational mobility to the persistence of hardship over the life cycle.

    Contents: Conference: “Economic Mobility in America and other Advanced Countries” * New Working Paper topics include: Polish and Italian Schooling Then, Mexican Schooling Now?; Race, Ethnicity, and the Gender-Poverty Gap; the Political Economy of the Euro; Managed Care, Physician Incentives, and Norms of Medical Practice; Should Banks Be Narrowed?; Threshold Effects in the US Budget Deficit; and Financial Globalization * Summaries of Policy Notes on Brazil and the Larger International Monetary Problem and European Integration and the “Euro Project” * New Chair of the Board of Governors * New research staff

    Download Volume 12, No. 4 PDF (943.69 KB)
  • Public Policy Brief Highlight No.70 04 November 2002

    Physician Incentives In Managed Care Organizations

    David J. Cooper and James B. Rebitzer
    Abstract

    This brief considers the interaction between physician incentive systems and product market competition in the delivery of medical services via managed care organizations. At the center of the analysis is the process by which health maintenance organizations (HMOs) assemble physician networks and the role these networks play in the competition for customers. The authors find that although physician practice styles respond to financial incentives, there is little evidence that HMO cost-containment incentives cause a discernable reduction in care quality. They propose a model of the managed care marketplace that solves for both physician incentive contracts and HMO product market strategies in an environment of extreme information asymmetry: physicians perceive the quality of care they offer perfectly and their patients do not perceive it at all.

    Download Public Policy Brief Highlights No. 70A, 2002 PDF (96.21 KB)
  • Public Policy Brief Highlight No.69 04 November 2002

    Should Banks Be “Narrowed”?

    Biagio Bossone
    Abstract

    In this brief, Biagio Bossone of the International Monetary Fund evaluates narrow banking from the perspective of modern theories of financial intermediation. These theories portray the status quo banking system as a solution to otherwise intractable problems of imperfect information, risk, and even moral hazard. The system’s characteristic coupling of liquid liabilities with illiquid assets—seen by some as an undesirable “mismatch”—in fact contributes greatly to the efficiency of the economy. Bossone argues that these efficiency gains outweigh the disadvantages associated with the existing legal framework.

    Download Public Policy Brief Highlights No. 69A, 2002 PDF (110.78 KB)
  • Report No.3 01 September 2002

    Report September 2002

    Levy Blog
    Abstract

    Newly released Congressional Budget Office figures show that the government’s fiscal stance in 2000 was tighter than at any time in the previous 40 years, with imbalances financed in recent years by dramatic increases in the level of private debt—a trend that cannot be sustained indefinitely. Summarized in this issue of the Report, the Institute’s latest Strategic Analysis assesses the likely implications of the coming adjustments in private borrowing for the economy as a whole.

    Contents: Strategic Analysis: Strategic Prospects and Policies for the US Economy * New Working Paper topics include: prospects for the renewal of the Community Reinvestment Act; an assessment of monetarism; asset prices, liquidity preference, and the business cycle; and state policies and growth. * Project Report: Economic Well-Being. * Also included are the names of new research associates and members of the Board of Governors.

    Download Volume 12, No. 3 PDF (28.23 MB)
  • Public Policy Brief Highlight No.68 04 August 2002

    Optimal CRA Reform

    Kenneth H. Thomas
    Abstract

    At issue in the debate over the renewal of the Community Reinvestment Act (CRA) of 1977 are the various yardsticks regulators use to judge whether individual institutions are meeting the credit and service needs of low- and moderate-income (LMI) communities. Based on careful examination of new CRA data and assessments of comments by selected stakeholders, the author concludes that if the new rules are to succeed, regulators will have to strike a careful balance between various competing interests vying to tip the balance of power in their favor. For example, to offset the effects of a possibly too-close relationship between industry and government agencies, the rules could mandate very explicit and objective measures of institutions’ lending performance. To relieve the burden of compliance, the rules could be simplified and pared down to their essentials. And to prevent banks from taking advantage of vulnerable members of LMI communities, rule makers could adopt strong measures against “predatory lending.”

    Download Public Policy Brief Highlights No. 68A, 2002 PDF (59.81 KB)
  • Report No.2 01 June 2002

    Report June 2002

    Levy Blog
    Abstract

    Included in this issue of the Report are summaries of the presentations made at the Institute’s Annual Hyman P. Minsky Conference; this year’s topic: "Recession and Recovery: Economic Policy in Uncertain Times."

    Contents: Conference: 12th Annual Hyman P. Minsky Conference on Financial Markets * Symposium: "New Directions in Research on Gender-Aware Macroeconomics and International Economics." * New Working Paper topics include: Dollarization in Argentina and Challenges to EMU Macropolicies

    Download Volume 12, No. 2 PDF (315.25 KB)
  • Conference Proceedings 25 April 2002

    12th Annual Hyman P. Minsky Conference on Financial Markets

    Levy Blog
    Abstract

    At the 12th annual Minsky conference, held at the Roosevelt Hotel in New York City on April 25, 2002, 100 participants from government, business, and the academy gathered to discuss the current state of the United States’ economy and its future direction. Many of the speakers advanced the notion that the recession was over, that it was one of the mildest on record, and that a moderate economic recovery was unfolding. Others, including Distinguished Scholar Wynne Godley, expressed doubts, pointing to a number of challenges ahead—for example, record-high private sector debt, waning profits, high financial leverages, outlandishly flexible accounting, current account deficits, and the bubble mentality. Finally, some presenters noted the strong underlying structure of the US economy and pro-growth economic policies that mitigated the impact of a number of shocks over a short period of time.

    These proceedings were published as part of the June 2002 Report.

    Download Conference Proceedings, April 25, 2002 PDF (315.25 KB)
  • Report No.1 01 March 2002

    Report March 2002

    Levy Blog
    Abstract

    The 1990s expansion was powered uniquely and exceptionally by a huge fall in net saving by the private sector. In a new Policy Note summarized in this issue, Distinguished Scholar Wynne Godley argues that the public sector must now step in and be the new motor that drives the economy.

    Contents: Editorials: "Shouldering Governmental Responsibility" (L. Randall Wray) and "The Economy and the Need for Action" (James K. Galbraith) * New Policy Note: Kick-Start Strategy Fails to Fire Sputtering US Economic Motor * New Working Paper topics include: Inter vivos transfers, a Hicksian concept of income, and Immigrant-to-native wage ratios.

    Download Volume 12, No. 1 PDF (234.32 KB)
  • Summary No.4 01 January 2002

    Summary Fall 2002

    W. Ray Towle
    Abstract

    New Working Papers summarized in this issue include an examination of racial and ethnic differentiation in gender inequality, a proposal for a poverty measure that considers household wealth together with income, and a study of the probable impact of the United Kingdom’s adoption of the euro. An analysis of "narrow" banking by the IMF’s Biagio Bossone concludes that it deprives the economy of key functions and diminishes the benefits of conventional banking.

    Contents: Working paper topics include US Ethnic School Attainments across Generations; Race, Ethnicity, and the Gender-Poverty Gap; Asset Poverty in the United States; Challenges to Economic and Monetary Union Macropolicies; Can Monetary Policy Affect the Real Economy? The Euro, Public Expenditure, and Taxation; and Managed Care, Physician Incentives, and Norms of Medical Practice · Levy Institute News: New Research Staff

    Download Volume 11, No. 4 PDF (206.87 KB)
  • Summary No.2 01 January 2002

    Summary Spring–Summer 2002

    W. Ray Towle
    Abstract

    This double issue begins with an account of an international symposium on gender-aware macroeconomics, held at the Levy Institute in May, and includes an overview of the Institute’s 12th Annual Hyman P. Minsky Conference on Financial Markets.

     

    Contents: Summaries of events include the 12th annual Hyman P. Minsky conference and a symposium on gender-aware economics · The most recent issue of Strategic Analysis (Wynne Godley and Alex Izurieta) · Working paper topics: Immigrant-to-native wage ratios, dollarization in Argentina, the 25th anniversary of the CRA, the warrented growth rate, a Hicksian definition of income, a historical examination of monetarism, and asset prices and the business cycle · New Book · New Board Members · New Research Associates · Upcoming Conference

    Download Volume 11, No. 2–3 PDF (1.10 MB)
  • Summary No.1 01 January 2002

    Summary Winter 2002

    W. Ray Towle
    Abstract

    This Summary begins with Senior Scholar James K. Galbraith’s analysis of a very topical issue—the war economy.

     

    Contents: New issue of Strategic Analysis (Wynne Godley and Alex Izurieta) · Policy Notes: The War Economy (Galbraith); Hard Times, Easy Money? Countercyclical Stabilization in an Uncertain Economy (Carpenter); Are We All Keynesians (Again)? (Papadimitriou and Wray) · Working Paper topics: Inter vivos transfers; monetary policies of the European Central Bank; economic sociology; incentives in HMOs · New Book · New Research Staff · Call for Papers

    Download Volume 11, No. 1 PDF (175.77 KB)
  • Report No.4 01 December 2001

    Report December 2001

    Levy Blog
    Abstract

    The United States is in the early stages of a recession that could be as deep and intractable as any since the Second World War, with serious consequences for the rest of the world. In his editorial for this issue of the Report, Distinguished Scholar Wynne Godley argues that the situation can be remedied, but only if there are large changes in policy, in the United States and elsewhere.

    Contents: Editorial: "Recession USA" (Wynne Godley) * New Policy Notes: The New Old Economy; The War Economy; Hard Times, Easy Money?; Are We All Keynesians (Again)? * New Working Paper topics include: Central bank independence; institutions and European unemployment; common currency and fiscal policy; uncertainty, conventional behavior, and economic sociology; incentives in HMOs

    Download Volume 11, No. 4 PDF (112.61 KB)
  • Public Policy Brief Highlight No.67 04 November 2001

    The Economic Consequences of German Unification

    Jörg Bibow
    Abstract

    Although the costs associated with moving an antiquated socialist economy toward its capitalist counterpart was anticipated to be significant, German industrial efficiency was expected to quickly overcome any challenges. Things turned out rather differently. Conventional wisdom blamed poor economic performance on unification. The government and the Bundesbank therefore put in place fiscal and monetary policies aimed at reducing borrowing and, in turn, containing the threat of inflation. The positive results (albeit in five years) supported this perception. The author of this brief, however, takes exception to the notion that these policies were effective in stabilizing the economy. His analysis shows that the country’s poor economic performance dramatically dampened economic activity and led to an extended period of sluggish growth. Blame for anemic growth and high unemployment, he believes, should be placed squarely on the country’s finance department and central bank rather than on unification.

    Download Public Policy Brief Highlights No. 67A, 2001 PDF (104.92 KB)
  • Public Policy Brief Highlight No.66 04 November 2001

    Racial Wealth Disparities

    Edward N. Wolff
    Abstract

    Despite decades of policies aimed at improving the economic position of African Americans in terms of relative income and earnings, they remain substantially behind whites. The research presented in this brief indicates that the wealth gap is even more staggering. Following families over time in order to understand racial differences in the sources and patterns of wealth accumulation, Senior Scholar Edward N. Wolff finds that African Americans would have gained significant ground relative to whites in the past 30 years if they had inherited similar amounts, comparable levels of family income, and more similar portfolio compositions. Therefore, even if the income gap between whites and African Americans were immediately eliminated, it may take another two generations for the wealth gap to close. However, certain policies could help speed up the process.

    Download Public Policy Brief Highlights No. 66A, 2001 PDF (81.50 KB)
  • Report No.3 01 September 2001

    Report September 2001

    Levy Blog
    Abstract

    In remarks delivered at the Levy Institute’s recent conference on educational policy, summarized in this issue, Bard College President Leon Botstein stated that schools will never function well if the general culture does not express an excitement and joy about learning. Botstein stressed the need for afterschool programs, which provide a more peer-supported environment that can instill a motivation to learn.

    Contents: Conferences: "What Has Happened to the Quality of Life in America and Other Advanced Industrialized Nations?" and "After the Bell: Education Solutions outside the School" * New Working Paper topics include: The economics of German unification, the new multiracial categories contained in the 2000 Census, and the polarization of wealth in the United States * Four new Policy Notes

    Download Volume 11, No. 3 PDF (371.76 KB)
  • Public Policy Brief Highlight No.65 04 August 2001

    Easy Money through the Back Door

    Jörg Bibow
    Abstract

    This brief assesses the experiences of Europe’s policy regime in the two years since the introduction of the euro in 1999, particularly the performance of the European Central Bank (ECB), the institution in charge of conducting monetary policy for the euro area. Conventional accounts of European growth, price, and labor market performance over recent years focus on labor market institutions and wage trends. By contrast, the interpretation offered here assigns a key role to demand-side factors as the driving force behind the recovery in output and employment growth. It is argued that the euro’s plunge essentially resumed the trend of deutsche mark weakness that had started in 1996 and that currency depreciation amounted to a significant easing of monetary conditions.

    Download Public Policy Brief Highlights No. 65A, 2001 PDF (63.90 KB)
  • Public Policy Brief Highlight No.64 04 June 2001

    Campaign Contributions, Policy Decisions, and Election Outcomes

    Christopher Magee
    Abstract

    Proposals for campaign finance reform are essentially based on the belief that political influence can be bought with financial donations to a candidate’s campaign. But do contributions really influence the decisions of legislators once they are in office? In this brief, Christopher Magee examines the link between campaign donations and legislators’ actions. His results suggest that political action committees donate campaign funds to challengers in order to affect the outcome of the election by increasing the challenger’s chances of winning. These contributions have a large effect on the election outcome but do not seem to affect challengers’ policy stances. In contrast, campaign contributions to incumbents do not raise their chances of being reelected and seem to be given with the hope of gaining influence.

    Download Public Policy Brief Highlights No. 64A, 2001 PDF (18.48 KB)
  • Report No.2 01 June 2001

    Report June 2001

    Levy Blog
    Abstract

    At the Annual Hyman P. Minsky Conference, summarized in this issue, participants discussed changes in the financial structure and their impact on the financial market and on policy, the current state of the American economy and the ability of monetary and/or fiscal policy to stem what appears to be a slowdown, and the causes of and cures for global financial crises.

    Contents: 11th Annual Hyman P. Minsky Conference on Financial Structure, "Can the Financial Structure Avert an Economic Downturn?" * New Working Papers: The Causes of Euro Instability * Endogenous Money in a Coherent Stock-flow Framework * Making EMU Work * Part-year Operation in 19th-century American Manufacturing

    Download Volume 11, No. 2 PDF (187.75 KB)