History

A gap between theory and reality has haunted economists.

We investigate the claim that the way in which debtor households service their debts matters for macroeconomic performance.

Throughout its first 10 years operation, the John Bates Clark medal was constantly challenged. Many young economists found it biased toward theory, and demanded the establishment of a distinct award for applied work.

The impact of the post-meltdown Federal Reserve policy of ultra-low interest rates and Quantitative Easing (QE) on income and wealth inequality has become an important policy and political issue.

A combination of leeway within the government and constitutional immunity during incumbency enables office holders to abuse their budget at will, which in turn creates a crisis of growth in Africa, relative to other parts of the world.

By integrating the history of industrial development in Britain and the United States with the ideas of leading economic thinkers, this essay demonstrates the absurdity of perfect competition as the ideal of economic efficiency.

This paper studies the role of credit in the business cycle, with a focus on private credit overhang.

This paper traces the evolution of the concept of the cyclically adjusted budget from the 1930s to the present.

In 1953, Oskar Morgenstern proposed to reform the eligibility criterion for fellows of the Econometric Society, in an attempt to foster empirical work.

The Institute extends its congratulations to Philip Lane, who has been named to succeed Patrick Honohan as the Irish central bank chief, and inherit his role on the council of the ECB.

This essay critically evaluates the benefits and costs of the dominant methodology in macroeconomics, the DSGE approach. Although the approach has led to great progress in some areas, it has also created biases and blind spots in the profession that hold back our understanding and our ability to govern the macroeconomy. There is great scope for progress in macroeconomics by judiciously pushing the boundaries of some of the methodological restrictions imposed by the DSGE approach.

Adair Turner discusses his new book, Between Debt and the Devil: Money, Credit, and Fixing Global Finance.

John Kay shares findings from his new book, Other People’s Money, and his insights on changing the financial sector.

The World Bank’s global poverty estimates suffer from deep-seated problems arising from a single source, the lack of a standard for identifying who is poor and who is not that is consistent and meaningful.

Economists’ assumptions, even about seemingly “small” matters, make an enormous difference to global poverty estimates but their impact often goes unnoticed, and the choices made have been badly justified. We must stop pretending that the World Bank’s “$1 per day” estimates are at all reliable.