Report JUNE 2002 VOLUME 12, NUMBER 2
12th Annual Hyman P.Minsky Conference on Financial Markets: “Recession and Recovery: Economic Policy in Uncertain Times”
G A RY H. STERN SPEAKS TO THE PRESS AT THE CLOSE OF THE 12TH A N N UAL MINSKY CONFERENCE
When recession hit the United States in 2001 it was widely believed that the country was facing a long-term downturn. Many economic analysts now believe that the U.S. economy is already on the path to recovery.Others, however, express caution and note that economic indicators pointo t a less-than-robust recovery.This uncertainty over how strong the economic recovery might be,if there is one,makes for difficulty in designing economico licyp .At the 12th Annual Hyman P.Minsky Conference on Financial Markets, held on April 25 in New York City, participants from government, business,and academe gathered to discuss such questions as “what is the statef othe U.S. economy?” and “what policies ought now to be adopted?” Brief summaries of participants’ comments follow.
Continued on page 3 C O N T E N T S
JUNE 2002 VOLUME 12, NUMBER 2
Conference 12th Annual Hyman P.Minsky Conference on Financial Markets: Recession and Recovery: Economic Policy in Uncertain Times 1
Symposium New Directions in Research on Gender-Aware Macroeconomics and International Economics: An International Symposium 6
New Working Papers Dollarization:A Dead End 8 The “Third Way”and the Challenges to Economic and Monetary Union Macropolicies 9
Levy Institute News Events 9
Publications and Presentations Publications and Presentations by Levy Institute Scholars 10 Recent Levy Institute Publications 11
The Levy Econo mics Ins ti t ute of Bar d Coll e ge, fou n d ed in 1986, is a nonp rofi t , To be placed on the Repor t mailing list,order publi c a ti on s , or inqui r e abou t or com- non p a r tisan res e a r ch orga n i z a ti o n devot ed to public service . Thro u g h scho l a rs h i p me nt on res e a r ch and event s , cont a ct the Levy Ins ti t ute: and econo mic res e a r ch it gene rat es via bl e , eff ective public policy res p onses to The Levy Economics Institute of Bard College im p ortant econo mic proble ms that profou n d ly affect the qua l i t y of li f e in the Blithewood Uni t ed States and abroad. PO Box 5000 Annandale-on-Hudson, New York 12504-5000 The Report is a quar terly publication o f The Levy Economics Institute of Bard Tel:845-758-7700,202-887-8464 (in Washington, D.C.) College. Fax:845-758-1149 Editor: Lynndee Kemmet Text Editor: Katherine Harper E-mail: [email protected] All publications are available on the Institute’s website (www.levy.org).
Printed on recycled paper Conference Continued from page 1
Speaker: Wynne Godley For the past two yea rs , Dis ti n g u i s h e d Scholar Wynne Godle y and Res e a r ch Scholar Ale x Izu ri e ta have worked join t l y on res e a r ch proje cts for the Levy Ins ti t ute’s Strat egic Ana l ysis pu bl i c a ti o n serie s . In past papers, the pair have warne d that, des p i t e the great strid es being made by the U.S . econo my, the growth of aggregate demand was so structured as to be u n su s t a i n a bl e . In pre s en ting their most recent findings , Godley stated that, although the economy appears to be in WYNNE GODLEY recovery, Americans should not be complacent: dangers do still exist. goods and services would be required. Foreign countries Many analysts and policymakers attribute the U.S. econo- would also need to enact expansionary measures to offset my’s quick rebound from recession to the New Economy’s the disinflationary shock caused by improvement in the U.S. natural resilience and to aggressive interest rate reductions by balance of payments. Godley was not optimistic about either the Federal Reserve. Godley sharply disagrees: too little credit, condition being met. he says, has been given to fiscal policy, which he points out went through major changes in the past year.In January 2001 the Congressional Budget Office projected budget surpluses of Speaker: Anthony M. Santomero $313 billion for 2002 and $359 billion for 2003. Two months Anthony M. Santomero, president of the Federal Reserve later, those figures were revised to deficits of $46 billion and Bank of Philadelphia, said that much can be learned from $40 billion respectively. The obvious conclusion, Godley said, the recent recession. This was unique in that the economy is that the government proposes to inject large sums of money suffered a number of negative shocks over a short period of into the economy, a move in the right direction and exactly the time—the September 11 terrorist attacks, the collapse of sort of relaxation of fiscal policy that he and Izurieta had Enron,a bursting stock bubble,and numerous global financial called for in past Strategic Analysis papers. and military crises—and yet experienced one of the mildest Godley next presented three five-year projections of the recessions on record. Santomero credited four factors with U.S. economy, pointing out strategic problems that could arise helping to moderate the recession: monetary and fiscal poli- within each and offering alternatives for dealing with them. cies, the strength of financial markets, business productivity, According to his and Izurieta’s recent research, he said, four and consumer confidence. main conclusions can be drawn. First, personal and corporate Although some economists are heaping praise on mone- debt are both high relative to income, which makes the econ- t a ry po l i c ym a kers for their qu i ck and ef fective acti on , omy vulnerable to shocks. Second, the government’s fiscal Santomero said that it was nothing new: the Federal Reserve stance, as projected by the CBO, is unlikely to halt a rise in acted as it has in the past and the same sort of response can unemployment after 2003. Third, a major relaxation of fiscal be expected in similar situations that might arise in the stance after 2003 could generate an adequate growth rate, but future. What was not so typical in this recent recession was only at the cost of large and growing budget and balance of fiscal policy. Federal government actions, such as the tax payments deficits. Fourth, a rapid expansion of net export rebates given out last summer and increased security spending demand could generate adequate growth while eliminating a f ter Septem ber 11, did help to sti mu l a te the econ omy. government and private sector deficits. This last, however, However, Santomero pointed out,some of these fiscal policies would require several conditions. If it occurred, for example, were planned before the recession and others were the result as the result of a major devaluation of the dollar not offset by of a unique situation—a terrorist attack. We cannot expect higher inflation, a substantial reduction in U.S. absorption of these same policies in a future recession. Thus, with regard to
THE LEVY ECONOMICS INSTITUTE OF BARD COLLEGE 3 economist, Hoenig & Co., Inc.; , manag- ing director and chief U.S. economist, Morgan Stanley Dean Witter & Co.; and . , chief economist, Bank of America. Bar bera stated that he exp ects the U.S . econo my to exp eri- enc e a modest recovery, but not to retur n to the sort of boom se en dur ing the 1990s. In rebou n d i n g , it faces two major ch a ll en ge s .F i rs t , due to the col lapse of En r on, accou n t ing stan- da r ds are likely to be tigh t en ed . As a resu l t , companies wil l lose ANTHONY M. S A N TO M E RO the accou n t ing syst em flexi bi l i t y that cont rib uted to their over- valu e d stock. The Brave New World econo my depend ed on government policy, monetary policy will remain the main tool these accou n t ing practice s . It also depend ed on pea ce. Thus , for dealing with recessions. the second cha ll en g e facing the econo my is the U.S . war on ter- Although monetary and fiscal policies were beneficial,said roris m , a conf l i c t that seems likely to conti n ue for some tim e . Santomero, the other three moderating factors are related to Berner, in turn, predicted a healthy U.S. economic recov- the private sector and they are likely to remain important ery, but one with much slower growth than previously. While moderating factors in the future. The financial sector entered he agrees with Ba rbera that ch a ll en ges ex i s t — re s tri ctive the recession in a relatively strong position. Banks had learned financial conditions, one of the widest current account gaps their lessons from the losses of the 1990s and had become on record, and a possible housing bubble—he is optimistic more cautious in their lending practices. Thus, when the that they can be overcome. Demand for credit is likely to recession began they had strong balance sheets and were able increase in 2003. Capital spending will probably rebound. to continue lending throughout. In general, financial markets While the current account gap is unlikely to change any time did a good job anticipating Fed actions and the impacts of soon, there seems to be no imbalance between supply and those actions. demand in the housing market and therefore,no likely crash. Businesses initially helped to push the country into a In contrast to his fellow panelists, Levy asserted that, as recession when they cut investment spending, but those same evidenced by how well it survived negative shocks in recent cost-cutting measures then played a role in moderating the years, the basic structure of the U.S. economy is quite strong. recession. Faced with softening demand, businesses sought to Many economists fail to see this strength because some of cut inventories and production, shedding employees. They its causes (for example, labor market and business structure then instituted price reductions, which worked to stimulate flexibility and policymakers’ ability to make quick adjust- consumer demand. This continuous consumer spending was ments when necessary) are difficult to quantify in economic the fourth factor that moderated the recession. Whether analysis. The U.S. economic recovery, Levy predicted, will be consumer confidence will be there in future recessions is not only healthy, but sustainable. unknown; however, said Santomero, the private sector, rather than the public, will more likely be the moderating force. Thus, federal policies should aim for long-term expansion and Session 2. Macroeconomic Issues in the Recovery support of the private sector. Moderator for this session was . , d i s ti n g u i s h ed vi s i ting sch o l a r, Cen ter for Stra tegic and International Studies, and former governor of the Federal Session 1. The State of the U.S. Economy: Reserve Board. Participants were , A View from the Street m a n a ging director, E con omic Cycle Re s e a rch In s ti tute ; This session was moderated by , eco- . , senior economist and managing nomics writer with the New York Times.Participants were director, J. P. Morgan & Co.; and , presi- . , executive vice president and chief dent, Macroeconomic Advisers, LLC.
4 RE P O R T / JUNE 2002 LEFT TO RIGHT: RO B E RT J. BA R B E RA , RICHARD BERNER, AND MICKEY D. L EV Y; CHRIS VA RVA R E S , LAURENCE H. M EY E R , LAKSHMAN AC H U T H A N, AND JAMES E. G LA S S M A N
The quick recovery of the U.S. economy from this latest Speaker: Gary H. Stern recession has led some to argue that perhaps it was not a Ga r y H. St ern, pres i d ent of the Federal Res e rve Bank of recession at all. Achuthan called this dangerous thinking, Min n e a po l i s , ca u tion e d against optimism by pol i c ym a k ers and because not taking this recession seriously could lead the econo mists abou t their abil i t y to forecast short- t erm econom i c nation to underestimate the risk of future such events. If cond i ti on s . Monet a r y pol i c ym a k ers, in partic u l a r , ha ve a des i r e one examines the definition of a recession—two quarters of to adopt policies that wil l ward off problem s , but they tend to negative growth in the gross domestic product and significant forg et that econo mic policy alwa ys deals with uncerta i n t y. declines in outp ut , i n com e , em p l oym en t , and trade — Moderat e pol i c i e s , he said, ar e the best approach. Des p i t e many economic data clearly show that the U.S. was in a recession. sh o cks over the past dozen yea rs , the U.S . econo my conti nu e d Achuthan credited aggressive fiscal and monetary policies to grow, a demon s t rati o n not of the suc cess of federal pol i c y , with bringing it to a quick end. but rat h e r the res i l i en c e of the econo my. Despite the recent recession, Glassman said that there is Ec ono mists and pol i c ym a k ers, St ern beli e ves , should take still much optimism in the market and he does not expect this i n to account recent findings abo ut two major econ omic to change. He attributes this optimism to the fact that recov- se ctors. The business sector does not neces s a ri l y agree with the ery prospects are very good due to the aggressive, stimulative conventi o nal wis d om that the U.S . econo my is on the rebou n d . policies of the Federal Reserve, and to federal fiscal policies. Many businesses have yet to adjust to a low-inflation environ- Also, continued consumer spending during the recession low- ment;as a result,they are still feeling pressure on their bottom ered inventory stocks to a point that production may now pick lines and have a more negative view of the economy. Labor, up to replenish them. Profits also seem to be improving and due to its attendant wage pressure, is often considered a key Glassman expects businesses to increase hiring this summer. factor in inflation. Research has shown, however, that it is not He does not feel that this optimism is misplaced; the Fed, he a reliable forecasting tool; in fact, many analysts have even said, is likely to remain extremely vigilant throughout this called for the discarding of NAIRU (nonaccelerating inflation recovery and will act quickly at the first sign of trouble. rate of unemployment), once considered key to the process. Varvares said that the recession may be over, but concerns The bottom line,Stern said,is that economic forecasting is persist. He attributes the recovery to successful monetary and difficult. No one really knows what will happen in the short fiscal policies,a rebound in confidence,and several temporary term. Policymakers need to accept this and act cautiously and factors such as a mild, dry winter and reduced energy prices. as correctly as possible. The U.S. economy is resilient;it does a These factors, however, may not be sustainable. For example, good job of taking care of itself. a rise in federal spending helped speed the recovery, but the federal government may not be able to maintain that spend- Audiocasts of conference speakers and sessions are available on ing through the 2003 and 2004 fiscal years. the Levy Institute website (www.levy.org).
THE LEVY ECONOMICS INSTITUTE OF BARD COLLEGE 5 S ymposium
New Directions in Research on Gender-Aware would be helpful: for example, the percentage of economic Macroeconomics and International Economics: growth that was due to the gender-wage gap. An International Symposium
Sch o l a r s gat h e red at the Levy Ins ti t ute May 9–10 to discuss their Session 2. Gender Inequality and Trade I res e a r ch on gend er-aw a r e econom i c s . The purpose of the sym- Participants in this session were of the pos i um was to provid e res e a r che rs with a venue to pres e nt their University of Utah, of the International la t est res e a r ch, obtain feedb a ck from fello w scho l a rs , and dis- Center for Research on Women, of cuss futur e directio ns in res e a r ch and pol i c y . Brie f sy n o pses of the Institute of Social Studies in The Hague, and the sessions foll o w. The sympo s i um was spons o red by the Ford of New School University. Fou n d a ti on , the Levy Ins ti t ute, the MacA rth ur Fo u n d a ti on ,a n d Ç a ga t ay pre s en ted re s e a rch that ex a m i n ed the impact the Uni versi t y of Utah econo mics depa r tmen t . of trade liberalization on gender inequalities and that of gender inequalities on trade performance. Trade policies and performance have different impacts on men and women, and Session 1. Gender Inequality, Growth, and therefore,Çagatay said, gender analysis is necessary in order to Investment develop effective policies because, as a result of gender-based Fac i l i t a tor for this session was of t h e inequalities, trade liberalization policies do not always yield University of Essex. Participants were expected results. Grown, presenting research from a paper of the Un ivers i ty of Verm on t , of t h e coauthored by Seguino, addressed the question of how to International Labour Organization, . shape policies to promote gender equity. Such policies, she of the University of North Carolina at Chapel Hill,and Senior noted,are often an afterthought, and argued that they need to Scholar . of New York University. focus more on developing opportunities for women, most of Seguino discussed the contribution of gender inequality to whom are segregated into low-wage, export-oriented, labor- the rapid economic growth of many Asian economies. The intensive industries. Discussants van Staveren and Milberg low wages paid to female workers helped to reduce unit labor raised some issues with the papers’ policy suggestions. It was costs; between 1975 and 1990,the economies of those nations noted that the wage-led economy suggested in Grown’s paper that most disadvantaged women grew the fastest. Kucera may not be possible. discussed the effect of labor standards on foreign direct invest- ment (FDI). He noted that most studies of FDI focus on labor costs and ignore the effects of labor standards, despite the Session 3. Gender Inequality and Trade II common belief that investors favor countries with lower Facilitator for this session was labor standards. Kucera presented research that indicates the of Ma rymount Manhattan Co ll ege . Pa rticipants were opposite—that investors actually seem to favor countries with of the In tern a ti onal Food Po l i c y higher labor standards. Institute, of Jawaharlal Nehru University, Darity, a discussant, said that although the two papers in of the Un i ted Na ti ons Devel opm en t this session address the issue of inequality and growth, both Programme, , and . ought to be linked more with theory. He suggested that Kucera Fontana presented research that examined the impact of expand his paper to focus on more than just FDI, perhaps to trade policy changes on female workers in Bangladesh and include such things as inequality indicators, immigrant labor, Zambia. She argued that men and women are affected differ- and net investment. Wolff, also a discussant, found Seguino’s ently but that there are also variations among women depend- re s e a rch intere s ting and su gge s ted that even more det a i l ing on their educations, household wealth, whether a woman
6 RE P O R T / JUNE 2002 is head of their household, and whether they live in a rural gend er-w a g e gap . Ghosh noted that she disagreed with the or an urban area. Ghosh addressed the issue of feminization hypothesis of Os t erreic h’s paper, while Kuc era said that it wou l d and presented research that examined female employment in be interes t ing to take the sample of cou n t ries used and drop India’s export-oriented manufacturing industry during the one at a time into the analysis to see how the res ults cha n ge . era of globalization. One important finding is that much female labor is found in informal and unorganized work- places,making them less reachable by government policies. Session 5. Gender-Sensitive Financial Reform Keklik, as a discussant, addressed Fontana’s paper and and Monetary Policy: A Roundtable Discussion no t ed that it requi r ed furth e r res e a r ch. The model used should (Part I) cons i d er other factors, suc h as governm e nt finances , es p eci a l ly was facilitator for this session. Participants were when applied to Zambia. Grown discussed the paper by of the University of Cambridge, of Ghosh and said that it led to the question of how to integrate the United Nations Research Institute for Social Development, the issue of feminization into settings other than India, or of the University of Utah,and Asia in gen era l . E l s on poi n ted out that Fon t a n a , wh o s e of the University of Muenster. research addressed the issue of leisure time,may need a better Singh and Zammit presented collaborative research that measurement of leisure. examined the gender impact of international capital flows on developing countries. Their findings indicate that, at the macroeconomic level, women lose more from slow and/or Session 4. Gender Inequality and Trade III unstable economic growth, financial crises, and meltdowns Fac i l i t a tor for this session was .Pa rticipants were than do men. The situ a ti on for wom en in devel oping co u n- of the Uni versi t y of Uta h , tri e s , t h ey su gge s ted , could be improved with publ i cly of Ithaca College, of New provi ded social sec u ri ty sys tem s . Other measures could also School University, , and . be adopted to mitigate the effects of capital flows on women Berik ’s res e a r ch exa m i n e d the impact of comp etiti o n from in particular.In his own discussion of capital flows, Erturk in t erna ti o nal trade on the gend er-w a g e gap in Tai wan and stated the need for reforms in the international financial Sou th Korea betw een 1980 and 1999. She found that in bot h system, such as a Tobin tax, in order to bring about more cou n t rie s , an increase in interna ti o nal comp etit iveness over stability. Young also called for more state regulation of inter- time in conc ent rat ed indus t ries was associ a t ed with a wid eni n g national capital flows, pointing out that research shows that in the gend er-w a g e gap . Os t erreic h pres en t ed res e a r ch that wom en su f fer more from instabi l i ty in the interna ti on a l in ves ti ga t ed the links betw een gend er inequa l i t ies in labor financial sys tem than do men . ma r kets , Nort h - So uth manuf a ctur ing terms of trade, an d un e ven develo pmen t . She argued that the res e a r ch sup ports the vie w that gend er-w a g e gaps in the semi - i n du s t ria l i z ed Session 6. Gender-Sensitive Financial Reform mi d dl e - i n c ome cou n t ries are associ a t ed with a decline in the and Monetary Policy: A Roundtable Discussion terms of trade in manuf a ctur ing with indus t ria l i z ed econom i e s . (Part II) Hou s t on add re s s e d the que s ti o n of whet h e r gend er inequa l i t y Faci l i t a t or for this session was .Par ticipants were was good for trade performa n ce . She said that res e a r ch indicates , of the Uni versi t y of that cou n t ries with grea t er gend er inequa l i t y perform bett er Mas s a chus et t s , and of the Uni versi t y of in trade. However, Hou s t on noted, it is difficult to prove this Kas s el . conc lus i vely due to the absenc e of good wage data. The first speaker, van Staveren, noted that global financial In discussing Berik’s paper, Ghosh said that some ques- policy is most often determined by men, who are not affected tions remain. For example, the research does not seem to by the gl obal financial sys tem in the same way as wom en .S h e address the effects of the financial crisis of 1998 and 1999. c a ll ed for ch a n ges in policy that would con s i der the reperc u s- Nor does it take into account the impacts of imports on the s i ons of policy dec i s i ons on wom en and su gge s ted , for on e ,
THE LEVY ECONOMICS INSTITUTE OF BARD COLLEGE 7 that the World Bank invest more in human devel opm en t Session 8. What Have We Learned and Where Do po l i c i e s , wh i ch tend to provi de incre a s ed ben efits for wom en . We Go from Here? Ep s tein ad d re s s ed the issue of cen tral bank po l i c i e s . He noted Participants for this final session were , , that most cen tral banks focus on con tro lling inflati on and , and , who discussed the overall su gge s ted that they ought to focus on full em p l oym en t lessons learned from the symposium and raised questions for i n s te ad . Policies that prom o te em p l oym ent are more ben ef i- future research.One clear problem is that not enough data are cial for wom en . Ca glar foc u s ed on the issue of bu d geting and yet available to draw concrete conclusions from much of the a r g u ed that co u n tries should adopt gen der- s en s i tive bu d get- research. Among the suggestions in the final session were to i n g. This can easily be done within the fra m ework of c u rren t develop more and better data, expand the issue of gender- bu d geting sys tem s . aware economics into other areas of economic study, and cre- ate better models.
Session 7. Gender-Aware Macroeconomics was facilitator for this session. Participants were N ew Working Papers of York Uni versi t y, - of the Ins ti t ute of Social Studies in The Hag u e , of the Integrated Social Development Dollarization: A Dead End Centre in Ghana, , and of the Ale x Izu ri et a University of Lugano. Working Pap er No. 34 4 Bakker discussed research into the links between unpaid ww w. l ev y. or g / d ocs / w rkp a p / p a p ers/ 3 4 4 . h tm l work and the macroeconomy. She noted that more women than men tend to be involved in unpaid work, such as child Several develo ping cou n t ries that have exp erien c ed suc ces s i ve care and elder care, yet their contribution is rarely recognized fa i lu r es of excha n g e rat e and monet a r y manageme nt have con- in econ omic re s e a rch or con s i dered in econ omic po l i c y si d ered tying the val ue of th e ir currencies to the U.S . doll a r . In debates. Akram-Lodhi discussed research into public finance this working paper, Res e a r ch Scholar Ale x Izu ri e ta examines the in Vietnam and called for gender awareness in budgeting. case for “doll a ri z a ti o n” and finds that it may not provid e the (The nation attempted to take this into account at one time, financial stabil i t y these cou n t ries seek . He pres e nts a theoretic a l but was not successful.) He placed part of the blame on World mo del that shows that, cont rar y to the comm on l y accepted Bank policies that set requ i rem ents for nati ons wi t h o ut vie w, a doll a ri z ed econo my would exp erien c e financial instabil - consideration of gender issues. Aubugre discussed the DEEP it y in the event of ext ernal shocks should it attemp t to operat e m odel , de s i gn ed to give gre a ter insight into the social impact s di s c r etion a r y fiscal pol i c i e s . of financial po l i c i e s , e s pec i a lly those impo s ed on co u n tries Izu ri e ta argues that shocks not simul t a n eo u s l y cont a i n e d by by the In tern a ti onal Mon et a ry Fu n d . Su ch a model is nece s- adju s tm e nts to spending lead to ever-i n c r easing fiscal and s a ry, he argued , in order to de s i gn bet ter policies aimed at c u rrent account deficits because public sector borrowi n g reducing poverty. requi r eme nts can onl y be financed by selling bonds in the The discussants, Fontana and Gall i , n o ted the benef i t s open market at cons t a n t l y rising rat es of in t eres t . Hence , suc h e ach paper provi ded to the re s e a rch on gen der and econ om i c a path cannot be an option . Alt erna t ively, if fiscal spend i n g po l i c y. However, in com m en ting on the model pre s en ted were curbed at par with the shock, ext ernal and current by Au bu gre , Fontana noted that it seem ed mu ch more account balances would converge to equilibrium, but trigger a complex than necessary and perhaps should focus on one recession and increased unemployment. Since this, too, is main objective. unacceptable, dollarization turns out to be a “dead end.”
8 RE P O R T / JUNE 2002 The “Third Way” and the Challenges to Economic achieve and maintain a framework of full employment.Arestis and Monetary Union Macropolicies asserts that they are not. Philip Ares ti s Arestis proposes a number of changes to improve EMU Working Pap er No. 34 5 policies. First, he argues, a revamped European Investment ww w. l ev y. or g / d ocs / w rkp a p / p a p ers/ 3 4 5 . h tm l Bank is necessary to supplement the European Central Bank. Second, political constraints on national budget positions In this working paper, Visiting Senior Scholar Philip Arestis should be removed and national governments set fiscal policy examines three issues: “third way” economics, the theoretical as they deem appropriate. Third, institutional arrangements and policy framework of the European Monetary Union for the coord i n a ti on of n a ti onal fiscal policies must be (EMU), and EMU macropolicies. He begins with an analysis s tren g t h en ed . Fo u rt h , EU insti tuti onal arra n gem ents are of eight elements that underpin third way economics that are required for the operation of an EU fiscal policy and to ensure embedded in New Keynesianism (the basis for the economic that monetary authorities do not dominate economic policy- model surrounding the EMU). The key challenge facing the making.And lastly, Arestis strongly suggests serious coordina- EMU, he says,is whether its policies are adequate to deal with tion of monetary and fiscal policies. the problems of unemployment and inflation in order to
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Events The focus of the conference is on empirical research on economic mobility in the United States and other advanced CONFERENCE countries. Potential topics include: Economic Mobility in the United States and Other 1. Mobility in jobs, earnings, income, wealth, and other Advanced Countries indicators of well-being over a lifetime October 18–19, 2002, Blithewood, Annandale-on-Hudson, 2. The distribution of lifetime income and other measures New York of lifetime resources Organizer: Edward N. Wolff, Levy Economics Institute and 3. Intergenerational mobility in income, wealth, and other New York University indicators of well-being 4. Changes in mobility, both over a lifetime and across It has been argued that rising inequality in the United States generations and several other advanced countries is not a problem because 5. International comparisons of mobility, both over a life- it is measur ed using annual income , while mobil i t y—the move- time and across generations me nt of ho u s e holds from one income group to another—has risen over time. Therefore, the argument goes, over an indi- Preliminary program information is available on the Levy vidual’s lifetime, inequality may actually decline. Moreover, Institute website (www.levy.org).Registration information will the higher degree of inequality (computed on the basis of be posted as it becomes available. annual income) in the United States as compared to other industrialized countries may be offset by higher U.S. mobility. One objective of this conference is to determine whether these arguments are true.
THE LEVY ECONOMICS INSTITUTE OF BARD COLLEGE 9 P ublic ations and Presen tations
Publications and When Money Is Endogenous,” Korea VISITING SENIOR SCHOLAR Presentations by Levy University, May 23; “A Contribution L. RANDALL WRAY Institute Scholars to the Analysis of Endogenous Publications: “Demand Constraint Money,” Korea University, May 27, and the New Economy”(with Marc- SENIOR SCHOLAR and Bank of Korea, Seoul, May 28; André Pigeon), in Paul Davidson, ed., JAMES K. GALBRAITH “Kaleckian Economics for the 21st A Post Keynesian Perspective on 21st Publications:“A Perfect Crime: Century: The Enduring Contribution Century Economic Problems, Inequality in the Age of of Michal Kalecki,” Korea University, Northampton, Mass.: Edward Elgar Globalization” Daedalus,Winter 2002; May 29. Publishing, 2002; “A Full Employment “The Importance of Being Sufficiently Program for Hong Kong” (with Equal,” Social Philosophy and Policy, SENIOR SCHOLAR Henry C. K. Liu), Center for Full Winter 2002. EDWARD N.WOLFF Employment and Price Stability Publications: Retirement Insecurity: Policy Note No. 01/03;“Downgrading VISITING SENIOR SCHOLAR The Income Shortfalls Awaiting the Japan,” CFEPS Policy Note No. 02/01; MALCOLM SAWYER Soon-to-Retire,Washington, D.C.: “A Monetary and Fiscal Framework Presentations: “Investment and Economic Policy Institute, 2002; for Economic Stability,” CFEPS Policy Barriers to Full Employment,” “Computerization and Structural Note No. 02/02;“Fisher Effect or Fed’s University of Newcastle, Australia, Change,” Review of Income and COLA?”CFEPS Policy Note No. April 11;“Monetary Policy when Wealth,March 2002;“Racial Wealth 02/03; “On Offer: A Full Employment Money Is Endogenous,”University of Disparities: What Are the Causes?” Program for China” (with Henry Newcastle, April 12;“Prospects and The Journal of Social Health, Liu), Asia Times,March 30, 2002; Alternative Policies for the European Spring 2002. “Public Service Employment: Full Single Currency,” University of New Presentations: “Is the Distributional Employment without Inflation,” South Wales, Sydney, April 19; Effect of Retirement Wealth Wearing Problemas del Desarrollo: Revista “Aggregate Demand, Investment,and Off?”NBER Labor Workshop, Latinamericana de Economía, Spring the NAIRU,” La Trobe University, Cambridge, Mass., April 12, and 2002; “What Happened to Melbourne, Australia, April 24; Income Distribution and Welfare Goldilocks?” Journal of Economic “What Are the Barriers to Full Conference, University of Bocconi, Issues,June 2002. Employment? A Critique of the Milan, Italy, May 30 – June 1; Presentations: “Downgrading Japan,” Non-Accelerating Inflation Rate of “Retirement Insecurity,” Economic “What Happened to Goldilocks?: A Unemployment (NAIRU),” Korea Policy Institute, Washington, D.C., Minskian Analysis,”“A Monetary and University, Seoul, May 21, and Seoul May 2; “Social Security,” Democratic Fiscal Framework for Economic National University, May 28; “Will Policy Committee, New York City, Stability,” and “Fisher Effect or Fed’s the Euro Bring Economic Prosperity May 4. COLA?”Eastern Economics to Europe? The Need for an Media: Lynn Holley Show, WebFN, Association, Boston, March 15–17; Alternative Economic Policy in the Chicago, April 10; Marketplace,Public “What Happened to Goldilocks?: A European Union,” Seoul National Radio International, May 2; Interview Minskian Framework,” Seminario de University, May 22, and Korea with Doug Henwood, WBAI Radio, Economía Financiera, Universidad University, May 24; “Can Monetary New York City, May 3. Nacional Autónoma de México, Policy Deal with Inflation and Mexico City, April 3; “Social Security: Unemployment? Monetary Policy Truth or Convenient Fictions?”
10 RE P O R T / JUNE 2002 Association for Institutional Thought, Recent Levy Institute POLICY NOTES Western Social Science Association, Publications Albuquerque, April 12, and 4th Hard Times, Easy Money? Annual National Policy Forum, WORKING PAPERS Countercyclical Stabilization Industrial Relations Research in an Uncertain Economy Association, National Press Club, Uncertainty, Conventional Behavior, Robert E. Carpenter Washington, D.C., June 20; “Can a and Economic Sociology 2001/9 Rising Tide Lift All Boats?”Global Jörg Bibow, Paul Lewis, Development and Environment and Jochen Runde Are We All Keynesians (Again)? Institute, Pocantico Conference No. 339, September 2001 Dimitri B.Papadimitriou and L. Center of the Rockefeller Brothers Randall Wray Fund, June 20–23. Incentives in HMOs 2001/10 Martin Gaynor, James B. Rebitzer, VISITING SCHOLAR and Lowell J. Taylor Kick-Start Strategy Fails to Fire JÖRG BIBOW No. 340, October 2001 Sputtering U.S. Economic Motor Publications:“The Euro: Market Wynne Godley Failure or Central Bank Failure?” Israeli Attitudes about Inter Vivos 2002/1 Challenge, May-June 2002; “Three Transfers Years Euro Weakness and Price Seymour Spilerman PUBLIC POLICY BRIEFS Instability. Three Years ECB Success and Yuval Elmelech Stories?” OikonomikosTachidromos, No. 341, November 2001 Easy Money through the Back Door April 6, 2002. The Markets vs. the ECB Presentation: “Zur (Re-)Etablierung A Note on the Hicksian Concept Jörg Bibow Zentralbankpolitischer Institutionen of Income No. 65, 2001 (Highlights, No. 65A) und Traditionen in Westdeutschland: Ajit Zacharias Theoretische Grundlagen und No. 342, February 2002 Racial Wealth Disparities Politisches Kalkül (1946–67),”Annual Is the Gap Closing? Meeting of the History of Thought Poles and Italians Then,Mexicans Edward N. Wolff Committee, Verein für Socialpolitik, Now?: Immigrant-to-Native No. 66, 2001 (Highlights, No. 66A) Obermayerhofen, Austria, May 9–10. Wage Ratios, 1910 and 1940 Joel Perlmann The Economic Consequences RESEARCH ASSOCIATE No. 343, February 2002 of German Unification WILLEM THORBECKE The Impact of Misguided Presentations:“The Effects of Dollarization: A Dead End Macroeconomic Policies Exchange Rate and Interest Rate Alex Izurieta Jörg Bibow Shocks on Bank Lending in No. 344, March 2002 No. 67, 2001 (Highlights, No. 67A) Indonesia,”Washington Area Finance Association, George Washington The “Third Way” and the University, Washington, D.C., April Challenges to Economic and 26;“Linking Firm and Bank Behavior Monetary Union Macropolicies with Macroeconomic Shocks” Philip Arestis (with I. Azis and F.Siddik), Asian No. 345, May 2002 Development Bank Institute, Tokyo, May 28.
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