According to Papadimitriou, Phillips, and Wray, at a time when small businesses are suffering from a credit crunch, "niche" financial institutions are filling the void left by more traditional sources of financing, such as commercial banks. The authors argue that the most important of these...

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...

The Federal Accounting Standards Advisory Board (FASAB) has proposed subjecting the entire federal budget to "intergenerational accounting"--which purports to calculate the debt burden our generation will leave for future generations--and is soliciting comments on the recommendations of its two...

This brief proposes that the establishment of a nationwide system of community development banks (CDBs) would advance the capital development of the economy. The proposal is based on the notion that a critical function of the financial system is not being adequately performed by existing...

From this paper's Preface, by Dr. Dimitri B. Papadimitriou, President: As his new term begins, President Bush has been trying to focus his domestic agenda on what he calls the Òownership society,Ó a sweeping vision of an America in which more citizens would hold significant assets and be free...

In the current global financial crisis, economists and policymakers have reembraced Big Government as a means of preventing the reoccurrence of a debt-deflation depression. The danger, however, is that policy may not downsize finance and replace money manager capitalism. According to Senior...

Even as the United States enjoys an economic expansion, there is an undercurrent of concern among economic analysts who follow financial markets. Some feel that the expansion of the credit derivatives markets poses the threat of a crisis similar to the Long-Term Capital Management debacle of...

Critics argue that the current crisis has exposed the profligacy of the Greek government and its citizens, who are stubbornly fighting proposed social spending cuts and refusing to live within their means. Yet Greece has one of the lowest per capita incomes in the European Union (EU), and its...

In this new brief, Senior Scholar L. Randall Wray examines the later works of Hyman P. Minsky, with a focus on Minsky’s general approach to financial institutions and policy. The New Deal reforms of the 1930s strengthened the financial system by separating investment banks from commercial...

This brief by Yeva Nersisyan and Senior Scholar L. Randall Wray argues that deficits do not burden future generations with debt, nor do they crowd out private spending. The authors base their conclusions on the premise that a sovereign nation with its own currency cannot become insolvent, and...