This timely book rethinks economic theory and policy by addressing the problem of economic instab... more This timely book rethinks economic theory and policy by addressing the problem of economic instability and the need to secure broadly shared prosperity. It stresses that advancing economics in the wake of the Great Recession requires an evolutionary standpoint, greater attention to uncertainty and expectations, and the integration of finance into macroeconomics. The result is a broader array of policy options – and challenges – than conventional economics presents.
This study examines the interplay between financial crises, uncertainty, and economic growth duri... more This study examines the interplay between financial crises, uncertainty, and economic growth during the interwar period. Comparing the experiences of ten countries, we provide evidence that reductions in the credibility of a country's commitment to the gold standard generated capital flight and higher interest rate volatility. This volatility, in turn, was inversely correlated with economic growth. These results suggest that financial crises helped propagate the Great Depression, in part, by increasing uncertainty.
Most economists agree that the effect of foreclosures on the housing market in the United States ... more Most economists agree that the effect of foreclosures on the housing market in the United States has been an important reason for recent macroeconomic stagnation. This paper considers the federal government's poor performance in helping homeowners renegotiate their mortgages to be a collective action failure in its role as a lender of last resort. The reasons for this failure have important implications for Minsky's model of financial crisis since both lenders of last resort and federal government actions are important factors in preventing economic collapses.
One of the most troubling developments in recent years has been widening income inequality in the... more One of the most troubling developments in recent years has been widening income inequality in the United States and elsewhere. We argue Post Keynesian Institutionalism (PKI) provides insight into the causes of increasing income inequality and our contribution is threefold. First, we compare PKI to the "financialization" literature, noting key similarities and differences. Second, we examine changes in financial structure and income inequality for a sample of developed nations, showing that financialization has increased in nearly all the countries sampled and that this increase has generally been accompanied by a rise in income inequality. Third, we demonstrate that the development of modern financial structures does not preclude an expansive welfare state and egalitarian public policies. Our finding is congruent with Hyman Minsky's conception of PKI, which stressed both that "economic systems are not natural systems" and that capitalism comes in as many varieties as Heinz has of pickles.
noncash benefits or earned-income-tax-credits (EITC) as household income. The authors address thi... more noncash benefits or earned-income-tax-credits (EITC) as household income. The authors address this directly and find that with the alternative poverty measures, the number of households classified as poor does not change significantly after accounting for noncash benefits and EITC. This outcome is observed, as the authors argue, because so few of the working poor receive those benefits. The problems of the working poor and female-headed households are clearly illuminated in this book. The United States, with the highest GDP per capita, maintains the highest relative poverty rates in the developed world. In addition, a large fraction of families must live on incomes that keep them only slightly above low, official poverty thresholds. Given the relatively wealthy position of the United States, the authors argue that the persistence of poverty must be at least somewhat determined by policy choices. The policy prescriptions include full-employment macro policies for the working poor, prenatal and childhood development programs in order to increase human capital and break generational poverty, and child care and wage subsidies to address the problems of female-headed households. The authors accomplish their goal of providing numerous descriptive measures of poverty and their implications for public policy. The design of this book is not to provide empirical models of poverty incidence and detailed policy descriptions. The reader is, however, appropriately guided to sources that contain any additional information that might be desired. In a concise manner, the authors are able to illustrate the magnitude of poverty and offer some excellent alternatives for its alleviation.
cussion, his book presents an excellent starting point for anyone who wishes to study the history... more cussion, his book presents an excellent starting point for anyone who wishes to study the history and politics of minimum wage legislation. My criticisms are limited to a few minor errors or oversights. For example, Levin-Waldman identifies the eminent Harvard economist Frank Taussig as an opponent of minimum wage legislation. While it is true that Taussig thought that the policy was weak on purely theoretical grounds, the closing paragraphs of his important article on the economics of minimum wages indicates his support for it in specific cases (Taussig 1916). In addition, at times Levin-Waldman misuses the somewhat idiosyncratic terminology of economic theory, and on a couple of occasions an economic argument is inadequately summarized. But such lapses neither undermine nor diminish the overall achievement. Anyone with a scholarly, political, or practical interest in minimum wage legislation will need to read Levin-Waldman's book. Moreover, its attractive price makes it a cost-effective addition to one's private collection.
International Journal of Pluralism and Economics Education, 2014
Recent studies find that business school students would benefit from a further integration of tra... more Recent studies find that business school students would benefit from a further integration of traditional disciplines with the liberal arts. This paper outlines a suggested approach for accomplishing this in a finance capstone course, and reports the results from student assessments. The findings suggest that coursework aimed at developing critical thinking and communications ability can be designed in ways that complement standard business programmes.
... Notes I. Tom Buerkle (2000) provided details about recent acquisition trends in Europe, and S... more ... Notes I. Tom Buerkle (2000) provided details about recent acquisition trends in Europe, and Steven Lipin, Nikhil Deogun, and Kara Scannell (2000) described a return to 1980s-style takeovers in the United States. ... Lipin, Steven, Nikhil Deogun, and Kara Scannell. ...
... On the other hand, progressives focused on how Greenspan's policies affected socialj... more ... On the other hand, progressives focused on how Greenspan's policies affected socialjustice. ... Also, Freddie Mac has found that most people are unaware that lenders will often agree to renegotiate loan terms with troubled borrowers. ...
Post-Keynesian Institutionalist economists like Wallace Peterson and John Kenneth Galbraith recog... more Post-Keynesian Institutionalist economists like Wallace Peterson and John Kenneth Galbraith recognized that the impact of uncertainty on economic well-being depends in part on the degree of control people have over the sources and consequences of it. Given the inability of government and other large institutions to reduce uncertainty or to provide citizens with the ability to manage it, mediating structures are considered as an alternative means of promoting economic security. The paper concludes by describing and evaluating several of these alternatives.
... See Lewis E. Hill, Charles E. Butler, and Stephen A. Lorenzen [1977] for a description of the... more ... See Lewis E. Hill, Charles E. Butler, and Stephen A. Lorenzen [1977] for a description of the relationship between inflation and politics in interwar Germany. 5. Quoted in Steven Levingston [1999]. ... Hill, Lewis E., Charles E. Butler, and Stephen A. Lorenzen. ...
Because the process of securitizing home mortgages played a critical role in precipitating the re... more Because the process of securitizing home mortgages played a critical role in precipitating the recent financial crisis, it is widely agreed that this market must be reformed to prevent future collapses. Most proposals focus on improving the dissemination of information among securitization participants, and on strengthening incentives to discourage excessive risk-taking. This paper argues that because securitization involves the commodification of the lending relationship, it reinforces the type of self-interested behavior that often undermines regulatory efforts. What are needed are structural reforms that encourage moral behavior by narrowing the social distance between lenders and borrowers. This can be accomplished by a return to traditional banking lending, supplemented by the use of covered bonds to loosen credit constraints and to help financial intermediaries manage market risk.
Abstract: Post-Keynesian institutionalist economists like Wallace Peterson and John Kenneth Galbr... more Abstract: Post-Keynesian institutionalist economists like Wallace Peterson and John Kenneth Galbraith recognized that the impact of uncertainty on economic wellbeing depends in part on the degree of control people have over the sources and consequences of it. Given the inability of government and other large institutions to reduce uncertainty or to provide citizens with the ability to manage it, mediating structures are considered as an alternative means of promoting economic security. The article concludes by describing and evaluating several of these alternatives.
This timely book rethinks economic theory and policy by addressing the problem of economic instab... more This timely book rethinks economic theory and policy by addressing the problem of economic instability and the need to secure broadly shared prosperity. It stresses that advancing economics in the wake of the Great Recession requires an evolutionary standpoint, greater attention to uncertainty and expectations, and the integration of finance into macroeconomics. The result is a broader array of policy options – and challenges – than conventional economics presents.
This study examines the interplay between financial crises, uncertainty, and economic growth duri... more This study examines the interplay between financial crises, uncertainty, and economic growth during the interwar period. Comparing the experiences of ten countries, we provide evidence that reductions in the credibility of a country's commitment to the gold standard generated capital flight and higher interest rate volatility. This volatility, in turn, was inversely correlated with economic growth. These results suggest that financial crises helped propagate the Great Depression, in part, by increasing uncertainty.
Most economists agree that the effect of foreclosures on the housing market in the United States ... more Most economists agree that the effect of foreclosures on the housing market in the United States has been an important reason for recent macroeconomic stagnation. This paper considers the federal government's poor performance in helping homeowners renegotiate their mortgages to be a collective action failure in its role as a lender of last resort. The reasons for this failure have important implications for Minsky's model of financial crisis since both lenders of last resort and federal government actions are important factors in preventing economic collapses.
One of the most troubling developments in recent years has been widening income inequality in the... more One of the most troubling developments in recent years has been widening income inequality in the United States and elsewhere. We argue Post Keynesian Institutionalism (PKI) provides insight into the causes of increasing income inequality and our contribution is threefold. First, we compare PKI to the "financialization" literature, noting key similarities and differences. Second, we examine changes in financial structure and income inequality for a sample of developed nations, showing that financialization has increased in nearly all the countries sampled and that this increase has generally been accompanied by a rise in income inequality. Third, we demonstrate that the development of modern financial structures does not preclude an expansive welfare state and egalitarian public policies. Our finding is congruent with Hyman Minsky's conception of PKI, which stressed both that "economic systems are not natural systems" and that capitalism comes in as many varieties as Heinz has of pickles.
noncash benefits or earned-income-tax-credits (EITC) as household income. The authors address thi... more noncash benefits or earned-income-tax-credits (EITC) as household income. The authors address this directly and find that with the alternative poverty measures, the number of households classified as poor does not change significantly after accounting for noncash benefits and EITC. This outcome is observed, as the authors argue, because so few of the working poor receive those benefits. The problems of the working poor and female-headed households are clearly illuminated in this book. The United States, with the highest GDP per capita, maintains the highest relative poverty rates in the developed world. In addition, a large fraction of families must live on incomes that keep them only slightly above low, official poverty thresholds. Given the relatively wealthy position of the United States, the authors argue that the persistence of poverty must be at least somewhat determined by policy choices. The policy prescriptions include full-employment macro policies for the working poor, prenatal and childhood development programs in order to increase human capital and break generational poverty, and child care and wage subsidies to address the problems of female-headed households. The authors accomplish their goal of providing numerous descriptive measures of poverty and their implications for public policy. The design of this book is not to provide empirical models of poverty incidence and detailed policy descriptions. The reader is, however, appropriately guided to sources that contain any additional information that might be desired. In a concise manner, the authors are able to illustrate the magnitude of poverty and offer some excellent alternatives for its alleviation.
cussion, his book presents an excellent starting point for anyone who wishes to study the history... more cussion, his book presents an excellent starting point for anyone who wishes to study the history and politics of minimum wage legislation. My criticisms are limited to a few minor errors or oversights. For example, Levin-Waldman identifies the eminent Harvard economist Frank Taussig as an opponent of minimum wage legislation. While it is true that Taussig thought that the policy was weak on purely theoretical grounds, the closing paragraphs of his important article on the economics of minimum wages indicates his support for it in specific cases (Taussig 1916). In addition, at times Levin-Waldman misuses the somewhat idiosyncratic terminology of economic theory, and on a couple of occasions an economic argument is inadequately summarized. But such lapses neither undermine nor diminish the overall achievement. Anyone with a scholarly, political, or practical interest in minimum wage legislation will need to read Levin-Waldman's book. Moreover, its attractive price makes it a cost-effective addition to one's private collection.
International Journal of Pluralism and Economics Education, 2014
Recent studies find that business school students would benefit from a further integration of tra... more Recent studies find that business school students would benefit from a further integration of traditional disciplines with the liberal arts. This paper outlines a suggested approach for accomplishing this in a finance capstone course, and reports the results from student assessments. The findings suggest that coursework aimed at developing critical thinking and communications ability can be designed in ways that complement standard business programmes.
... Notes I. Tom Buerkle (2000) provided details about recent acquisition trends in Europe, and S... more ... Notes I. Tom Buerkle (2000) provided details about recent acquisition trends in Europe, and Steven Lipin, Nikhil Deogun, and Kara Scannell (2000) described a return to 1980s-style takeovers in the United States. ... Lipin, Steven, Nikhil Deogun, and Kara Scannell. ...
... On the other hand, progressives focused on how Greenspan's policies affected socialj... more ... On the other hand, progressives focused on how Greenspan's policies affected socialjustice. ... Also, Freddie Mac has found that most people are unaware that lenders will often agree to renegotiate loan terms with troubled borrowers. ...
Post-Keynesian Institutionalist economists like Wallace Peterson and John Kenneth Galbraith recog... more Post-Keynesian Institutionalist economists like Wallace Peterson and John Kenneth Galbraith recognized that the impact of uncertainty on economic well-being depends in part on the degree of control people have over the sources and consequences of it. Given the inability of government and other large institutions to reduce uncertainty or to provide citizens with the ability to manage it, mediating structures are considered as an alternative means of promoting economic security. The paper concludes by describing and evaluating several of these alternatives.
... See Lewis E. Hill, Charles E. Butler, and Stephen A. Lorenzen [1977] for a description of the... more ... See Lewis E. Hill, Charles E. Butler, and Stephen A. Lorenzen [1977] for a description of the relationship between inflation and politics in interwar Germany. 5. Quoted in Steven Levingston [1999]. ... Hill, Lewis E., Charles E. Butler, and Stephen A. Lorenzen. ...
Because the process of securitizing home mortgages played a critical role in precipitating the re... more Because the process of securitizing home mortgages played a critical role in precipitating the recent financial crisis, it is widely agreed that this market must be reformed to prevent future collapses. Most proposals focus on improving the dissemination of information among securitization participants, and on strengthening incentives to discourage excessive risk-taking. This paper argues that because securitization involves the commodification of the lending relationship, it reinforces the type of self-interested behavior that often undermines regulatory efforts. What are needed are structural reforms that encourage moral behavior by narrowing the social distance between lenders and borrowers. This can be accomplished by a return to traditional banking lending, supplemented by the use of covered bonds to loosen credit constraints and to help financial intermediaries manage market risk.
Abstract: Post-Keynesian institutionalist economists like Wallace Peterson and John Kenneth Galbr... more Abstract: Post-Keynesian institutionalist economists like Wallace Peterson and John Kenneth Galbraith recognized that the impact of uncertainty on economic wellbeing depends in part on the degree of control people have over the sources and consequences of it. Given the inability of government and other large institutions to reduce uncertainty or to provide citizens with the ability to manage it, mediating structures are considered as an alternative means of promoting economic security. The article concludes by describing and evaluating several of these alternatives.
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Papers by David Zalewski