Do all types of demand have the same effect on output? To answer this question, I estimate a cointegrated vector autoregressive (VAR) model of consumption, investment, and government spending on US data, 1955–2007. I find that: (1) economic growth can be decomposed into a short-run...

The years since the Great Crisis of 2008 have seen slow growth, high unemployment, falling home values, chronic deficits, a deepening disaster in Europe--and a stale argument between two false solutions, "austerity" on one side and "stimulus" on the other. Both sides and practically all analyses...

Ideen für die Wirtschaft von morgen: Seit Ausbruch der Finanzkrise 2008 streiten zwei ökonomische Denkschulen, zuletzt im Fall Griechenlands, über die ?richtige? Lösung: sparen oder investieren? Beide Ansätze, so James K. Galbraith, sind falsch, denn beide basieren auf der Annahme einer...

This paper discusses two issues in the relationship between inequality and economic growth: the data and the econometrics. We first review the income inequality data set of Deininger and Squire (D&S), which, we argue, fails to provide either adequate or accurate coverage, whether through time or...