Jacob Assa | The New School University (original) (raw)
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Papers by Jacob Assa
RePEc: Research Papers in Economics, 2018
This paper locates human security ideas vis-à-vis the concept of sustainability in the context of... more This paper locates human security ideas vis-à-vis the concept of sustainability in the context of the new international cooperation challenges brought by the COVID-19 pandemic. The main aim is to show how a robust understanding of human security is necessary for rethinking sustainability beyond a narrow focus on environmental problems. The paper provides first a historical review of the overlaps and complementarities between the two concepts as described through the series of Human Development Reports. The review shows how both ideas were initially downplayed and constrained to narrow understandings for over a decade. Sustainability eventually proved broadly appealing to the scientific community and the Global South, as the Sustainable Development Goals (SDGs) show. Still, it failed to include any serious concern for shocks, downside risks and crisis management. The human security approach emphasizes protection and resilience, offering a better frame to cover the whole crisis management cycle of response, recovery, prevention and preparedness. It promotes the consolidation of responsive and capable systems to cope with risks and vulnerabilities, both objective and subjective, by the whole of society. It also advocates protecting human dignity in crises and upholding global agreement on the importance of human life and dignity beyond borders, a notion menaced by increasing protectionism and nationalism worldwide. After the general discussion, we review specific shocks or downside risks compromising prospects for future generations, namely infectious diseases, disasters, climate change, conflict, displacement and technological change. The last section calls for promoting the engagement of the scientific community and actors in the Global South around human security ideas to move forward their operationalization.
Modern Monetary Theory (MMT) as well as Stock-Flow Consistent (SFC) modelling have both had signi... more Modern Monetary Theory (MMT) as well as Stock-Flow Consistent (SFC) modelling have both had significant implications for economic theory in recent years. Neither, however, had any meaningful impact on the key measurement of output, Gross Domestic Product (GDP). While balance sheets have been nominally included in national accounting systems since 1968, main aggregates such as GDP are still blind to the creation and flow of credit (and hence debt). The financial sector is only presented in GDP as a provider of services, not as a producer of credit and thus money. Following Schumpeter's (and Bezemer's) functional differentiation of credit, this paper separates finance into two parts - credit to the productive sectors and credit for speculation (i.e. for purchasing financial assets and real-estate). The former grows at the same rate as GDP, while the latter grows faster, increasing aggregate leverage. A systemic leverage index is then constructed from flow-of-funds data for the US (1960-2015), and used to render real GDP stock-flow consistent. Debt-adjusted GDP is theoretically and methodologically more consistent than GDP, and also correlates better with aggregate employment. The paper concludes by discussing the implications of debt-adjusted output for the trend and volatility of growth, as well as some thoughts on the gap between measurement and theory in economics.
Review of Political Economy
John Maynard Keynes was one of those multifaceted economists who are so rare today. He may have b... more John Maynard Keynes was one of those multifaceted economists who are so rare today. He may have been describing himself when he listed the variety of qualities required in the ideal economist: [T]h...
This paper investigates the inconsistent treatment of financial services in the national accounts... more This paper investigates the inconsistent treatment of financial services in the national accounts. While net interest income from financial intermediation is netted out as input to other industries and thus does not affect the overall level and trend of Gross Domestic Product (GDP), fee-based net income from financial services is included as value-added, inflating GDP by the same amount. A new measure of economic activity which resolves this inconsistency is introduced, treating all financial income as a cost or intermediate input to the rest of the economy. The resulting aggregate tracks employment and median income far more closely than GDP.
Abstract This paper examines the incidence and consequences of financialization in the industri... more Abstract This paper examines the incidence and consequences of financialization in the industrialized countries of the Organization for Economic Cooperation and Development (OECD). Using the latest panel data from the OECD and the ILO, the paper first documents the extent of financialization in OECD countries and then analyzes the relationships between financialization and three other variables: inequality, growth and unemployment. There is strong empirical evidence for considerable financialization across the OECD, with significant and negative impacts on all three variables.
RePEc: Research Papers in Economics, 2018
This paper locates human security ideas vis-à-vis the concept of sustainability in the context of... more This paper locates human security ideas vis-à-vis the concept of sustainability in the context of the new international cooperation challenges brought by the COVID-19 pandemic. The main aim is to show how a robust understanding of human security is necessary for rethinking sustainability beyond a narrow focus on environmental problems. The paper provides first a historical review of the overlaps and complementarities between the two concepts as described through the series of Human Development Reports. The review shows how both ideas were initially downplayed and constrained to narrow understandings for over a decade. Sustainability eventually proved broadly appealing to the scientific community and the Global South, as the Sustainable Development Goals (SDGs) show. Still, it failed to include any serious concern for shocks, downside risks and crisis management. The human security approach emphasizes protection and resilience, offering a better frame to cover the whole crisis management cycle of response, recovery, prevention and preparedness. It promotes the consolidation of responsive and capable systems to cope with risks and vulnerabilities, both objective and subjective, by the whole of society. It also advocates protecting human dignity in crises and upholding global agreement on the importance of human life and dignity beyond borders, a notion menaced by increasing protectionism and nationalism worldwide. After the general discussion, we review specific shocks or downside risks compromising prospects for future generations, namely infectious diseases, disasters, climate change, conflict, displacement and technological change. The last section calls for promoting the engagement of the scientific community and actors in the Global South around human security ideas to move forward their operationalization.
Modern Monetary Theory (MMT) as well as Stock-Flow Consistent (SFC) modelling have both had signi... more Modern Monetary Theory (MMT) as well as Stock-Flow Consistent (SFC) modelling have both had significant implications for economic theory in recent years. Neither, however, had any meaningful impact on the key measurement of output, Gross Domestic Product (GDP). While balance sheets have been nominally included in national accounting systems since 1968, main aggregates such as GDP are still blind to the creation and flow of credit (and hence debt). The financial sector is only presented in GDP as a provider of services, not as a producer of credit and thus money. Following Schumpeter's (and Bezemer's) functional differentiation of credit, this paper separates finance into two parts - credit to the productive sectors and credit for speculation (i.e. for purchasing financial assets and real-estate). The former grows at the same rate as GDP, while the latter grows faster, increasing aggregate leverage. A systemic leverage index is then constructed from flow-of-funds data for the US (1960-2015), and used to render real GDP stock-flow consistent. Debt-adjusted GDP is theoretically and methodologically more consistent than GDP, and also correlates better with aggregate employment. The paper concludes by discussing the implications of debt-adjusted output for the trend and volatility of growth, as well as some thoughts on the gap between measurement and theory in economics.
Review of Political Economy
John Maynard Keynes was one of those multifaceted economists who are so rare today. He may have b... more John Maynard Keynes was one of those multifaceted economists who are so rare today. He may have been describing himself when he listed the variety of qualities required in the ideal economist: [T]h...
This paper investigates the inconsistent treatment of financial services in the national accounts... more This paper investigates the inconsistent treatment of financial services in the national accounts. While net interest income from financial intermediation is netted out as input to other industries and thus does not affect the overall level and trend of Gross Domestic Product (GDP), fee-based net income from financial services is included as value-added, inflating GDP by the same amount. A new measure of economic activity which resolves this inconsistency is introduced, treating all financial income as a cost or intermediate input to the rest of the economy. The resulting aggregate tracks employment and median income far more closely than GDP.
Abstract This paper examines the incidence and consequences of financialization in the industri... more Abstract This paper examines the incidence and consequences of financialization in the industrialized countries of the Organization for Economic Cooperation and Development (OECD). Using the latest panel data from the OECD and the ILO, the paper first documents the extent of financialization in OECD countries and then analyzes the relationships between financialization and three other variables: inequality, growth and unemployment. There is strong empirical evidence for considerable financialization across the OECD, with significant and negative impacts on all three variables.