Working Papers

Is Victorian writer Walter Bagehot, whose adage “lending freely against good collateral at a penalty rate” has been gospel for central bankers, still relevant in a post-Great Financial Crisis world?

How once-promising Black upward mobility reversed course, and what can be done about it

Despite fear-mongering about the latest Consumer Price Index, unemployment remains elevated and stimulus is needed to prevent a collapse in demand

Analyzing corporate conference calls reveals the way that countries perceive and spread risk through the global financial system

Contrary to the New Keynesian paradigm, long-term unemployment can be reversed without a significant uptick in inflation

The People’s Bank of China’s network of local currency swap arrangements provide Asian countries with a much-needed safety net, while also strengthening China’s diplomatic position

Formerly incarcerated Black people emerge from prison with far less education and social skills than white ex-cons. And they have great trouble forming families or earning a good living.

Mortality and economic data show how constraints to government spending and a skepticism of redistributive policies have made the pandemic far worse

INET’s Commission on Global Economic Transformation - Interim Report on the Global Response to the Pandemic

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

A large and growing percentage of households are missed in the monthly Current Population Survey (CPS).

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Labor-saving advances in AI may undo the gains from globalization and pose new challenges for economic development

Recognizing that inflation of the value of output and its costs of production must be equal, we focus on a cost-based macroeconomic structuralist approach in contrast to micro-oriented monetarist analysis.

This paper analyzes the role of local spending, particularly on social welfare, and local inequality as factors in the Italian political crisis following the adoption in 2011 of more radical national austerity measures.

“Build back” means restoring the government and business investments in the productive capabilities of the U.S. labor force that created a growing middle class in the three decades after World War II

Even if psychological factors influence participants’ decision-making, as behavioral economists compellingly argue, incorporating such factors into economic theory would seem to require that market participants adhere to elementary logical rules.

How electric and self-driving cars could change the industry

Carbon pricing still has the potential to be a powerful tool contributing to emissions reductions, but it is clearly no panacea.

In this paper we analyze the Gilens dataset using the complementary tools of Random Forest classifiers (RFs), from Machine Learning.

Unregistered lobbyists, including former members of Congress, are a key resource for lobbying firms

Our findings confirm the existence of a negative relationship between labor market slack and the wage share, and we find no tendency to return to a ‘normal’ unemployment rate associated with a stable wage share.

The study seeks to explain why the instruments of central banking inevitably break down over time.

How NAFTA led to GOP dominance of the American South

Amid debates over costs—and profits—from a coronavirus vaccine, a new study shows that taxpayers have been footing the bill for every new drug approved between 2010 and 2019

Consolidation in the dairy industry has created separate, inflexible supply chains for consumers and commercial markets. When COVID killed commercial demand, perfectly good milk and cheese was wasted.

An alternative look at the “global savings glut”

Despite post-2008 regulations, the boom-bust credit cycle continues to run wild

The success of projects for pandemic preparedness and response depends on the strength of government-business collaborations.

A look at Dodd-Frank’s impact

To fulfill MLK’s vision of jobs and freedom for Black Americans, Washington must rein in corporate greed

Over and over again, US government policies designed to transfer and create wealth and economic opportunity were restricted to whites by design.

Rising inequality has focused attention on the benefits of new technologies. Do these accrue primarily to inventors, early investors, and highly skilled users, or to society more widely as their adoption generates employment growth?

In this introduction to our project, “Fifty Years After: Black Employment in the United States Under the Equal Employment Opportunity Commission,” we outline the socioeconomic forces behind the promising rise and disastrous fall of an African American blue-collar middle class.

The popular discontent and rise of ‘populist’ political parties is closely related to the failure of New Labor to navigate social democracy’s dilemma.

Increased borrowing by middle-class families with low income growth played a central role in rising indebtedness

We reveal a novel channel through which market participants’ sentiment influences how they forecast stock returns: their optimism (pessimism) affects the weights they assign to fundamentals.

This paper analyzes regional contributions to the US payroll share from 1977 to 2017 and the four major business cycles throughout this period.

This paper considers the relationship between profits realized from higher insulin list prices, pharmaceutical innovation, and the financial structures of the three dominant insulin manufacturing companies, which set list prices.

The links between campaign contributions from the financial sector and switches to a pro-bank vote were direct and substantial

As Covid-19 spreads globally in the first quarter of 2020, this paper finds that firms’ primary concerns relate to the collapse of demand, increased uncertainty, and disruption in supply chains

This paper considers the ambition, scale, substance and strategy of the European Union’s Green Deal

Private equity firms have become major players in the healthcare industry. How has this happened and what are the results?

This article proposes a new “Concentric Circle framework” which would improve workers’ access to civil, labor, and employment rights.

New research points to critical role of public funding in drug discoveries and development for the last decade

We conclude that representing dynamic realism in such models is as important as – and far more empirically tractable than – continued debate about the monetization of climate damages and ‘social cost of carbon’.

The central bank today is not just the government’s bank, but also a bankers’ bank, a truly hybrid institution

To get beyond the neoclassical fallacy, economists have to stop relying on constrained-optimization methodology

This paper argues that it is a mistake to dismiss secular demand stagnation as main cause of declining potential growth in the OECD.

Reconstituting capitalism and revitalizing the liberal international order will require revisiting first principles of Western political economy, rebalancing the emphasis it places on broad living standards as opposed to national income. The 2020 US presidential campaign has begun to do just that.

This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy.

Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world

This paper provides novel insights on the changing functional distribution of income in the post–war US economy.

This paper analyzes the early stages of the formation of the Common Market.

This essay deals with the contradictory dynamics that engulfed Europe from 1959 to 1979, the year of the launching of the European Monetary System.

This essay deals with the EMS experience and its failure, with the Maastricht Treaty, and with the interregnum leading to the formation of the EMU in 1999.

Policy hype but vintage fiscal economics from Godley, Lerner, and Keynes

How antitrust law is ill-equipped to address tech mergers

The Chicago School has long used bankrupt assumptions to strangle antitrust policy.

We adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual US firms: the share of their quarterly earnings conference calls that they devote to political risks.

It was too good to be true: Another effort to vindicate austerity falls victim to flawed methodology.

Frequent civil conflicts in African countries may erode national identity, thus highlighting a reason why civil conflict is costly for growth and development

A report of the Commission on Global Economic Transformation’s subcommittee on Macroeconomics & Finance

Everyone is waking up to the fact that estimates of what is possible in the economy are way off: this paper explains why

This paper presents an historical analysis of the antitrust laws.

A report of the Commission on Global Economic Transformation’s subcommittee on Inequality, Technology, and the Future of Work

Why Italy’s woes are a warning to the whole Eurozone

Prisoners employed in manufacturing constitute 4.2% of total U.S. manufacturing employment in 2005; they produce cheap goods, creating labor demand shock.

This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory.

Asset markets are indispensable in harnessing society’s diverse views and insights about future business performance. But those views are shaped as much by emotion and crowd mentality as by rational expectations.

Economic distress in rural areas and opioid exposure in cities are key indicators of overdose deaths

For years, governments in India and much of the developing world have followed the advice of a paper arguing that labor regulations actually hurt workers. The problem? The research was wrong.

Starting with the literature on the estimates of the natural rate of interest, this paper critically analyzes the modern practice of identifying the benchmark rate of monetary policy with an equilibrium or neutral interest rate reflecting “fundamental forces” unaffected by monetary factors.

The American economy changed rapidly in the last half-century. The National Income and Product Accounts (NIPA) were designed before these changes started. They have stretched to accommodate new and growing service activities, but they are still organized for an industrial economy.

Wishful thinking and tinkering won’t cut it. Nothing short of a mass mobilization for deep de-carbonization across the global economy can avert the looming climate catastrophe.

We need a new system of rules for the digital 21st century that enhances global digital cooperation and welfare. Nothing less than a historic gathering of the world’s key decision makers will get us there.    

Assessing the Peculiarities of Economics from Two Scientometric Perspectives

In this paper we comparatively explore three claims concerning the disciplinary character of economics by means of citation analysis.

This paper critically analyzes voting patterns in the 2016 U.S. presidential election.

This paper examines the relationship between placement of publications in Top Five (T5) journals and receipt of tenure in academic economics departments.

This paper concerns itself with the joint effect of implicit subsidies that are built into the US housing-finance system and financial safety net.

This paper adds to the empirical evidence on the extent to which stock-based pay incentivizes and rewards European corporate executives. It shows that the actual realized gains (that is, take-home compensation) from stock-based pay of CEOs in European publicly-listed firms may be underestimated by the use of “estimated fair value” measures. The paper also documents the heterogeneity among countries in terms of the levels and components of CEO take-home pay. We base our work on a sample of 301 large, publicly-traded companies listed in the S&P Europe 350 index from 11 EU countries: Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Spain, Sweden and United Kingdom for the fiscal year 2015. Through analyzing companies’ annual reports, we have hand-collected data on various elements of compensation of the company’s CEO in 2015, including the gains that executives realize from stock-based pay. We document that on average half of the total compensation of the European CEOs in our sample is stock-based, measured by actual realized gains, with large differences among countries. Although in some European countries the majority of total compensation is stock-based, the proportions are still well below those that prevail in the

“Dualism” in the structure of production across sectors of the US economy, employment by sector, productivity levels and growth, real wages, and intersectoral terms-of trade increased markedly between 1990 and 2016.

Using datasets on transactions within business groups and social sentiment in China, I show that state-owned enterprises (SOEs) use internal funds to address social unrest, complying with the government’s political goals.

This paper explains how hedge-fund activists are exerting power over corporate resourceallocation far in excess of the actual voting power of their shareholdings.

Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market

Labor market regulation is a controversial area of public policy in both developed and developing countries.

A presentation from the panel “Research Evaluation in Economic Theory and Policy Making” at the 2018 G20 Global Solutions Summit in Berlin

Alberto Baccini’s presentation for INET’s panel on research evaluation at the G20 Global Solutions Summit in Berlin, May 2018.

Has the global financial crisis of 2007 had a visible impact on the economics profession?

Adair Turner, Chair of the Institute for New Economic Thinking, Lecture at School of Advanced International Studies, Johns Hopkins University, Washington DC April 10th 2018

“Meso” level analysis of 16 producing sectors sheds light on broad forces shaping growth of employment and profits. 

As early as 1900, German sociologist Georg Simmel identified a central feature of wealth in his seminal work The Philosophy of Money. Simmel writes about the superadditum of wealth for the rich, namely that a great fortune is encircled by innumerable possibilities of use, as though by an astral body.

Over the last four decades, Americans have consistently told pollsters that they favor higher taxes on business and the wealthy, even as tax policy has moved sharply in the other direction.

Money in politics is not a strictly American phenomenon. In France, despite strong campaign finance laws, campaign donations have a direct influence on legislative and municipal election results.

The prevailing wisdom that aggregate demand ‘shocks’ determine short-run cyclical fluctuations around a supply-determined equilibrium growth rate and an associated equilibrium unemployment rate (or NAIRU) has been called into question by various streams of literature in the last decades. Specifically, a recently revived literature on hysteresis finds significant persistence in the effects of recessions and negative aggregate demand shocks (Blanchard et al. 2015; Martin et al. 2015).

A critical analysis of Piketty’s work

A large literature has detailed the seminal roles played in the Civil Rights Movement by activists, new political organizations, churches, and philanthropies. But black-owned businesses also provided a behind-the-scenes foundation for the movement’s success.

The U.S. presidential election of 2016 featured frontal challenges to the political establishments of both parties and perhaps the most shocking election upset in American history.

To get justice, targets must show measurable harm: economists can help.