Working Papers
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Grantee paper
The Making of America’s Imbalances
Jun 2012
This paper tracks the development of sectoral saving and borrowing in the US economy over the past 50 years.
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Grantee paper
Principled Policymaking in an Uncertain World
Jun 2012
Revised text of a presentation at the Conference on Microfoundations for Modern Macroeconomics, Columbia University, November 2010. I would like to thank Amar Bhidé, Roman Frydman, and Andy Haldane for helpful comments, and the Institute for New Economic Thinking for research support.
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Grantee paper
What’s Wrong with Economic Models?
Jun 2012
John Kay’s thought-provoking essay The Map is Not the Territory: An Essay on the State of Economics argues that economists have been led astray by excessive reliance on formal models derived from assumptions that bear too little similarity to the world we live in.
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Grantee paper
State-Dependent Effects of Fiscal Policy
May 2012
We investigate the effects of government spending on U.S. economic activity using a threshold version of a structural vector autoregressive model.
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Grantee paper
Does the Effectiveness of Fiscal Stimulus Depend on Economic Context?
Apr 2012
The topic of this session of the INET conference is a question: does the effectiveness of fiscal policy in stabilizing an economy depend on the underlying economic context in which the policy is implemented?
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Grantee paper
Old Lady Charm: Explaining the Persistent Appeal of Chicago Antitrust
Apr 2012
The paper deals with the mysterious persistence of the Chicago approach as the main analytical engine driving antitrust enforcement in the US.
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Conference paper
Revitalizing the Eurozone without Fiscal Union
Apr 2012
The ongoing eurozone crisis has prompted many to argue that monetary union withoutfiscal union was bound to fail.
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Conference paper
Financial Instability after Minsky:Heterogeneity, Agent Based Models and Credit Networks
Apr 2012
Albeit the majority of the profession either ignores Minskyís Financial Instability Hypothesis (FIH) or considers it plainly wrong, at least since the mid-80’s a few influential economists —who have certainly not embraced any unorthodoxcredo —have grown more receptive to this idea and eager to incorporate it in their models, even if diluted and sometimes disguised in order to make it more palatable to the conventional “representative” macroeconomist
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Conference paper
Taking Stock of Complexity Economics: A Comment
Apr 2012
I am supposed to speak about Complexity Economics and the issues this theoretical approach is able to illuminate. Defined as such, it appears as if I should discuss methodology and I am reminded of Paul Krugman’s quote: “It is said that those who can, do, while those who cannot, discuss methodology”. So, having a discussion centered on methodology may give the impression that the panelists in this session are unable to make scientific progress.
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Conference paper
Andrew Haldane: Financial Arms Races
Apr 2012
Elephant seals have got too big for their beaches. A large specimen might weigh over 8000 lbs (3700 kg).Their size has a simple evolutionary explanation. Large males fight for the right to mate with a whole beach full of females. For elephant seals it is, quite literally, winner-takes-all. And the key to winning is simple – size.
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Conference paper
Real vs. Imagined Financial Markets The Regulatory Challenge
Apr 2012
We have grown accustomed to regulating financial markets based on imagined, not real markets. Real markets are shaped by and co-evolve with institutional arrangements within two fundamental constraints: Imperfect knowledge and the threat of illiquidity.
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Conference paper
Finance and Growth: When Credit Helps, and When it Hinders
Apr 2012
The financial sector can support growth but it can also cause crisis. The present crisis has exposedgaps in economists’ understanding of this dual potential.
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Conference paper
Instability in Financial Markets: Sources and Remedies
Apr 2012
In the seemingly never-ending aftermath to the economic crisis that began in 2007, there is little disagreement that financial markets are characterized by instability rather than stability.
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Conference paper
Instability in Financial Markets: Sources and Remedies The View from Economic History
Apr 2012
Taking a long‐run view from economic history, I make three points about instability in financial markets. First, I argue that economic historians have a relatively good understanding of the proximate causes of financial crises.
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Conference paper
Inequality and Employment
Apr 2012
“Natural rate theory” has dominated interpretations of economic trends and policy prescriptions over many decades. European-type welfare state institution were claimed to cause a compressed wage distribution that distorts otherwise well functioning labor markets.