April 20, 2020
Institute News

The Hyman P. Minsky Summer Seminar Canceled <[link removed]>

After careful consideration and consultation, the 11th Minsky Summer Seminar, scheduled from June 7--13, 2020, has been canceled in light of concerns related to the ongoing COVID-19 (coronavirus) pandemic.

To learn more about Minsky's work, please visit the Institute's website <[link removed]> and Bard's Digital Commons <[link removed]> to access his writings, correspondence, notes, and more.

New Publications

Public Policy Brief No. 149, April 2020
Pandemic of Inequality <[link removed]>
Luiza Nassif-Pires <[link removed]>, Laura de Lima Xavier, Thomas Masterson <[link removed]>, Michalis Nikiforos <[link removed]>, and Fernando Rios-Avila <[link removed]>

Research Fellow Luiza Nassif-Pires <[link removed]>, Laura de Lima Xavier, and Research Scholars Thomas Masterson <[link removed]>, Michalis Nikiforos <[link removed]>, and Fernando Rios-Avila <[link removed]> demonstrate that the COVID-19 crisis is likely to widen the US's already-worrisome levels of inequality, arguing that our policy response must be responsive to these unequally shared burdens—and that a failure to mitigate the regressive impact of the crisis will not only be unjust, it will prolong the pandemic and undermine ensuing economic recovery efforts.

Read complete text (pdf) <[link removed]>


Policy Note 2020/3 | April 2020
Immigration Policy Undermines the US Pandemic Response <[link removed]>
Martha Tepepa <[link removed]>

Research Scholar Martha Tepepa <[link removed]> explains how the US response to the COVID-19 crisis will be hindered by its approach to immigration policy, such as the "zero tolerance" immigration campaign that creates a public health risk in the context of this pandemic, and the recent implementation of the "Inadmissibility on Public Charge Grounds" final rule penalizing noncitizen recipients of some social services.

An earlier version of this note appeared as Working Paper No. 950 <[link removed]>, "Public Charge in the Time of Coronavirus"

Read complete text (pdf) <[link removed]>


Policy Note 2020/2 | April 2020
Stabilizing State and Local Budgets through the Pandemic and Beyond <[link removed]>
Alexander Williams

The federal government appears to have abandoned the idea of a coordinated public health response to the COVID-19 pandemic, leaving the entirety to state and local governments. Meanwhile, the economic standstill resulting from necessary public health measures will soon cripple state and local budgets. Alexander Williams outlines a proposal for an intragovernmental automatic stabilizer program that would provide a backstop for state and local finances—both during the pandemic and beyond.

Read complete text (pdf) <[link removed]>


Policy Note 2020/1 | March 2020
When Two Minskyan Processes Meet a Large Shock: The Economic Implications of the Pandemic <[link removed]>
Michalis Nikiforos <[link removed]>

Research Scholar Michalis Nikiforos <[link removed]> explains that we cannot fully understand the economic implications of the COVID-19 pandemic without reference to two Minskyan processes at play in the US economy: the growing divergence of stock market prices from output prices, and the increasing fragility in corporate balance sheets. Using a Minskyan framework, Nikiforos explains how the current economic weakness can be perpetuated through feedback effects between flows of demand and supply and their balance sheet impacts.

Read complete text (pdf) <[link removed]>


One-Pager No. 63, April 2020
Are We All MMTers Now? Not so Fast <[link removed]>
Yeva Nersisyan and L. Randall Wray <[link removed]>

As governments around the world explore ambitious approaches to fiscal and monetary policy in their responses to the COVID-19 crisis, Modern Money Theory (MMT) has been thrust into the spotlight once again. Unfortunately, many of those invoking the theory have misrepresented its central tenets, according Yeva Nersisyan and Senior Scholar L. Randall Wray <[link removed]>.

Read complete text (pdf) <[link removed]>


One-Pager No. 62, March 2020
The Economic Response to the Coronavirus Pandemic <[link removed]>
Yeva Nersisyan and L. Randall Wray <[link removed]>

Nersisyan and Wray <[link removed]> identify four steps that require immediate attention in dealing with the COVID-19 crisis: (1) full coverage of medical costs associated with disease testing and treatment; (2) mandated paid sick leave and full coverage of associated costs; (3) debt relief for families; and (4) swift deployment of testing and treatment facilities to underserved communities.

Read complete text (pdf) <[link removed]>


One-Pager No. 61, March 2020
A Global Slowdown Will Test US Corporate Fragility <[link removed]>
Dimitri B. Papadimitriou <[link removed]>, Michalis Nikiforos <[link removed]>, and Gennaro Zezza <[link removed]>

Institute President Dimitri Papadimitriou <[link removed]> and Research Scholars Michalis Nikiforos <[link removed]> and Gennaro Zezza <[link removed]> report that the rapidly growing uncertainty about the potential global fallout from an emerging pandemic is occurring against a background in which there is evidence US corporate sector balance sheets are significantly overstretched, exhibiting a degree of fragility that will have severe consequences for both the real and financial sides of the economy.

Read complete text (pdf) <[link removed]>
New Blog Posts at "The Multiplier Effect"


At the Institute's "Multiplier Effect" blog, our scholars bring you their takes on COVID-19's economic and social consequences. Recent posts discuss unemployment and inequality, the increase in domestic violence in households under quarantine, and the economic impacts of nationalizing payrolls.

April 4: What MMT Is, and Why We Should Not Wait for the Next Crisis to Live Up to Our Means <[link removed]> by Yeva Nersisyan and L. Randall Wray

April 2: We Need Class, Race, and Gender Sensitive Policies to Fight the COVID-19 Crisis <[link removed]> by Luiza Nassif-Pires, Laura de Lima Xavier, Thomas Masterson, Michalis Nikiforos, and Fernando Rios-Avila

March 30: What If We Nationalized Payroll? <[link removed]> by Pavlina Tcherneva

March 29: Home Quarantine: Confinement With an Abuser <[link removed]> by Luiza Nassif-Pires

March 27: The Coronavirus Does Not Discriminate; Unfortunately Our Economic System Does <[link removed]> by Thomas Masterson
Levy Graduate Programs in Economic Theory and Policy Now Accepting Students for Fall 2020

Designed as preparation for a professional career in economic research and policy formulation, the Levy Economics Institute Graduate Programs in Economic Theory and Policy offer an alternative to mainstream programs in economics and finance. We are pleased to announce that both our M.A. and M.S. programs are now open to international students.

Our diverse student body comes from Afghanistan, Australia, Austria, Canada, Chile, Colombia, Ethiopia, Gambia, Germany, India, Kyrgyzstan, Lebanon, Nepal, Peru, the United Kingdom, and the United States, with research interests focusing on banking regulations, monetary policy in Europe, trade, financial regulations, economic forecasting, poverty, unemployment and exclusion, modern monetary theory, and stock-flow-consistent modeling. To find out more about our innovative programs that combine a rigorous course of study with exceptional opportunity to participate in advanced economics research alongside the Institute's global network of researchers, visit bard.edu/levygrad or follow the program's Facebook <[link removed]> page.

Applications for fall 2020 are now open. Interested students should contact the program recruiter, Martha Tepepa ([email protected]), to discuss their options. Scholarships are available.
Media and Web Coverage


Citing Research Scholar Michalis Nikiforos' <[link removed]> observation that "the record-high stock prices the president routinely touted became disconnected from companies' underlying value," <[link removed]> a March 28th Washington Post <[link removed]> article by David J. Lynch claims "the pandemic exposed vulnerabilities that had accumulated during a record-long expansion and years of ultralow interest rates—and which now could make it harder to recover from a recession."

The Guardian's <[link removed]> April 8th editorial suggests that "what is possible in dealing with coronavirus can be paid for. Money is not the issue." They cite Yeva Nersisyan and Senior Scholar L. Randall Wray's <[link removed]> recent assertion in the Multiplier Effect <[link removed]> that "the real limits faced by the government before the pandemic hit were far less constraining than the limits faced after the virus had brought a huge part of our productive capacity to a halt" as evidence that "there are more important things to worry about than government debt."

And in their own April 17 op-ed for The Guardian <[link removed]>, Nersisyan and Wray stress that Modern Money Theory "is not a prescription, but merely a description of what actually happens," and the current crisis "has clearly demonstrated what should have been obvious already: provisioning society ... is not a financial issue." They suggest we can mobilize our resources in a manner similar to our World War II response, with the hope that "the coronavirus crisis will not be as destructive as the Great Depression, but if there is one thing it should destroy, it's the myth of the deficit."

Because "a viral epidemic, unfortunately, does not just sicken families; it also sickens the economy, and ours is quite vulnerable already," an interest rate cut may not be enough to spur investment and growth as the US formulates its response to COVID-19. In her first of two op-eds <[link removed]> for MarketWatch, Research Scholar Pavlina R. Tcherneva <[link removed]> calls instead for an "aggressive public-health-services mobilization and an economic stabilization package. And that's the job of Congress, not the Fed."

In the second <[link removed]>, Tcherneva calls for a wartime-like mobilization of resources, including a federal job guarantee, to ensure the coronavirus pandemic does not lead to decades of elevated unemployment, suggesting that "only big government, big public investments, and big public-employment programs will ensure a quick bounce back, rather than another protracted jobless recovery," a sentiment she echoes to the New York Times' <[link removed]> Peter S. Goodman, as well as in several recent interviews. Hear more from her discussion with Bloomberg's <[link removed]> financial team, as well as on the Bloomberg Surveillance <[link removed]>, Opinion Has It <[link removed]>, and Wharton Business Review <[link removed]> podcasts, and Hill TV's morning show, Rising <[link removed]>.

Alexander Williams joins Joe Weisenthal and Tracy Alloway, hosts of Bloomberg's Odd Lots <[link removed]> podcast, to discuss how his findings in Policy Note 2020/2 <[link removed]>, "Stabilizing State and Local Budgets through the Pandemic and Beyond," can help the already-fragile US economy recover from the effects of COVID-19.

A new study <[link removed]> on Brazil by Research Fellow Luiza Nassif-Pires <[link removed]> (with coauthors Laura Carvalho and Laura de Lima Xavier) demonstrates that comorbidities are more prevalent among Brazilians with low educational attainment, indicating that poor people are more likely to be severely affected by COVID-19. Results of their study have been reported on in the Brazilian press, including Folha de São Paulo <[link removed]> and Jornal da Universidade de São Paulo <%20https://jornal.usp.br/ciencias/ciencias-da-saude/doencas-cronicas-farao-brasileiros-de-baixa-renda-os-mais-afetados-pela-covid-19/>. (all links in Portuguese)

Estimating that private demand could be weak for 18 months or more, Research Associate Stephanie Kelton <[link removed]> tells Mehdi Hasan of the Intercept's "Deconstructed" <[link removed]> podcast that we must "decrease the amount that people are required to pay out each month and increase what's coming in because that's the only way people are going to be able to hold it together." And in her March 21st op-ed for The New York Times <[link removed]>, she explains that "only the federal government has the means to step up and save the economy," suggesting it "can and should use this opportunity to make ambitious, lasting improvements."

Speaking to Daniel Bush of PBS NewsHour <[link removed]> on April 2nd, Kelton noted "we had these extreme vulnerabilities" long before the pandemic exposed them, suggesting that "we don't have the robust social safety nets that many European countries have, and we pay the price for that." Her April 8th interview <[link removed]> with Bloomberg's Stephanie Flanders suggests, however, that in spite of the deficits we have run in the past, we have the policy space to take action.

Quoting Wray <[link removed]>, Kelton <[link removed]>, and frequent Minsky Conference keynote speaker, former PIMCO Chief Economist Paul McCulley <[link removed]>, who asserts that "it's an epic moment in terms of breaking down the orthodoxy of church-and-state separation of the fiscal and monetary authority," The New York Times' <[link removed]> Matt Phillips uses MMT to illustrate how we can replace "a few months of American economic activity with a flood of government money."






In This Issue

Institute News: Summer Seminar Cancelled <#29cxl>

Pandemic of Inequality <#ppb_149>

Immigration Policy Undermines the US Pandemic Response <#pn_20_3>

Stabilizing State and Local Budgets through the Pandemic and Beyond <#pn_20_2>

When Two Minskyan Processes Meet a Large Shock <#pn_20_1>

Are We All MMTers Now? Not so Fast <#op_63>

The Economic Response to the Coronavirus Pandemic <#op_62>

A Global Slowdown Will Test US Corporate Fragility <#op_61>

The Multiplier Effect <#blog>

Levy Graduate Programs <#grad>

Web and Media Coverage <#media>


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