SS

S.T.H. Storm

133 records found

The art of paradigm maintenance

How the New Keynesian ‘Science of Monetary Policy’ tries to deal with the inflation of 2021–2023

The macroeconomic models used by major institutions including the Federal Reserve and the International Monetary Fund (IMF) failed to predict the inflation surge during 2021–2023. The output gap, the unemployment gap, the New Keynesian Phillips curve and inflation expectations di ...

Tilting at Windmills

Bernanke and Blanchard’s Obsession with the Wage-Price Spiral

Bernanke and Blanchard use a simple dynamic New Keynesian model of wage-price determination to explain the sharp acceleration in U.S. inflation during 2021–2023. They claim that their model closely tracks the pandemic-era inflation and they confidently conclude that “… we don’t t ...
Economic costs of climate change are conventionally assessed at the aggregated global and national levels, while adaptation is local. When present, regionalised assessments are confined to direct damages, hindered by both data and models’ limitations. This article goes beyond the ...

The Return of Debt Crisis in Developing Countries

Shifting or Maintaining Dominant Development Paradigms?

In the aftermath of the COVID-19 pandemic, much of the global South has been immersed in a debt crisis of a breadth and depth not seen since the early 1980s. The debt distress was apparent before the pandemic and the situation over the last decade is best described as a slow burn ...

Myth and Reality in the Great Inflation Debate

Supply Shocks and Wealth Effects in a Multipolar World Economy

This article critically evaluates debates over the causes of U.S. inflation. We first show that claims that the Biden stimulus was the major cause of inflation are mistaken: the key data series—stimulus spending and inflation—move dramatically out of phase. While the first ebbs q ...

Betting on Black Gold

Oil Speculation and U.S. Inflation (2020–2022)

Sharp increases in systemically important crude oil prices have been a major cause of the recent surge in the inflation rate in the U.S. This paper investigates the extent to which the increase in oil prices can be attributed to excessive speculation in the oil futures market. Ou ...

Lance Taylor (1940–2022)

Reconstructing Macroeconomics

The concern that an economy could experience persistent stagnation, caused by a structural weakness of aggregate demand, goes back to Alvin Hansen's thesis of “secular stagnation.” Hansen's thesis has been revived in recent times, when it became clear that productivity and potent ...

Labour laws and manufacturing performance in India

How priors trump evidence and progress gets stalled

Comparative empirical evidence for 22 OECD countries shows that country differences in cumulative mortality impacts of SARS-CoV-2 are caused by weaknesses in public health competences, pre-existing variances in structural socio-economic and public health vulnerabilities, and the ...

Reclaiming Development Studies

Essays for Ashwani Saith

This book aims to reclaim the mission, relevance and intellectual orientation of development studies – something that is increasingly challenged from different directions. Confronted by the status quoist enterprise of randomized control trials ( RCTs) on the one hand and the radi ...
This is a rejoinder to the stimulating comments by David Colander, Drucilla Barker and Jeronim Capaldo on my critique of the non-progressive macroeconomic DSGE research paradigm. The three comments expand my arguments and underscore the need for a drastic change in the mainstream ...

Cordon of Conformity

Why DSGE Models Are Not the Future of Macroeconomics

The Rebuilding Macroeconomic Theory Project, led by David Vines and Samuel Wills (2020), is an important, albeit long overdue, initiative to rethink a failing mainstream macroeconomics. Professors Vines and Wills, who must be congratulated for stepping up to the challenge of tryi ...

Economic Growth and Carbon Emissions

The Road to “Hothouse Earth” is Paved with Good Intentions

De-carbonization to restrict future global warming to 1.5 °C is technically feasible but may impose a “limit” or “planetary boundary” to economic growth, depending on whether or not human society can decouple growth from emissions. In this paper, we assess the viability of decoup ...
The prolific writings of Marc Lavoie and Mario Seccareccia include outstanding contributions to Keynesian macroeconomics, macro modelling, the analysis of fiscal and monetary policymaking, theories of (endogenous) money and credit, and political economy in general. One thread tha ...

Lost in deflation

Why Italy’s woes are a warning to the whole Eurozone

Using macroeconomic data for 1960-2018, this paper analyzes the origins of the crisis of the ‘post-Maastricht Treaty order of Italian capitalism’. After 1992, Italy did more than most other Eurozone members to satisfy EMU conditions in terms of self-imposed fiscal consolidation, ...