scholarly journals Varieties of capitalism, increasing income inequality and the sustainability of long-run growth

2020 ◽  
Vol 44 (3) ◽  
pp. 559-582
Author(s):  
Mark Setterfield ◽  
Yun K Kim
Keyword(s):  
Varieties Of Capitalism ◽  
Financial Fragility ◽  
Debt Accumulation ◽  
Us Economy ◽  
Long Run ◽  
The Social ◽  
The Us ◽  
Debt Dynamics ◽  
Social Wage ◽  
Household Borrowing

Abstract We model US household debt accumulation during the neoliberal boom (1990–2007) as a response to emulation effects and the decline of the social wage, which has ‘privatised’ an increasing share of the costs of providing for services such as health and education. The debt dynamics of the US economy are then studied under alternative assumptions about the configuration of distributional variables, which is shown to differ across varieties of capitalism that have ‘neoliberalised’ to different degrees. A key result is that distributional change alone will not make contemporary US capitalism financially sustainable due, in part, to the paradoxical nature of inequality as a spur to household borrowing, and hence a source of both demand-formation and financial fragility. Achieving sustainability requires, instead, more wide-ranging reform.

Prison, Subordination, Inequality: Again on a Marxist Perspective

2021 ◽  
pp. 301-324
Author(s):  
Dario Melossi
Keyword(s):  
Economic Development ◽  
Social Hierarchy ◽  
Capitalist Development ◽  
Economic Cycles ◽  
Inequality Measures ◽  
Class Composition ◽  
Long Run ◽  
The Social ◽  
The Us ◽  
The Relationship

This Chapter advances two claims which are related and sustain each other. The first is that in the contemporary “post-Fordist” world, the coupling of imprisonment and production persists in a relationship, if not between “the prison” and “the factory” – as Dario Melossi and Massimo Pavarini wrote 40 years ago – rather between “the prison” and “subordination”, because what all the multiple forms of “labor” and “non-labor” have in common – and have in common with the origins of protoindustrial capitalism – is subordination. The second is that the traditional reading of the “Rusche and Kirchheimer hypothesis” on the relationship between economic cycles and imprisonment depends on the specific conjuncture and class composition of the capitalist social formation to which it is applied. One thing is economic development in the period of Fordist mass industry and another in the globalized and fragmented labor market of neo-liberalism. Often imprisonment promotes phases of capitalist development rather than crises and recessions. Furthermore, subordination and inequality are strictly linked and feed on each other. Inequality promotes subordination, by putting the squeeze on those who are at the bottom of the social hierarchy; but subordination at the same time promotes inequality, by making sure that those who occupy those bottom positions, stay there. One strong link in the chain of subordination to inequality is penality, because penality reinforces inequality by reaffirming subordination. Data about long-run empirical relationships between imprisonment rates and inequality measures for the US and Italy are discussed.

Does the US economy face a long run trade off between inflation and unemployment

2019 ◽  
Vol 12 (2) ◽  
pp. 118 ◽  
Author(s):  
Jamil Sayeed ◽  
Md. Deen Islam ◽  
Shanjida Yasmin
Keyword(s):  
Trade Off ◽  
Us Economy ◽  
Long Run ◽  
The Us

Path dependence, the COVID-19 crisis, and inequality in the United States

2021 ◽  
Vol 18 (2) ◽  
pp. 198-206
Author(s):  
Daniele Tavani
Keyword(s):  
Great Recession ◽  
Path Dependence ◽  
The United States ◽  
Economic Security ◽  
The Great Recession ◽  
Us Economy ◽  
Long Run ◽  
The Us ◽  
Historical Trajectory

This paper considers both secular and medium-run trends to argue that the US economy was already vulnerable to shocks before the COVID-19 crisis. Long-run trends have shown a pattern of secular stagnation and increasing inequality since the 1980s, while the economy has displayed hysteresis during the sluggish recovery from the Great Recession. The immediate policy response through the Coronavirus, Relief and Economic Security (CARES) Act highlighted the coordinating role of fiscal policy on the economy, but also showcased limits, especially with regard to the paycheck protection program. The historical trajectory of the US economy before the COVID-19 crisis cast serious doubts on recent cries of ‘overheating’ and inflationary pressures that should supposedly arise from the $1.9 trillion relief package just signed into law by President Biden. Projecting forward to the long run, redistribution policies may provide useful first steps in reversing the trends of rising inequality and declining productivity growth that the US economy has seen over the last few decades.

Does the US Economy Face a Long Run Trade Off between Inflation and Unemployment

2019 ◽  
Vol 12 (1) ◽  
pp. 1
Author(s):  
Jamil Sayeed ◽  
Shanjida Yasmin ◽  
Md. Islam ◽  
N.A. Deen
Keyword(s):  
Trade Off ◽  
Us Economy ◽  
Long Run ◽  
The Us

Optimal Inflation for the US Economy

2011 ◽  
Vol 3 (3) ◽  
pp. 29-52 ◽  
Author(s):  
Roberto M Billi
Keyword(s):  
Inflation Rate ◽  
Low Cost ◽  
Policy Instrument ◽  
New Keynesian ◽  
Worst Case ◽  
Us Economy ◽  
Keynesian Model ◽  
Long Run ◽  
The Us ◽  
The Government

This paper studies the optimal long-run inflation rate (OIR) in a small New Keynesian model, where the only policy instrument is a short-term nominal interest rate that may occasionally run against a zero lower bound (ZLB). The model allows for worst-case scenarios of misspecification. The analysis shows first, if the government optimally commits, the OIR is below 1 percent annually. Second, if the government re-optimizes each period, the OIR rises markedly to 17 percent. Third, if the government commits only to an inertial Taylor rule, the inflation bias is eliminated at very low cost in terms of welfare for the representative household. (JEL E12, E31, E43, E52, E58)

scholarly journals A macro analysis of the united states recoverywith a particular focus on public debt

2012 ◽  
Vol 2 (1) ◽  
pp. 48
Author(s):  
Dr.Sc. Selman Selmanaj ◽  
Donika Limani ◽  
Pëllumb Reshidi
Keyword(s):  
United States ◽  
Public Debt ◽  
Aggregate Demand ◽  
The United States ◽  
Consumption Patterns ◽  
Debt Accumulation ◽  
The Third ◽  
Long Run ◽  
The Us ◽  
American Economy

The intention of this paper is to analyze the lingering effects of the 2008 crisis in the United States and the implication they have on the policies undertaken by the Obama administration. A particular focus is given to the debt accumulation and how that relates to the challenges of the long run development of the American economy. The first part of this paper will give a brief overview of some of the elements central to the causes of the crisis, namely the centralization of wealth and its implication for the unsustainable consumption patterns. It will then follow to consider how the previous issues relate to the weak aggregate demand and the expansionary policies used to tackle it. Additionally, an overview of the crisis effect on the already troubled labor market is laid out in the third part. After exploring the interventionist policies used by the US administration in the after-crisis period, we move on to the presing issue of debt and possible scenarios that may arise in case it is not seriously addressed.

scholarly journals Determinants of Energy Inflation in Pakistan: An Empirical Analysis

2014 ◽  
Vol 53 (4II) ◽  
pp. 491-504
Author(s):  
Adnan Haider ◽  
Qazi Masood Ahmed ◽  
Zohaib Jawed
Keyword(s):  
High Energy ◽  
Productive Capacity ◽  
Energy Prices ◽  
Price Inflation ◽  
Us Economy ◽  
Long Run ◽  
Demand Pull ◽  
The Us ◽  
History Of ◽  
Energy Products

Energy inflation has remained a significant topic in macroeconomic policy for the past few decades. This is due to several reasons pertaining to both demand and supply sides. In addition, the history of energy prices has also been characterised by extreme volatilities, Hamilton (2008). This makes forecasting and modelling of energy prices difficult, nevertheless it is important to model and forecast energy prices in all economies. In this paper we have tried to identify the determinants of energy inflation in Pakistan. Energy products are a critical component in any economy, serving as a core input, particularly in manufacturing industries. Moreover, the demand for energy and fuel comes from households fuelling cars and kitchens for which other alternatives are not easily available. This renders the demand inelastic compared to any other good [Edelstein and Kilian (2009)], making economies vulnerable to supply and price shocks. The energy price inflation therefore through cost push inflation and demand-pull inflation has a major impact on core inflation itself, thereby playing a significant role in macroeconomic health of a country. As predicted by Ben Bernanke for the US in 2006, “in the long run energy prices can reduce the productive capacity of US economy if high energy costs make businesses less willing to invest new capital”. The nature of the energy market itself creates a major gap between the oil consumers and oil producers. Whilst demand is inelastic everywhere, supply is limited and is difficult to increase, and confined to certain regions on Earth. This is true particularly for two of the most common energy types: oil and gasoline. The supply of oil is controlled by a few countries, and supply shocks therefore lead to an immediate surge in prices.

scholarly journals Escaping the Great Recession

2017 ◽  
Vol 107 (4) ◽  
pp. 1030-1058 ◽  
Author(s):  
Francesco Bianchi ◽  
Leonardo Melosi
Keyword(s):  
Lower Bound ◽  
Great Recession ◽  
Public Debt ◽  
Zero Lower Bound ◽  
Policy Uncertainty ◽  
The Great Recession ◽  
Us Economy ◽  
Long Run ◽  
The Us ◽  
Deep Recession

We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation in the US economy at the zero lower bound. We first estimate a Markov-switching VAR to highlight that a zero-lower-bound regime captures most of the comovements during the Great Recession: a deep recession, no deflation, and large fiscal imbalances. We then show that a microfounded model that features policy uncertainty accounts for these stylized facts. Finally, we highlight that policy uncertainty arises at the zero lower bound because of a trade-off between mitigating the recession and preserving long-run macroeconomic stability. (JEL E31, E32, E52, E62, G01, H63)

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