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  • Author: Trevon Logan, Peter Temin
  • Publication Date: 01-2020
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy. The path was not monotonic, and we organize our tale by periods in which inclusiveness rose and fell. The history we recount demonstrates the staying power of the myth of black inferiority held by a changing white majority as the economy expanded dramatically. Slavery was outlawed after the Civil War, and blacks began to participate in American politics en masse for the first time during Reconstruction. This process met with white resistance, and black inclusion in the growing economy fell as the Gilded Age followed and white political will for black political participation faded. The Second World War also was followed by prosperity in which blacks were included more fully into the white economy, but still not completely. The Civil Rights Movement proved no more durable than Reconstruction, and blacks lost ground as the 20th century ended in the growth of a New Gilded Age. Resources that could be used to improve the welfare of whites and blacks continue to be spent on the continued repressions of blacks.
  • Topic: Economics, Race, History, Capitalism, Slavery
  • Political Geography: United States, Global Focus
  • Author: Nathan Nunn
  • Publication Date: 01-2020
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: In this brief, I discuss the current state of economic development policy, which tends to focus on interventions, usually funded with foreign aid, that are aimed at fixing deficiencies in developing countries. The general perception is that there are inherent problems with less-developed countries that can be fixed by with the help of the Western world. I discuss evidence that shows that the effects of such ‘help’ can be mixed. While foreign aid can improve things, it can also make things worse. In addition, at the same time that this ‘help’ is being offered, the developed West regularly undertakes actions that are harmful to developing countries. Examples include tariffs, antidumping duties, restrictions on international labor mobility, the use of international power and coercion, and tied-aid used for export promotion. Overall, it is unclear whether interactions with the West are, on the whole, helpful or detrimental to developing countries. We may have our largest and most positive effects on alleviating global poverty if we focus on restraining ourselves from actively harming less-developed countries rather than focusing our efforts on fixing them.
  • Topic: Development, Economics, International Political Economy, Developing World, Economic Development
  • Political Geography: United States, Global Focus
  • Author: John Macwilliams, Sarah Lamonaca, James Kobus
  • Publication Date: 08-2019
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy
  • Abstract: The Pacific Gas and Electric (PG&E) bankruptcy, which was caused by liabilities resulting from massive wildfires, has widely been called the first climate change bankruptcy. It will likely not be the last, as climate change exacerbates natural disasters, leading to more frequent and intense wildfires, storms, and flooding. Wildfires alone could become up to 900 percent more destructive in certain regions by midcentury, and utility assets will also be increasingly exposed to threats stemming from hurricanes, rising sea levels, and other climate-related events. These extreme weather events will increase costs to utility-sector stakeholders, including investor-owned utilities, state and local governments, ratepayers, and taxpayers. These risks could place financial stress on utility companies, drive up electricity rates, crowd out essential investment in renewable energy and grid upgrades, and disrupt service. In this paper, Columbia University’s Center on Global Energy Policy reviews and analyzes the PG&E bankruptcy, assesses how capital markets have reacted to the bankruptcy through the lens of valuations in the US utility sector, and discusses policy implications of California’s recent legislative response to wildfire risk. This paper examines market indicators to assess investor expectations of climate risk exposure and likely cost allocation. Neither debt nor equity markets suggest widespread concern about climate risk in the utility sector. In the absence of strong market signals to encourage climate risk mitigation, the authors find that policy frameworks are needed to ensure that companies make necessary preventative investments and to define how costs will be allocated among stakeholders. This paper also reviews a recently passed California bill aimed at achieving these objectives and the lessons and best practices it offers for other policy makers. In short, the paper finds the following: Market indicators suggest that the California wildfires and subsequent PG&E bankruptcy have not caused imminent concern about climate risks in the utility sector. Equity valuations for the sector remain strong, with a utility stock index trading at a higher-than-average premium to the market benchmark. In credit markets, regulated utilities in the United States have raised more than $50 billion of corporate debt in 2019 to date, and borrowing spreads are currently below historical averages. There are several reasons why markets may not reflect widespread climate risk to utilities, despite the scientific evidence around likely future damage. Investors may believe that cost increases from climate change will occur too far in the future to materially impact the present value of their investments. Even if investors believe that climate change risks are material to valuation, they may also believe that such risks will not be considered by other investors for some time. Investors may be viewing wildfires as a California-specific risk, though the regional skew of wildfires is likely to shift significantly in coming years. They may lack the information or modeling tools for assessing the likelihood and geographic dispersion of high-impact tail events, such as the wildfires that PG&E faced. Financial markets may also reflect the belief that the costs of climate change in the utility sector will fall predominantly on ratepayers, insurance companies, and/or taxpayers rather than investors, and therefore investors may not view themselves as materially exposed. California’s recent creation of a wildfire insurance fund with contributions from both ratepayers and companies provides important policy lessons for designing comprehensive frameworks to allocate climate damage costs. These include the strengthening of both regulatory and corporate climate resilience expertise, mandating preventative investment as a prerequisite for cost-recovery mechanisms, defining utility financial exposure for climate damage situations, and providing cash for utilities to provide essential services when facing large disasters. The policy also presents some potential pitfalls that may be instructive for other state policy makers. The legislation sets aside large reserves for future damage, a necessary measure, but one that will result in higher electric bills. The bill does not allow utilities to earn a return on safety-related spending, which broadly diminishes incentives for proactive climate mitigation investment. The potential insufficiency of the wildfire fund also creates uncertainty about future cost allocation. Finally, failing to reform the California legal framework that allows utilities to be held liable for damages they did not cause perpetuates risks for companies and ratepayers. If the first climate change bankruptcy is indicative of a new reality, it is not that utilities are going to go bankrupt overnight. Rather, climate disasters will increasingly add financial stress to utility-sector stakeholders, as costs accumulate from both acute events and damaging extreme weather impacts. Adapting the regulatory bargain for a climate-exposed future will require lawmakers, regulators, and shareholders to develop new approaches and new incentive structures to ensure an accountable, robust utility sector. Moreover, while climate change is already presenting real financial challenges to utilities, it will not be the only sector to face large climate-driven costs. Other corporate actors can look to the utility experience to better understand how policy makers, investors, and companies will respond to the growing financial threat from climate change.
  • Topic: Climate Change, Economics, Gas, Electricity
  • Political Geography: United States, California
  • Author: Enea Gjoza
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: Defense Priorities
  • Abstract: The American economy, dollar, and banking system create unparalleled power for the U.S. in the global financial system. This power provides disproportionate influence over the world’s key economic and financial institutions, regulatory authority over major foreign companies and banks, and allows borrowing on favorable terms and in dollars, enabling long-term deficit spending.
  • Topic: Economics, International Trade and Finance, Hegemony, Sanctions, Finance, Global Political Economy
  • Political Geography: United States
  • Author: Michael Kende1, Nivedita Sen
  • Publication Date: 01-2019
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: E-commerce has long been recognized as a driver of growth of the digital economy, with the potential to promote economic development. The benefits come from lower transaction costs online, increased efficiency, and access to new markets. The smallest of vendors can join online marketplaces to increase their sales, while larger companies can use the Internet to join global value chains (GVCs), and the largest e-commerce providers are now among the most valuable companies in the world.
  • Topic: Development, Economics, Science and Technology, World Trade Organization, Digital Economy, Economic growth, Free Trade
  • Political Geography: United States, Europe, Switzerland, Global Focus
  • Author: Tarek A. Hassan, Laurence van Lent, Stephan Hollander, Ahmed Tahoun
  • Publication Date: 01-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.
  • Topic: Economics, Political Economy, Regional Cooperation, Brexit, Global Political Economy, Economic Policy
  • Political Geography: Britain, United States, United Kingdom, Europe, European Union
  • Author: Joseph Halevi
  • Publication Date: 06-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper analyzes the early stages of the formation of the Common Market. The period covered runs from the end of WW2 to 1959, which is the year in which the European Payments Union ceased to operate. The essay begins by highlighting the differences between the prewar political economy of Europe and the new dimensions and institutions brought in by the United States after 1945. It focuses on the marginalization of Britain and on the relaunching of French great power ambitions and how the latter determined, in a very problematical way, the European complexion of France. Because of France’s imperial aspirations, France, not West Germany, emerged as the politically crisis prone country of Europe acting as a factor of instability thereby jeopardizing the process of European integration, Among the large European nations, Germany and Italy appear, for opposite economic reasons, as the countries most focused on furthering integration. Germany expressed the strongest form of neomercantilism while Italy the weakest.
  • Topic: Economics, Political Economy, Global Political Economy, World War II, Common Market
  • Political Geography: United States, Europe, Germany, Global Focus
  • Author: Lance Taylor
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Expansionary macroeconomic policy with a strong redistributive component is an attractive proposition, most recently launched on the basis of Modern Monetary Theory or MMT. The Theory is a synthesis of familiar ideas, newly relevant but scarcely path-breaking. Its basics – Chartalist or fiat money, functional finance, and models based on consistent national accounting – come straight from Maynard Keynes, Abba Lerner, and Wynne Godley. Functional finance is the heart of fiscalist Keynesianism built upon automatic stabilizers for the business cycle. MMT’s job guarantee proposal is one more stabilizer which could be a modest helpful supplement to the system which exists. National accounting comparisons of a possible MMT package with the 2008 crash and the Trump tax cut are presented with emphasis on autonomous shifts in demand. The package could have problems with debt sustainability and external balance. Inflation is unlikely if wage repression in the USA is not reversed. But strong wage increases are presumably a goal of MMT.
  • Topic: Economics, Monetary Policy, Finance, Economic Theory, Macroeconomics, Money
  • Political Geography: United States
  • Author: Catherine Ruetschli, Mark Glick
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: The Big Tech companies, including Google, Facebook, Amazon, Microsoft and Apple, have individually and collectively engaged in an unprecedented number of acquisitions.When a dominant firm purchases a start-up that could be a future entrant and thereby increase competitive rivalry, it raises a potential competition issue. Unfortunately, the antitrust law of potential competition mergers is ill-equipped to address tech mergers. We contend that the Chicago School’s assumptions and policy prescriptions hobbled antitrust law and policy on potential competition mergers. We illustrate this problem with the example of Facebook. Facebook has engaged in 90 completed acquisitions in its short history (documented in the Appendix to this paper). Many antitrust commentators have focused on the Instagram and WhatsApp acquisitions as cases of mergers that have reduced potential competition. We show the impotence of the potential competition doctrine applied to these two acquisitions. We suggest that the remedy for Chicago School damage to the potential competition doctrine is a return to an empirically tractable structural approach to potential competition mergers.
  • Topic: Economics, Science and Technology, Communications, Law, Digital Economy, Macroeconomics, Monopoly, Antitrust Law
  • Political Geography: United States
  • Author: Mark Glick
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
  • Topic: Economics, Law, Legal Theory , Economic Theory, Macroeconomics, Antitrust Law, Microeconomics
  • Political Geography: United States
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: We validate our measure by showing it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is neither captured by the interaction of sector and time fixed effects, nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
  • Topic: Economics, Economy, Business , Risk
  • Political Geography: United States
  • Author: Christian Breuer
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: In this paper we methodologically review and criticize a broad literature of empirical work on the effects of fiscal policy (the ‘conventional approach’). Beyond previous critiques of this approach, we show that the cyclical adjustment strategy as used in this literature entails erroneous assumptions that necessarily produce flawed results in support of expansionary austerity. Specifically, the cyclically-adjusted primary balance (CAPB) strategy this literature employs fails to correct for cyclical effects in the expenditure- GDP-ratio, so that the estimates of the results of expansionary fiscal consolidation are affected by reverse causality, i.e. increasing GDP causally decreases expenditure-GDP- ratios, rather than vice versa. We provide suggestions on how to fix this incomplete cyclical adjustment problem with a new approach. After replicating two famous articles of the conventional literature and controlling for this bias, the expansionary effects of fiscal adjustments disappear or turn into their opposite
  • Topic: Economics, Macroeconomics, Fiscal Policy
  • Political Geography: United States
  • Publication Date: 05-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Finance and the macroeconomy, both policy and industry practices as well as academic research, have evolved substantially in recent years. While the old questions of business cycles, macroeconomic management, financial regulation, and social protection are still being debated, we are now confronted with new developments in the economy, characterized by digital technology, new modes of production and business models, and changing employment relations. Macroeconomics and finance need urgent rethinking as the global economy transforms. Our gathering on March 5, 2019 brought together economists, policymakers, financial regulators, and industry practitioners from around the world. We heard diverse perspectives on multilateralism, pension and labor market reform, international trade, and risks in the world economy, and we grappled with issues on stagnant wages, public debt, fiscal and monetary policy, and banking reforms. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most prominent questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated Commissioners, and our outside experts for helping us to promote this dialogue.
  • Topic: Economics, Industrial Policy, Regulation, Digital Economy, Economic Theory, Macroeconomics
  • Political Geography: United States, Global Focus
  • Author: Claudia Fontanari, Antonella Palumbo, Chiara Salvatori
  • Publication Date: 05-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper challenges the mainstream view of potential output, and enquires into the supposed effects of Great Recession on potential growth. We identify in the demand-led growth perspective a more promising theoretical framework both to define the notion and to gauge the long-term effects of a demand slow down. Based on the poor reliability of standard estimates of potential output, we also propose an alternative calculation. This is based on an update of Arthur M. Okun’s original method for estimating potential output, which, differently from the estimation methods currently in use, does not rely on the notion of NAIRU, thus being immune to its theoretical and empirical shortcomings. Our calculation, based on a re-estimation of Okun’s Law on US quarterly data, shows both how far an economy generally operates from its production possibilities, and how much potential growth is affected by the actual growth of demand over time. These wide margins for expansion of actual and potential output growth imply that a determined policy of demand expansion would create, given time, the very capacity that justifies it.
  • Topic: Economics, Global Recession, Economic growth, Macroeconomics, Demand
  • Political Geography: United States, Global Focus
  • Publication Date: 04-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Technology has become the most powerful disruptive force in our economy. It bears on the future of work, competition, market power, and national security, and it binds the other major areas of our commission’s investigation: macroeconomics and finance, globalization, and climate change. In essence, technological progress propels global economic transformation. Our gathering on February 6, 2019 brought economists together with leading voices from academia, labor, private industry, and the nonprofit/NGO sector. We heard from industry leaders with deep roots and history in the Silicon Valley technology revolution, academics who have also spent time in the policy arena, and from individuals who are already considering new models and approaches to digital rights and the future of work. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most vexing questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated commissioners, and our outside thought leaders for helping us to promote this dialogue.
  • Topic: Economics, Science and Technology, Global Markets, Digital Economy, Global Political Economy, Macroeconomics
  • Political Geography: United States, Global Focus
  • Author: Michael Poyker
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: I study the economic externalities of convict labor on local labor markets and firms. Using newly collected panel data on U.S. prisons and convict-labor camps from 1886 to 1940, I calculate each county’s exposure to prisons. I exploit quasi-random variation in county’s exposure to capacities of pre-convict-labor prisons as an instrument. I find that competition from cheap prison-made goods led to higher unemployment, lower labor-force participation, and reduced wages (particularly for women) in counties that housed competing manufacturing industries. The introduction of convict labor accounts for 0.5 percentage-point slower annual growth in manufacturing wages during 1880– 1900. At the same time, affected industries had to innovate away from the competition and thus had higher patenting rates. I also document that technological changes in affected industries were capital-biased.
  • Topic: Economics, Political Economy, Labor Issues, Capitalism, Domestic politics, Macroeconomics, Mass Incarceration, Manufacturing
  • Political Geography: United States
  • Author: Roman Frydman, Søren Johansen, Anders Rahbek, Morten Tabor
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory. KUH rests on a novel mathematical framework that characterizes both measurable and Knightian uncertainty about economic outcomes. Relying on this framework and John Muth’s pathbreaking hypothesis, KUH represents participants’ forecasts to be consistent with both uncertainties. KUH thus enables models of aggregate outcomes that 1) are premised on market participants’ rationality, and 2) yet accord a role to both fundamental and psychological (and other non-fundamental) factors in driving outcomes. The paper also suggests how a KUH model’s quantitative predictions can be confronted with time-series data.
  • Topic: Economics, Markets, Economic Theory, Macroeconomics, Mathematics
  • Political Geography: United States
  • Author: Shannon Monnat
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Over the past two decades deaths from opioids and other drugs have grown to be a major U.S. population health problem, but the magnitude of the crisis varies across the U.S., and explanations for widespread geographic variation in the severity of the drug crisis are limited. An emerging debate is whether geographic differences in drug mortality rates are driven mostly by opioid supply factors or socioeconomic distress. To explore this topic, I examined relationships between county-level non-Hispanic white drug mortality rates for 2000-02 and 2014-16 and several socioeconomic and opioid supply measures across the urban-rural continuum and within different rural labor markets. Net of county demographic composition, average non-Hispanic white drug mortality rates are highest and increased the most in large metro counties. In 2014-16, the most rural counties had an average of 6.2 fewer deaths per 100,000 population than large metro counties. Economic distress, family distress, persistent population loss, and opioid supply factors (exposure to prescription opioids and fentanyl) are all associated with significantly higher drug mortality rates. However, the magnitude of associations varies across the urban-rural continuum and across different types of rural labor markets. In rural counties, economic distress appears to be a stronger predictor than opioid supply measures of drug mortality rates, but in urban counties, opioid supply factors are more strongly associated with drug mortality rates than is economic distress. Ultimately, the highest drug mortality rates are disproportionately concentrated in economically distressed mining and service sector dependent counties with high exposure to prescription opioids and fentanyl.
  • Topic: Economics, Health, Inequality, Macroeconomics, Drugs
  • Political Geography: United States
  • Author: Enrico Sergio Levrero
  • Publication Date: 01-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: After briefly mentioning the determinants of the natural rate of interest in the New Keynesian models, the paper discusses the different notions of it that we find in these models and the problems encountered when the natural rate is estimated. It states that these problems are not only related to the difficulties in distinguishing the kind and persistency of economic shocks, but pertain to theory, namely to model specification and the alleged independence of the average or normal interest rate from monetary policy. Following Keynes’s suggestion regarding the monetary nature of interest rates, some final remarks will thus be advanced on their effects on prices and income distribution as well as on the objectives and stance of monetary policies.
  • Topic: Economics, Monetary Policy, Income Inequality, Macroeconomics, Keynes
  • Political Geography: United States, Global Focus
  • Author: Peter Temin
  • Publication Date: 01-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: It is hard to fit finance into the measurement of national product and of economic growth, and similar problems bedevil efforts to include other intangible investments as well. I describe how our current accounts deal with these problems, and I argue that existing NIPA data fail to describe the future path of growth in our new economy because they lack output data on financial, human and social capital investments. They fail to show that the United States is consuming its capital stock now and will suffer later, rather like killing the family cow to have a steak dinner.
  • Topic: Economics, Finance, Economic growth, Macroeconomics
  • Political Geography: United States
  • Author: Ricardo Perez Truglia, Matias Giaccobasso, Guillermo Cruces, Rodrigo Ceni, Marcelo Bergolo
  • Publication Date: 11-2019
  • Content Type: Working Paper
  • Institution: Center for Distributive, Labor and Social Studies (CEDLAS)
  • Abstract: The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds.
  • Topic: Economics, Global Political Economy, Tax Systems, Economic Policy, Macroeconomics
  • Political Geography: United States, Argentina, Global Focus
  • Author: David Jaume, Alexander Willén
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center for Distributive, Labor and Social Studies (CEDLAS)
  • Abstract: Temporary school closures (TSC) represent a major challenge to policymakers across the globe due to their potential impact on instructional time and student achievement. A neglected but equally important question relates to how such closures affect the labor market behavior of parents. This paper provides novel evidence on the effect of temporary school closures on parental labor market behavior, exploiting the prevalence of primary school teacher strikes across time and provinces in Argentina. We find clear evidence that temporary school closures negatively impact the labor market participation of mothers, in particular lower-skilled mothers less attached to the labor force and mothers in dual-income households who face a lower opportunity cost of dropping out of the labor force. This effect translates into a statistically significant and economically meaningful reduction in labor earnings: the average mother whose child is exposed to ten days of TSCs suffers a decline in monthly labor earnings equivalent to 2.92% of the mean. While we do not find any effects among fathers in general, fathers with lower predicted earnings than their spouses also experience negative labor market effects. This suggests that the parental response to TSCs depend, at least in part, on the relative income of each parent. A back-of-the-envelope calculation suggest that the aggregate impact of TSCs on annual parental earnings is more than $113 million, and that the average mother would be willing to forego 1.6 months of labor earnings in order to ensure that there are no TSCs while her child is in primary school.
  • Topic: Economics, Education, Markets, Political Economy, Labor Issues
  • Political Geography: United States
  • Author: Suresh Naidu, Dani Rodrik, Gabriel Zucman
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: We live in an age of astonishing inequality. Income and wealth disparities between the rich and the poor in the United States have risen to heights not seen since the gilded age in the early part of the 20th century, and are among the highest in the developed world. Median wages for American workers remain at 1970s levels. Fewer and fewer among newer generations can expect to do better than their parents. Organizational and technological changes and globalization have fueled great wealth accumulation among those able to take advantage of them, but have left large segments of the population behind. U.S. life expectancy has declined for the third year in a row in 2017, and the allocation of healthcare looks both inefficient and unfair. Advances in automation and digitization threaten even greater labor market disruptions in the years ahead. Climate change fueled disasters increasingly disrupt everyday life. Greater prosperity and inclusion both seem attainable, yet the joint target recedes ever further.
  • Topic: Economics, Capitalism, Inequality, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Anat R. Admati
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: The financial system is fragile and distorted because current rules fail to counter the distorted incentives by banking institutions to borrow excessively and to remain opaque. Better-designed rules to reduce the reliance on debt and ensure that institutions use significantly more equity would enable the financial system to serve society better. Revising counterproductive tax and bankruptcy codes that, together with the extensive safety net offered to the financial system currently encourage dangerous conduct, would also be beneficial.
  • Topic: Economics, International Trade and Finance, Finance, Economic Policy, Economic Theory, Macroeconomics
  • Political Geography: United States
  • Author: Sandra E. Black, Jesse Rothstein
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: While private provision of goods often yields the efficient outcome, there are a number of goods that are not efficiently provided in the private market. Here, we outline two such situations: investments in child care and education, and insurance against risks created by business cycles, poor health, and old age. Because private markets work poorly for these goods, and the costs of market failure are large, standard economic reasoning implies a significant role for government provision. The reduction in economic insecurity that this would bring could help to improve political stability as well, by reducing the stakes that people perceive in discussions of trade, immigration, technological change, and countercyclical policy (Inglehart and Norris, 2016). Many observers (e.g, Hacker, 2018) have pointed to economic anxiety as a potential contributor to populist reactions in the U.S. and many European countries; a public sector that acts to reduce the risk that households face could ameliorate this, generating political spillovers and improving the state of the country more broadly.
  • Topic: Economics, Education, Health, Health Care Policy, Children, Economic Policy, Economic Theory
  • Political Geography: United States, Europe
  • Author: Ethan Kaplan
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: In sum, political institutions in the United States favor higher income individuals over lower income individuals and ethnic majorities over ethnic minorities. This is accomplished through a myriad of policies which impact who votes, allow for differential influence and access by the wealthy, structure voting districts to dilute the impacts of under-represented voters, and allow for oversized influence of pro-business owner ideas through media and membership organizations.
  • Topic: Economics, Law, Elections, Democracy, Economic Policy, Voting
  • Political Geography: United States
  • Author: Anton Korinek
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: As technology advanced in recent decades, it increasingly left workers behind and led to sharp increases in inequality. The current wave of progress in artificial intelligence is likely to accelerate these trends. This note lays out three complementary approaches to countering these developments. Firstly, since technological progress generates net gains for society as a whole, the winners could in principle compensate the losers and still be better off. Secondly, progress should be steered to minimize the losses of workers. Thirdly, there is an important role for government intervention in information technology to thwart the rise of monopolies that extract rents from society. The note concludes with some speculations on the impact of artificial intelligence increasingly rivaling human labor.
  • Topic: Economics, Science and Technology, Labor Issues, Economic Policy, Macroeconomics, Artificial Intelligence
  • Political Geography: United States
  • Author: Atif Mian
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: There has been a major structural shift in financial markets since the 1980s. The world is awash in credit, and credit is cheaper than ever before. I discuss how increasing financial surpluses within parts of the economy have resulted in an expansion in the supply of credit, which has largely financed the demand-side of the real economy. This increasing reliance on “credit as demand” raises some serious policy questions going forward. I discuss the importance of equitable and inclusive growth, fair taxation system and risk-sharing in creating a financial system that promotes prosperity and stability.
  • Topic: Economics, International Trade and Finance, Finance, Economic Policy, Economic Theory
  • Political Geography: United States
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Private sector union density in the United States has fallen below 7%, but new historical evidence shows high union density played an important role in compressing the US income distribution at mid-century and lowering intergenerational income persistence. Other recent evidence on pervasive labor market power suggests that unions may be able raise wages without severe dis-employment effects, and may alleviate inefficient contracting problems. Despite substantial survey evidence indicating latent demand for unions, employers have successfully fought unionization efforts in rising service sectors, and a combination of legal restrictions and economic transformations have impaired the ability of US unions to solve collective action problems at the appropriate scale – an issue that economics may be able to help ameliorate.
  • Topic: Economics, Labor Issues, Income Inequality, Labor Policies
  • Political Geography: United States
  • Author: Jonathan B. Baker, Fiona Scott Morton
  • Publication Date: 05-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Rising market power in the U.S. economy is not just a microeconomic problem, as the textbook analysis shows, creating allocative efficiency losses and transferring wealth away from victimized participants in the affected markets. Rising market power also undermines inclusive prosperity by contributing to inequality and slowed economic growth. Modern economic research points to multiple ways to attack market power and enhance competition, including ways of strengthening antitrust enforcement, improving antitrust rules and institutions, and deploying regulation to enhance competition.
  • Topic: Economics, Economic Policy, Economic Theory, Macroeconomics, Microeconomics
  • Political Geography: United States
  • Author: José Azar, Ioana Marinescu, Marshall Steinbaum
  • Publication Date: 05-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Starting with the Chicago School’s influence in the late 1970s and 1980s, antitrust enforcement has been weakened under the assumption that market power is justified by economic efficiency. While consumers are the main focus of antitrust enforcement, the weakening of antitrust enforcement has likely also adversely impacted workers, thus contributing to increasing inequality.
  • Topic: Economics, Labor Issues, Economic Policy, Economic Theory, Antitrust Law
  • Political Geography: United States
  • Author: Daron Acemoglu
  • Publication Date: 06-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Progressive policy proposals that would have appeared radical just a few years ago, including high marginal tax rates, wealth taxes, universal basic income, single-payer health insurance, and free college for all, are now on the agenda. The recognition that we can do more to create shared prosperity — that is, economic growth benefiting society at large, not just corporations and the very well-educated — is a welcome development. But are we targeting the right policies? We are at a critical juncture both economically and politically. We do not have much time left to reverse the trend towards greater inequality and worsening economic prospects for less educated Americans before its social consequences become more deeply ingrained. And the 2020 presidential election may provide a unique opportunity to adopt fundamentally different economic policies. Failing to identify the right policy priorities would not only squander this critical juncture; it could also deepen the rift between the different wings of US politics.
  • Topic: Economics, Labor Issues, Employment, Labor Policies, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Ilyana Kuziemko
  • Publication Date: 07-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: My read of the evidence (and my own social welfare weights, which place great weight on the un- and under-insured as well as middle-class workers who are implicitly taxed via expensive health plans) lead me to conclude that Medicare for All would increase welfare in the US. However, I also want to highlight what I consider the biggest risks of such a policy.
  • Topic: Economics, Health, Health Care Policy, Economic Policy
  • Political Geography: United States
  • Author: David Deming
  • Publication Date: 06-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Despite growing public concern about the cost of college, higher education is still the best investment a young person can make. The American public understands that college is both increasingly necessary and increasingly unaffordable. This dynamic explains the growing public conversation around the idea of “free college”.
  • Topic: Economics, Education, Economic Policy, Higher Education
  • Political Geography: United States
  • Author: David Klenert, Linus Mattauch
  • Publication Date: 08-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: It is common knowledge among economists that the most efficient instrument to mitigate climate change is a price on carbon. However, current carbon prices around the world are too low to reach global climate targets. This essay assesses the difficulties in designing successful carbon pricing reforms. It discusses how to overcome these difficulties by combining traditional public economics lessons with findings from behavioral and political science. We stress insights from public finance about the “second-best” nature of pricing carbon reforms. Further, we highlight how framing a carbon tax reform around tangible benefits can enhance political support. Finally, we explain how certain countries were successful at introducing high carbon prices and what can be learned from these cases for making progress with climate change mitigation.
  • Topic: Climate Change, Economics, Science and Technology, Natural Resources, Global Warming, Green Technology, Economic Policy
  • Political Geography: United States
  • Author: Maximilian Kasy
  • Publication Date: 08-2019
  • Content Type: Working Paper
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Decision making based on data - whether by policymakers drawing on empirical research, or by algorithms using machine learning - is becoming ever more widespread. Any time such decisions are made, we need to carefully think about the goals we want to achieve, and the policies we might possibly use to achieve them. Data cannot absolve us of this responsibility. They do not allow us to avoid value judgements, and do not relieve us from taking sides in distributional conflicts. This essay introduces a general framework to clarify this point, and then discusses a series of settings in which the choice of objectives (goals) has far-reaching and maybe unexpected implications.
  • Topic: Economics, Science and Technology, Labor Policies, Economic Policy, Artificial Intelligence
  • Political Geography: United States
  • Author: Şebnem Kalemli-Özcan
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: There has been a large increase in corporate leverage in many countries since the early 2000s. Figure 1 plots corporate debt to GDP since 2002 for different groups of countries. With the exception of the U.S., both advanced economies and emerging markets have corporate debt exceeding GDP since 2005. U.S. corporate debt is also on an increasing trend. The fastest growth in corporate debt has been observed in emerging markets. A closer look will reveal that China and other fast growing emerging countries in Asia drive most of the increase in corporate debt for the emerging markets.
  • Topic: Debt, Economics, Markets, Regulation, Multinational Corporations, Economic Policy
  • Political Geography: United States, Global Focus
  • Author: Charlie Harris, Christopher McKenna
  • Publication Date: 01-2019
  • Content Type: Case Study
  • Institution: Oxford Centre for Global History
  • Abstract: California’s Mendocino County is a single-industry economy. Arriving in the sixties, marijuana cultivation gained a momentum in Mendocino that local government eventually began perceive as unstoppable, filling an economic void once occupied by lumber and fishing. Remote, permissive, boasting near-perfect outdoor growing conditions and conveniently situated between San Francisco and Portland, Oregon – two cities with something of a reputation for the consumption (and nationwide distribution) of marijuana. This convergence of assets, along with the benefit of timing, have led Mendocino County to draw growers – whether seasoned professionals or hopeful amateurs – from all over the world.
  • Topic: Economics, History, Capitalism, Economic growth, Economic Policy
  • Political Geography: United States, California
  • Author: Sandro Knezović
  • Publication Date: 02-2018
  • Content Type: Working Paper
  • Institution: Institute for Development and International Relations (IRMO)
  • Abstract: The European strategic landscape has changed dramatically over the course of the last decade. The post-Cold War mantra about the obsolescence of conventional threats in the wider European space proved to be short-sighted with developments at its eastern �lanks, while security dysfunctions in the MENA region and their immanent consequences for the safety of European citizens have loaded a heavy burden on compromise-building and decision-making in the �ield of the Common Security and Defence Policy (CSDP) of the EU. Furthermore, the approach of the new US administration to European security and the strategic consequences of Brexit have changed the wider framework in which security of 'the Old Continent' is to be determined, hence stimulating European leaders to rethink European security in a strive for strategic autonomy of their own. The very ambitiously phrased EU Global Strategy that came out in June 2016, served as both catalyst and umbrella document for such an endeavour. However, in order to achieve measurable progress in responding to contemporary security challenges, it was clear that the EU needs to develop a structural way for member states to do jointly what they were not capable of doing at the national level. This is so especially in the environment in which China, Russia and Saudi Arabia are championing the defence spending, right after the US, while European states are signi�icantly trailing behind. The fact that the EU collectively is the second largest military investor and yet far from being among the dominant military powers only emphasises the burning issue of ef�iciency of military spending and the level of interoperability among member states’ armies. High-level fragmentation of the European defence market and the fact that defence industries are kept in national clusters is clearly contributing to that. The reality on the ground is obviously challenging traditional methods of co-operation that operate mainly in ‘national boxes’ and calling for a paradigm change in the wider policy context of CSDP. However, it remains to be seen to which extent will this new security environment actually be able to push the European defence policy context over the strict national boundaries.
  • Topic: Security, Economics, Military Strategy, European Union
  • Political Geography: United States, China, Europe, Middle East, Asia, Saudi Arabia
  • Author: Andreas Antoniades, Stephany Griffith-Jones
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Centre for Global Political Economy, University of Sussex
  • Abstract: This paper analyses the nature and characteristics of global debt dynamics in the post global financial crisis (GFC) period. First, we attempt to map the ways in which debt has been moving from sector to sector, and from one group of countries to another within the global economy. By capturing this inter-sectorial, inter-national, inter-regional movements of global debt we aspire to contribute to a more comprehensive understanding of global debt and its mode of operation. Second, we attempt to analyse what is wrong with global debt dynamics, i.e. we examine the broken link between what global debt was supposed to do and what it does. Here, we point to three interrelated dynamics: the accumulation of unproductive debt, growing inequalities of income and wealth, and the increase in privately-created, interest-bearing money.
  • Topic: Debt, Economics, Global Recession, Financial Crisis, Global Political Economy
  • Political Geography: United States, Global Focus, Global Markets
  • Author: Vandana Gyanchandani
  • Publication Date: 08-2018
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: Three methodologies are used to enforce labour and environmental commitments in the US and EU trade agreements: cooperative, sanctions and composite. In-depth analysis of the scope of commitments, level of protection, institutional framework as well as types of informal and formal dispute processes elucidates the pros and cons of such methodologies. Sanctions approach weakens cooperation by misjudging the complexity of domestic policy adjustments through transnational governance. Cooperative mechanism within the NAAEC's composite design emerges as the best approach: Submission on Enforcement Matters (SEM). As it provides for an independent secretariat supported by civil society group and factual records as a sunshine remedy to review citizen submissions. However, the process is constrained by political clout, lack of managerial capacity and legal dilemmas around informal lawmaking (IN-LAW) procedures.
  • Topic: Economics, Environment, International Cooperation, International Trade and Finance, Labor Issues, Sustainable Development Goals, Global Political Economy
  • Political Geography: United States, Europe, Global Focus, European Union
  • Author: Yi Huang, Chen Lin, Sibo Liu, Heiwai Tang
  • Publication Date: 04-2018
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: On March 22, 2018, Trump proposed to impose tariffs on up to $50 billion of Chinese imports leading to a significant concern over the "Trade War" between the US and China. We evaluate the market responses to this event for firms in both countries, depending on their direct and indirect exposures to US-China trade. US firms that are more dependent on exports to and imports from China have lower stock and bond returns but higher default risks in the short time window around the announcement date. We also find that firms' indirect exposure to US-China trade through domestic input-output linkages affects their responses to the announcement. These findings suggest that the structure of US-China trade is much more complex than the simplistic view of global trade that engendered Trump's "Trade War" against China.
  • Topic: Economics, International Cooperation, International Trade and Finance, Global Political Economy, Trade Wars, Exports
  • Political Geography: United States, China, Asia
  • Author: Arindrajit Dube
  • Publication Date: 12-2018
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: During the past 40 years, the United States has experienced a sharp and sustained rise in wage and income inequality. The high level of inequality in the United States reflects both a disconnect between (1) average wages and productivity, and (2) top and bottom wages.
  • Topic: Economics, Labor Issues, Income Inequality, Labor Policies, Wage Subsidies, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Robert McNally
  • Publication Date: 01-2017
  • Content Type: Book
  • Institution: Columbia University Press
  • Abstract: As OPEC has loosened its grip over the past ten years, the oil market has been rocked by wild price swings, the likes of which haven't been seen for eight decades. Crafting an engrossing journey from the gushing Pennsylvania oil fields of the 1860s to today's fraught and fractious Middle East, Crude Volatility explains how past periods of stability and volatility in oil prices help us understand the new boom-bust era. Oil's notorious volatility has always been considered a scourge afflicting not only the oil industry but also the broader economy and geopolitical landscape; Robert McNally makes sense of how oil became so central to our world and why it is subject to such extreme price fluctuations. Tracing a history marked by conflict, intrigue, and extreme uncertainty, McNally shows how—even from the oil industry's first years—wild and harmful price volatility prompted industry leaders and officials to undertake extraordinary efforts to stabilize oil prices by controlling production. Herculean market interventions—first, by Rockefeller's Standard Oil, then, by U.S. state regulators in partnership with major international oil companies, and, finally, by OPEC—succeeded to varying degrees in taming the beast. McNally, a veteran oil market and policy expert, explains the consequences of the ebbing of OPEC's power, debunking myths and offering recommendations—including mistakes to avoid—as we confront the unwelcome return of boom and bust oil prices.
  • Topic: Economics, Oil, OPEC
  • Political Geography: United States, Middle East
  • Publication Identifier: 9780231543682
  • Publication Identifier Type: ISBN
  • Author: Jefferey Bleich
  • Publication Date: 03-2017
  • Content Type: Journal Article
  • Journal: The Ambassador's Review
  • Institution: Council of American Ambassadors
  • Abstract: We grew up in a century defined by the Second Industrial Revolution. Today, that revolution is being eclipsed by a Digital Revolution. The uncertainty that we are experiencing in every aspect of our society is the same disorientation that occurred between 1870 and 1910 when the first Industrial Revolution ended and a second one began. It eventually vaulted nations like America and Australia to the top of the world order. But it also produced the Gilded Age, labor unrest, mass migrations, the Great Depression and two world wars. That era is closing, and we are now experiencing the new great dis­ruption that Silicon Valley promised. Digital technology—while solving crucial problems—is creating or compounding others. It has outstripped the capacity of government to control it and amplified the collapse of public confidence in democratic governments. It has inflamed rivalries between those who benefit and those who don’t. It has undermined standards—of altruism and of civility—that are necessary for us to find common ground. To appreciate this, we have to see where we’ve come from. A hundred and fifty years ago, we went through the same thing. Changes in technology revolutionized media, global integration and demographics. The changes were profound. In 1879, during a three-month period, both the electric light and a workable internal combustion engine were invented. Those two inventions alone produced over the next 40 years a dizzying number of new technologies. The telephone, phonograph, motion pictures, cars, airplanes, elevators, X-rays, electric machinery, consumer appliances, highways, suburbs and supermarkets—all were created in a 40-year burst from 1875 to 1915. Technology fundamentally transformed how people live. We’ve known for a while that the structures created by this Second Industrial Revolution were running their course, at least in advanced economies, and that it was being replaced by a new revolution, the digital revolution. Recently, the pace of these advances has started to build exponen­tially, and the pressure has been mounting. Everyone who has had to throw out their CD player for a DVD player for an iPod for an iPhone for Spotify knows what I mean. Further, the pace at which our world is being changed just keeps accelerating. Every year a new massive theory of disruption emerges: “the digital economy,” “the social network,” “the Internet of things,” “sharing economy” and “big data.” Last year, “machine learning”—where machines teach themselves things we do not know—was the buzzword. The word in Silicon Valley this year is “singularity”—where our species itself is altered by technology (gene-editing, bionics, artificial intelligence), creating a new hybrid species.
  • Topic: Economics, Education, Digital Economy, Higher Education, Digital Revolution
  • Political Geography: United States, Europe, Australia, North America
  • Author: Petra Dolata
  • Publication Date: 01-2017
  • Content Type: Journal Article
  • Journal: Journal of Military and Strategic Studies
  • Institution: Centre for Military, Security and Strategic Studies
  • Abstract: While some of the announcements and approaches to energy by Donald Trump may sound like familiar stories of energy security, they are significantly different. Any discussion on energy security is driven by an inward-looking perspective, which highlights the economic dimension of creating jobs while tapping into a discourse that emphasizes America’s greatness.
  • Topic: Security, Economics, Energy Policy, Job Creation
  • Political Geography: United States, North America
  • Author: Samuel Knafo, Benno Teschke
  • Publication Date: 01-2017
  • Content Type: Working Paper
  • Institution: Centre for Global Political Economy, University of Sussex
  • Abstract: Marxism has often been associated with two different legacies. The first rests on a strong exposition and critique of the logic of capitalism, which has been grounded in a systematic analysis of the laws of motion of capitalism as a system. The second legacy refers to a strong historicist perspective grounded in a conception of social relations and an emphasis on the centrality of power and social conflict to analyse history. In this article, we challenge the prominence of structural accounts of capitalism, which are inspired by the first of these legacies and argue for the need to radicalize the agent-centered and historicist contribution of Marx that derive from the second. Our claim is that Marxists operating within a structural framework systematically fall into economistic readings of capitalism, which hinder the practice of historicisation Marxism was supposed to buttress. To make this argument, we show how this tension between these legacies has played out within Political Marxism (PM). We argue that both orientations – encapsulated in the simultaneous programmatic emphasis on historically specific social conflicts and determinate rules of reproduction that are logically deduced from definitive social property relations – co-existed already uneasily in Robert Brenner’s original contributions to the Transition Debate. We proceed by critically exploring the increasing reliance on a structural conception of the ‘rules of reproduction’ in later works of PM’s early proponents and by some of its contemporary followers. This, we argue, has led to the reification of capitalism and a growing divide between theoretical premises and historical explanation. In response, we seek to return to the early historicist innovation of PM and to recover and develop its commitment to a more contextualised and open-ended interpretation of social conflicts. Through this internal critique and re-formulation of PM, we wish to open a broader debate within Marxism on the need for a more agency-based account of capitalism, which builds more explicitly on the concept of social relations.
  • Topic: Economics, Socialism/Marxism, Capitalism
  • Political Geography: United States, Japan, Eastern Europe, Germany, Western Europe
  • Author: David S. Mitchell, Jeremy Smith
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: Aspen Institute
  • Abstract: On November 18, 2015, the Obama Administration's Department of Labor (DOL) published two important legal opinions that propose to give states new options for expanding retirement coverage for private-sector workers. These opinions open the door for states to move forward along one of two distinct paths: a payroll deduction plan that avoids ERISA, or a more traditional model that would fall under ERISA. This issue brief summarizes these rules and highlights the tradeoffs state policymakers will face when deciding which of these new avenues to pursue. The brief will be updated once the proposals are finalized.
  • Topic: Economics, Human Welfare, Labor Issues, Governance, Social Movement
  • Political Geography: United States
  • Publication Date: 01-2016
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: This special report is prepared for the North American Forum (NAF). In 2015, CIGI’s Global Security & Politics Program became the Secretariat for the Canadian leadership within the NAF. CIGI will be undertaking a program of research to support the Canadian contribution to the NAF in cooperation with our American and Mexican partners. In the coming months, CIGI will publish additional reports to support the work of the NAF. Since the 1994 North American Free Trade Agreement, trade, investment and migration flows among Canada, Mexico and the United States have helped turn North America into one of the most dynamic and prosperous trade blocs on the planet. With a new government in Ottawa, it is an ideal time for Canada to make a stronger, deeper relationship with Mexico a crucial plank of a plan to secure a prosperous future for North America. Better relations between Mexico and Canada not only means more opportunities to take advantage of the two countries’ economic and social complementarities, it also gives the two countries the opportunity to closely work together to get the United States on board with an ambitious North American agenda to secure the continent’s economic future.
  • Topic: Security, Economics, International Trade and Finance, Politics, Regional Cooperation
  • Political Geography: United States
  • Author: Saul P. Limaye, Tsutomu Kikuchi
  • Publication Date: 01-2016
  • Content Type: Working Paper
  • Institution: East-West Center
  • Abstract: Until recently, Southeast Asia had not been a region of sustained focus for the US-Japan relationship. But the situation is changing. The international relations of the Asia-Pacific is becoming more "multipolarized." This requires the US and Japan to think about the future of the region beyond the issue of US-China relations, which has preoccupied past discussions. A number of nations and institutions in the Asia-Pacific region will substantially affect the region's future. Southeast Asian nations and the Association of Southeast Asian Nations (ASEAN) are among them. A new era of more coordinated, sustained, and combined commercial and security involvement by the US and Japan in Southeast Asia may be at hand. In light of these changes, the East-West Center in Washington (EWCW), in collaboration with the Japan Institute of International Affairs (JIIA), and through the support of the Sasakawa Peace Foundation (SPF), initiated a dialogue with Southeast Asians about their perspectives on how the US-Japan relationship and alliance could or should approach cooperation with the region.
  • Topic: Security, Economics, Markets, Peacekeeping
  • Political Geography: United States, Japan, China, Asia-Pacific