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).
The path to holding fossil fuel producers accountable for climate change & climate damages
What economics can – and can’t – tell us about climate change
The Death of the Seventy-year American Empire
As globalization proceeds rapidly, manufacturing industry in most of developed countries declined steadily.
An Assessment and Some Policy Implications
Financial Reform Is Working, But Deregulation That Incentivizes One-Way Bets Is Sowing the Seeds of Another Catastrophic Financial Crash
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.”
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.
Unpacking the Effect of Trade on Workers and Voters
The Hinge of Fate? Economic and Social Populism in the 2016 Presidential Election A Preliminary Exploration
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.
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.
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.
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.
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.
Building symbiotic public-private partnerships