Engineering a New Crisis to resolve an Old One C.P. Chandasekhar

News that the US economy grew at 3 per cent during the hurricane-blighted third quarter of 2017, close to the 3.1 per cent recorded in the previous quarter, has once more revived claims that the world economy has left the Great Recession behind. There is one reason to discount this claim. Back to back 3 per cent annualized rates of growth in consecutive quarters has been observed more than once since the 2008 crisis. In fact, as recently as the second and third quarters of 2014, rates of GDP growth in the US stood at 4.6 and 5.2 per cent…

Once More on “The Humbug of Finance” Prabhat Patnaik

The renowned economist Joan Robinson had referred to the view that the government’s budget should always be balanced, as the “humbug of finance” (Robinson 1962), namely as a false proposition with no theoretical merit which was nonetheless promoted by finance capital. These days of course the insistence is not exactly on balancing the budget as was the case during the pre-second world war years. A certain amount of fiscal deficit relative to GDP, usually 3 percent, is considered “permissible”, though it is not clear what is so sacrosanct about the figure 3 and why 3 is better than zero. But…

A Universal Basic Income in India? Jayati Ghosh

There is a lot of buzz globally around the idea of a Universal Basic Income (or UBI). It is perceived as one way of coping with technology-induced unemployment that is projected to grow significantly in the near future, as well as reducing inequalities and increasing consumption demand in stagnant economies. Certainly there is much to be said for the idea, especially if it is to be achieved by taxing the rich and particularly those activities that are either socially less desirable or are generating larger surpluses because of technological changes. Indeed, that is precisely the proposal of the French Socialist…

CETA without Blinders: How cutting ‘trade costs and more’ will cause unemployment, inequality and welfare losses Pierre Kohler and Servaas Storm

Contrary to the positive outcomes as projected by the proponents of CETA, this paper shows that it will lead to intra-EU trade diversion and in the current context of tepid economic growth, competitive pressures induced by CETA will cause unemployment, inequality and welfare losses. ceta (Download the full text in PDF format) (This article was originally published as GDAE Working Paper No. 16-03.)

Why do we have Unemployment? Prabhat Patnaik

Unemployment has become so persistent a phenomenon in contemporary times that there is a common feeling that it is a “natural” state of affairs, that nothing can ever be done about it, and that the only way to have greater employment opportunities coming your way is either to oppose the system of job "reservations" for the deprived segments of the population altogether, or to demand that your own “caste” or “community” be included in the category of those eligible for such "reservations". But this view that unemployment is a "natural" state of affairs is based either on ignorance or on…

The Gathering Clouds of Recession Prabhat Patnaik

The world capitalist economy has been mired in stagnation and high unemployment ever since the 2008 financial crisis. Many were predicting that a turnaround was about to occur, partly because of the fact that the U.S. economy last month showed larger job creation than of late, and also because it had grown at 3.5 percent last quarter which is higher than for some time now. But, far from recovering, the world capitalist economy now appears to be sliding into a new downturn. A recession is defined to be a situation where an economy fails to grow for two successive quarters,…

Economics: The user’s guide Author: Ha-Joon Chang

  • September 8, 2014
  • Books

Published by Bloomsbury Press ISBN 1620408120 Review by Juan Carlos Moreno-Brid With a unique mixture of recognition of the merits of alternative economic theories, reverence for historical facts, systematic reference to real-life numbers and an enviable sense of humor, Ha-Joon Chang manages to present economics as a user friendly, relevant and passionately exciting craft! For details click here Table of Content What is economics? What can - and can't - it explain about the world? Why does it matter? About the Author Ha-Joon Chang teaches economics at Cambridge University, and writes a column for the Guardian. The Observer called his book…

Economics: The User’s Guide Author: Ha-Joon Chang

Responding to the Unemployment Challenge: A job guarantee proposal for Greece Rania Antonopoulos, Sofia Adam, Kijong Kim, Thomas Masterson, Dimitri B. Papadimitriou

This report, by the Levy Institute and INE-GSEE, presents research based evidence of the macroeconomic and employment effects of a large-scale direct job creation intervention. Unemployment_Challenge (Download the full text in PDF format)

On Wealth and Income Inequalities Prabhat Patnaik

In the late nineteen sixties and the early nineteenth seventies, an argument used to be put forward by theorists of Social Democracy that went as follows. In any society wealth inequality is always greater than income inequality; but if this income inequality is curtailed, then that ipso facto has the effect of curtailing wealth inequality as well, and that too quite substantially. Hence it is not necessary to actually nationalize private property and institute social ownership of the means of production; all that is required is the use of taxes and subsidies to reduce income inequality, and over time wealth…

The US Economy Needs an Exports-Led Boost Dimitri Papadimitriou

A recent visit by President Obama to an Ohio steel mill underscored his promise to create 1 million manufacturing jobs. On the same day, Commerce Secretary Penny Pritzker announced her department’s commitment to exports, saying “Trade must become a bigger part of the DNA of our economy.” These two impulses — to reinvigorate manufacturing and to emphasize exports — are, or should be, joined at the hip. The U.S. needs an export strategy led by research and development, and it needs it now. A serious federal commitment to R&D would help arrest the long-term decline in manufacturing, and return America…