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Author Archives: Devin Smith
By Felipe Rezende
What Should Brazil do?
The Brazilian current crisis fit with Minsky’s theory of instability (see here, here and here). The traditional response to a Minsky crisis involves government deficits to allow the non-government sector to net save. That is, if the private sector desire to net save increases, then fiscal deficits increase to allow it to accumulate net financial assets. The sharp increase in budget deficits in 2015 comes as no surprise. Rezende (2015a) simulated Continue reading
By J.D. ALT
My last essay, “A Perfect Example,” elicited six thoughtful and compelling questions from a reader with the moniker “MadcapMongoose.” They deserve an equally thoughtful response, which I’ve been trying to formulate, off and on, these past many weeks. Each formulation I come up with, however, seems to be missing a larger and deeper issue that I keep getting glimpses of. So, with apologizes to Mongoose, instead of answering him (or her) directly, I’m going to try to mine the topic obliquely to see if I can get at that deeper vein.
Michael Hoexter, Ph.D.
- Conventional “Hard” Climate Denial
- A Web of Soft Climate Denial
- The Foundations of Soft Climate Denial in Economics
- Settling on Neoliberal, “Market-Based” Carbon Gradualism
- Soft Climate Denial, Fossil Fuels, and the Hedonic Self
1. Conventional “Hard” Climate Denial
The Rio Olympics opening ceremony highlighted global warming as a major theme of international concern even on an occasion of diversion from the cares of the world. That most Brazilians understand intuitively and uncontroversially that climate change is a real threat contrasts with the still substantial fights that occur in parts of the Anglophone world regarding the reality of human caused climate change. A powerful minority in that world, strongest in the United States and Australia, holds to the idea that climate change is a hoax. The Republican governor of Florida, a state that almost certainly will lose population centers and land area to rising seas, has, for instance, banned the use of the words “climate change” by state employees. Meanwhile we are, due to a strong El Nino and climate change combined, experiencing record average global temperatures and are seeing signs that we may be approaching tipping points in the destruction of the habitable biosphere to which we are adapted as a species and civilization. Due to the ravages of 2016’s heat, the Anglophone world even might now eject climate deniers from the arena of legitimated public discourse.
By Felipe Rezende
This part of the series (see Part I and II, here and here) will focus on macroeconomic and microeconomic aspects to financial fragility and provision for liquidity. Minsky’s framework not only sheds light on how to detect unsustainable financial practices, but the position adopted in this paper is that the current Brazilian crisis does fit with Minsky’s instability theory. This is a Minsky’s crisis in which during economic expansions market participants show greater tolerance for risk and forget the lessons of past crises so economic units gradually move from safe financial positions to riskier positions and declining cushions of safety.
NEP’s Randy Wray appears on The Radical Imagination with host Jim Vrettos. Topic of discussion is the science of economics and what a U.S. economy will look like under the administration of Stein, Clinton, Trump or Johnson.
View directly on vimeo here.
NEP’s Bill Black appears on the Ralph Nader Radio Hour.
Nowadays we have zero prosecutions of any of the people that led the three fraud epidemics that drove this crisis. And now they are highly skilled and have seen that they can get away with financial murder. And so they are already back in the business, already selling other toxic stuff and they’re going to produce the next crisis…
You can listen to the podcast here.
By Felipe Rezende
This series will discuss at length the underlying forces behind Brazil’s current crisis.
Building on Keynes’ investment theory of the cycle, Minsky’s work suggests that the structure the economy becomes more fragile over a period of tranquility and prosperity. That is, endogenous processes breed financial and economic instability. While Minsky adopted Keynes’ “investment theory of the cycle”, he added a financial theory of investment, with a detailed exposition of the theory in his book John Maynard Keynes (1975), which put at the forefront the interrelation between investment decisions and the financial structure designed to allow economic units to take positions in assets by issuing debt. In this regard, debt accumulation is at the core of Minsky’s instability theory. His financial theory of investment incorporated Kalecki’s approach in which aggregate profits are created, mostly, by the autonomous components of demand (Minsky 1986, 1989). One can add to this analysis Godley’s three balances approach, which explores the interlinkages between the government sector, the private sector, and the external sector. This means that a surplus must be matched by an equal deficit and flows accumulate to stocks.
NEP’s Pavlina Tcherneva appears on RT’s Boom and Bust with Ameera David and continues her conversation with RT-TV explaining how the Job Guarantee program delivers the economic benefits that the Basic Income proposal only promises. She appears at 12 min and 55 seconds.
Professor Rod O”Donnell is currently engaged in preparing a major edition of the remaining unpublished writings of JM Keynes, of which there remains a HUGE quantity of valuable material scattered across many archives in several countries. Since standard sources of funds for this kind of research have dried up, he has turned to crowdfunding.
The CROWDFUNDING CAMPAIGN begins 11 OCTOBER 2016 on INDIEGOGO.
OVERALL AIM: To complete the publication of ALL of Keynes’s unpublished writings of academic significance. Only about ONE THIRD were published in the Royal Economic Society edition. Continue reading