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Marxist Crisis Theory and the Severity of the Current Economic Crisis
Marxist Crisis Theory and the Severity of the Current Economic Crisis By David M. Kotz Department of Economics Thompson Hall University of Massachusetts Amherst Amherst, MA 01003, U.S.A. December, 2009 Email Address: [email protected] This paper was presented on a panel on "Heterodox Analyses of the Current Economic Crisis" sponsored by the Union for Radical Political Economics at the Allied Social Science Associations annual convention, Atlanta, January 4, 2010. Research Assistance was provided by Ann Werboff. It is a revised version of a paper "The Final Crisis: What Can Cause a System-Threatening Crisis of Capitalism," Science & Society 74(3), July 2010. Marxist Crisis Theory and the Current Crisis, December, 2009 1 The theory of economic crisis has long occupied an important place in Marxist theory. One reason is the belief that a severe economic crisis can play a key role in the supersession of capitalism and the transition to socialism. Some early Marxist writers sought to develop a breakdown theory of economic crisis, in which an absolute barrier is identified to the reproduction of capitalism.1 However, one need not follow such a mechanistic approach to regard economic crisis as central to the problem of transition to socialism. It seems highly plausible that a severe and long-lasting crisis of accumulation would create conditions that are potentially favorable for a transition, although such a crisis is no guarantee of that outcome.2 Marxist analysts generally agree that capitalism produces two qualitatively different kinds of economic crisis. One is the periodic business cycle recession, which is resolved after a relatively short period by the normal mechanisms of a capitalist economy, although since World War II government monetary and fiscal policy have often been employed to speed the end of the recession. -
* * Top Incomes During Wars, Communism and Capitalism: Poland 1892-2015
WID.world*WORKING*PAPER*SERIES*N°*2017/22* * * Top Incomes during Wars, Communism and Capitalism: Poland 1892-2015 Pawel Bukowski and Filip Novokmet November 2017 ! ! ! Top Incomes during Wars, Communism and Capitalism: Poland 1892-2015 Pawel Bukowski Centre for Economic Performance, London School of Economics Filip Novokmet Paris School of Economics Abstract. This study presents the history of top incomes in Poland. We document a U- shaped evolution of top income shares from the end of the 19th century until today. The initial high level, during the period of Partitions, was due to the strong concentration of capital income at the top of the distribution. The long-run downward trend in top in- comes was primarily induced by shocks to capital income, from destructions of world wars to changed political and ideological environment. The Great Depression, however, led to a rise in top shares as the richest were less adversely affected than the majority of population consisting of smallholding farmers. The introduction of communism ab- ruptly reduced inequalities by eliminating private capital income and compressing earn- ings. Top incomes stagnated at low levels during the whole communist period. Yet, after the fall of communism, the Polish top incomes experienced a substantial and steady rise and today are at the level of more unequal European countries. While the initial up- ward adjustment during the transition in the 1990s was induced both by the rise of top labour and capital incomes, the strong rise of top income shares in 2000s was driven solely by the increase in top capital incomes, which make the dominant income source at the top. -
Price Spike Of
United States Department of The "Great" Price Spike of '93: Agriculture Forest Service An Analysis of Lumber and Pacific Northwest Research Station Stum.page Pr=ces =n the Research Paper PNW-RP-476 Pac=f=c Northwest August 1994 Brent L. Sohngen and Richard W. Haynes ....~ ~i!i I 11~.............. pp~L~ ~ S if!i,: ~SS ~$~ ~ ~ S$ $ $_ ss sSSos'S S$ $ S$$ s$$SsSss s ss $ sss~ ~ S sSsS~ Sss S $~ $.~ $ S$ Authors BRENT L. SOHNGEN is a graduate student, Yale University School of Forestry and Environmental Studies, New Haven, CT 06510; and RICHARD W. HAYNES is a research forester, U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station, Forestry Sciences Laboratory, P.O. Box 3890, Portland, OR 97208-3890. Abstract Sohngen, Brent L.; Haynes, Richard W. 1994. The "great" price spike of '93: an analysis of lumber and stumpage prices in the Pacific Northwest. Res. Pap. PNW-RP-476. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 20 p. Lumber prices for coast Douglas-fir (Psuedotsuga menziesii (Mirb.) Franco var. menziesil) swung rapidly from a low of $306 per thousand board feet (MBF) in September 1992 to a high of $495/MBF in March 1993. This price spike represented a sizable increase in the value of lumber over a short period, but it was not the histor- ical anomaly that many in the media would suggest. Using the theoretical relation between lumber and stumpage prices, we analyzed the interaction between these two markets over the past 82 years. Among our major findings were that there are distinct seasonal variations in monthly lumber and stumpage prices; over the longer term, these markets can be divided into three different periodsm1910 to 1944, 1945 to 1962, and 1963 to 1992; the most recent price spike did not match previous spikes in real terms; and the traditional lumber and stumpage price interaction became more significant with time but it does not seem to be as pronounced when we look at monthly prices. -
On the Classification of Economic Fluctuations
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Explorations in Economic Research, Volume 2, number 2 Volume Author/Editor: NBER Volume Publisher: NBER Volume URL: http://www.nber.org/books/moor75-2 Publication Date: 1975 Chapter Title: On the Classification of Economic Fluctuations Chapter Author: John R. Meyer, Daniel H. Weinberg Chapter URL: http://www.nber.org/chapters/c7408 Chapter pages in book: (p. 43 - 78) Moo5 2 'fl the 'if at fir JOHN R. MEYER National Bureau of Economic on, Research and Harvard (Jriiversity drawfi 'Ces DANIEL H. WEINBERG National Bureau of Economic iliOns Research and'ale University 'Clical Ihit onth Economic orith On the Classification of 1975 0 Fluctuations and ABSTRACT:Attempts to classify economic fluctuations havehistori- cally focused mainly on the identification of turning points,that is, so-called peaks and troughs. In this paper we report on anexperimen- tal use of multivariate discriminant analysis to determine afour-phase classification of the business cycle, using quarterly andmonthly U.S. economic data for 1947-1973. Specifically, weattempted to discrimi- nate between phases of (1) recession, (2) recovery, (3)demand-pull, and (4) stagflation. Using these techniques, we wereable to identify two complete four-phase cycles in the p'stwarperiod: 1949 through 1953 and 1960 through 1969. ¶ As a furher test,extrapolations were made to periods occurring before February 1947 andalter September 1973. Using annual data for the period 1926 -1951, a"backcasting" to the prewar U.S. economy suggests that the n.ajordifference between prewar and postwar business cycles isthe onii:sion of the stagflation phase in the former. -
Macroeconomic and Financial Risks: a Tale of Mean and Volatility
Board of Governors of the Federal Reserve System International Finance Discussion Papers Number 1326 August 2021 Macroeconomic and Financial Risks: A Tale of Mean and Volatility Dario Caldara, Chiara Scotti and Molin Zhong Please cite this paper as: Caldara, Dario, Chiara Scotti and Molin Zhong (2021). \Macroeconomic and Fi- nancial Risks: A Tale of Mean and Volatility," International Finance Discussion Papers 1326. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/IFDP.2021.1326. NOTE: International Finance Discussion Papers (IFDPs) are preliminary materials circulated to stimu- late discussion and critical comment. The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of the research staff or the Board of Governors. References in publications to the International Finance Discussion Papers Series (other than acknowledgement) should be cleared with the author(s) to protect the tentative character of these papers. Recent IFDPs are available on the Web at www.federalreserve.gov/pubs/ifdp/. This paper can be downloaded without charge from the Social Science Research Network electronic library at www.ssrn.com. Macroeconomic and Financial Risks: A Tale of Mean and Volatility∗ Dario Caldara† Chiara Scotti‡ Molin Zhong§ August 18, 2021 Abstract We study the joint conditional distribution of GDP growth and corporate credit spreads using a stochastic volatility VAR. Our estimates display significant cyclical co-movement in uncertainty (the volatility implied by the conditional distributions), and risk (the probability of tail events) between the two variables. We also find that the interaction between two shocks|a main business cycle shock as in Angeletos et al. -
31St Annual Report of the Bank for International Settlements
BANK FOR INTERNATIONAL SETTLEMENTS THIRTY-FIRST ANNUAL REPORT 1st APRIL 1960 — 31st MARCH 1961 BASLE 12th June 1061 TABLE OF CONTENTS Page Introduction i Part I - Problems of Economic and Financial Policy in 1960-61 . 3 The United States: the recession (p. 5), anti-recession measures (p. 8), the dilemma of monetary policy (p. 11), the new Administration's policy approach (p. 11); Germany: the boom (p. 13), monetary policy (p. 15)', Italy: the rules of the game (p. 17); the Netherlands: multiple restraint (p. 19); Switzerland: capital exports (p. 21); the United Kingdom: longer-term problems (p. 23), balance of payments (p. 24), economic growth (p. 26); France: balanced growth (p. 28); the international payments position (p. 29): the basic imbalance (p. 30), short-term capital flows (p. 31) Part II - Survey of Economic and Monetary Developments .... 33 I. The Formation and Use of the National Product . 33 Industrial production (p. 33); productivity gains (p. 36); structural economic changes in the last decade (p. 37); economic cycles in the last decade (p. 40); sources of demand and available resources (p. 42); saving and investment by sectors (p. 47) II. Money, Credit and Capital Markets 53 Monetary policy and the structure of interest rates: discount rate policy (P- 54) > reserve requirements (p. $6), debt management and open-market operations (p. 57); the control of liquid assets and the flow of bank credit (p. 60); capital-market activity (p. 62); credit developments in individual countries: the United States (p. 64), the United Kingdom (p. 67), France (p. 70), Germany (p. 73), the Netherlands (p. -
The Shape of the Coming Recovery
The Shape of the Coming Recovery Mark Zandi July 9, 2009 he Great Recession continues. Given these prospects, a heated debate will resume spending more aggressively. After 18 months of economic has broken out over the strength of the Businesses may also have slashed too T contraction, 6.5 million jobs have coming recovery, with the back-and-forth deeply and, once confidence is restored, been lost, and the unemployment rate is simplifying into which letter of the alphabet will ramp up investment and hiring. fast approaching double digits. Many with best describes its shape. Pessimists dismiss this possibility, jobs are seeing their hours cut—the length Optimists argue for a V-shaped arguing instead for a W-shaped or double- of the average workweek fell to a record recovery, with a vigorous economic dip business cycle, with the economy low in June—and are taking cuts in pay as revival beginning soon. History is on their sliding back into recession after a brief overall wage growth stalls. Balance sheets side. The one and only regularity of past recovery, or an L-shaped cycle in which have also been hit hard: Some $15 trillion business cycles is that severe downturns the recession is followed by measurably in household wealth has evaporated, the have been followed by strong recoveries, weaker growth for an extended period. federal government has run up deficits and shallow downturns by shallow A W-shaped cycle seems more likely approaching $1.5 trillion, and many state recoveries.2 The 2001 recession was the if policymakers misstep. The last time and local governments have borrowed mildest since World War II—real GDP the economy suffered a double-dip was heavily to fill gaping budget holes. -
The UK Recession in Context — What Do Three Centuries of Data Tell Us?
Research and analysis The UK recession in context 277 The UK recession in context — what do three centuries of data tell us? By Sally Hills and Ryland Thomas of the Bank’s Monetary Assessment and Strategy Division and Nicholas Dimsdale of The Queen’s College, Oxford.(1) The Quarterly Bulletin has a long tradition of using historical data to help analyse the latest developments in the UK economy. To mark the Bulletin’s 50th anniversary, this article places the recent UK recession in a long-run historical context. It draws on the extensive literature on UK economic history and analyses a wide range of macroeconomic and financial data going back to the 18th century. The UK economy has undergone major structural change over this period but such historical comparisons can provide lessons for the current economic situation. Introduction An overview of UK business cycles The UK economy recently suffered its deepest recession since Over the past half century, enormous effort has gone into the 1930s. The recent recession had several defining constructing historical national income data for the characteristics: it took place simultaneously with a global United Kingdom. First, annual GDP estimates were recession; the financial sector was both the source and constructed back to the mid-19th century, based on output, propagator of the crisis; the exchange rate depreciated income and expenditure approaches (Deane and Cole (1962), sharply; and there was a substantial loosening of monetary Deane (1968) and Feinstein (1972)). These were followed by policy alongside a marked increase in the fiscal deficit. But ‘balanced’ estimates of GDP growth that attempted to despite UK output falling by more than 6% between 2008 Q1 reconcile these different approaches from 1870 onwards and 2009 Q3, CPI inflation remains above the Government’s (Solomou and Weale (1991) and Sefton and Weale (1995)). -
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Erie and Crisis:Region Faces Unique Opportunity to Reimagine Itself
Erie & Crisis: Region Faces Unique Opportunity to Reimagine Itself By Andrew Roth, Judith Lynch, Pat Cuneo, Ben Speggen, Angela Beaumont, and Colleen Dougherty Edited by Ferki Ferati MAY 2020 A Publication of The Jefferson Educational Society 2 FOREWORD pen any newspaper, browse news websites and social platforms, or turn Oon the television to any news channel at any given point during the day and you will find that COVID-19 continues to dominate discussion globally. What you will also find is that information and updates are changing more often than not from minute-to-minute rather than week-to-week – so much so that it makes it almost impossible for leaders to make rational and sustainable decisions in real time. How can decisions be made when we do not know what is on the other side of the mountain? Is COVID-19 beatable, or is it here to stay, like HIV? Will a vaccine take six months, a year, or longer? No one seems to know these answers for certain. When facing these kinds of difficult decisions, we must draw back to not only understand but, as John Quincy Adams said, “to embrace… that who Jefferson President Dr. Ferki Ferati we are is who we were.” That means we need to look at past experiences to inform the present and the uncertain future. This essay, written by members of the Jefferson’s team, including Scholars-in-Residence Drs. Judith Lynch and Andrew Roth, is an attempt to look at COVID-19 through the lens of past experiences and make recommendations for the future. -
Supporting Documents for DSGE Models Update
Authorized for public release by the FOMC Secretariat on 02/09/2018 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Division of Monetary Affairs FOMC SECRETARIAT Date: June 11, 2012 To: Research Directors From: Deborah J. Danker Subject: Supporting Documents for DSGE Models Update The attached documents support the update on the projections of the DSGE models. 1 of 1 Authorized for public release by the FOMC Secretariat on 02/09/2018 System DSGE Project: Research Directors Drafts June 8, 2012 1 of 105 Authorized for public release by the FOMC Secretariat on 02/09/2018 Projections from EDO: Current Outlook June FOMC Meeting Hess Chung, Michael T. Kiley, and Jean-Philippe Laforte∗ June 8, 2012 1 The Outlook for 2012 to 2015 The EDO model projects economic growth modestly below trend through 2013 while the policy rate is pegged to its e ective lower bound until late 2014. Growth picks up noticeably in 2014 and 2015 to around 3.25 percent on average, but infation remains below target at 1.7 percent. In the current forecast, unemployment declines slowly from 8.25 percent in the third quarter of 2012 to around 7.75 percent at the end of 2014 and 7.25 percent by the end of 2015. The slow decline in unemployment refects both the inertial behavior of unemployment following shocks to risk-premia and the elevated level of the aggregate risk premium over the forecast. By the end of the forecast horizon, however, around 1 percentage point of unemployment is attributable to shifts in household labor supply. -
The Recent Evolution of the Natural Rate of Unemployment
FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES The Recent Evolution of the Natural Rate of Unemployment Mary Daly Federal Reserve Bank of San Francisco Bart Hobijn Federal Reserve Bank of San Francisco Rob Valletta Federal Reserve Bank of San Francisco January 2011 Working Paper 2011-05 http://www.frbsf.org/publications/economics/papers/2011/wp11-05bk.pdf The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. The Recent Evolution of the Natural Rate of Unemployment MARY DALY,* BART HOBIJN, AND ROB VALLETTA Federal Reserve Bank of San Francisco 101 Market Street San Francisco, CA 94105 January 17, 2011 ABSTRACT The U.S. economy is recovering from the financial crisis and ensuing deep recession, but the unemployment rate has remained stubbornly high. Some have argued that the persistent elevation of unemployment relative to historical norms reflects the fact that the shocks that hit the economy were especially disruptive to labor markets and likely to have long lasting effects. If such structural factors are at work they would result in a higher underlying natural or non- accelerating inflation rate of unemployment, implying that conventional monetary and fiscal policy should not be used in an attempt to return unemployment to its pre-recession levels. We investigate the hypothesis that the natural rate of unemployment has increased since the recession began, and if so, whether the underlying causes are transitory or persistent.