Many empirical studies have found that interest rate increases have a positive effect on the price level. This paper pursues an obvious, but neglected explanation: interest payments are a cost of production that is at least in part passed on to customers. A model shows that the cost- push effect...

Using Minsky (1986), this paper attempts to answer two questions: (1) How does policy affect real and nominal variables? and (2) How should monetary policy be conducted so as to improve the performance of the economy? Minsky asserted that rising interest rates, brought about by contractionary...

Recently, many economists have credited the late-1990s economic boom in the United States for the easy money policies of the Federal Reserve. On the other hand, observers have noted that very low interest rates have had very little positive effect on the chronically weak Japanese economy....

A Post-Keynesian Stock-Flow Consistent Macroeconomic Growth Model: Preliminary Results Claudio H. Dos Santos (The Levy Economics Institute) Gennaro Zezza (University of Cassino, Italy, and The Levy Economics Institute) Abstract Stock-flow consistent models may be considered the rallying point...

We address the finance motive and the determination of profits in the Monetary Theory of Production associated with the Circuitist School. We show that the “profit paradox” puzzle addressed by many authors who adopt this approach can be solved by integrating a simple Circuit model with a...

A Simplified Stock-Flow Consistent Post-Keynesian Growth Model Claudio H. Dos Santos* and Gennaro Zezza** Abstract: Despite being arguably the most rigorous form of structuralist/post-Keynesian macroeconomics, stock-flow consistent models are quite often complex and difficult to deal with. This...

During the last fifteen years the Fed has experimented with a variety of monetary targets, including reserve aggregates (borrowed and nonborrowed); monetary aggregates as measured by M1, M2, and even M3; prices, as measured by P-Star, price indexes, gold prices, and expected inflation; and a...

Recent low and stable inflation rates are, according to most observers, the result of the Federal Reserve's monetary policy, and most observers do not seem to question that the Fed's sole responsibility is to fight inflation. However, as Executive Director Dimitri B. Papadimitriou and Research...

The first part of this paper is an overview of projections of Social Security's future and an explanation of why the projections have led many to believe there is a looming financial crisis. We argue that any problems to be faced are far down the road and not severe enough to justify the use of...

The difficulties in achieving a consensus regarding the definition of the underclass cannot be minimized. The term was first coined by The New Yorker writer Ken Auletta (1982) who used it broadly to include individuals with "behavioral and income deficiencies." Other definitions have been...