Dimitri Papadimitriou | Levy Economics Institute of Bard college (original) (raw)

Papers by Dimitri Papadimitriou

Palgrave Macmillan US eBooks, 2015

Edward Elgar Publishing eBooks, Jan 26, 2001

Nova Economia, Dec 1, 2015

RePEc: Research Papers in Economics, 2016

The Greek economy has not succeeded in returning to growth, nor has it managed to create an envir... more The Greek economy has not succeeded in returning to growth, nor has it managed to create an environment of reduced uncertainty, which is crucial for stabilizing the business climate and promoting investment. On the contrary, the new round of austerity measures that has been agreed upon implies another year of recession in 2016. After reviewing some recent indicators for the Greek economy, we project the trajectory of key macroeconomic indicators over the next three years. Our model shows that a slow recovery can be expected from 2017 onward, at a pace well below what is needed to alleviate poverty and reduce unemployment. We then analyze the impact of a public investment program, financed by European institutions, of a size that is feasible given the current political and economic conditions. We find that, while such a plan would help stimulate the economy, it would not sufficiently speed up the recovery. Finally, we revise our proposal for a fiscal stimulus financed through the emission of a complementary currency targeted to job creation. Our model shows that such a plan, calibrated in a way that avoids inflationary pressures, would be more effective, without disrupting the primary surplus targets the government has agreed to, and without reversing the improvement in the current account.

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

RePEc: Research Papers in Economics, Dec 1, 2010

In recent years, the US public debt has grown rapidly, with last fiscal year's deficit reaching n... more In recent years, the US public debt has grown rapidly, with last fiscal year's deficit reaching nearly $1.3 trillion. Meanwhile, many of the euro nations with large amounts of public debt have come close to bankruptcy and loss of capital market access. The same may soon be true of many US states and localities, with the governor of California, for example, publicly regretting that he has been forced to cut bone, and not just fat, from the state's budget. Chartalist economists have long attributed the seemingly limitless borrowing ability of the US government to a particular kind of monetary system, one in which money is a "creature of the state" and the government can create as much currency and bank reserves as it needs to pay its bills (this is not to say that it lacks the power to impose taxes). In this paper, we examine this situation in light of recent discussions of possible limits to the federal government's use of debt and the Federal Reserve's "printing press." We examine and compare the fiscal situations in the United States and the eurozone, and suggest that the US system works well, but that some changes must be made to macro policy if the United States and the world as a whole are to avoid another deep recession.

and holder of the British Hispanic Foundation 'Queen Victoria Eugenia' British Hispanic Chair of ... more and holder of the British Hispanic Foundation 'Queen Victoria Eugenia' British Hispanic Chair of Doctoral Studies. He is Chief Academic Adviser to the UK Government Economic Service (GES) on Professional Developments in Economics. He has published as sole author or editor, as well as co-author and co-editor, a number of books, contributed in the form of invited chapters to numerous books, produced research reports for research institutes, and has published widely in academic journals.

To mobilize Greece's severely underemployed labor potential and confront the social and econo... more To mobilize Greece's severely underemployed labor potential and confront the social and economic dangers of persistent unemployment, we propose the immediate implementation of a direct public benefit job creation program--a Greek "New Deal." The Job Guarantee (JG) program would offer the unemployed jobs, at a minimum wage, on work projects providing public goods and services. This policy would have substantial positive economic impacts in terms of output and employment, and when newly accrued tax revenue is taken into account, which substantially reduces the net cost of the program, it makes for a comparatively modest fiscal stimulus. At a net cost of roughly 1 percent to 1.2 percent of GDP (depending on the wage level offered), a midrange JG program featuring the direct creation of 300,000 jobs has the potential to reduce the unemployed population by a third or more, once indirect employment effects are taken into account. And our research indicates that the policy wo...

RePEc: Research Papers in Economics, Nov 1, 2002

Macroeconomics, 1999

Continuous federal budget deficits and a rising public debt have been presented in terms that hav... more Continuous federal budget deficits and a rising public debt have been presented in terms that have produced mounting dissatisfaction with government. One solution offered to deal with this discontent has been a constitutional amendment to balance the federal budget. In a working paper, Charles J. Whalen presents a historical review of balanced budget legislation, including the constitutional amendment proposed in the Republican Contract with America. He outlines the arguments in favor of and against such legislation and ...

SSRN Electronic Journal, 2016

After reviewing the main determinants of the current Eurozone crisis, this paper discusses the fe... more After reviewing the main determinants of the current Eurozone crisis, this paper discusses the feasibility of introducing fiscal currencies as a way to restore fiscal space in peripheral countries, such as Greece, which have so far adopted austerity measures in order to abide by their commitments with Eurozone institutions and the IMF. We show that the introduction of fiscal currencies would speed up the recovery, without violating the rules of Eurozone Treaties. At the same time, these processes could help the transition of the euro from its current status of single currency to a status of "common clearing currency" along the lines proposed by Keynes at Bretton Woods as a system of international settlements. Eurozone countries could therefore move from "Plan B" aimed at addressing member state domestic problems, to a "Plan A" of a better European monetary system.

SSRN Electronic Journal, 2011

SSRN Electronic Journal, 2005

SSRN Electronic Journal, 2004

Policies and Prospects in an Election Year dimitri b. papadimitriou, anwar m. shaikh, claudio h. ... more Policies and Prospects in an Election Year dimitri b. papadimitriou, anwar m. shaikh, claudio h. dos santos, and gennaro zezza Introduction Wynne Godley, our Levy Institute colleague, has warned since 1999 that the falling personal saving and rising borrowing trends that had powered the U.S. economic expansion were not sustainable. He also warned that when these trends were reversed, as has happened in other countries, the expansion would come to a halt unless there were major changes in fiscal policy. Not long ago, official circles insisted that monetary policy was the most effective tool, and that fiscal deficits were not only unnecessary but also harmful (Economic Report of the President 2000, pp. 31-34; Greenspan 2000). Some economists, notably Edmund Phelps of Columbia University, went so far as to suggest that the economic expansion was not caused by rising demand, but rather because growth had become "structural" (Phelps 2000). Yet fiscal policy has made a swift and major comeback, not simply as tax cuts and military expenditures, but also as huge budget deficits. Three years ago, at the beginning of 2001, there was a government surplus of 113billion.1Oneyearlaterthishadbecomeadeficitof113 billion. 1 One year later this had become a deficit of 113billion.1Oneyearlaterthishadbecomeadeficitof292 billion. According to the latest available figures, by the third quarter of 2003 the deficit had grown to $604 billion. The historical events that gave rise to this change in practice are well known. But they may also signal a growing recognition of the limited effect of monetary policy. Many colleagues at The Levy Economics Institute have long argued that government deficits, albeit of a different composition, would be necessary to sustain economic growth when private sector borrowing reached its limits (Godley 1999; Papadimitriou and Wray 2001; Godley and Izurieta The Levy Institute's Macro-Modeling Team consists of Levy Institute President dimitri b. papadimitriou, Senior Scholar anwar m. shaikh, and Research Scholars claudio h. dos santos and gennaro zezza. All questions and correspondence should be directed to Professor Papadimitriou at 845-758-7700.

Levy Economics Institute, May 1, 2015

Although the ongoing recovery is about to become the longest in the history of the United States,... more Although the ongoing recovery is about to become the longest in the history of the United States, it is also the weakest in postwar history, and as we enter the second quarter of 2019, many clouds have gathered. This Strategic Analysis considers the recent trajectory, the present state, and the future prospects of the US economy. The authors identify four main structural problems that explain how we arrived at the crisis of 2007-09 and why the recovery that has followed has been so weak-as well as why the prospect of a recession is increasingly likely. The US economy is in need of deep structural reforms that will deal with these problems. This report analyzes a pair of policies that begin to move in that direction, both involving an increase in the tax rate for high-income and high-net-worth households. Even if the primary justification for these policies is not economic, this report shows that if such an increase in taxes is accompanied by an equivalent increase in government outl...

The Greek economy has the potential to recover, and in this report we argue that access to altern... more The Greek economy has the potential to recover, and in this report we argue that access to alternative financing sources such as zero-coupon bonds ("Geuros") and fiscal credit certificates could provide the impetus and liquidity needed to grow the economy and create jobs. But there are preconditions: the existing government debt must be rolled over and austerity policies put aside, restoring trust in the country's economic future and setting the stage for sustainable income growth, which will eventually enable Greece to repay its debt.

If the Congressional Budget Office's recent projections of government revenues and outlays co... more If the Congressional Budget Office's recent projections of government revenues and outlays come to pass, the United States will not grow fast enough to bring down the unemployment rate between now and 2016. The public sector deficit will decline from present levels, endangering the sustainability of the recovery. But as this new Strategic Analysis shows, a public sector stimulus of a little over 1 percent of GDP per year focused on export-oriented R and D investment would increase US competitiveness through export-price effects, resulting in a rise of net exports, and slowly lower unemployment to less than 5 percent by 2016. The improvement in net export demand would allow the US economy to enter a period of aggregate-demand rehabilitation—with very encouraging consequences at home.

The US economy has been expanding moderately since the official end of the Great Recession in 200... more The US economy has been expanding moderately since the official end of the Great Recession in 2009. The budget deficit has been steadily decreasing, inflation has remained in check, and the unemployment rate has fallen to 6.7 percent. The restrictive fiscal policy stance of the past three years has exerted a negative influence on aggregate demand and growth, which has been offset by rising domestic private demand; net exports have had only a negligible (positive) effect on growth. As Wynne Godley noted in 1999, in the Strategic Analysis Seven Unsustainable Processes, if an economy faces sluggish net export demand and fiscal policy is restrictive, economic growth becomes dependent on the private sector's continuing to spend in excess of its income. However, this continuous excess is not sustainable in the medium and long run. Therefore, if spending were to stop rising relative to income, without either fiscal relaxation or a sharp recovery in net exports, the impetus driving the ...