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1657 publications found
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Working Paper No.505
10 July 2007
Implementation of the National Rural Employment Guarantee Act in India
AbstractSince its enactment in 2005, the National Rural Employment Guarantee Act (NREGA) has been implemented in 200 districts in India. Based on state-by-state employment demand-supply data and the use of funds released under NREGA, it is found that, although it is a demand-driven scheme, there are significant interstate differences in the supply of employment. The supply falls far short of demand, particularly in low-income states, where the organizational capacity to implement the scheme is limited. It is also noted that the NREGA-induced fiscal expansion has not contributed to higher fiscal imbalances. The consolidation of other public employment programs into NREGA has actually kept the total allocation of funds by the central government at a level no higher than those reached in the fiscal years 2002–03 to 2005–06. The NREGA fund utilization ratio varies widely across states and is abysmally low in the poorer states. Since the flow of resources to individual states is based on approved plans outlining employment demand, it may turn out to be regressive for the poorer states with low organizational capacity in terms of planning and management of the schemes, especially labor demand forecasting.
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Working Paper No.504
05 July 2007
Female Land Rights, Crop Specialization, and Productivity in Paraguayan Agriculture
AbstractPrevious work has shown a pattern of lower household incomes for those Paraguayan farms with female landowners in the household. The study of agricultural production reveals that Paraguayan women specialize in livestock and dairy production, while men specialize in crop production. An analysis of crop specialization and crop yields finds no significant differences in yields among households along gender lines, although women appear to specialize in food crops. Finally, households with female land rights have markedly lower rates of return on agricultural production.
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Public Policy Brief No.90
03 July 2007
Cracks in the Foundations of Growth
AbstractWith economic growth having cooled to less than 1 percent in the first quarter of 2007, the economy can ill afford a slump in consumption by the American household. But it now appears that the household sector could finally give in to the pressures of rising gasoline prices, a weakening home market, and a large debt burden. The signals are still mixed; for example, while April’s retail sales numbers caused concern, May’s were much improved, and so was the ISM manufacturing index for June. Consumption growth indicates a slowdown. This Public Policy Brief examines the American household and its economic fortunes, concentrating on how falling home prices might hamper economic growth, generate social dislocations, and possibly lead to a full-blown financial crisis.
Download Public Policy Brief No. 90, 2007 PDF (367.52 KB) -
Working Paper No.503
26 June 2007
A Simplified “Benchmark” Stock-flow Consistent (SFC) Post-Keynesian Growth Model
AbstractDespite being arguably one of the most active areas of research in heterodox macroeconomics, the study of the dynamic properties of stock-flow consistent (SFC) growth models of financially sophisticated economies is still in its early stages. This paper attempts to offer a contribution to this line of research by presenting a simplified Post-Keynesian SFC growth model with well-defined dynamic properties, and using it to shed light on the merits and limitations of the current heterodox SFC literature.
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Working Paper No.502
08 June 2007
Recent Trends in Household Wealth in the United States
AbstractI find here that the early 2000s witnessed both exploding debt and the middle-class squeeze. While median wealth grew briskly in the late 1990s, it fell slightly between 2001 and 2004, while the inequality of net worth increased slightly. Indebtedness, which fell substantially during the late 1990s, skyrocketed in the early 2000s. Among the middle class, the debt-to-income ratio reached its highest level in 20 years. The concentration of investment-type assets generally remained as high in 2004 as during the previous two decades. The racial and ethnic disparity in wealth holdings, after stabilizing during most of the 1990s, widened in the years between 1998 and 2001, but then narrowed during the early 2000s. Wealth also shifted in relative terms, away from young households (particularly those under age 35) and toward those in the 55–64 age group.
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Working Paper No.500
20 May 2007
Economic Perspectives on Aging
AbstractThe aging of the American population will be a critical public policy issue in the years ahead. This paper surveys the recent literature on the economics of aging, with a special emphasis on government spending on the aged. The US Census Bureau projects that the proportion of the elderly in the total population will increase while the proportion of the working-age population will decline. This demographic shift implies a significant growth in the number of beneficiaries of major federal entitlement programs. Existing rules and escalating health care costs are expected to lead to fiscal pressures and to pose challenges for economic growth. The paper offers the author’s assessment of the forces that determine government spending on retirees. It also examines how the retirement and health care of older citizens might be financed, and measures the potential impact of different reform proposals. Finally, it provides an introduction to an edited volume, Government Spending on the Elderly.
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Policy Notes
17 May 2007
State, Difference, and Diversity
AbstractThe centrality of the state in promoting gender
equality is generally acknowledged, but a perplexing and complex issue confronts
us: should the state treat men and women in identical ways, or should it
legislate and enforce policies that are aware of gender differences? In other
words, should the state be gender-blind or gender-sensitive? Gender, ethnic,
religious, sexual orientation, ideological, economic, political, and cultural
dimensions represent diversity among citizens. This paper argues that if the
goal of the state is to promote democratic participation for all, a distinction
must be drawn between socioeconomic characteristics that signify difference and
those that manifest inequalities. The former require a politics of acceptance
and recognition and policies to match, leading to equal treatment for all
despite differences, while the latter necessitate interventions that remedy or
remove structural elements that result in inequalities. The authors suggest that
such a framework is useful in that it lends itself to a better understanding of
gender-based asymmetries. -
Working Paper No.499
14 May 2007
ELR-led Economic Development
AbstractThis paper establishes the financial feasibility of an employer-of-last-resort (ELR) program in a small developing country like Tunisia. It argues that an ELR-led economic development policy is vastly superior to the traditional import substitution industrialization (ISI), export-led, and FDI-led development models, all of which Tunisia has adopted without much success in reducing unemployment. Despite outperforming its peers in terms of macroeconomic stability, Tunisia’s official unemployment rate still hovers around 15 percent, with two-thirds of first-time job seekers having university degrees. The paper demonstrates that a well-targeted ELR program can be gradually introduced over a six-year period to remedy this problem by reclaiming sovereignty over the country’s domestic monetary and fiscal policies under a floating exchange rate regime. The estimated ELR net wage bill would be around 2.7 percent of GDP; however, spending by ELR workers would offset program costs, and the net effect on GDP would be an increase of about 3.6 percent. The paper concludes by proposing a set of complementary policy reforms that must accompany an ELR program to ensure long-term growth sustainability along with full employment and price stability.
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Working Paper No.498
09 May 2007
Employment Guarantee Programs
AbstractThis working paper provides a survey of the theoretical underpinnings for the various employment guarantee schemes, and discusses full employment policy experiences in the United States, Sweden, India, Argentina, and France. The theoretical and policy developments are delineated in a historical context. The paper concludes by identifying some questions that still need to be addressed in the context of the global political economy.
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Working Paper No.496
01 May 2007
Gender Disparities in Employment and Aggregate Profitability in the United States
AbstractWe explore the relationships between aggregate profitability and women’s growing share of market work in the United States during the 1980s and 1990s. Using decomposition analysis and counterfactuals, we investigate whether the contribution of the declining wage share to the upswing in profitability was aided by the growing incorporation of women into the workforce. Results show that women helped to moderate the decline in the aggregate wage share. The counterfactuals suggest that the reduction in gender pay disparity overwhelmed the negative effect of women’s growing share of market work on the wage share. The decline in the wage share was driven primarily by distributional changes within the sectors rather than by changes in the composition of value added. In sectors where wage shares fell, however, women did not restrain the fall, indicating that the aggregate outcome was the net result of distinct sectoral trends in women’s employment.
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Research Project Report
30 April 2007
How Well Off Are America’s Elderly?
AbstractGiven the aging of the American population and the widening gap between rich and
poor—not to mention the controversy surrounding the future viability of Social
Security—the economic welfare of the elderly is an extremely topical issue.
This report provides a new look at America’s elderly, and shows that the official
measures drastically understate their level of economic well-being.The conventional measures of well-being do not adequately reflect income from
wealth and net government expenditures. Moreover, in the period from 1989 to
2001, there was an extraordinary increase in income from nonhome wealth, as
well as a widening gap in net government expenditures between the elderly and
nonelderly. Thus, on the basis of the Levy Institute Measure of Economic Well-Being,
which is a more comprehensive measure of income, the economic disadvantage
of the elderly relative to the nonelderly appears to be less severe. Nevertheless,
inequality has continued to widen within both groups.The results suggest that government policies and programs that favor the elderly
Download LIMEW Report, April 2007 PDF (2.93 MB)
over the nonelderly are misdirected. Rather than cutting back on these programs
or redirecting policy, however, the authors advocate the extension of similar
programs to the nonelderly, such as universal health care, as well as more
generous provisions for the nonelderly in existing social welfare programs. -
Working Paper No.495
30 April 2007
Gender Inequalities in Allocating Time to Paid and Unpaid Work
AbstractThis working paper analyzes paid and unpaid work-time inequalities among Bolivian
Download Working Paper No. 495 PDF (167.14 KB)
urban adults using time use data from a 2001 household survey. We identified
a gender-based division of labor characterized not so much by who does what type
of work but by how much work of each type they do. There is a trade-off between
paid and unpaid work, but this trade-off is only partial: women’s entry
into the labor market tends to result in a double shift of paid and unpaid work.
We also find very high levels of within-group inequality in the distributions
of paid and unpaid work-time for men and women, a sign that, beyond the sexual
division of labor, subgroup differentiation is also important. Using decompositions
of the inequality in the distribution of total time spent at work, we show that
gender plays an important role in determining the proportion of paid to unpaid
work done by individuals, but it plays a lesser role in determining the higher
total workload of some individuals relative to others. -
Strategic Analysis
30 April 2007
The US Economy: What’s Next?
AbstractThe collapse in the subprime mortgage market, along with multiple signals of distress in the broader housing market, has already drawn forth a large body of comment. Some people think the upheaval will turn out to be contagious, causing a major slowdown or even a recession later in 2007. Others believe that the turmoil will be contained, and that the US economy will recover quite rapidly and resume the steady growth it has enjoyed during the last four years or so.
Yet no participants in the public discussion, so far as we know, have framed their views in the context of a formal model that enables them to draw well-argued conclusions (however conditional) about the magnitude and timing of the impact of recent events on the overall economy in the medium term—not just the next few months.
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Working Paper No.494
29 April 2007
Fiscal Policy in a Stock-flow Consistent (SFC) Model
AbstractThis paper deploys a simple stock-flow consistent (SFC) model in order to examine various contentions regarding fiscal and monetary policy. It follows from the model that if the fiscal stance is not set in the appropriate fashion—that is, at a well-defined level and growth rate—then full employment and low inflation will not be achieved in a sustainable way. We also show that fiscal policy on its own could achieve both full employment and a target rate of inflation. Finally, we arrive at two unconventional conclusions: first, that an economy (described within an SFC framework) with a real rate of interest net of taxes that exceeds the real growth rate will not generate explosive interest flows, even when the government is not targeting primary surpluses; and, second, that it cannot be assumed that a debtor country requires a trade surplus if interest payments on debt are not to explode.
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Working Paper No.493
21 March 2007
State, Difference, and Diversity
AbstractShould the state treat men and women in identical ways, or should it
Download Working Paper No. 493 PDF (200.96 KB)
legislate and enforce policies that are aware of gender differences? In other
words, should the state be gender-blind or gender-sensitive? Gender, ethnic,
religious, sexual orientation, ideological, economic, political, and cultural
dimensions represent diversity among citizens. This paper argues that if the
goal of the state is to promote democratic participation for all, a distinction
must be drawn between socioeconomic characteristics that signify difference and
those that manifest inequalities. The former require a politics of acceptance
and recognition and policies to match, while the latter necessitate interventions that remedy or remove structural elements that result in inequalities. The authors suggest that
such a framework is useful in that it lends itself to a better understanding of
gender-based asymmetries. -
Working Paper No.492
02 March 2007
Are the Costs of the Business Cycle “Trivially Small”?
AbstractIn his presidential address to the American Economic Association, Robert Lucas claimed that the welfare costs of the business cycle in the United States equaled .05 percent of consumption. His calculation compared the utility of a representative consumer receiving actual per-capita consumption each year with that of a similar consumer receiving the expectation of consumption. To a risk-averse person, the latter path of consumption confers more utility, because it is less volatile. Applying Amartya Sen’s chooser-dependent preferences to a non-expected utility case, I will counter Lucas’s claim by arguing that people have different attitudes toward risk that is imposed and risk that is voluntarily taken on, and that policymakers, in carrying out public duties, must use sorts of reasoning different from those used by the optimizing consumers of neoclassical economic theory.
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Working Paper No.491
22 February 2007
Land Rental and Sales Markets in Paraguay
AbstractThis paper examines the claim that the land rental market can be an effective means of redistributing access to, if not ownership of, land to the rural poor, using Paraguay as our model. The land sales market is also examined. The land rental market in Paraguay’s rural areas is found to be very thin, due at least in part to a lack of available credit for inputs. Renting-in substantial amounts of land is found to contribute significantly to household per-capita income.
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Working Paper No.490
21 February 2007
Productivity, Technical Efficiency, and Farm Size in Paraguayan Agriculture
AbstractThis essay assesses the relationship between farm size and productivity. Both parametric and nonparametric methods are used to derive efficiency measures. Smaller farms are found to have higher net farm income per hectare, and to be more technically efficient, than larger farms.
Download Working Paper No. 490 PDF (621.06 KB) -
Working Paper No.489
31 January 2007
Fixed and Flexible Exchange Rates and Currency Sovereignty
AbstractThis paper provides an analysis of Keynes’s original “Bancor” proposal as well as
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more recent proposals for fixed exchange rates. We argue that these schemes fail to
pay due attention to the importance of capital movements in today’s economy, and
that they implicitly adopt an unsatisfactory notion of money as a mere medium of
exchange. We develop an alternative approach to money based on the notion of
currency sovereignty. As currency sovereignty implies the ability of a country to
implement monetary and fiscal policies independently, we argue that it is necessarily
contingent on a country’s adoption of floating exchange rates. As illustrations of the
problems created for domestic policy by the adoption of fixed exchange rates, we
briefly look at the recent Argentinean and European experiences. We take these as
telling examples of the high costs of giving up sovereignty (Argentina and the
European countries of the EMU) and the benefits of regaining it (Argentina). A
regime of more flexible exchange rates would have likely produced a more viable and
dynamic European economic system, one in which each individual country could
have adopted and implemented a mix of fiscal and monetary policies more suitable to
its specific economic, social, and political context. Alternatively, the euro area will
have to create a fiscal authority on par with that of the US Treasury, which means
surrendering national authority to a central government—an unlikely possibility in
today’s political climate. We conclude by pointing out some of the advantages of
floating exchange rates, but also stress that such a regime should not be regarded as a
sort of panacea. It is a necessary condition if a country is to retain its sovereignty and
the power to implement autonomous economic policies, but it is not a sufficient
condition for guaranteeing that such policies actually be aimed at providing higher
levels of employment and welfare. -
Public Policy Brief No.89
31 January 2007
The Economics of Outsourcing
AbstractAccording to Research Associate Thomas I. Palley, global outsourcing represents a new economic challenge that calls for a new set of institutions. In this brief, he expands upon the problems of offshore outsourcing as outlined in Public Policy Brief no. 86 and focuses on the microeconomic foundations. He argues that outsourcing is a central element of globalization that is best understood as a new form of competition. Palley urges policymakers to understand the economic basis of outsourcing in order to develop effective policies, and suggests that they focus on enhancing national competitiveness and establishing new rules that govern the nature of global competition.
Download Public Policy Brief No. 89, 2007 PDF (164.52 KB) -
Working Paper No.488
23 January 2007
Demand Constraints and Big Government
AbstractIn a series of articles and books, Harold Vatter and John Walker attempted to make the case that the American economy suffers from chronically insufficient demand that leads to growth below capacity. Of particular interest are a 1989 Journal of Post Keynesian Economics article that extends Domar’s work on the supply side effects of investment spending and a 1997 book that provides a comprehensive analysis of the evolution of the US "mixed" economy. Their analysis of secular growth complements the well-known writings of Hyman Minsky, who also emphasized the role of the "big government" and the "big bank" in stabilizing an unstable economy over the cycle. This article will summarize, provide support for, and extend the Vatter and Walker approach, concluding with an examination of some of the dangers facing the US economy today. As appropriate, the ideas of Minsky will be used to supplement the argument.
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Working Paper No.487
09 January 2007
Class Structure and Economic Inequality
AbstractExisting empirical schemas of class structure do not specify the capitalist class in an adequate manner. We propose a schema in which the specification of capitalist households is based on wealth thresholds. Individuals in noncapitalist households are assigned class locations based on their position in the labor process. The schema is designed to address the question of the relationship between class structure and overall economic inequality. Our analysis of the US data shows that class divisions among households, especially the large gaps between capitalist households and everyone else, contribute substantially to overall inequality.
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Policy Notes No.1
07 January 2007
The April AMT Shock
AbstractAnyone who reads a newspaper knows that most Americans have accumulated excessive levels of debt, and realizes that as interest rates climb, it becomes more difficult to service financial liabilities. To add insult to injury, wage growth has been slow, while prices—especially for energy—have risen sharply. What is not clear, however, is the fact that taxes have also been rising rapidly, relative to both income and government spending. In this Policy Note, we concentrate on the last issue, and argue that many middle-income earners will find themselves unprepared for the coming surprise in April.
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Book Series
27 December 2006
International Perspectives on Household Wealth
AbstractThe contributors to this comprehensive book compile and analyze the latest data available on household wealth using, as case studies, the United States, Canada, Germany, Italy, Sweden, and Finland during the 1990s and into the 21st century. The authors show that in the United States, trends are highlighted in terms of wealth holdings among the low-income population, along with changes in wealth polarization, racial differences in wealth holdings, and the dynamics of portfolio choices.
The consensus between the authors is that wealth inequality has generally risen among the OECD countries since the early 1980s, although Germany stands out as an exception. In the case of the United States, it is also noted that wealth holdings have generally failed to improve among low-income families and the racial wealth gap widened during the late 1980s.
International Perspectives on Household Wealth also contains new results on a number of topics, including measures and changes of wealth polarization in the United States, measurement and changes of portfolio span in the United States, asset holdings of low-income household in the United States, and the effects of parental resources on asset holdings in Chile.
Academic, government, and public policy economists in OECD countries, as well as those in the so-called middle-income countries around the world, will find much to engage them within this book. It will also appeal to academics and researchers of international and welfare economics and other social scientists interested in the issues of inequality.