4. Debt, deficits or unemployment: identifying real threats to growth
Topic Summary
This seminar explores the intersection between the real and monetary (or nominal) economy. It addresses the relationship between money and economic growth, and explores popular misconceptions surrounding the "sustainability" of government deficits, national debt and trade deficits for developed and developing nations. Questions to be addressed include:
Why does unemployment exist in a monetary economy?
How does a nation's developmental stage affect the sustainability of government deficits?
Is national debt a problem, and if so, under what conditions?
Can developing nations "afford" welfare programs?
What is the relationship between capital flows, trade and exchange rates?
What is the relationship between money creation, exchange rates and global competitiveness?
Why does unemployment exist in a monetary economy?
How does a nation's developmental stage affect the sustainability of government deficits?
Is national debt a problem, and if so, under what conditions?
Can developing nations "afford" welfare programs?
What is the relationship between capital flows, trade and exchange rates?
What is the relationship between money creation, exchange rates and global competitiveness?
core readings
J. T. Harvey, 2012, Why the Government Should Not Be Run Like a Business, Forbes
J. T. Harvey, 2011, How To Destroy the US Economy? Balance the Budget, Forbes
J. Kregel, 2007, Nurske and the Role of Finance in Development Economics, Levy Economics Institute
J. T. Harvey, 2011, How To Destroy the US Economy? Balance the Budget, Forbes
J. Kregel, 2007, Nurske and the Role of Finance in Development Economics, Levy Economics Institute
video
Background
John T. Harvey
2012, One Businessman's View of the So-Called Fiscal Cliff, Forbes
2012, The Real Reason Unemployment Isn't Falling, Forbes
2012, Why Our Current National Debt Is Not The Largest In History, Forbes
2011, The Great Recession: How We Got Here (And How To Get Out), Forbes
2011, Why You Should Learn to Love the Deficit: Federal Budget Fallacies, Forbes
2010, US Business Cycles from 1971-2010: A Post-Keynesian Explanation
2009, Neoliberalism, Neoclassicism and Economic Welfare
2009, Post Keynesian versus Neoclassical Explanations of Exchange Rate Movements: A Short Look at the Long Run
2005, Modeling Interest Rate Parity: A Systems Dynamics Approach
2004, Capital Flows and Trade in Mexico: A Model of Institutional Dynamics
Jan Kregel
2010, An Alternative Perspective on Global Reserve Imbalances and Reserve Currencies, Levy Economics Institute
2009, The Global Crisis and the Implications for Developing Countries and the BRICS, Levy Economics Institute
2009, Some Simple Observations on the Reform of the International Monetary System, Levy Economics Institute
2009, Managing the Impact of Volatility in International Capital Markets in an Uncertain World, Levy Economics Institute
2008, The Discrete Charm of the Washington Consensus, Levy Economics Institute
2008, Financial Flows and International Imbalances: The Role of Catching Up By Late-Industrializing Developing Countries, Levy Economics Institute
2007, Nurske and the Role of Finance in Development Economics, Levy Economics Institute
1996, Globalization, Capital Flows and International Regulation, Levy Economics Institute
Related Materials
P. Krugman, 2013, The Jobless Trap, New York Times
P. Jay & H. Flassbeck, 2012, Low Wages and High Unemployment are Paralyzing the Global Economy, The Real News Network
R. Antonopoulos, T. Masterson & A. Zacharias, 2012, It's About "Time": Why Time Deficits Matter for Poverty, Levy Economics Institute
E. P. Caldentey & M. Vernengo, 2012, Towards an Understanding of Crisis Episodes in Latin America, Levy Economics Institute
T. Palley, 2011, The Rise and Fall of Export-Led Growth, Levy Economics Institute
J. Bibow, 2010, How To Sustain the Chinese Economic Miracle? Levy Economics Institute
T. Palley, 2007, Globalization and the Changing Trade Debate, Levy Economics Institute
A. Shaikh & J. Moudud, 2004, Measuring Capacity Utilization in OECD Countries, Levy Economics Institute
2012, One Businessman's View of the So-Called Fiscal Cliff, Forbes
2012, The Real Reason Unemployment Isn't Falling, Forbes
2012, Why Our Current National Debt Is Not The Largest In History, Forbes
2011, The Great Recession: How We Got Here (And How To Get Out), Forbes
2011, Why You Should Learn to Love the Deficit: Federal Budget Fallacies, Forbes
2010, US Business Cycles from 1971-2010: A Post-Keynesian Explanation
2009, Neoliberalism, Neoclassicism and Economic Welfare
2009, Post Keynesian versus Neoclassical Explanations of Exchange Rate Movements: A Short Look at the Long Run
2005, Modeling Interest Rate Parity: A Systems Dynamics Approach
2004, Capital Flows and Trade in Mexico: A Model of Institutional Dynamics
Jan Kregel
2010, An Alternative Perspective on Global Reserve Imbalances and Reserve Currencies, Levy Economics Institute
2009, The Global Crisis and the Implications for Developing Countries and the BRICS, Levy Economics Institute
2009, Some Simple Observations on the Reform of the International Monetary System, Levy Economics Institute
2009, Managing the Impact of Volatility in International Capital Markets in an Uncertain World, Levy Economics Institute
2008, The Discrete Charm of the Washington Consensus, Levy Economics Institute
2008, Financial Flows and International Imbalances: The Role of Catching Up By Late-Industrializing Developing Countries, Levy Economics Institute
2007, Nurske and the Role of Finance in Development Economics, Levy Economics Institute
1996, Globalization, Capital Flows and International Regulation, Levy Economics Institute
Related Materials
P. Krugman, 2013, The Jobless Trap, New York Times
P. Jay & H. Flassbeck, 2012, Low Wages and High Unemployment are Paralyzing the Global Economy, The Real News Network
R. Antonopoulos, T. Masterson & A. Zacharias, 2012, It's About "Time": Why Time Deficits Matter for Poverty, Levy Economics Institute
E. P. Caldentey & M. Vernengo, 2012, Towards an Understanding of Crisis Episodes in Latin America, Levy Economics Institute
T. Palley, 2011, The Rise and Fall of Export-Led Growth, Levy Economics Institute
J. Bibow, 2010, How To Sustain the Chinese Economic Miracle? Levy Economics Institute
T. Palley, 2007, Globalization and the Changing Trade Debate, Levy Economics Institute
A. Shaikh & J. Moudud, 2004, Measuring Capacity Utilization in OECD Countries, Levy Economics Institute
Featured Speakers
John T. Harvey, Ph.D. is a Professor and former Chair of the Department of Economics at Texas Christian University. In 2010, Dr. Harvey published a book titled Currencies, Capital Flows and Crises (Routledge), which presented a Post-Keynesian explanation of exchange rate determination based on the premise that it is financial capital flows and not international trade that represents the driving force behind currency movements. Dr. Harvey currently writes an economics blog for Forbes called Pragmatic Economics, which offers economic commentary in a manner understandable to the general public, and can also be followed on Twitter.
Jan Kregel, Ph.D. is a Professor of Development Finance at Tallinn University of Technology and a Senior Scholar at the Levy Economics Institute of Bard College, where he also serves as the Director of the Institute’s Monetary Policy and Financial Structure program. He has previously served as Rapporteur of the President of the UN General Assembly’s Commission on Reform of the International Financial System, Director of the Policy Analysis and Development Branch of the UN Financing for Development Office, and Deputy Secretary of the UN Committee of Experts on International Cooperation in Tax Matters.
