Dear Friend,

When the Levy Institute was founded over three decades ago, economic thought and policymaking had come to be dominated by a certain orthodoxy: one that envisioned central banks rather than fiscal authorities as the proper managers of the macroeconomy, amplified fears of public deficits and debt, and neglected matters of financial instability or rising inequalities in income and wealth.

Piece by piece, that reigning orthodoxy is losing its grip.

Part of the Institute's mission has been to lay bare the deficiencies in mainstream economic thinking, and there is still much work to be done on that front. Nevertheless, as the prevailing paradigms weaken, we are entering a phase in which another aspect of our mission will prove critical: namely, developing those alternative analytical tools and policy blueprints that can fill the gaps left by the receding orthodoxy. This is a moment of opportunity. And we need your help for what comes next.
Our work on the economic dimensions of the COVID-19 <[link removed]> crisis, in the United States and elsewhere, has uncovered a feedback loop in which racial and income inequality worsen the pandemic and are in turn exacerbated by it. The crisis has also overshadowed the financial fragility that still underlies the US economy—another structural weakness that has remained unaddressed and underappreciated. Since Hyman Minsky's <[link removed]> time at the Institute, we have endeavored to help economic observers better understand our current mode of financial capitalism and its cycles of instability. Our influential work reexamining the impacts of public deficits and debt and exploring alternative budgeting frameworks can help guide how we approach the bold, multi-level public action that will be necessary to combat the climate emergency. Following in the footsteps of Wynne Godley <[link removed]>, our stock-flow macroeconomic models (recently expanded to the Italian economy) produce alternative projections that are rooted in an understanding of the interconnected financial balances of the private, public, and external sectors. Our research on direct job creation policies can serve as a crucial plank in the foundation of a more progressive, more stable economy; one driven by government-backed full employment rather than private-debt-driven growth. Our alternative metrics of poverty and economic well-being help governments better understand who is falling through the cracks. And the growing number of graduates from our Graduate Programs in Economic Theory and Policy <[link removed]> are making their own impact as they take their places in government, think tanks, graduate schools, and private firms.

We will continue building on the foundations of our innovative research programs, endeavoring to influence how economic questions are framed, craft solutions to the problems that have been neglected by the prevailing policy regime, and help policymakers, analysts, and the broader public better understand the urgent economic challenges that lie ahead of us. Your contributions are crucial to making that possible.
If you'd like to get more involved by partnering with us on a specific program or project, e-mail me at [email protected] to discuss how you'd like to direct your gift.

Sincerely,
Dimitri B. Papadimitriou











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