May 27, 2020
Institute News

Video from "The Legacy of Wynne Godley" Now Available Online <[link removed]>

On Wednesday, May 13, friends and colleagues of Distinguished Scholar Wynne Godley <[link removed]> gathered online to remember the life and work of a man considered by some to be "the most insightful macroeconomic forecaster of his generation." The event, organized by the Institute and Universita' degli Studi di Cassino e del Lazio Meridionale, marked the 10th anniversary of Godley's passing and was attended by over 100 people.

Click here <[link removed]> to view the event schedule and access video of the panels.

New Publications

Policy Note 2020/4 | May 2020
Guaranteeing Employment during the Pandemic and Beyond <[link removed]>
Pavlina R. Tcherneva <[link removed]>

The ongoing job losses and mass unemployment that will remain once the COVID-19 crisis is over are of our own making, argues Research Associate Pavlina R. Tcherneva <[link removed]>. In this Policy Note, she suggests a public program of guaranteed employment, with the government acting as an employer of last resort, as well as creating jobs directly via mass mobilization and a job guarantee to secure the right to decent, useful, and remunerative employment opportunities for all.

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


Working Paper No. 956, May 2020
An Empirical Analysis of Long-Term Brazilian Interest Rates <[link removed]>
Tanweer Akram and Syed Al-Helal Uddin

Tanweer Akram and Syed Al-Helal Uddin use monthly data to empirically model the dynamics of Brazilian government bond (BGB) yields in the context of the evolution of Brazil's key macroeconomic variables. The results show that the current short-term interest rate has a decisive influence on BGBs' long-term interest rates, supporting John Maynard Keynes's claim that the central bank's actions influence the long-term interest rate on government bonds mainly through the short-term interest rate.

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


Working Paper No. 955, May 2020
Class Size, Cognitive Abilities, Bullying, and Violent Behavior: Evidence from West Bank Schools <[link removed]>
Sameh Hallaq <[link removed]>

Using administrative and survey data, Research Scholar Sameh Hallaq <[link removed]> investigates the effects of class size in the West Bank's public and United Nations Relief and Works Agency (UNRWA) school systems. The main findings suggest that, with few exceptions, class size has no direct impact on students' cognitive skills, though class size reduction improves their quality of life by mitigating the bullying and violent behavior among pupils that may negatively affect their achievements.

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


Working Paper No. 954, April 2020
Household Consumption, Household Indebtedness, and Inequality in Turkey: A Microeconometric Analysis <[link removed]>
Özlem Albayrak <[link removed]>

In the context of the credit expansion for Turkish households since the 2000s, Research Associate Özlem Albayrak <[link removed]> examines consumption levels through the lens of the relative income hypothesis to ascertain if a household's relative position and inequality within their reference group affects their spending. Her findings suggest that between 2005 and 2012, household consumption was negatively related to the relative income indicator after controlling for absolute income, and positively related to the income inequality of the reference group.

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


Working Papers No. 952 and 953, April 2020
Notes on the Accumulation and Utilization of Capital <[link removed]>
Michalis Nikiforos <[link removed]>

In this two-part paper, Research Scholar Michalis Nikiforos <[link removed]> presents some issues related to the triangle between capital accumulation, distribution, and capacity utilization.

Working Paper No. 952 <[link removed]> deals with the theoretical issues around why utilization is a crucial variable in theories of growth and distribution, while responding to some recent criticism and providing concrete examples of why demand is a determinant for the long-run rate of utilization of capital.

Working Paper No. 953 <[link removed]> addresses the empirical issues, including an in-depth examination of the Federal Reserve's measure of capacity utilization, revealing that other measures (such as the average workweek of capital) may be more appropriate.

Read complete text of WP 952 (pdf) <[link removed]>

Read complete text of WP 953 (pdf) <[link removed]>


Working Paper No. 951, April 2020
A Simple Model of the Long-Term Interest Rate <[link removed]>
Tanweer Akram


Tanweer Akram presents a simple model of the long-term interest rate, employing the geometric Brownian motion to formally model Keynes's assumption that the central bank's actions influence the long-term interest rate primarily through the short-term interest rate. He suggests that interest rate models based on Keynes's conjecture can be useful for understanding monetary, fiscal, and other economic policies, as well as a wide range of theoretical questions in macroeconomics and finance.

Read complete text (pdf) <[link removed]>
Levy Graduate Programs in Economic Theory and Policy Now Accepting Students for Fall 2020

We are so proud of the Levy Economics Institute Graduate Programs in Economic Theory and Policy's Class of 2020 and look forward to welcoming students, old and new, back to campus when the fall semester begins in September.

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. With small classes in a dedicated facility, we can also offer more options for social distancing while completing your degree in these uncertain times.

Our diverse student body comes from around the world, with research interests focusing on banking regulations, monetary policy, 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, with new part-time options in the MA program and generous financial aid available for Bard alumni. Interested students should contact the program recruiter, Martha Tepepa ([email protected]), to discuss their options. Scholarships are available.
Media and Web Coverage


"The pandemic brought to the surface the issues masked by our previously 'roaring' economy, from lack of federally mandated sick leave, to lack of access to health care, and the folly of tying retirement security to the stock market," observe Yeva Nersisyan and Senior Scholar L. Randall Wray <[link removed]> in their recent article for Dollars&Sense <[link removed]>. To remedy these issues, they suggest policies guided by Modern Money Theory (MMT) that would make use of "the fiscal tools of spending and taxation with a view to their functions and the goal of ensuring full employment and other public purpose." In an April 20th Project Syndicate <[link removed]> op-ed, they dispel the myth that MMT is only "cranking up the 'printing press' or conducting 'helicopter drops,'" noting that "jobs, not cash, is MMT's answer to economic downturns."






In This Issue

Institute News: The Legacy of Wynne Godley <#godley2020>

Guaranteeing Employment during the Pandemic and Beyond <#pn_20_4>

An Empirical Analysis of Long-Term Brazilian Interest Rates <#wp_956>

Class Size, Cognitive Abilities, Bullying, and Violent Behavior <#wp_955>

Household Consumption, Household Indebtedness, and Inequality in Turkey <#wp_954>

Notes on the Accumulation and Utilization of Capital <#wp_953>

A Simple Model of the Long-Term Interest Rate <#wp_951>

Levy Graduate Programs <#grad>

Web and Media Coverage <#media>


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