September 23, 2019
Institute News

Levy Institute Distinguished Scholar Hyman P. Minsky Turns 100 <[link removed]>

Born in Chicago on this day in 1919, Distinguished Scholar Hyman P. Minsky (1919--1996) went on to study at the University of Chicago and Harvard, eventually developing what he called the "financial instability hypothesis," positing that over a prolonged period of prosperity, investors take on more and more risk, until lending exceeds what borrowers can pay off from their incoming revenues. When overindebted investors are forced to sell even their less-speculative positions to make good on their loans, markets spiral lower and create a severe demand for cash—an event that has come to be known as a "Minsky moment."

You can read more about Minsky's work on the Institute's website <[link removed]> or visit the Minsky Archives <[link removed]>, comprised of Minsky's writings, correspondence, notes, and ephemera, much of it centered on understanding and explaining financial crises.


Research Scholar Thomas Masterson Presents at 6th Annual Summer Freedom and Justice Conference <[link removed]>

Research Scholar Thomas Masterson presented his paper, "The Costs of Segregation: Estimates of the Contribution of Occupational Segregation to the Earnings Gap by Race and Gender," coauthored with Michelle Holder of John Jay College, at the American Society of Hispanic Economists (ASHE) and National Economic Association's (NEA) 6th Annual Summer Freedom and Justice Conference, held August 8--10, 2019 at the University of New Mexico.
New Publications

Research Project Report, September 2019
Macroeconomic and Microeconomic Impacts of Improving Physical and Social Infrastructure: A Macro-Micro Policy Model for Ghana and Tanzania <[link removed]>
Ajit Zacharias <[link removed]>, Thomas Masterson <[link removed]>, Fernando Rios-Avila <[link removed]>, Michalis Nikiforos <[link removed]>, Kijong Kim <[link removed]>, and Tamar Khitarishvili <[link removed]>

Feminist economics has long emphasized the role of physical and social infrastructure as determinants of the time women spend on household production, though there are few studies that directly investigate how infrastructure improvements affect the time spent on household production and commuting to work. To fill the lacunae in the research on how infrastructure improvements affect the time spent on these tasks, Senior Scholar Ajit Zacharias <[link removed]>, Research Scholars Thomas Masterson <[link removed]>, Fernando Rios-Avila <[link removed]>, Michalis Nikiforos <[link removed]>, and Kijong Kim <[link removed]>, and Research Associate Tamar Khitarishvili <[link removed]> develop a disaggregated and fully articulated macroeconomic model based on the social accounting matrices for Ghana and Tanzania to account for intersectoral linkages and external constraints, such as balance of payments, that are particularly important for many developing nations.

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


Working Paper 936, September 2019
Fiscal Reform to Benefit State and Local Governments: The Modern Money Theory Approach <[link removed]>
L. Randall Wray <[link removed]>

Senior Scholar L. Randall Wray <[link removed]> presents the Modern Money Theory (MMT) approach to government finance, suggesting the theory was well understood in the early postwar period, but gradually forgotten as the neoclassical theory of the household budget constraint was applied to government finance. Wray asserts that we need to redevelop our understanding of the fiscal space open to the currency issuer and expand its responsibility not only for national social spending, but also for funding state and local government spending given the challenges posed by climate change, growing inequality, secular stagnation, and the rise of Trumpism.

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


Working Paper 935, September 2019
Evolving International Monetary and Financial Architecture and the Development Challenge: A Liquidity Preference Theoretical Perspective <[link removed]>
Jörg Bibow <[link removed]>

Given the peculiar macroeconomic policy challenges faced by emerging economies in today's monetary (non)order and globalized finance, Research Associate Jörg Bibow <[link removed]> reviews the evolution of the international monetary and financial architecture against the background of Keynes's original Bretton Woods vision, highlighting the US dollar's hegemonic status, while Keynes's liquidity preference theory informs the analysis of the loss of policy space and widespread instabilities in emerging economies that are the consequence of financial hyperglobalization.

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


Working Paper 934, August 2019
An Analysis of the Daily Changes in US Treasury Security Yields <[link removed]>
Tanweer Akram and Anupam Das

Noting that Keynes held that the short-term interest rate is the main driver of the long-term interest rate, Tanweer Akram and Anupam Das empirically model the daily changes in long-term Treasury security yields as a function of the daily changes in the short-term interest rate and other important financial variables to test Keynes's hypothesis.

» Read complete text (pdf) <[link removed]>
Minsky Celebrated in Bergamo

In recognition of Hyman Minsky's association with the University of Bergamo's economics department, which bears his name, the University, the City of Bergamo, and the Fondazione A. J. Zaninoni sponsored a seminar, "Minsky the Man and the Economist," on July 25 to mark the 100th anniversary of Minsky's birth. The seminar was held at the Salone Furietti of the Biblioteca Civica Angelo Mai in Piazza Vecchia, Bergamo.

Personal recollections were provided by Pia Locatelli, president of the Fondazione A. J. Zaninoni, and the widow of Jack Zaninoni, both longtime friends of Hy and Esther Minsky in their visits to Italy. Marco Vitale, financial analyst, and Riccardo Leoni, who served as head of the economics department when Hy was a frequent visitor, also offered remarks.

Academic appreciations were provided by Piero Ferri in the form of the presentation of his recent book, Minsky's Moment: An Insider's View on the Economics of Hyman Minsky. Other presenters included Levy Institute Senior Scholar Jan Kregel <[link removed]>, Alessandro Roncaglia of the Università La Sapienza di Roma, and Riccardo Bellofiore and Anna Maria Variato, both of the Università di Bergamo.

Video of the event is available at the seminar website <[link removed]> (in Italian).
Graduate Programs in Economic Theory and Policy

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.

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


Suggesting "capitalism itself is up for debate," Bloomberg's <[link removed]> John Authers' recent op-ed notes "it is time to turn to Minsky <[link removed]> in the original and see exactly what he argued," calling Minsky's seminal publication, John Maynard Keynes <[link removed]>, required reading.

Senior Scholar L. Randall Wray <[link removed]> joined Bloomberg's <[link removed]> Cristina Lindblad and Peter Coy for a conversation on the basics of Modern Monetary Theory.

Adding to the "national conversation about the role of government in serving the public interest," Research Associate Pavlina Tcherneva <[link removed]> discusses the negative effects of state balanced-budget amendments on working families in a recent article for Fatherly <[link removed]>.

In making his case for a job guarantee program for Project Syndicate <[link removed]>, Robert Skidelsky cites the Levy research project report, "Public Service Employment: A Path to Full Employment," <[link removed]> as one plan to make "unwanted unemployment, as we have known it since the Industrial Revolution... no longer exist."

Newsweek <[link removed]> notes that though "a recent survey found that the majority of members of the National Association of Business Economics (NABE) disagreed with [Elizabeth] Warren's conclusion that forgiving student debt would boost the economy," the authors of the Institute's report, "The Macroeconomic Effects of Student Debt Cancellation," <[link removed]> conclude that canceling student debt would have a "meaningful stimulus effect."






In This Issue

Institute News: Minsky Turns 100 <#minsky100>

Institute News: Levy Scholar Presents at Freedom and Justice Conference <#tom>

Macroeconomic and Microeconomic Impacts of Improving Physical and Social Infrastructure <#rpr_9_19>

Fiscal Reform to Benefit State and Local Governments <#wp_936>

Evolving International Monetary and Financial Architecture and the Development Challenge <#wp_935>

An Analysis of the Daily Changes in US Treasury Security Yields <#wp_934>

Minsky in Bergamo <#bergamo>

Levy Graduate Programs <#grad>

Web and Media Coverage <#media>


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