I thank Tom Michl for his insightful and gracious note (Michl 2013) pointing out a mistake in my paper (Palley 2013a) on fiscal policy in post-Keynesian economics. Despite correctly deriving the analytic condition (ibid., p. 85, footnote 6), I incorrectly drew the IS-ZZ diagram in figure 2,...

The distinction between wage-led and profit-led growth is a major feature of Post-Keynesian economics and it has triggered an extensive econometric literature aimed at identifying whether economies are wage or profit-led. That literature treats the economy’s character as exogenously given....

This paper examines modern monetary theory (MMT). MMT is a restatement of established Keynesian monetary macroeconomics and so there is nothing new warranting a separate nomenclature. MMT over-simplifies the challenges of attaining non-inflationary full employment by ignoring dilemmas posed by...

Eric Tymoigne and Randall Wray's (2014) defense of MMT leaves the MMT emperor even more naked than before (excuse the Yogi Berra-ism). The criticism of MMT is not that it has produced nothing new. The criticism is that MMT is a mix of old and new, the old is correct and well understood, while...

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...

Prior to the 2008 financial crisis there was much debate about global trade imbalances. Prima facie, the imbalances seem a significant problem. However, acknowledging that would question mainstream economics’ celebratory stance toward globalization. That tension prompted an array of...

It is widely believed that the current economic slowdown will be mild and temporary in nature, the result of a momentary wobble in the stock market. This paper argues that the slowdown stands to be more deep- seated, owing to contradictions in the existing process of aggregate demand generation....