We support dynamic research that can help solve the great economic and social challenges of the 21st century. INET’s research is interdisciplinary, incorporating concepts from history, political science, and the humanities.
Research Papers
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Working Paper Series
The Political Economy of Europe Since 1945: A Kaleckian Perspective
Nov 2019
This paper analyzes the early stages of the formation of the Common Market.
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Working Paper Series
Europe 1957 to 1979: From the Common Market to the European Monetary System
Nov 2019
This essay deals with the contradictory dynamics that engulfed Europe from 1959 to 1979, the year of the launching of the European Monetary System.
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Working Paper Series
From the EMS to the EMU and...to China
Nov 2019
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.
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Working Paper Series
Synthetic MMT: Old Line Keynesianism with an Expansionary Twist
Oct 2019
Policy hype but vintage fiscal economics from Godley, Lerner, and Keynes
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Working Paper Series
Big Tech Acquisitions and the Potential Competition Doctrine: The Case of Facebook
Oct 2019
How antitrust law is ill-equipped to address tech mergers
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Working Paper Series
American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust
Jul 2019
The Chicago School has long used bankrupt assumptions to strangle antitrust policy.
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Working Paper Series
Firm-Level Political Risk: Measurement and Effects
Jul 2019
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.
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Working Paper Series
Expansionary Austerity and Reverse Causality: A Critique of the Conventional Approach
Jul 2019
It was too good to be true: Another effort to vindicate austerity falls victim to flawed methodology.
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Working Paper Series
State Capacity and Demand for Identity: Evidence from Political Instability in Mali
Jun 2019
Frequent civil conflicts in African countries may erode national identity, thus highlighting a reason why civil conflict is costly for growth and development
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Report
Macroeconomic Management Meets the New Economy
May 2019
A report of the Commission on Global Economic Transformation’s subcommittee on Macroeconomics & Finance
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Report
Technological Disruption in the Global Economy
Apr 2019
A report of the Commission on Global Economic Transformation’s subcommittee on Inequality, Technology, and the Future of Work
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Working Paper Series
Demand-determined potential output: a revision and update of Okun’s original method
May 2019
Everyone is waking up to the fact that estimates of what is possible in the economy are way off: this paper explains why
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Working Paper Series
Antitrust and Economic History: The Historic Failure of the Chicago School of Antitrust
May 2019
This paper presents an historical analysis of the antitrust laws.
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Working Paper Series
Lost in Deflation
Apr 2019
Why Italy’s woes are a warning to the whole Eurozone
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Working Paper Series
Economic Consequences of the U.S. Convict Labor System
Mar 2019
Prisoners employed in manufacturing constitute 4.2% of total U.S. manufacturing employment in 2005; they produce cheap goods, creating labor demand shock.
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Working Paper Series
The Knightian Uncertainty Hypothesis: Unforeseeable Change and Muth’s Consistency Constraint in Modeling Aggregate Outcomes
Mar 2019
This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory.
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Working Paper Series
New Evidence on the Portfolio Balance Approach to Currency Returns
Feb 2019
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.
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Working Paper Series
The Contributions of Socioeconomic and Opioid Supply Factors to Geographic Variation in U.S. Drug Mortality Rates
Feb 2019
Economic distress in rural areas and opioid exposure in cities are key indicators of overdose deaths
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Working Paper Series
Labor Laws and Manufacturing Performance in India: How Priors Trump Evidence and Progress Gets Stalled
Feb 2019
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.
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Working Paper Series
Estimates of the Natural Rate of Interest and the Stance of Monetary Policies: A Critical Assessment
Jan 2019
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.
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Working Paper Series
Finance in Economic Growth: Eating the Family Cow
Jan 2019
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.
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Working Paper Series
Economic Growth and Carbon Emissions: The Road to ‘Hothouse Earth’ is Paved with Good Intentions
Dec 2018
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.
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Commentary
Why We Need a Second Bretton Woods Gathering
Nov 2018
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.
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Working Paper Series
Citation Patterns in Economics and Beyond
Nov 2018
In this paper we comparatively explore three claims concerning the disciplinary character of economics by means of citation analysis.
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Working Paper Series
Citation Patterns in Economics and Beyond
Nov 2018
Assessing the Peculiarities of Economics from Two Scientometric Perspectives
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Working Paper Series
The Economic and Social Roots of Populist Rebellion: Support for Donald Trump in 2016
Oct 2018
This paper critically analyzes voting patterns in the 2016 U.S. presidential election.
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Working Paper Series
Publishing and Promotion in Economics: The Tyranny of the Top Five
Oct 2018
This paper examines the relationship between placement of publications in Top Five (T5) journals and receipt of tenure in academic economics departments.
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Working Paper Series
Double Whammy: Implicit Subsidies and the Great Financial Crisis
Sep 2018
This paper concerns itself with the joint effect of implicit subsidies that are built into the US housing-finance system and financial safety net.
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Working Paper Series
Executive compensation in Europe: Realized gains from stock-based pay
Sep 2018
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
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Working Paper Series
Race to the Bottom: Low Productivity, Market Power, and Lagging Wages
Aug 2018
“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.
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Working Paper Series
Social Stability and Resource Allocation within Business Groups
Aug 2018
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.
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Working Paper Series
The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism
Aug 2018
This paper explains how hedge-fund activists are exerting power over corporate resourceallocation far in excess of the actual voting power of their shareholdings.
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Working Paper Series
Too Big to Fail Banks' Regulatory Alchemy
Jun 2018
Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market
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Working Paper Series
Labor Institutions and Development Under Globalization
Jun 2018
Labor market regulation is a controversial area of public policy in both developed and developing countries.
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Presentation
Citation Counts: Consequences on the Development of Economics
May 2018
A presentation from the panel “Research Evaluation in Economic Theory and Policy Making” at the 2018 G20 Global Solutions Summit in Berlin
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Conference paper
Performance-Based Incentives, Research Evaluation Systems and the Trickle-Down of Bad Science
May 2018
Alberto Baccini’s presentation for INET’s panel on research evaluation at the G20 Global Solutions Summit in Berlin, May 2018.
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Working Paper Series
The Focus of Academic Economics: Before and After the Crisis
May 2018
Has the global financial crisis of 2007 had a visible impact on the economics profession?
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Conference paper
Capitalism in the age of robots: work, income and wealth in the 21st-century
May 2018
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
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Working Paper Series
Where Do Profits and Jobs Come From? Employment and Distribution in the US Economy
May 2018
“Meso” level analysis of 16 producing sectors sheds light on broad forces shaping growth of employment and profits.
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Commentary
Analysing Wealth Inequality: A Conceptual Reflection
Apr 2018
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.
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Working paper
A Distorting Mirror: Major Media Coverage of Americans’ Tax Policy Preferences
Apr 2018
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.
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Working Paper Series
Corporate Scandals and Regulation
Dec 2017
Are regulatory interventions delayed reactions to market failures or can regulators proactively pre-empt corporate misbehavior?
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Working Paper Series
The Price of a Vote: Evidence from France, 1993-2014
Feb 2018
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.
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Working Paper Series
Inequality in the 21st century
Jan 2018
A critical analysis of Piketty’s work
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Working Paper Series
Lending a Hand: How Small Black Businesses Supported the Civil Rights Movement
Jan 2018
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.
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Conference paper
$MeToo: The Economic Cost of Sexual Harassment
Jan 2018
To get justice, targets must show measurable harm: economists can help.
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Grantee paper
Empirical Research on the Revolving Door ‘Shadow Lobbyists’
Oct 2017
The US federal lobbying industry, based in Washington DC, is major focal point for political money and the exercise of influence, with expenditures peaking at approximately $2.5 billion per annum during the first Obama administration.
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Working Paper Series
Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election
Jan 2018
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.
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Conference paper
Why central bank models failed and how to repair them
Oct 2017
The consensus that reigned in macroeconomics before the financial crisis has come under renewed attack.
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Conference paper
Why Observation of the Behaviour of Human Actors and How They Combine Within the Economy, is an Important Next Step.
Oct 2017
One might think of the satisfied consensus reigning in macroeconomics before the financial crisis (and still relatively entrenched) as evidence of “Groupthink” in a “Divided State”
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Conference paper
How a Flawed Structure is Hurting the Eurozone—Economically and Politically
Oct 2017
The wind appears to be back in the sails of the Eurozone economy ….
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Conference paper
A Fiscal Union. Is it likely? Would it be enough?
Oct 2017
The current crisis is the culmination of a process of integration that has profoundly changed the structure of each member state, their inter-relations and their power relations. One of its side effects was the rediscovery of the terms ‘centre’ and ‘periphery’ to analyse the economic situations of the European countries.
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Conference paper
Macroeconomic stabilization, monetary-fiscal interactions, and Europe’s monetary union
Oct 2017
The euro area has been experiencing a prolonged period of weak economic activity and very low inflation.
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Conference paper
Power or Economic Law?
Oct 2017
Some fresh reflections on ECB policy
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Conference paper
Veiling
Dec 2017
Veiling among Muslim women is modeled as a commitment mechanism that limits temptation to deviate from religious norms of behavior.
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Conference paper
Betting on Hitler – The Value of Political Connections in Nazi Germany
Oct 2017
This paper examines the value of connections between German industry and the Nazi movement in early 1933. Drawing on previously unused contemporary sources about management and supervisory board composition and stock returns, we find that one out of seven firms, and a large proportion of the biggest companies, had substantive links with the National Socialist German Workers’ Party. Firms supporting the Nazi movement experienced unusually high returns, outperforming unconnected ones by 5% to 8% between January and March 1933. These results are not driven by sectoral composition and are robust to alternative estimators and definitions of affiliation.
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Conference paper
The Value of Political Connections in Fascist Italy
Oct 2017
Stock Market Returns and Corporate Networks
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Conference paper
Notes on the Failure of the Weimar Republic
Oct 2017
“The Failure of Democracy” – “The weaknesses of Weimar” Do headlines such as these suggest that the whole architecture of the first German republic was wrong, that it was doomed right from the start, that the “collapse” was unavoidable?
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Conference paper
From the Prevailing Paradigm to the Qualitative Expectations Hypothesis
Oct 2017
In the paper that we present this afternoon, Soren Johansen, Anders Rahbek, Morten Tabor, and I introduce the Qualitative Expectations Hypothesis (QEH) as a new approach to modeling macroeconomic and financial outcomes.
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Conference paper
Imperfect Knowledge, Unpredictability and the Failures of Modern Macroeconomics
Oct 2017
After re-iterating five well-known theorems about the properties of conditional expectations in stationary settings—such as providing unbiased minimum mean square error predictions despite in- complete information, and the law of iterated expectations—we clarify unpredictability and illustrate its prevalence empirically.
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Commentary
Some Thoughts on Secular Stagnation, Loanable Funds and the ZLB
Dec 2017
I have read the various conference papers and am struck by the fact that many use the (omnipresent New-Keynesian) model of an aggregate loanable funds market to diagnose secular stagnation and investigate possible remedies.
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Working Paper Series
Persistent Effects of Autonomous Demand Expansions
Feb 2018
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).
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Conference paper
Transition to Slower Population Growth: Demography and its Effect on Real Interest Rates
Dec 2017
The past 30 years has witnessed a worldwide decrease in real interest rates. We demonstrate that a large part of the fall in interest rates can be explained by changes in demography, which are as the result of a sudden fall in fertility rates across all of the advanced economies in the early 1970s.
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Conference paper
Endogenous Technology Adoption and R&D as Sources of Business Cycle Persistence
Dec 2017
We examine the hypothesis that the slowdown in productivity following the Great Recession was in significant part an endogenous response to the contraction in demand that induced the downturn.
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Conference paper
Secular Demand Stagnation in the 21st Century U.S. Economy
Dec 2017
The concern that an economy could experience persistent, and in some sense unusual, weakness goes back to Keynes’s General Theory and led Alvin Hansen to coin the term “secular stagnation.”
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Conference paper
Aging, Output per capita and Secular Stagnation
Dec 2017
This paper shows that aging has positive effect on output growth per capital at positive interest rates, due to capital deepening.
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Conference paper
Stagnation Traps
Dec 2017
We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent, slumps characterized by high unemployment and weak growth.
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Conference paper
Inequality and Aggregate Demand
Dec 2017
We explore the transmission mechanism of income inequality to output.
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Conference paper
The Rate of Return on Everything, 1870–2015
Dec 2017
This paper answers fundamental questions that have preoccupied modern economic thought since the 18th century.
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Conference paper
Are Low Real Interest Rates Here to Stay?
Dec 2017
Long-term real interest rates across the world are low, having fallen by about 450 basis points (bps) over the past thirty years.
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Conference paper
A Model of Secular Stagnation: Theory and Quantitative Evaluation
Dec 2017
This paper replaces an earlier version of a paper released in 2014 under the title “A Model of Secular Stagnation.”
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Conference paper
On Adam Smith
Oct 2017
Given that this is a panel on that quintessential Enlightenment thinker Adam Smith, I can think of no better way to begin my remarks than to invoke that most enlightened of modern economists, Kenneth Boulding, who in 1971 penned the delightful essay, “After Samuelson, Who Needs Adam Smith?”
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Conference paper
“Come forth into the light of things”: William Wordsworth’s Human Challenge to Economic Thinking
Oct 2017
When priests and princes lost their monopoly over the big questions of human existence over the course of the Enlightenment, philosophers, poets, and ordinary people struggled to find out the answers on their own.
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Conference paper
Adam Smith, the Scottish Enlightenment, and ‘realistic’ Philosophy
Oct 2017
Adam Smith’s modern fame as the founding father of economics has, until relatively recently, obscured the fact that he saw himself as a moral philosopher.
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Conference paper
Reawakening: From the Origins of Economic Ideas to the Challenges of Our Time
Oct 2017
The road towards a decent society; lessons from classical political economy
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Conference paper
Carbon producers’ tar pit: dinosaurs beware
Oct 2017
The path to holding fossil fuel producers accountable for climate change & climate damages
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Conference paper
The humble economist
Oct 2017
What economics can – and can’t – tell us about climate change
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Conference paper
Fracturing at the Core of the Global Order
Oct 2017
The Death of the Seventy-year American Empire
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Conference paper
Globalization and Japanese Manufacturing Industry
Oct 2017
As globalization proceeds rapidly, manufacturing industry in most of developed countries declined steadily.
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Conference paper
The Functional Importance of Asset Backed Securities
Oct 2017
An Assessment and Some Policy Implications
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Conference paper
Financial Reform Is Working, But Deregulation That Incentivizes One-Way Bets Is Sowing the Seeds of Another Catastrophic Financial Crash
Oct 2017
The deregulatory zeal of the 1990s and 2000s has returned to the US and the post-Brexit plans to protect the City in the UK sound like the pre-crash light-touch mentality that fueled global regulatory arbitrage. As a result, a foremost “challenge of our time” is to stop “subsidizing more one-way bets” and “doubling down on failure.”
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Conference paper
Who voted for Brexit? A comprehensive district-level analysis
Oct 2017
On 23 June 2016, the British electorate voted to leave the European Union (EU). We analyse vote and turnout shares across 380 local authority areas in the United Kingdom.
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Conference paper
Instrumental Variables and Causal Mechanisms
Oct 2017
Unpacking the Effect of Trade on Workers and Voters
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Conference paper
The Hinge of Fate? Economic and Social Populism in the 2016 Presidential Election A Preliminary Exploration
Oct 2017
Support for populism is often attributed to xenophobia, racism, sexism; to anger and resentment at immigrants, racial or ethnic minorities, or “uppity” non-traditional women. According to these accounts , people who feel socially resentful may reject established politicians as favoring those “others” over people like themselves, and turn to outsider populistic leaders.
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Conference paper
Inside the Great Leveraging
Oct 2017
This paper discusses what we have learned about the debt build-up in advanced societies over the past century. It shows that the extraordinary growth of aggregate debt in the past century was driven by the private sector.
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Conference paper
Rising public debt-to-GDP can harm economic growth
Oct 2017
The debt-growth relationship is complex, varying across countries and being affected by global factors. While there is no simple universal threshold above which debt-to-GDP becomes a significant brake on growth, based on data from the last four decades we show that high and rising public debt burdens slow down growth in the long term.
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Conference paper
A Burning Debt. The Influence of Household Debt on Investment, Production and Growth in US.
Oct 2017
This paper discusses household debt as a long term phenomenon that influences economies beyond crises.1 In other words, rather than look at how household indebtedness can lead to crises, I will focus on its surprising persistence at very high levels, and its interactions along the way with other key variables, such as public policies and spending. The first section describes some stylized facts and the final section explores the macroeconomic consequences.
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Conference paper
Innovative Enterprise and Sustainable Prosperity
Oct 2017
We want an economy that generates stable and equitable growth—or what I call “sustainable prosperity.” We want productivity growth that makes it possible for the population to have higher living standards over time. We want an equitable sharing of the gains from productivity growth among those whose work efforts and financial resources contribute to that growth. And we want sufficient job stability to enable workers to remain in productive employment for some four decades at work while providing them with enough savings to provide them with adequate incomes over some two decades of retirement.
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Conference paper
Wealth Creation and the Entrepreneurial State
Oct 2017
Building symbiotic public-private partnerships
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Conference paper
Dualism and Economic Stagnation
Oct 2017
Can a Policy of Guaranteed Basic Income Return Mature Market Economies to les Trente Glorieuses?
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Conference paper
How far are Economists Purveyors of Fake News?
Oct 2017
How far are economists implicated in the rise of ‘fake experts’ and ‘fake news’?
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Conference paper
Hell is Truth Seen Too Late
Oct 2017
The contemporary literature on neoliberalism has grown so large as to be unwieldy. For some on the left, this has presented an occasion to denounce it altogether.
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Conference paper
Gains from Trade
Oct 2017
Is Comparative Advantage the Ideology of the Comparatively Advantaged?
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Conference paper
Innovation, Intellectual Property, and Development
Oct 2017
A better set of approaches for the 21st century.
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Conference paper
Importing Political Polarization?
Oct 2017
The Electoral Consequences of Rising Trade Exposure
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Conference paper
Gender and the Future of Macroeconomics
Oct 2017
Decomposition by such an important category as gender helps us understand the economy at the macro level, and design macroeconomic policy, better. It also provides the foundation for advocating equal gender rights and outcomes. But, where gendered policy issues arise in mainstream macroeconomics (income maldistribution, labour market composition, etc.) the subject matter is narrowed by its microfoundations, by focusing on GDP growth and on suboptimal outcomes being explained by market imperfections.
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Conference paper
The Vanishing Middle Class: The Growth of a Dual Economy
Oct 2017
Growing income inequality is threatening the American middle class, and the middle class is vanishing before our eyes. We are still one country, but the stretch of incomes is fraying the unity of our nation.
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Conference paper
The Precariat under Rentier Capitalism
Oct 2017
The Precariat under Rentier Capitalism Guy Standing We are in the midst of a Global Transformation, analogous to Karl Polanyi’s Great Transformation described in his seminal 1944 book. Whereas Polanyi’s Transformation was about constructing national market systems, today’s is about the painful construction of a global market system. To use Polanyi’s term, the ‘dis-embedded’ phase has been dominated by an ideology of market liberalisation, commodification and privatisation, orchestrated by financial interests, as in his model. The similarities also extend to today’s fundamental challenge, how to construct a ‘re-embedded’ phase, with new systems of regulation, distribution and social protection.
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Conference paper
Explaining Dualism in a Gender Perspective: Gender, Class and the Crisis
Oct 2017
In the economic literature, several scholars have addressed the narrative of a two-stage European crisis. In a first stage, the so-called “he-cession”, men would have been hit the most by the economic recession induced by the financial crisis. Shortly thereafter, in the “she-austerity” stage, women would have suffered the heaviest burdens of the fiscal retrenchment measures. If that were the case, the policy response to the crisis would be producing an increase in the – already high pre-existing – gender inequality.
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Conference paper
Diversity and the Evaluation of Economic Research: The Case of Italy
Oct 2017
Especially in the wake of the Great Recession, calls for more diversity within economics are usually limited to appealing for greater diversity in the economists’ backgrounds, while diversity of opinion and approaches is often neglected.