:: Levy Economics Institute of Bard College ::

Strategic Analysis | December 2008
Prospects for the U.S. and the World: A Crisis That Conventional Remedies Cannot Resolve 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 well coordinated, this approach will not be sufficient; what’s required, they say, is a worldwide recovery of output, combined with sustainable balances in international trade. [more]
Associated Research Program(s):
The State of the U.S. and World Economies

Public Policy Briefs | October 2008
The Commodities Market Bubble Money manager capitalism—characterized by highly leveraged funds seeking maximum returns in an environment that systematically underprices risk—has resulted in a series of boom-and-bust cycles in equities, real estate, and commodities. Because subsequent cycles have been increasingly damaging to the broader economy, we are now at the point where we are experiencing the most severe financial crisis since the Great Depression. [more]
Associated Research Program(s):
Monetary Policy and Financial Structure

Public Policy Brief Highlights | October 2008
Shaky Foundations Treasury Secretary Henry Paulson’s latest plan for tackling the housing-centered credit crisis involves giving the Federal Reserve vast new authority to regulate investment banks, not just depository institutions. However, news analyst Pedro Nicolaci da Costa argues that attitude changes among regulators will be even more important than shifts in mandate in ensuring that regulators like the Fed do their jobs properly. [more]
Associated Research Program(s):
Monetary Policy and Financial Structure | The State of the U.S. and World Economies

Policy Notes | November 2008
Time to Bail Out: Alternatives to the Bush-Paulson Plan While serving as chairman of the Federal Reserve Board, Alan Greenspan advocated unsupervised securitization, subprime lending, option ARMs, credit-default swaps, and all manner of financial alchemy in the belief that markets “work” to reduce and spread risk, and to allocate it to those best able to assess and bear it—in his view, markets would stabilize in the absence of nasty government intervention. But as Greenspan now admits, he could never have imagined the outcome: a financial and economic crisis of biblical proportions. [more]
Associated Research Program(s):
Monetary Policy and Financial Structure

Working Papers | December 2008
Insuring Against Private Capital Flows: Is It Worth the Premium? Following an analysis of the forces behind the “global capital flows paradox” observed in the era of advancing financial globalization, this paper sets out to investigate the opportunity costs of self-insurance through precautionary reserve holdings. We reject the idea of reserves as low-cost protection against the vagaries of global finance. [more]
Associated Research Program(s):
The State of the U.S. and World Economies

LIMEW Reports | April 2007
How Well Off Are America’s Elderly? Given the aging of the American population and the widening gap between rich and poor—not to mention the controversy surrounding the future viability of Social Security—the economic welfare of the elderly is an extremely topical issue. This report provides a new look at America’s elderly, and shows that the official measures drastically understate their level of economic well-being. [more]
Associated Research Program(s):
The Levy Institute Measure of Economic Well-Being (LIMEW)

Book Series | May 2008
Stabilizing an Unstable Economy The late American economist and Distinguished Scholar Hyman P. Minsky first wrote about the inherent instability of financial markets in the late 1950s, and accurately predicted a transformation of the economy that would not become apparent for nearly a generation. [more]
Associated Research Program(s):
Monetary Policy and Financial Structure

Report | October 2008
Report October 2008 Recent experience has bolstered the view that asset prices must come under the central bank’s purview in order for the economy to retain some semblance of stability. However, in a new Public Policy Brief, Pedro Nicolaci da Costa argues that attitude changes among regulators will be even more important than shifts in mandate in ensuring that regulators like the Federal Reserve do their jobs properly. [more]

Summary | December 2008
Summary Winter 2009 Recent attempts by the Treasury and the Federal Reserve to counter the worst financial and economic crisis since the Great Depression have brought into question the role of the government and the effectiveness of its rescue package. Levy Institute scholars foresee an extended period of stagnation and possibly deflation if the government does not take a more active part in terms of fiscal policy, direct homeowner relief, and regulatory system reform. [more]

Conference Proceedings | April 2008
The 17th Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies In April 2008, top policymakers, economists, and analysts from government, industry, and academia gathered at the Levy Institute’s research and conference facility in Annandale-on-Hudson, New York, to present their insights about the American economy and the financial sector in the context of Minsky’s economic theories. Participants discussed Minsky’s financial instability hypothesis and the ability of monetary policy to stabilize financial markets and the economy, as well as the role of the Federal Reserve and its ability to function as a systemic lender of last resort. [more]
Associated Research Program(s):
The State of the U.S. and World Economies

Conference Audio | May 2008
17th Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies The focus of this year's conference was the current economic and financial crisis in the United States and its effects on the world economy. Topics included the causes and consequences of the “Minsky moment”; the impact of the credit crunch on the economic and financial market outlook; dislocations and policy options; margins of safety, systemic risk, and the American subprime mortgage market; financial markets regulation-reregulation; the inefficiency of computer-driven markets; currency market fluctuations; and exchange rate misalignment. [more]
Associated Research Program(s):
The State of the U.S. and World Economies

Press Releases | September 2008
Federal Government in Better Position Than Federal Reserve to Support Faltering Economy, Levy Scholar Says [more]

Biennial Reports | April 2008
Biennial Report, 2006–2007 Throughout 2006–07, the Levy Institute continued to make significant contributions to the public policy discussions on many economic issues. In addition to organizing conferences, workshops, and lectures with distinguished representatives of the academy, the business community, and government, the Levy Institute used its wide range of print and online publications to disseminate information about, and foster debate on, numerous policy issues. [more]

In the Media | October 2008
Asia’s revenge October 8, 2008. Copyright 2008 The Financial Times Limited. [more]
Associated Research Program(s):
The State of the U.S. and World Economies