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This presidential address to the Association for Evolutionary Economics was delivered at the annual meeting in San Diego, California, on January 5, 2013. Keywords: evolution, financial crisis, fraud, institutions, resources, technology JEL Classification Codes: A11, A13, B25, B40, B52, My title is a self-conscious nod to the Ely Lecture by Joan Robinson (1972, 8) entitled, 'The Second Crisis in Economics,' on a program arranged by my father, John Kenneth [...]

We present a common analytical framework for evolutionary and institutional economics, conceived as the study of systems that do not tend toward, nor necessarily fluctuate around, a steady state. Using an evolutionary equation, we derive an analytical theory of the relation between resource abundance and the rate of return available under differing institutional structures. We suggest that the recent political and financial turmoil around the world reflects incompatibilities between existing institutional structures and the increasing scarcity of resources. We apply this idea to the most fundamental determinant of any society's prosperity, profitability and even long-term survival, namely its fertility and rate of population growth. Keywords: evolution, institutions, non-equilibrium theory, resource JEL Classification Codes: B41, E11, Q01, Institutional structures play fundamental roles in the performance of economic systems, while history teaches that firms, industries and economic systems change continually through time. We would therefore expect the concepts [...]

In this paper, we provide a model that permits systematic and even quantitative assessment of the policy implications of increasingly scarce and expensive resources. Specifically, we model the return to investment as a function of fixed cost, discount rate, uncertainty, project duration and the volume of output. Institutions can be understood as the accumulation of past fixed investments, which lower the variable cost of economic activities but constrain choices open to future policymakers. How much to invest in fixed assets and how institutions respond to a changing environment are the key questions as the cost of nonrenewable resources rises. Keywords: fixed cost, institutional structures, resources JEL Classification Codes: B41, E11, Q01, During the last several centuries, fueled by abundant non-renewable resources, the global economy has been expanding more or less uninterruptedly. Robust economic activities have consumed large amounts of low-cost non-renewable [...]

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1540-6237.2008.00589.x Byline: James K. Galbraith (1), J. Travis Hale (1) Abstract: Objective. This study examines the links among income inequality, voter turnout, and electoral choice at the state level in recent presidential elections. Methods. We introduce two new state-level ecological data sets, estimated annual Gini coefficients of income inequality from 1969 to 2004 and a measure of income segregation across Census tracts within states in 1999. We test for associations among inequality, turnout, and party preference with cross-sectional, fixed-effects, and multilevel analyses. Results. The cross-sectional effect of inequality on voter turnout and electoral choice is ambiguous. However, a fixed-effects analysis links higher income inequality to lower voter turnout and also to a stronger Democratic vote. Multilevel results indicate that higher levels of economic segregation likewise are associated with depressed turnout, after controlling for individual voter characteristics and for state-level income. Author Affiliation: (1)University of Texas at Austin

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpolmod.2007.05.008 Byline: James K. Galbraith Keywords: Inequality; Macroeconomic forces; Globalization; Development; Kuznets; Inverted 'U' hypothesis Abstract: This paper presents evidence for a common global pattern in the movement of inequality in national structures of pay, over the years 1963 to 1999. We find a worldwide pattern of declining inequality from 1971 until 1980, followed by a long and sharp period of increasing inequality from 1981 through the end of the century. The existence of a global pattern suggests that the study of inequality, long associated with the disparate effects of technology, trade in local or national labor markets and with national policy choices, would be better treated as a branch of a global macroeconomics, associated with the breakdown of Bretton Woods in 1971-73 and with the onset of the global debt crisis in 1981-82. The work is based on data sets developed by the University of Texas Inequality Project. Author Affiliation: LBJ School of Public Affairs, The University of Texas at Austin, Austin, TX 78713-8925, USA Article History: Received 1 August 2006; Revised 1 February 2007; Accepted 1 April 2007 Article Note: (footnote) [star] Reprinted with permission from David Held and Ayse Kaya (Eds.), Global Inequality, Ralph Miliband Lecture Series on Inequalities at the London School of Economics. Cambridge: Polity Press, 2007, 148-175.

THE END OF POVERTY: ECONOMIC POSSIBILITIES FOR OUR TIME BY JEFFREY D. SACHS, FOREWORD BY BONO Penguin Books, 416 pages, $27.95 THE GLOBAL CLASS WAR: HOW AMERICA'S BIPARTISAN ELITE LOST […]

The success of United States Federal Reserve Board's monetary policy, in relation to European Central Bank's policy, is examined.

DOES WAR PRESENT DISTINCTIVE PROBLEMS FOR THE WORLDLY philosophy? Does empire? Do economists have any particular insight into these topics? Do we have any professional obligations when faced with the [...]

Most of the world's political leaders have embraced economic globalization on two grounds: that open markets and transnational production networks are unstoppable; and that the benefits will surely flow out [...]

Issues concerning the characteristics of the political regime in the United States following the election of George W. Bush as president are discussed. Comparisons between the political stance of George W. Bush and Bill Clinton are drawn.

In a recent paper and book, one of us [Galbraith 1998a, 1998b] has presented estimates of the evolution of inequality in hourly wage rates in American manufacturing for two periods, [...]

Globalization as been taken to mean the erosion of the nation state and faith in free markets, yet the case of Russia shows that such faith is unfounded. Deregulation and other free market policies have undermined the interests of poorer people in Latin America, Asia and other areas. Investors tend to seek short-term returns, and governments may seek longer term growth to benefit national economies. This is one way in which conflicts of interest can arise. The free market project itself is flawed, and this is not a case of unforeseen events having hindered it.

Assuming that there exists a stable long-term, positive relationship between the rate of unemployment and the rate of change of inequality in the wage structure, the ethical rate of unemployment [...]

The 1997 Economic Report of the President glossed over the president's abandonment of the welfare policies and principles declared in 1996. Lessons from the welfare experience and the report's handling of related issues indicate that the report's primary purpose is to define the administration's economic philosophy. The report also claims credit for the administration for the economic growth and reduced unemployment during Clinton's term despite its inability to adequately explain such successes.

The use of NAIRU (nonaccelerating inflation rate of unemployment) in the economic profession is erroneous due to various aspects. First, several unresolved theoretical questions have been raised by the concept of 'natural rate of unemployment.' Second, the foundation of the proposed vertical Phillips curve is weak. Third, the application of this concept in policymaking has created minimal benefits and disastrous effects.

The study of wage contours and cluster analysis has been used to establish an association correlation between trade performance and the developing wage structure in US industry (1959-88). Six industrial clusters were subjected to a series of tests that indicated that industrial structure and trade are factors in wage determination. Economists need to study wages by looking at group forces rather than focussing on the individual.

The 1996 Economic Report of the President aims to indicate how the Clinton administration's policies will contribute to the attainment of the objectives of the Employment Act of 1946, such as full employment, steady economic development and price stability. The 1996 report is more thorough and informative than the 1995 report. It is also well written and more direct in confronting sensitive issues. However, the policies contained in the 1996 report are not likely to create full employment.

The factors that influence the US budget deficit are discussed. The budget deficit is defined as the difference between government expenditures and tax revenues. Current deficits have future effects on the economy since government borrowings to reduce the deficit also increases national debt. Inflation plays an important role in debt reduction since it can offset increases in both government spending and taxes. Recommendations for fiscal policies are presented.

The 1995 Economic Report of the President reflects the inability of the Clinton administration to surpass the economic achievement of the country in 1994. The government's current policy has many loopholes because it is founded on supply-side economics, following a model which favors capital accumulation, production and productivity. Keynesian economics has been totally abandoned by the administration and this has been detrimental to the US economy.

Economists have continually failed to provide convincing arguments to prove that Keynesian demand management policy is not suitable for modern economic environments. Their failure can be attributed to several factors. For one, they have often criticized John Keynes as a person instead of his work. In addition, critics often use weak empirical evidence and do not tackle significant policy issues that supporters of Keynesian economics are still having difficulties with.

The 1994 Council of Economic Advisers (CEA) is headed for a good year. The council, led by Laura D'Andrea Tyson, has delivered a solid report that has less controversies and more information compared to those from past years. Hopefully, the CEA will treat its Federal Reserve counterparts with more firmness and offer more support to working US citizens. The Joint Economic Committee may tackle the issues, including specific corrective actions, in its yearly report on the CEA Report.

A two-track growth program for the US economy is proposed. Its first track involves instituting emergency relief and self-limiting spending measures and tentative tax reductions. This first phase is designed to create immediate employment opportunities and guarantee sustained economic growth. The main objective of this two-track approach is to lower interest rates and maintain them at this reduced level.

The Russia Hand: A Memoir of Presidential Diplomacy By Strobe Talbott. Random House, 457 pages, $29.95 The Oligarchs: Wealth and Power in the New Russia By David E. Hoffman. Public [...]

THERE MAY COME A DAY, IN JANUARY 2005, WHEN THE Democrats will come back to power. Can we perhaps divert ourselves from the campaign long enough to ask, what then? […]

There is a common ground on economic policy that now stretches, with differences only of degree, from the radical right to Bill Clinton. Across the spectrum, all declare that the [...]

The United States policy on missile defense is discussed with emphasis on the disadvantages of a national system. Four areas where national missile defense has problems including cost, technology, diplomacy and its strategic role are examined.