Wray Guest Lectures, Brazil and Italy (Video)

Michael Stephens | September 13, 2018

L. Randall Wray, Professor of Economics at Bard and Senior Scholar at the Levy Economics Institute, was a visiting professor at the University of Bolzano (Italy) and the University of Bergamo (Italy) in May-June and at the University of Campinas (Brazil) in August. In Campinas, he gave a series of lectures for a course on Modern Money Theory. In Bolzano he gave a talk titled “Secular Stagnation: Is It Inevitable?”

Wray also delivered a series of lectures in Trento for a course on Modern Money Theory and participated on a panel on the Job Guarantee: La rivoluzione dei Piani di Lavoro Garantito. Video of the latter presentations can be viewed here and here.


The Second International Modern Monetary Theory Conference

Michael Stephens | September 10, 2018

The Levy Institute is a cosponsor of the Second International Modern Monetary Theory Conference, which will take place September 28–30 at the New School and will feature Institute scholars L. Randall Wray, Pavlina Tcherneva, Stephanie Kelton, and Mathew Forstater:

Like the first conference, this year will feature contributions from fields as diverse as macroeconomics, law, history, public policy, and corporate finance, with the goal of creating a community of scholars working within the MMT paradigm. This year’s theme, “Public Money, Public Purpose, Public Power,” signals the MMT community’s efforts to build bridges between social justice movements, inspire broad-based participation, and more deeply discuss how our ideas may be concretized politically.

The conference runs from Friday, September 28 through Sunday, September 30. Friday will feature roundtable discussions and keynote addresses from MMT luminaries on the origins of MMT, the process of making MMT “mainstream,” and the relationship between MMT and progressive advocacy for the job guarantee. Saturday will feature workshops facilitated by a range of community leaders and experts seeking to develop and deepen connections between MMT and other fields. Sunday begins with two “town hall” meetings, exploring MMT’s capacity as both a domestic and an international movement. The proceedings will conclude with a plenary session on the strategic and institutional goals of the movement going forward.

To learn more about the Second International MMT Conference or to register, visit their website at mmtconference.org or email conference@mmtconference.org.

Learn more about MMT in these Levy Institute publications: continue reading…


Tcherneva and Wray on the Public Service Employment (PSE) Program

Michael Stephens | August 15, 2018

The job guarantee proposal fleshed out and analyzed by L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina Tcherneva, and Stephanie Kelton — dubbed the Public Service Employment (PSE) program — garnered a considerable amount of media attention as support for some version of a job guarantee began appearing on the agendas of various 2020 Democratic hopefuls. This panel discussion at the Levy Institute’s 27th Annual Hyman P. Minsky Conference, featuring Tcherneva and Wray along with critical engagement from John Henry, provides more background on the rationale behind the PSE proposal as well as its potential economic impact:


Video from all the panels at the Minsky Conference can be found here.


Banks, Capital Markets, and Institutional Investors as Providers of Long-Term Finance

Michael Stephens | May 29, 2018

by Felipe Rezende

This is the second in a series of blog posts on financing infrastructure assets.

From 1990 to 2012, the stock of global financial assets increased from $56 trillion to $225 trillion. In 2012, it included a $50 trillion stock market, $47 trillion public debt securities market, $42 trillion in financial institution bonds outstanding, $11 trillion in non-financial corporate bonds, and $62 trillion in non-securitized loans and $13 trillion in securitized loans outstanding (Figure 1).

Figure 1. Stock of Global Financial Assets (USD trillion)

Source: Lund et al. 2013, p. 2

From 2007 to 2012, government debt securities increased by 47 percent (Figure 1) while financial depth rose to 355 percent of global GDP in 2007 from 120 percent in 1980 (Lund et al. 2013: 2). In spite of a massive increase in the stock of global financial assets—equivalent to 302 percent between 1990 and 2012—“[m]ost of the increase in financial depth prior to the crisis was due to financial system leverage and equity valuations” (Lund et al. 2013: 2). Yet the world needs more and better infrastructure, and redirecting finance towards sustainable infrastructure will require a major shift in policy coordination with various stakeholders. For instance, Standard & Poor’s estimated that “institutional investors could provide as much as $200 billion per year—or $3.2 trillion by ­­­2030—for infrastructure financing” (Standard & Poor’s 2014: 2). But “if the right levers are pulled, there is potential to increase investment from private institutional investors by ~$1.2 trillion per year” (Bielenberg et al. 2016: 28). Thus, the problem is not necessarily one of funding but how to direct the finance created by the financial system towards productivity-enhancing investments. continue reading…


The Job Guarantee and the Economics of Fear: A Response to Robert Samuelson

Pavlina Tcherneva | May 25, 2018

The Job Guarantee is finally getting the public debate it deserves and criticism is expected. Building on several decades of research, the Levy Institute’s latest proposal analyzes the program’s economic impact and advances a blueprint for its implementation. Critics have taken note and are (thus far) restating the usual concerns, but with a notably alarmist tone.

The latest, courtesy of the Washington Post’Robert Samuelson, warns that the Job Guarantee would be 1) an expensive big-government takeover, 2) unproductive and impossible to manage, 3) dangerously disruptive to the private sector, and 4) inflationary.

Samuelson wants us to be afraid—very afraid—of big government. But he forgets that we already have big government—one that devotes hundreds of billions of dollars, time, resources, and administrative effort to deal with all the economic and social costs of unemployment, underemployment, and poverty.

Unemployment is already paid for. In this context, the program does not increase the government’s costs—it reduces them—while also cutting costs to households and firms and creating real actual benefits by supporting families, communities, and the economy. As David Dayen points out, whether we can afford the Job Guarantee is not up for debate.

Will the Job Guarantee create impossible-to-manage make-work projects? This is a fear that James Galbraith—a self-proclaimed former skeptic of the Job Guarantee—calls “an admission of impotence and a call for preemptive surrender.” Kate Aronoff recalls that New Deal projects were often derided as boondoggles. Still, they rebuilt communities, the economy, and people’s lives, while leaving a lasting legacy.

The Job Guarantee is subjected to a unique double standard for managerial efficiency. We never hear objections to going to war, “nation building,” or bailing out the financial sector on the grounds that these efforts would be an “administrative nightmare.” And yet our proposal to put our underutilized labor force to productive use, by using much of the existing institutional infrastructure in the nonprofit and state and local government sectors is dismissed as an impossibly difficult task.

The claim that the Job Guarantee is unproductive misses another basic point: unemployment is inherently unproductive. What is the productivity of an unemployed person and her family struggling to make ends meet, compared to her productivity when she is employed in a public service job with decent pay? continue reading…


On the Costs of Doing Without a Job Guarantee

Michael Stephens | May 1, 2018

Pavlina Tcherneva — who, along with L. Randall Wray, Flavia Dantas, Scott Fullwiler, and Stephanie Kelton, authored this report estimating the economic impact of a job guarantee proposal (the Public Service Employment program) — was interviewed by Bloomberg’s Joe Weisenthal and Julia Chatterley about the purposes and costs of the plan.

This recently released policy note by L. Randall Wray also takes on some of the criticisms raised by the interviewers, in addition to seeking a consensus among the job guarantee proposals emanating from progressive think-tanks.


The Massive Need for Infrastructure in the Emerging and Developed World

Michael Stephens | April 26, 2018

by Felipe Rezende

This is the first in a series of blog posts on financing infrastructure assets

Insufficient or inadequate infrastructure in both developing and developed economies has sparked a debate about whether financing is sufficient to sustain infrastructure investment to at least keep pace with projected global GDP growth. The task of keeping the minimum investment required to maintain current levels and fostering incremental spending to close the infrastructure gap has revived the debate over the role played by each actor in closing the gap and how to finance this process (see for instance G-20 2013; OECD 2013; World Bank 2015).

One of the major post-crisis challenges is that in spite of an ultra-low interest rate environment or even negative nominal and real rates, investment has been anemic in developed and developing economies (IMF 2015). This is particularly important because, since the crisis, investment has collapsed across all sectors (public, business, and household sectors) in Europe (McKinsey 2016, 2). And in the United States, “the trajectory of net fixed capital formation, which decreased from 12 percent of GDP in 1950 to 8 percent in 2007, then fell to only 4 percent in 2014. Average depreciation rates accelerated by about 20 percent during the 1980s as companies invested in shorter-lived assets such as ICT equipment but did not compensate in terms of higher gross investment rates. This amplified the decline in net investment” (2). To make matters worse, most governments in developed and developing nations (with the exception of a few cases) are cutting back on infrastructure spending due to fiscal consolidation (Figure 1), generating a public-funding shortfall in infrastructure investment.

Figure 1

Source: Mckinsey 2016, p.11

Moreover, insufficient private investment and declining real public investment have contributed to reduce the stock of public capital as a share of output over the past three decades (Figure 2). continue reading…


27th Annual Minsky Conference Presentations

Michael Stephens | April 19, 2018

The 27th Minsky Conference — “Financial Stability in a World of Rising Rates and the Repeal of Dodd-Frank” — just wrapped up yesterday. Anyone interested in the slide presentations can find them below:

Welcome and Introduction
Jan Kregel, Director of Research, Levy Institute
Remarks in PDF
MODERATOR: L. Randall Wray, Senior Scholar, Levy Institute; Professor of Economics, Bard College
SPEAKERS: Lakshman AchuthanCofounder and Chief Operations Officer, Economic Cycle Research Institute
PowerPoint presentation in PDF
Philip SuttleFounder and Principal, Suttle Economics LLC
PowerPoint presentation in PDF
Michalis NikiforosResearch Scholar, Levy Institute
PowerPoint presentation in PDF
MODERATOR: Peter Coy, Economics Editor, Bloomberg Businessweek
SPEAKERS: Pavlina TchernevaResearch Associate, Levy Institute; Professor of Economics, Bard College
PowerPoint presentation in PDF
L. Randall Wray, Senior Scholar, Levy Institute; Professor of Economics, Bard College
PowerPoint presentation in PDF
John F. HenrySenior Scholar, Levy Institute; Professor Emeritus, California State University, Sacramento; Adjunct Professor, University of Missouri—Kansas City
MODERATOR: Matt PhillipsMarkets Reporter, The New York Times
SPEAKERS: Thomas FergusonDirector of Research, Institute for New Economic Thinking; Professor Emeritus, University of Massachusetts, Boston; Senior Fellow, Better Markets
PowerPoint presentation in PDF
Thorvald Grung MoeResearch Associate, Levy Institute; Special Adviser, Norges Bank
PowerPoint presentation in PDF
Walker F. ToddTrustee, American Institute for Economic Research (AIER); Lecturer in Finance, Middle Tennessee State University
PowerPoint presentation in PDF

MODERATOR: Edward HarrisonFounder, Creditwritedowns.com; Global Macro Advisors
SPEAKERS: Emilios AvgouleasResearch Associate, Levy Institute; Professor, University of Edinburgh Law School
PowerPoint presentation in PDF
Joerg BibowProfessor of Economics, Skidmore College
PowerPoint presentation in PDF
Rogerio StudartProfessor of Economics, Federal University of Rio de Janeiro, Brazil
PowerPoint presentation in PDF
MODERATOR: Sophia LinLegal and Policy Coordinator, International Corporate Accountability Roundtable
SPEAKERS: Robert A. BleckerProfessor of Economics, American University
PowerPoint presentation in PDF
William MilbergDean and Professor of Economics, The New School for Social Research
PowerPoint presentation in PDF
Todd N. Tucker, Fellow, Roosevelt Institute
MODERATOR: Jan Kregel, Director of Research, Levy Institute
SPEAKERS: Robert N. McCauleySenior Advisor, Bank for International Settlements
PowerPoint presentation in PDF
Frank VenerosoPresident, Veneroso Associates, LLC
PowerPoint presentation in PDF

Video of all the sessions, speakers, and Q&A will eventually be posted on the Institute YouTube page.


New Book of Essays in Honor of Roncaglia

Michael Stephens | February 20, 2018

Director of Research Jan Kregel is one of the editors and contributors for a new collection of essays devoted to the work of Alessandro Roncaglia:

Classical Economics Today: Essays in Honor of Alessandro Roncaglia is a collection of essays that pays tribute to Alessandro Roncaglia whose research is based on Schumpeter’s dictum that good economics must encompass history, economic theory and statistics, and therefore does not generally take the form of elegant formal models that are applicable to all and everything. In this direction, Roncaglia is inspired by the Classical economists of the past and becomes a model for present-day Classical economists. A perceptible family air imbues the essays: all the contributors are friends of Roncaglia and see his personality and his interests as a common point of reference.

View the table of contents below the fold:

continue reading…


Join Us for the 2018 Minsky Summer Seminar

Michael Stephens | December 21, 2017

The Levy Economics Institute of Bard College is pleased to announce the ninth Minsky Summer Seminar will be held from June 17–23, 2018. The Seminar will provide a rigorous discussion of both the theoretical and applied aspects of Minsky’s economics, with an examination of meaningful prescriptive policies relevant to the current economic and financial outlook. It will also provide an introduction to Wynne Godley’s stock-flow consistent modeling methods via hands-on workshops.

The Summer Seminar will be of particular interest to graduate students, recent graduates, and those at the beginning of their academic or professional careers. The teaching staff will include well-known economists working in the theory and policy tradition of Hyman Minsky and Wynne Godley.

Applications may be made to Kathleen Mullaly at the Levy Institute (mullaly@levy.org), and should include a letter of application and current curriculum vitae. Admission to the Summer Seminar will include provision of room and board on the Bard College Campus. The registration fee for the Seminar will be $325.

Due to limited space availability, the Seminar will be limited to 30 participants; applications will be reviewed on a rolling basis starting in January 2018.

Last year’s seminar featured the following faculty (the roster changes somewhat from year to year, but will be broadly similar for ’18):

Robert J. Barbera
Codirector, Center for Financial Economics, The Johns Hopkins University

Leonardo Burlamaqui
Associate Professor, University of the State of Rio de Janeiro

Fernando J. Cardim de Carvalho
Senior Scholar, Levy Institute; Emeritus Professor of Economics, Federal University of Rio de Janeiro

Steven M. Fazzari
Research Associate, Levy Institute; Professor, Washington University in St. Louis

John F. Henry
Senior Scholar, Levy Institute

Arturo Huerta González
Professor of Economics, Universidad Nacional Autónoma de México

Fadhel Kaboub
Research Associate, Levy Institute; Associate Professor, Denison University; President, Binzagr Institute for Sustainable Prosperity

Stephanie A. Kelton
Research Associate, Levy Institute; Professor, University of Missouri–Kansas City

Jan Kregel
Director of Research, Levy Institute; Professor, Tallinn University of Technology

Tracy Mott
Associate Professor and Chair, Department of Economics, University of Denver

Michalis Nikiforos
Research Scholar, Levy Institute

Felipe Rezende
Assistant Professor of Economics, Bard College

Pavlina R. Tcherneva
Research Associate, Levy Institute; Associate Professor, Bard College

Mario Tonveronachi
Professor, University of Siena

Frank Veneroso
President, Veneroso Associates, LLC

L. Randall Wray
Senior Scholar, Levy Institute; Professor, Bard College

Gennaro Zezza
Research Scholar, Levy Institute; Associate Professor, University of Cassino