This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy's structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that...

This paper examines the implications of a currency union for monetary policy. The formation of a currency union worsens the inflation-unemployment tradeoff, so that leaving the inflation target unchanged at its pre-currency union level generates increased unemployment. Geographically based...

Central banks have generally opposed targeting asset and credit market excess. This paper argues against that position. Bubbles can impose significant harm through the debt footprint effects they leave behind, and through distortions resulting from using interest rates to mitigate their...

This paper provides a simple model of deleveraging that surfaces the contradictions inherent in neoliberal financialization and explains the pattern of US business cycles over the past thirty years. Deleveraging involves a two step correction. The first step is when a borrowing boom ends. The...

This paper explores the macroeconomics of fiscal austerity. A binding budget deficit cap makes the economy more volatile by turning the government budget into an automatic destabilizer. Public debt helps maintain aggregate demand (AD) in the presence of a lower price level because a lower price...

Gattopardo constitutes change that keeps things the same. Gattopardo is relevant for understanding the economics profession's response to the financial crash of 2008. This paper explores gattopardo economics as it applies to the issues of the macroeconomics of income distribution; the global...

This paper explores and contrasts the revised Bretton Woods hypothesis (BW II) with the structural Keynesian hypothesis. Whereas the former sees the growing global imbalances of the 3 decades prior to the financial crisis of 2008 as beneficial, the latter sees them as problematic and destructive...

Federal Reserve Chairman William McChesney Martin famously declared that the Federal Reserve 'is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.' This paper uses the punch bowl metaphor to analyse how the Federal Reserve can...

The conventional wisdom is that there have been two globalizations in the modern era. The first began around 1870 and ended in 1914. The second began in 1945 and is still under way. This paper challenges that view and argues that there have been three globalizations, not two. The first half of...