Working Papers

This paper presents a theory of pseudo-wealth in a model that displays aggregate demand externalities.

A recent New York Times article observed that Americans want action to address inequality. 2016 presidential candidates from both parties also acknowledge that inequality is a pressing concern. But not one of the candidates has proposed to do anything meaningful about it, sharing wealthy Americans’ (understandable) opposition to any solution (Scheiber 2015). Perhaps nothing has been done because there is nothing to do about it.

A structural transformation is investing labour in Europe, accelerated by the crisis started in 2008. Job destruction is dominating employment trends in most EU countries and deep changes are taking place in labour relations, labour market institutions and wage regimes.

We develop a novel stress-test framework to monitor systemic risk in financial systems. The modular structure of the framework allows to accommodate for a variety of shock scenarios, methods to estimate interbank exposures and mechanisms of distress propagation.

Innovation is essential to economic growth. However, it appears that the ways in which we pursue innovation policies have aggravated inequality. Inequality is an increasingly contentious political issue in both wealthy and emerging economies.

“Oh, the Chinese hate the Japanese and the Japanese hate the Chinese—to hate all but the right folks is an old established rule. The Koreans hate the Japanese and the Vietnamese hate the Chinese, and the North Koreans hate them all. Oh, the People hate the Communists and the Communists hate the People. The Nationalists hate the Communists and the Communists hate themselves. The Confucians hate the Buddhists and the Muslims hate them all. All of my folks hate all of your folks. But during National Brotherhood Week, be nice to people who are inferior to you. It’s only for a week, so have no fear—be grateful that it doesn’t last all year.”

This paper finds its origins in two important developments within mainstream economics since the financial crisis, both of which analyze the economy from the viewpoint of what Schumpeter (1954) referred to as the domain of “real” analysis of a modern market economy in contrast to “monetary” analysis.

Caring Economics is about a new way of thinking about human prosperity. In mainstream economics, prosperity is a matter of consumption, income and wealth. By contrast, Caring Economics conceives of prosperity in terms of deeper sources of durable human wellbeing.

The SSGAC is a research infrastructure designed to stimulate dialogue and cooperation between medical researchers and social scientists. The SSGAC facilitates collaborative research that seeks to identify associations between specific genetic markers (segments of DNA) and behavioral traits, such as preferences, personality and social-science outcomes.

Behavior genetics is the study of the relationship between genetic variation and psychological traits. Turkheimer (2000) proposed “Three Laws of Behavior Genetics” based on empirical regularities observed in studies of twins and other kinships. On the basis of molecular studies that have measured DNA variation directly, we propose a Fourth Law of Behavior Genetics: “A typical human behavioral trait is associated with very many genetic variants, each of which accounts for a very small percentage of the behavioral variability.”

Income and wealth inequality have been rising in the past three decades. Surprisingly, inequality has been largely ignored in the literature and practice of monetary policy. However, due to the crisis, this question has been gaining more attention.

Recent years have witnessed the flourishing of a body of economic literature concerned with the search for empirical evidence of a positive relation between political connections, economic rent and the value of firms. The present paper contributes to the strand of this literature that deals with the quantitative measurement of the value of the political connections of firms.

Regulation of financial services has been an unmitigated policy disaster.

This essay argues that the Achilles heel of the international monetary and financial system is that it amplifies the “excess financial elasticity” of domestic policy regimes, ie it exacerbates their inability to prevent the build-up of financial imbalances, or outsize financial cycles, that lead to serious financial crises and macroeconomic dislocations.