If the United States's balance of trade does not improve, the country could eventually find itself in a "debt trap," the author says. The aim of this paper, the second in a series offering Godley's strategic analysis, is to display what seems reasonably likely to happen if world output recovers...

A Rejoinder to Goldman Sach's J. Hatzius' "The Un-Godley Private Sector Deficit" in US Economic Analyst (27 July).

Right through the boom years prior to 2001, the U.S. economy faced a strategic predicament in that the main engine of growth (credit financed private spending) was unsustainable, from which it followed that the whole stance of U.S. fiscal policy would have to be radically changed if the New...

The main arguments in this paper can be simply stated: 1) If output in the US grows fast enough to keep unemployment constant between now and 2010 and if there is no further depreciation in the dollar, the deficit in the balance of trade is likely to get worse, perhaps reaching 7.5 per cent by...

The U.S. economy is probably now in recession, and a prolonged period of subnormal growth and rising unemployment is likely unless there is another round of policy changes. A further relaxation of fiscal policy will probably be needed, but if a satisfactory rate of growth is to be sustained,...

The collapse in the subprime mortgage market, along with multiple signals of distress in the broader housing market, has already drawn forth a large body of comment. Some people think the upheaval will turn out to be contagious, causing a major slowdown or even a recession later in 2007. Others...

The United States should now be prepared for one of the deepest and most intractable recessions of the post-World War II period, with no natural process of recovery in prospect unless a large and complex reorientation of policy occurs both here and in the rest of the world. The grounds for...

The economic recovery plans currently under consideration by the United States and many other countries seem to be concentrated on the possibility of using expansionary fiscal and monetary policies alone. In a new Strategic Analysis, the Levy Institute's Macro-Modeling Team argues that, however...

The US economy has grown reasonably fast since the second half of 2003 and the general expectation seems to be that satisfactory growth will continue more or less indefinitely. This paper argues that the expansion may, indeed, continue through 2004 and for some time beyond. But with the...

This Strategic Analysis provides a retrospective view of U.S. growth in the last 10 years, showing that the authors’ previous work, grounded in the linkages between growth and the financial balances of the private, public, and foreign sectors of the economy, has proven a useful contribution to...