Public Policy Brief Highlights | December 2009
Can Euroland Survive? Social unrest across Europe is growing as Euroland’s economy collapses faster than the United States’, the result of falling exports and a weaker fiscal response. The controversial title of this brief is based on a belief that the nature of the euro itself limits Euroland’s fiscal policy space. [more]
Public Policy Brief Highlights No. 106A, 2009

Public Policy Brief Highlights | November 2009
It Isn't Working: Time for More Radical Policies The Obama administration has had a lot to deal with in its first few months in office. Unfortunately, like the Bush administration before it, the Obama team appears to be trying to re-create the bubbly financial conditions that led to disaster. [more]
Public Policy Brief Highlights No. 105A, 2009

Public Policy Briefs | November 2009
Can Euroland Survive? Social unrest across Europe is growing as Euroland’s economy collapses faster than the United States’, the result of falling exports and a weaker fiscal response. The controversial title of this brief is based on a belief that the nature of the euro itself limits Euroland’s fiscal policy space. [more]
Public Policy Brief No. 106, 2009

Public Policy Briefs | October 2009
It Isn’t Working: Time for More Radical Policies The Obama administration has implemented several policies to “jump-start” the American economy—efforts that have largely focused on preserving the financial interests of major banks. The authors of this new policy brief believe that maintaining the status quo is not the solution, since it overlooks the debt problems of households and nonfinancial businesses—and re-creating the financial conditions that led to disaster will simply set the stage for a recurrence of the Great Depression or a Japanese-style “lost decade. [more]
Public Policy Brief No. 105, 2009

Working Papers | October 2009
An Alternative View of Finance, Saving, Deficits, and Liquidity This paper contrasts the orthodox approach with an alternative view on finance, saving, deficits, and liquidity. The conventional view on the cause of the current global financial crisis points first to excessive United States trade deficits that are supposed to have “soaked up” global savings. [more]
Working Paper No. 580

Policy Notes | October 2009
Banks Running Wild: The Subversion of Insurance by “Life Settlements” and Credit Default Swaps Oblivious to any lessons that might have been learned from the global financial mess it has created, Wall Street is looking for the next asset bubble. Perhaps in the market for death it has found a replacement for the collapsed markets in subprime mortgage–backed securities and credit default swaps (CDSs). [more]
Policy Note 2009/9

Working Papers | September 2009
Money Manager Capitalism and the Global Financial Crisis This paper applies Hyman Minsky’s approach to provide an analysis of the causes of the global financial crisis. Rather than finding the origins in recent developments, this paper links the crisis to the long-term transformation of the economy from a robust financial structure in the 1950s to the fragile one that existed at the beginning of this crisis in 2007. [more]
Working Paper No. 578

Working Papers | April 2009
The Social and Economic Importance of Full Employment Unemployment was singled out by John Maynard Keynes as one of the principle faults of capitalism; the other is excessive inequality. Obviously, there is some link between these two faults: since most people living in capitalist economies must work for wages as a major source of their incomes, the inability to obtain a job means a lower income. [more]
Working Paper No. 560

Public Policy Brief Highlights | April 2009
The Return of Big Government In the current global financial crisis, economists and policymakers have reembraced Big Government as a means of preventing the reoccurrence of a debt-deflation depression. The danger, however, is that policy may not downsize finance and replace money manager capitalism. [more]
Public Policy Brief Highlights No. 99A, 2009

Public Policy Briefs | March 2009
The Return of Big Government: Policy Advice for President Obama In the current global financial crisis, economists and policymakers have reembraced Big Government as a means of preventing the reoccurrence of a debt-deflation depression. The danger, however, is that policy may not downsize finance and replace money manager capitalism. [more]
Public Policy Brief No. 99, 2009

Public Policy Brief Highlights | February 2009
The Case Against Intergenerational Accounting: The Accounting Campaign Against Social Security and Medicare The Federal Accounting Standards Advisory Board (FASAB) has proposed subjecting the entire federal budget to “intergenerational accounting”—which purports to calculate the debt burden our generation will leave for future generations—and is soliciting comments on the recommendations of its two “exposure drafts.” The authors of this brief find that intergenerational accounting is a deeply flawed and unsound concept that should play no role in federal government budgeting, and that arguments based on this concept do not support a case for cutting Social Security or Medicare. [more]
Public Policy Brief Highlights No. 98A, 2009

Public Policy Briefs | February 2009
The Case Against Intergenerational Accounting: The Accounting Campaign Against Social Security and Medicare The Federal Accounting Standards Advisory Board (FASAB) has proposed subjecting the entire federal budget to “intergenerational accounting”—which purports to calculate the debt burden our generation will leave for future generations—and is soliciting comments on the recommendations of its two “exposure drafts.” The authors of this brief find that intergenerational accounting is a deeply flawed and unsound concept that should play no role in federal government budgeting, and that arguments based on this concept do not support a case for cutting Social Security or Medicare. [more]
Public Policy Brief No. 98, 2009

Policy Notes | November 2008
Time to Bail Out: Alternatives to the Bush-Paulson Plan While serving as chairman of the Federal Reserve Board, Alan Greenspan advocated unsupervised securitization, subprime lending, option ARMs, credit-default swaps, and all manner of financial alchemy in the belief that markets “work” to reduce and spread risk, and to allocate it to those best able to assess and bear it—in his view, markets would stabilize in the absence of nasty government intervention. But as Greenspan now admits, he could never have imagined the outcome: a financial and economic crisis of biblical proportions. [more]
Policy Note 2008/6

Public Policy Brief Highlights | October 2008
The Commodities Market Bubble In a new public policy brief, Senior Scholar L. Randall Wray shows how money manager capitalism—characterized by highly leveraged funds seeking maximum returns in an environment that systematically underprices risk—has destabilized one asset class after another, with commodities being simply the latest. [more]
Public Policy Brief Highlights No. 96A, 2008

Public Policy Briefs | October 2008
The Commodities Market Bubble Money manager capitalism—characterized by highly leveraged funds seeking maximum returns in an environment that systematically underprices risk—has resulted in a series of boom-and-bust cycles in equities, real estate, and commodities. Because subsequent cycles have been increasingly damaging to the broader economy, we are now at the point where we are experiencing the most severe financial crisis since the Great Depression. [more]
Public Policy Brief No. 96, 2008

Working Papers | September 2008
Macroeconomics Meets Hyman P. Minsky Expanding on an approach developed by financial economist Hyman Minsky, the authors present an alternative to the standard “efficient markets hypothesis”—the relevance of which Minsky vehemently denied. Minsky recognized that, in a modern capitalist economy with complex, expensive, and long-lived assets, the method used to finance asset positions is of critical importance, both for theory and for real-world outcomes—one reason his alternate approach has been embraced by Post Keynesian economists and Wall Street practitioners alike. [more]
Working Paper No. 543

Policy Notes | August 2008
What's a Central Bank to Do? As homeowner equity continues to disappear, there is a growing consensus that losses on all mortgages will exceed $1 trillion, with financial losses spreading far beyond real estate. Mortgage rates are spiking and, more generally, interest rate spreads remain wide, as financial players shun private debt in the rush to safe Treasury securities. [more]
Policy Note 2008/3

Policy Notes | June 2008
Securitization “At the annual banking structure and competition conference of the Federal Reserve Bank of Chicago in May 1987, the buzzword heard in the corridors and used by many of the speakers was ‘that which can be securitized, will be securitized.’” So notes Hyman Minsky in a prescient memo on the nature, and the implications, of securitization, written 20 years before an explosion in the securitization of home mortgages helped create the current financial crisis. [more]
Policy Note 2008/2

Public Policy Brief Highlights | April 2008
Financial Markets Meltdown: What Can We Learn from Minsky? According to Senior Scholar L. Randall Wray, the current crisis in financial markets can be traced back to securitization (the “originate and distribute” model), leverage, the demise of relationship-based banking, and a dizzying array of extremely complex instruments that—quite literally—only a handful understand. [more]
Public Policy Brief Highlights No. 94A, 2008

Public Policy Briefs | April 2008
Financial Markets Meltdown In this new Public Policy Brief, Senior Scholar L. Randall Wray explains today’s complex and fragile financial system, and how the seeds of crisis were sown by lax oversight, deregulation, and risky innovations such as securitization. [more]
Public Policy Brief No. 94, 2008

Working Papers | December 2007
Lessons from the Subprime Meltdown This paper uses Hyman P. Minsky’s approach to analyze the current international financial crisis, which was initiated by problems in the American real estate market. [more]
Working Paper No. 522

Working Papers | November 2007
Public Employment and Women In 2002, Argentina implemented a large-scale public employment program to deal with the latest economic crisis and the ensuing massive unemployment and poverty. The program, known as Plan Jefes, offered part-time work for unemployed heads of households, and yet more than 70 percent of the people who turned up for work were women. [more]
Working Paper No. 519

Working Papers | September 2007
Minsky’s Approach to Employment Policy and Poverty While Hyman P. Minsky is best known for his work on financial instability, he was also intimately involved in the postwar debates about fiscal policy and what would become the War on Poverty. [more]
Working Paper No. 515

Working Papers | September 2007
The Continuing Legacy of John Maynard Keynes This working paper examines the legacy of Keynes’s General Theory of Employment, Interest, and Money (1936) on the occasion of the 70th anniversary of its publication and the 60th anniversary of Keynes’s death. The paper incorporates some of the latest research by prominent followers of Keynes, presented at the 9th International Post Keynesian Conference in September 2006. [more]
Working Paper No. 514

Working Papers | September 2007
Endogenous Money While the mainstream long argued that the central bank could use quantitative constraints as a means to controlling the private creation of money, most economists now recognize that the central bank can only set the overnight interest rate—which has only an indirect impact on the quantity of reserves and the quantity of privately created money. Indeed, in order to hit the overnight rate target, the central bank must accommodate the demand for reserves, draining the excess or supplying reserves when the system is short. [more]
Working Paper No. 512

Working Papers | August 2007
A Post-Keynesian View of Central Bank Independence, Policy Targets, and the Rules-versus-Discretion Debate This paper addresses three issues surrounding monetary policy formation: policy independence, choice of operating targets, and rules versus discretion. According to the New Monetary Consensus, the central bank needs policy independence to build credibility; the operating target is the overnight interbank lending rate, and the ultimate goal is price stability. [more]
Working Paper No. 510

Working Papers | January 2007
Fixed and Flexible Exchange Rates and Currency Sovereignty This paper provides an analysis of Keynes’s original “Bancor” proposal as well as 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. [more]
Working Paper No. 489

Working Papers | January 2007
Demand Constraints and Big Government In 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 U. [more]
Working Paper No. 488

Policy Notes | January 2007
The April AMT Shock Anyone 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. [more]
Policy Note 2007/1

Working Papers | August 2006
Global Demographic Trends and Provisioning for the Future The world's population is aging. Virtually no nation is immune to this demographic trend and the challenges it brings for future generations. [more]
Working Paper No. 468

Working Papers | July 2006
Banking, Finance, and Money This paper briefly summarizes the orthodox approach to banking, finance, and money, and then points the way toward an alternative based on socioeconomics. It argues that the alternative approach is better fitted to not only the historical record, but also sheds more light on the nature of money in modern economies. [more]
Working Paper No. 459

Policy Notes | July 2006
The Burden of Aging Demographers and economists agree that we are aging—individually and collectively, nationally and globally. An aging population results from the twin demographic forces of fewer children per family and longer lives. [more]
Policy Note 2006/5

Working Papers | May 2006
Extending Minsky’s Classifications of Fragility to Government and the Open Economy Minsky’s classification of fragility according to hedge, speculative, and Ponzi positions is well-known. He wrote about fragile positions of individual firms and of the economy as a whole, with the economy transitioning naturally from a robust financial structure (dominated by hedge units) to a fragile structure (dominated by speculative units). [more]
Working Paper No. 450

Public Policy Briefs | May 2006
Can Basel II Enhance Financial Stability? Even as the United States enjoys an economic expansion, there is an undercurrent of concern among economic analysts who follow financial markets. Some feel that the expansion of the credit derivatives markets poses the threat of a crisis similar to the Long-Term Capital Management debacle of 1998. [more]
Public Policy Brief No. 84, 2006

Public Policy Brief Highlights | May 2006
Can Basel II Enhance Financial Stability? Even as the United States enjoys an economic expansion, there is an undercurrent of concern among economic analysts who follow financial markets. Some feel that the expansion of the credit derivatives markets poses the threat of a crisis similar to the Long-Term Capital Management debacle of 1998. [more]
Public Policy Brief Highlights No. 84A, 2006

Policy Notes | April 2006
Twin Deficits and Sustainability In the mid-to-late 1980s, the American economy simultaneously produced—for the first time in the postwar period—huge federal budget deficits as well as large current account deficits, together known as the “twin deficits”. This generated much debate and hand-wringing, most of which focused on supposed “crowding-out” effects. [more]
Policy Note 2006/3

Letters to the Editor | February 2006
The balance of trade, not payments, is true measure of a deficit's effects Copyright 2005 The Financial Times Limited (London, England)
Wednesday, February 15, 2006; Financial Times; USA [more]
Letter to the Editor, February 2006

Working Papers | January 2006
Keynes's Approach to Money This paper first examines two approaches to money adopted by John Maynard Keynes in his General Theory (GT). The first is the more familiar “supply and demand” equilibrium approach of Chapter 13 incorporated within conventional macroeconomics textbooks. [more]
Working Paper No. 438

Working Papers | November 2005
Monetary Policy Strategies of the European Central Bank and the Federal Reserve Bank of the U.S. In the debate on monetary policy strategies on both sides of the Atlantic, it is now almost a commonplace to contrast the Fed and the ECB by pointing out the former’s flexibility and capacity to adjust rigidity, and the latter’s extreme caution and its obsession with low inflation. In looking at the foundations of the two banks’ strategies, however, we do not find differences that can provide a simple explanation for their divergent behavior, nor for the very different economic performance in the United States and in Euroland in recent years. [more]
Working Paper No. 431

Policy Notes | September 2005
Social Security's 70th Anniversary Social Security turned 70 on August 14, although no national celebration marked the occasion. Rather, our top policymakers in Washington continue to suggest that the system is “unsustainable. [more]
Policy Note 2005/6

Letters to the Editor | September 2005
Fed can handle reserves to keep U.S. rates on target Copyright 2005 The Financial Times Limited (London, England)
Wednesday, September 21, 2005; Financial Times; USA [more]
Letter to the Editor, September 21, 2005

Public Policy Briefs | August 2005
The Ownership Society As his new term begins, President George W. Bush has been trying to focus his domestic agenda on what he calls the “ownership society,” a sweeping vision of an America in which more citizens would hold significant assets and be free to make their own choices about providing for their health care and retirement, and educating their children. [more]
Public Policy Brief No. 82, 2005

Public Policy Brief Highlights | August 2005
The Ownership Society As his new term begins, President George W. Bush has been trying to focus his domestic agenda on what he calls the “ownership society,” a sweeping vision of an America in which more citizens would hold significant assets and be free to make their own choices about providing for their health care and retirement, and educating their children. [more]
Public Policy Brief Highlights No. 82A, 2005

Policy Notes | February 2005
Manufacturing a Crisis For seven decades, the far right has never veered from its avowed mission to gut America’s most comprehensive, successful, and popular safety net: Social Security. While it had won a few small battles (most notably, the Greenspan Commission’s huge 1983 payroll tax hikes and two-year increase in the normal retirement age), its efforts never gained much political traction before 2000. [more]
Policy Note 2005/2

Public Policy Briefs | December 2004
The Fed and the New Monetary Consensus The most charitable interpretation of the Federal Reserve’s recent interest rate hikes is that they appear to have been premature. A convincing array of data on payrolls, employment-to-population ratios, and other labor market indicators show that the current recovery has not yet attained the degree of labor market tightness that was common in previous recoveries, and therefore that the threat of inflation is minimal. [more]
Public Policy Brief No. 80, 2004

Public Policy Brief Highlights | December 2004
The Fed and the New Monetary Consensus The most charitable interpretation of the Federal Reserve’s recent interest rate hikes is that they appear to have been premature. A convincing array of data on payrolls, employment-to-population ratios, and other labor market indicators show that the current recovery has not yet attained the degree of labor market tightness that was common in previous recoveries, and therefore that the threat of inflation is minimal. [more]
Public Policy Brief Highlights No. 80A, 2004

Public Policy Brief Highlights | August 2004
The Case for Rate Hikes For a time, the Federal Open Market Committee (FOMC) seemed to have learned from the mistakes of the past. Instead of taking good economic performance as a sign of incipient inflation, Chairman Alan Greenspan kept interest rates relatively low in the late 1990s, even as unemployment plummeted. [more]
Public Policy Brief Highlights No. 79A, 2004

Public Policy Briefs | August 2004
The Case for Rate Hikes For a time, the Federal Open Market Committee (FOMC) seemed to have learned from the mistakes of the past. Instead of taking good economic performance as a sign of incipient inflation, Chairman Alan Greenspan kept interest rates relatively low in the late 1990s, even as unemployment plummeted. [more]
Public Policy Brief No. 79, 2004

Public Policy Briefs | June 2004
The War on Poverty after 40 Years Twenty to 25 years ago, a debate was under way in academe and in the popular press over the War on Poverty. One group of scholars argued that the war, initiated by Presidents Kennedy and Johnson, had been lost, owing to the inherent ineffectiveness of government welfare programs. [more]
Public Policy Brief No. 78, 2004

Public Policy Brief Highlights | June 2004
The War on Poverty after 40 Years Twenty to 25 years ago, a debate was under way in academe and in the popular press over the War on Poverty. One group of scholars argued that the war, initiated by Presidents Kennedy and Johnson, had been lost, owing to the inherent ineffectiveness of government welfare programs. [more]
Public Policy Brief Highlights No. 78A, 2004

Policy Notes | May 2004
Those “D” Words Recent economic commentary has been filled with “D” words: deficits, debt, deflation, depreciation. Deficits—budget and trade—are of the greatest concern and may be on an unsustainable course, as federal and national debt grow without limit. [more]
Policy Note 2004/2

Working Papers | April 2004
The "War on Poverty" after 40 Years Hyman Minsky is best known for his work in the area of financial economics, and especially for his financial instability hypothesis. In recent years, some authors have also recognized his advocacy of the "employer of last resort" as part of his "big government" intervention to help maintain stability. [more]
Working Paper No. 404

Public Policy Brief Highlights | November 2003
Understanding Deflation Most recent discussions of deflation seem to overlook the main dangers posed by a deflationary economy and appear to offer superficial solutions. In this brief, the authors argue that, barring drastic changes in asset and output prices, deflation itself is not the main problem, but rather the recessionary conditions that sometimes give rise to deflation. [more]
Public Policy Brief Highlights No. 74A, 2003

Public Policy Briefs | November 2003
Understanding Deflation Most recent discussions of deflation seem to overlook the main dangers posed by a deflationary economy and appear to offer superficial solutions. In this brief, the authors argue that, barring drastic changes in asset and output prices, deflation itself is not the main problem, but rather the recessionary conditions that sometimes give rise to deflation. [more]
Public Policy Brief No. 74, 2003

Working Papers | October 2003
Understanding Deflation Deflation can be defined as a falling general price level utilizing one of the common price indices.the consumer price index; the GDP deflator or other, narrower indices as the wholesale price index; or an index of manufactured goods prices. [more]
Working Paper No. 392

Policy Notes | September 2003
Deflation Worries For the first time since the 1930s, many worry that the world's economy faces the prospect of deflation—accompanied by massive job losses—on a global scale. In a rather hopeful sign, policymakers from Euroland to Japan to America all seem to recognize the threat that falling prices pose to markets. [more]
Policy Note 2003/5

Policy Notes | October 2001
Are We All Keynesians (Again)? It is now widely recognized that economists and policymakers alike had been living a 30-year fantasy. The best government is not that which governs least. [more]
Policy Note 2001/10

Policy Notes | June 2001
Killing Social Security Softly with Faux Kindness The President’s commission claims that the Social Security program is “unsustainable” and requires a complete “overhaul.” It also claims that the program is a bad deal for women and minorities. [more]
Policy Note 2001/6

Policy Notes | May 2001
The Backward Art of Tax Cutting This policy note examines the case for large tax cuts, focusing on the issues surrounding the purpose and overall size of the needed cut. Although Congress has passed a significant package of tax relief, many have worried that the budget surplus on which it was based will never appear. [more]
Policy Note 2001/5

Policy Notes | February 2001
Fiscal Policy for the Coming Recession Growing government surpluses, a ballooning trade deficit, and the resulting growth in private sector debt have placed the United States' economy in a precarious position. Papadimitriou and Wray agree with President Bush that fiscal stimulus is necessary to reinvigorate the economy; in the current economic environment, monetary policy will not work. [more]
Policy Note 2001/2

Policy Notes | July 2000
Why Does the Fed Want Slower Growth? The Fed has raised interest rates six times in the past year to slow the economy, in the belief that unemployment is too low. There is scant evidence, however, that low unemployment leads to inflation, that the economy is in danger of overheating, or that higher interest rates will reduce inflation. [more]
Policy Note 2000/7

Policy Notes | May 2000
Can the Expansion Be Sustained? Hyman P. Minsky’s insights into the relationship between profits, economic growth, and the public and private financial balances are particularly relevant to today’s conditions. [more]
Policy Note 2000/5

Policy Notes | August 1999
More Pain, No Gain Neither the Breaux plan nor President Clinton’s proposal for “saving” Social Security promises much gain, but the Breaux plan, unlike the president's proposal, would inflict real pain in the form of reduced benefits. [more]
Policy Note 1999/8 Revision

Public Policy Brief Highlights | August 1999
Does Social Security Need Saving? Projections of an impending crisis in financing Social Security depend on unduly pessimistic assumptions about basic demographic and economic variables. Moreover, even if the assumptions are accepted, the projected gap between Social Security revenues and expenditures would not constitute a “crisis” and could be eliminated with relatively simple adjustments when it occurs. [more]
Public Policy Brief Highlights No. 55A, 1999

Public Policy Briefs | August 1999
Does Social Security Need Saving? Projections of an impending crisis in financing Social Security depend on unduly pessimistic assumptions about basic demographic and economic variables. Moreover, even if the assumptions are accepted, the projected gap between Social Security revenues and expenditures would not constitute a “crisis” and could be eliminated with relatively simple adjustments when it occurs. [more]
Public Policy Brief No. 55, 1999

Public Policy Brief Highlights | July 1999
Down and Out in the United States Despite a long period of strong economic growth, more than 28 million working-age persons were categorized by the Bureau of Labor Statistics as out of the labor force in 1998. A small portion of this population will move into the labor force, but the majority will remain without work. [more]
Public Policy Brief Highlights No. 54A, 1999

Public Policy Briefs | July 1999
Down and Out in the United States Despite a long period of strong economic growth, more than 28 million working-age persons were categorized by the Bureau of Labor Statistics as out of the labor force in 1998. A small portion of this population will move into the labor force, but the majority will remain without work. [more]
Public Policy Brief No. 54, 1999

Working Papers | July 1999
Minsky's Analysis of Financial Capitalism In this paper, the authors discuss Minsky's analysis of the evolution of one variety of capitalism—financial capitalism—which developed at the end of the nineteenth century and was the dominant form of capitalism in the developed countries after World War II. Minsky's approach, like those of Schumpeter and Veblen, emphasized the importance of market power in this stage of capitalism. [more]
Working Paper No. 275

Working Papers | May 1999
Can Social Security Be Saved? The first part of this paper is an overview of projections of Social Security's future and an explanation of why the projections have led many to believe there is a looming financial crisis. We argue that any problems to be faced are far down the road and not severe enough to justify the use of the word "crisis. [more]
Working Paper No. 270

Working Papers | May 1999
Demand Constraints and Economic Growth In recent years the United States has seemed to achieve the best of all possible worlds: robust economic growth, very low unemployment, and low inflation. Many attribute this performance to fewer supply-side constraints, as the country has moved away from stifling regulations and other impediments to trade. [more]
Working Paper No. 269

Policy Notes | May 1999
How Can We Provide for the Baby Boomers in Their Old Age? The search for the solution to the problems faced by the Social Security system should focus not on how to amend OASDI but on how best to achieve faster long-term economic growth. Achieving such growth is better left to the purview of fiscal and monetary policy, not the OASDI system. [more]
Policy Note 1999/5

Policy Notes | April 1999
Can Goldilocks Survive? Growing government budget surpluses combined with growing trade deficits have generated record private sector deficits. Unless households continue to reduce their saving—creating an increasingly unsustainable debt burden—the impetus that has driven the expansion will evaporate. [more]
Policy Note 1999/4

Policy Notes | March 1999
Surplus Mania A federal government surplus has finally been achieved, and it has been met with pronouncements that it is a great gift for the future and with arguments about what to do with it. However, the surplus will be short-lived, it will depress economic growth, and, in any case, surpluses cannot be “used” for anything. [more]
Policy Note 1999/3

Policy Notes | February 1999
The Emperor Has No Clothes If you were to write yourself IOUs to provide for your retirement and put them in a safety deposit box, would you rest comfortably, assured that you would be able to purchase all the necessities of life in 2020? Well, President Clinton’s proposal is even worse. [more]
Policy Note 1999/2

Working Papers | January 1999
The 1966 Financial Crisis The so-called credit crunch of 1966 has long been recognized as the first significant postwar financial crisis and one that required the first important intervention by the Federal Reserve Bank. In the midst of the robust postwar expansion, the Fed began to fear inflation and tightened monetary policy to the point at which profitability of financial institutions was threatened. [more]
Working Paper No. 262

Working Papers | January 1999
Theories of Value and the Monetary Theory of Production This paper extends earlier work that argued that liquidity preference theory should be interpreted as a theory of value. Here I will argue that two theories of value are needed for analysis of a monetary production economy: the labor theory of value and the liquidity preference theory of value. [more]
Working Paper No. 261

Working Papers | November 1998
Is Keynesianism Institutionalist? This paper poses that the one commonality between institutionalist thought and Keynesianism (as presented in his General Theory) was money. Tracing the origins and uses of money, the myth of the development of money as a medium of exchange is dispelled and replaced with money used as evidence of debt, specifically, government debt. [more]
Working Paper No. 257

Public Policy Briefs | October 1998
Did the Clinton Rising Tide Raise All Boats? During the recent robust expansion only 700,000 of the almost 12 million jobs created went to the half of the population that does not have at least some college education. Even though the number of officially unemployed fell to less than 4 million in the 25-and-over age group, there remain in that group over 26 million potentially employable workers—the combined number of those who are actively seeking work (and are counted as officially unemployed) and those who are currently out of the labor force but would be willing to participate. [more]
Public Policy Brief No. 45, 1998

Public Policy Brief Highlights | October 1998
Did the Clinton Rising Tide Raise All Boats? During the recent robust expansion only 700,000 of the almost 12 million jobs created went to the half of the population that does not have at least some college education. Even though the number of officially unemployed fell to less than 4 million in the 25-and-over age group, there remain in that group over 26 million potentially employable workers—the combined number of those who are actively seeking work (and are counted as officially unemployed) and those who are currently out of the labor force but would be willing to participate. [more]
Public Policy Brief Highlights No. 45A, 1998

Working Papers | October 1998
Economic Time This paper argues that economists require a particular concept of time to develop theory with greater explanatory power in describing and analyzing the sort of economy in which we are primarily interested--the monetary economy usually termed capitalism. Economists of various persuasions have recognized the importance of a concept of time, but we argue that a very specific concept is required. [more]
Working Paper No. 255

Working Papers | September 1998
Modern Money All modern economies have a "chartalist" or "state" money, as acknowledged by Friedrich Knapp and John Maynard Keynes. In this paper, I examine the "history" of money to shed light on its origins. [more]
Working Paper No. 252

Working Papers | September 1998
Paul Davidson's Economics Paul Davidson is one of the best known and most influential post-Keynesian economists. He has insisted throughout his career that economists should focus on real-world problems and that the purpose of economic policy is to help society become more humane and civilized. [more]
Working Paper No. 251

Policy Notes | July 1998
Goldilocks and the Three Bears Unlike the Papa, Mama, and Baby Bears faced by the storybook Goldilocks, our Goldilocks faced three ferocious grizzlies: a cascading, global financial crisis, global deflation and excess capacity (or insufficient demand), and a domestic fiscal surplus in conjunction with record private deficits. [more]
Policy Note 1998/7

Policy Notes | June 1998
What to Do with the Surplus Neither Congress nor the president is on the right track. Rather than protecting the surplus, we should be increasing spending and cutting taxes to contain the looming world recession. [more]
Policy Note 1998/6

Policy Notes | May 1998
The Fed Should Lower Interest Rates More Some analysts have argued against monetary ease, fearing that it might fuel a speculative boom. Alas, given the recent substantial “market correction,” this objection may safely be put away. [more]
Policy Note 1998/5

Working Papers | January 1998
The Development and Reform of the Modern International Financial System The international financial system might be said to be in crisis. It requires frequent intervention by central banks and other national and international bodies to reduce fluctuations of currencies. [more]
Working Paper No. 225

Working Papers | January 1998
Money and Taxes Senior Scholar L. Randall Wray traces the development of the chartalist approach to money from Adam Smith, Georg Friedrich Knapp, and John Maynard Keynes to the later theorists, including Hyman Minsky, Abba Lerner, and Kenneth Boulding, who follow the endogenous money approach. [more]
Working Paper No. 222

Working Papers | November 1997
Government As Employer of Last Resort Since the Employment Act of 1946 a stated policy of the United States government has been to pursue simultaneously high employment and stable prices. However, because many economists and policymakers do not believe that it is possible to have both high employment and stable prices, monetary policy has generally been geared, at least for the past two decades, toward increasing unemployment as a means to achieving stable prices. [more]
Working Paper No. 213

Public Policy Briefs | September 1996
Targeting Inflation The targets for monetary policy adopted by the Fed in recent years have not proven to be closely correlated with inflation, leading some theorists and policymakers to advocate the use of a price index, such as the consumer price index (CPI), as both the target and the goal of monetary policy. The authors of this brief show that such a choice is not wise because the CPI does not accurately reflect market-caused price increases and is not under the control of monetary policy. [more]
Public Policy Brief No. 27, 1996

Working Papers | May 1996
The Consumer Price Index As a Measure of Inflation A consensus is emerging among economists and policymakers that the consumer price index (CPI) as a measure of cost of living has an upward bias. As a result, downward revisions of cost-of- living adjustments are frequently recommended, especially in discussions about deficit reduction. [more]
Working Paper No. 164

Public Policy Briefs | September 1994
Monetary Policy Uncovered Experience with a variety of targets has cast doubt on the likelihood that a single variable can be found to be closely and reliably linked to future inflation; it is even less likely that such a variable, should it be found, would somehow be under the control and manipulation of the Federal Reserve. This brief provides a review of the experiments with various targets undertaken by former Fed Chairman Paul Volcker and current Chairman Alan Greenspan. [more]
Public Policy Brief No. 15, 1994

Working Papers | September 1994
Flying Blind No further information available. [more]
Working Paper No. 124

Public Policy Briefs | May 1994
An Alternative in Small Business Finance At a time when small businesses are suffering from a credit crunch, “niche” financial institutions are filling the void left by more traditional sources of financing, such as commercial banks. The authors argue that the most important of these niche players are community-based factor companies, which are rapidly expanding from their client base in apparel and textiles to finance a range of firms in everything from electronics to health care. [more]
Public Policy Brief No. 12, 1994

Working Papers | April 1994
Community-based Factoring Companies and Small Business Lending No further information available. [more]
Working Paper No. 108

Working Papers | October 1993
Government Deficits, Liquidity Preference, and Schumpeterian Innovation No further information available. [more]
Working Paper No. 99

Working Papers | May 1993
The Community Reinvestment Act, Lending Discrimination, and the Role of Community Development Banks No further information available. [more]
Working Paper No. 95

Public Policy Briefs | May 1993
A Path to Community Development The establishment of a system of federally regulated, for-profit community development banks (CDBs) would help to fill the financial gap in areas inadequately served by traditional banks, requirements of the Community Reinvestment Act (CRA) notwithstanding. These organizations would be charged with delivering credit, payment, and savings opportunities and providing basic financing to households and small businesses in underserved areas. [more]
Public Policy Brief No. 6, 1993

Working Papers | March 1993
The Origins of Money and the Development of the Modern Financial System No further information available. [more]
Working Paper No. 86

Working Papers | March 1993
The Origins of Money and the Development of the Modern Financial System No further information available. [more]
Working Paper No. 86

Public Policy Briefs | January 1993
Community Development Banking This brief proposes that the establishment of a nationwide system of community development banks (CDBs) would advance the capital development of the economy. The proposal is based on the notion that a critical function of the financial system is not being adequately performed by existing institutions for low-income citizens, inner-city minorities, and entrepreneurs who seek modest financing for small businesses. [more]
Public Policy Brief No. 3, 1993

Working Papers | December 1992
Community Development Banks No further information available. [more]
Working Paper No. 83

Working Papers | December 1992
Community Development Banks No further information available. [more]
Working Paper No. 83