Levy Economics Institute of Bard College Levy Economics Institute Summary of Bard College Fall 2010 Vol. 19, No. 3 Contents INSTITUTE RESEARCH Program: The State of the U.S. and World Economies 5 19th annual hyman p. minsky conference After the Crisis: Planning a New Financial Structure 6 james k. galbraith, The Great Crisis and the American Response 7 dimitri b. papadimitriou, l. randall wray, and yeva nersisyan, Endgame for the Euro? Without Major Restructuring, the Eurozone Is Doomed 8 dimitri b. papadimitriou and greg hannsgen, Debts, Deficits, Economic Recovery, and the U.S. Government 9 paul mcculley, Global Central Bank Focus: Facts on the Ground 9 jörg bibow, Global Imbalances, the U.S. Dollar, and How the Crisis at the Core of Global Finance Spread to “Self-Insuring” Emerging Market Economies 10 claudio h. dos santos and antonio c. macedo e silva, Revisiting “New Cambridge”: The Three Financial Balances in a General Stock-flow Consistent Applied Modeling Strategy 11 g. e. krimpas, The Recycling Problem in a Currency Union 12 jörg bibow, Bretton Woods 2 Is Dead, Long Live Bretton Woods 3? 13 yeva nersisyan and l. randall wray, Does Excessive Sovereign Debt Really Hurt Growth? A Critique of This Time Is Different, by Reinhart and Rogoff Program: Monetary Policy and Financial Structure 14 yeva nersisyan and l. randall wray, Deficit Hysteria Redux? Why We Should Stop Worrying About U.S. Government Deficits 15 luiz carlos bresser-pereira, The Global Financial Crisis and a New Capitalism? 16 amit bhaduri, A Contribution to the Theory of Financial Fragility and Crisis 17 bernard shull, Too Big to Fail in Financial Crisis: Motives, Countermeasures, and Prospects 18 jan kregel, Fiscal Responsibility: What Exactly Does It Mean? 19 gary a. dymski, Three Futures for Postcrisis Banking in the Americas: The Financial Trilemma and the Wall Street Complex 20 éric tymoigne, Detecting Ponzi Finance: An Evolutionary Approach to the Measure of Financial Fragility Continued on page 3 > Scholars by Program The State of the U.S. and World Economies Employment Policy and Labor Markets dimitri b. papadimitriou, President and Program Director dimitri b. papadimitriou, President james k. galbraith, Senior Scholar james k. galbraith, Senior Scholar jan kregel, Senior Scholar jan kregel, Senior Scholar l. randall wray, Senior Scholar l. randall wray, Senior Scholar greg hannsgen, Research Scholar rania antonopoulos, Research Scholar gennaro zezza, Research Scholar valeria esquivel, Research Associate claudio h. dos santos, Research Associate mathew forstater, Research Associate robert w. parenteau, Research Associate fadhel kaboub, Research Associate pavlina r. tcherneva Monetary Policy and Financial Structure , Research Associate jan kregel, Senior Scholar and Program Director Immigration, Ethnicity, and Social Structure dimitri b. papadimitriou, President joel perlmann, Senior Scholar and Program Director philip arestis, Senior Scholar dimitri b. papadimitriou, President james k. galbraith, Senior Scholar yuval elmelech, Research Associate l. randall wray, Senior Scholar yinon cohen, Research Associate jörg bibow, Research Associate sergio dellapergola, Research Associate steven m. fazzari, Research Associate sanjaya desilva, Research Associate thomas i. palley, Research Associate barbara s. okun, Research Associate robert w. parenteau, Research Associate seymour spilerman, Research Associate sunanda sen, Research Associate willem thorbecke, Research Associate Economic Policy for the 21st Century james k. galbraith éric tymoigne, Research Associate , Senior Scholar dimitri b. papadimitriou, President The Distribution of Income and Wealth rania antonopoulos, Research Scholar james k. galbraith, Senior Scholar philip arestis, Senior Scholar edward n. wolff, Senior Scholar william j. baumol, Research Associate dimitri b. papadimitriou, President jörg bibow, Research Associate ajit zacharias, Senior Scholar barry bluestone, Research Associate selcuk eren, Research Scholar robert e. carpenter, Research Associate thomas masterson, Research Scholar lekha s. chakraborty, Research Associate barry bluestone, Research Associate pinaki chakraborty, Research Associate robert haveman, Research Associate sanjaya desilva, Research Associate christopher jencks, Research Associate steven m. fazzari, Research Associate susan e. mayer, Research Associate mathew forstater, Research Associate branko milanovic, Research Associate greg hannsgen, Research Scholar jacques silber, Research Associate thomas karier, Research Associate barbara wolfe, Research Associate stephanie a. kelton, Research Associate william h. lazonick Gender Equality and the Economy , Research Associate jamee k. moudud, Research Associate rania antonopoulos, Research Scholar and Program Director mary o’sullivan, Research Associate dimitri b. papadimitriou, President thomas i. palley, Research Associate nilüfer Çagatay˘ , Senior Scholar robert w. parenteau, Research Associate kijong kim, Research Scholar james b. rebitzer, Research Associate lekha s. chakraborty, Research Associate malcolm sawyer, Research Associate pinaki chakraborty, Research Associate willem thorbecke, Research Associate valeria esquivel, Research Associate w. ray towle, Research Associate and Editor indira hirway, Research Associate éric tymoigne, Research Associate tamar khitarishvili, Research Associate l. randall wray, Senior Scholar feridoon koohi-kamali, Research Associate ajit zacharias, Senior Scholar emel memis, Research Associate fatma gül ünal, Research Associate Equality of Educational Opportunity in the 21st Century imraan valodia , Research Associate ellen condliffe lagemann, Senior Scholar and Program Director taun toay , Research Analyst daniel karpowitz, Research Associate The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, non partisan research organ ization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic issues that profoundly affect the quality of life in the United States and abroad. The Summary is published three times a year (Winter, Spring, and Fall) and is intended to keep the aca demic community informed about the Institute’s research. To accomplish this goal, it contains summaries of recent research publications and reports on other activities. Editor: W. Ray Towle Text Editor: Barbara Ross The Summary and other Levy Institute publications are available on the Institute’s website. To comment on or inquire about publications, research, and events, contact the Institute online at www.levyinstitute.org. Levy Economics Institute of Bard College, Blithewood, Annandale-on-Hudson, NY 12504-5000 Phone: 845-758-7700, 202-887-8464 (in Washington, D.C.) Fax: 845-758-1149 E-mail: [email protected] Website: www.levyinstitute.org Contents (continued) Program: Gender Equality and the Economy 21 lekha s. chakraborty, Determining Gender Equity in Fiscal Federalism: Analytical Issues and Empirical Evidence from India 22 fatma gül ünal, mirjana dokmanovic, and rafis abazov, The Economic and Financial Crises in CEE and CIS: Gender Perspectives and Policy Choices 23 rania antonopoulos and emel memis, Time and Poverty from a Developing Country Perspective Program: Employment Policy and Labor Markets 24 charles j. whalen, Economic Policy for the Real World Program: Immigration, Ethnicity, and Social Structure 25 sanjaya desilva, anh pham, and michael smith, Racial Preferences in a Small Urban Housing Market: A Spatial Econometric Analysis of Microneighborhoods in Kingston, New York Program: Economic Policy for the 21st Century Explorations in Theory and Empirical Analysis 26 greg hannsgen, Infinite-variance, Alpha-stable Shocks in Monetary SVAR INSTITUTE NEWS 27 The Hyman P. Minsky Summer Seminar and Conference, June 19–29, 2010 Upcoming Event 27 The 2011 Hyman P. Minsky Summer Seminar 27 New Research Associate PUBLICATIONS AND PRESENTATIONS 27 Publications and Presentations by Levy Institute Scholars 30 Recent Levy Institute Publications LETTER FROM THE PRESIDENT on global rebalancing. Moreover, without current fiscal deficits, a second Great Depression would have been unavoidable. Five working papers are also included under this program. To our readers: Research Associate Jörg Bibow advises developing countries to Distinguished Scholar Wynne Godley, longtime head of our pursue policies in direct opposition to the preaching of the Macro-Modeling Team, passed away in May. Much of his work International Monetary Fund. In a second paper, he finds that focused on the strategic prospects for the world economies a Bretton Woods 3 regime could arise, where U.S. current and creating accounting macroeconomic models to reveal account deficits continue. Research Associate Claudio H. Dos structural imbalances. According to the London Times, he was Santos and Antonio C. Macedo e Silva argue that modified “the most insightful macroeconomic forecaster of his genera- versions of the New Cambridge approach to macroeconomic tion.” Wynne’s intellectual achievements in macroeconomics modeling (led by Godley) are an important contribution to and his courage in going against conventional wisdom were the tool kit for applied macroeconomists. G. E. Krimpas con- due to a systematic framework of analysis that enabled him to siders the currency recycling problem in the European determine the impact of economic policies, a framework he Monetary Union and advocates an entity that is a lender as first applied to Britain’s economy