Finance

A member of the Austrian Central Bank tells us his research on wealth and income inequality in Europe.

In recent decades, advanced economies have experienced low and stable inflation and long periods of liquidity trap. We construct an alternative business-cycle model capturing these two features by adding two assumptions to a money-in-the-utility-function model: the labor market is subject to matching frictions, and real wealth enters the utility function. These assumptions modify the two core equations of the standard New Keynesian model

Yanis Varoufakis and Joseph Stiglitz discuss Greece’s financial challenges and the associated Eurozone politics in this exclusive conversation.

The Institute for New Economic Thinking responds to an evident need for innovative approaches to understanding economic and financial processes.

At least the Labour Party has only promised to cut day-to-day spending, not public investment.

Here we are, some 7 years after the Great Financial Crisis, and not one senior banking executive has gone to jail.

This paper proposes a different interpretation of the Eurozone crisis, seeing as its “final” cause European policies which have forced private savings down too low.

In much of Europe, the social rights and social protections won in the first post-war decades, by labour movements in particular, have subsequently been seriously eroded, and are further threatened by neoliberal austerity.

We discuss recent work on bounded rationality and learning in relation to Soros’ principle of reflexivity and stress the empirical importance of non-rational, almost self-fulfilling equilibria in positive feedback systems.

Italy was one of the worst hit during the 2007–2009 global financial crisis (GFC) among the major advanced economies. By year-end 2009, Italy’s economy had contracted by 6.6 percent; significantly larger than the recessions in the euro zone and the United States, for example, which saw their GDPs shrink by 4.4 and 3.1 percent, respectively.