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Recently, considerable research effort has been devoted to studying the impact of monetary policy on inequality. This paper summarizes the literature on the causes of rising inequality and looks at the empirical work on interest rates and inequality. It argues that growing empirical evidence concerning the impact of monetary policy on inequality is mixed and that the conflicting results concerning monetary policy and inequality involve, to a large extent, how one measures inequality. Overall, it seems that loose monetary policy increases incomes of those at the bottom of the distribution but reduces their income relative to those at the top of the distribution. The paper also examines some post-Keynesian monetary policy rules to deal with inequality and finds them wanting in many respects. Going further, the paper argues that monetary policy is too a blunt instrument for reducing inequality and that reducing inequality needs to be the job fiscal policy, which is better suited to dealing with this problem and which has the political authority to deal with distributional problems. [ABSTRACT FROM AUTHOR]

Direct cash transfers to households during the COVID-19 pandemic, including relief checks and Child Tax Credit payments, were delayed by weeks for recipients without bank accounts and were not received by many non-filers who lacked the time or resources to complete necessary paperwork. A postal banking system has the potential to expand access to financial infrastructure and enable the rapid distribution of resources to households in need during economic downturns – often the same households that are currently excluded from the financial system. This paper examines the history of the US Postal Savings System and the feasibility of a return to postal banking using evidence on the socioeconomic and spatial patterns of financial exclusion. We find that postal banks would be well positioned to compete with both alternative and conventional financial institutions, address issues with physical branch access, and improve outreach to vulnerable populations. [ABSTRACT FROM AUTHOR]

Households with children face burdens that households without children don't face. Besides food, clothing, shelter and healthcare, childcare can easily run several thousand dollars each year. Historically, US economic and social policies have done little to help families with children. Until 2018, families with children were helped indirectly through tax exemptions for children and some child tax credits. These benefits mainly helped middle-income families in high tax brackets. Things changed with American Rescue Plan Act of 2021, which provided a refundable tax credit to all families with children ($3,600 annually for children under six and $3,000 for those six and older)—even families with no taxable income. This payment is like the child allowance programs that exist in nearly all nations. Our paper examines how the refundable child tax credit affected the economic condition of US households with children, and the impact of this credit on poverty and income inequality in the United States. We conclude with some suggestions for improving the refundable child credit so that it does a better job of helping families with children. [ABSTRACT FROM AUTHOR]

This article discusses institutional weaknesses revealed by the COVID-19 pandemic. We investigate two institutions shown to be insufficient for maintaining economic stability during the pandemic. We focus on social safety nets that were tattered prior to the pandemic but are now more vulnerable to failure. We discuss unemployment and health care as twin crises. Job loss during the pandemic has been swift and deep. Many were in the service sector with lower average salaries. Besides the loss of income, many people have employer-sponsored health insurance. The compounding effects of income loss and inadequate access to health care have exposed our enfeebled social safety nets. We end with some policy suggestions to help create greater economic and social stability. [ABSTRACT FROM AUTHOR]

Over several decades, income has become increasingly concentrated at the top of the distributional pyramid in many rich countries. Raising taxes on top income earners and top wealth owners has gained traction in many policy circles as a way to reverse this inequality surge. This paper examines the views of mainstream economists, Thomas Piketty and Post-Keynesian economists concerning the impact of taxation and optimal tax policy. We show that, in terms of taxing the rich, these three perspectives have a great deal in common, but there are also many disagreements. We argue that Piketty occupies a middle ground between mainstream and Post-Keynesian economics, and there is a good deal that Piketty and these two schools can learn from one another. [ABSTRACT FROM AUTHOR]

One of Hyman Minsky's most important contributions is the Financial Instability Hypothesis (FIH), which explains why capitalist economies experience periods of optimism (booms) and pessimism (bust). At the beginning of a cycle, businesses take on more debt, but they are conservative, and the principal is easily paid back (a hedge position). As optimism grows, so does risk-taking and businesses take on more debt. At some point they can only afford to pay interest on that debt (speculative position). In the most extreme case, businesses take on so much debt that they can neither pay the principal nor make interest payments (Ponzi position). Minsky wrote about financial instability (e.g., 1975, 1982) before U.S. households had taken on large levels of debt. Minsky focused on businesses since they were the debt drivers. Today household debt is at record levels, so it makes sense to understand how financially unstable U.S. households are and what this means for the economy. We begin the article by arguing that Minsky's categories should be applied to households; then we operationalize them using the Federal Reserve's Survey of Consumer Finances. This enables us to measure changes in household financial instability using a Minsky-inspired framework and draw some conclusions. [ABSTRACT FROM AUTHOR]

This paper studies the effects of the recent housing crash on small business survival and household geographic mobility. Although a number of other works have studied these issues, our analysis differs from these because we do not focus only on underwater mortgages (less than 0% home equity), but also those slightly above water (0-10% equity). Homeowners with little or no equity face considerable constraints regarding moving, starting a business or keeping a current business open. They are more like underwater homeowners, but they differ enough to deserve a separate categorization in comparative studies, rather than being conflated with all other homeowners that have positive equity. We use the Federal Reserve’s Survey of Consumer Finances panel data for 2007 and 2009, which allows us to track the exact same households during this critical time in the housing crisis. [ABSTRACT FROM PUBLISHER]

This article studies whether 529 plans are an effective way for most people to save for college. The 529 plans were created in 1996 to help low- and middle-income American families save for college. Since this time they have adopted more tax advantages and grown substantially as a result. While total balances in 529 plans now exceed $250 billion, less than 3.0 percent of households have a 529 plan. And the majority of 529 plan accounts are held by the wealthiest households. Low- and middle-income households receive little tax savings from investing in 529 plans, and some states count these plans against financial aid. Also, 529 plans are complicated, rules vary by state, and fund management fees tend to be high. Thus, 529 plans are not the panacea to college affordability. [ABSTRACT FROM PUBLISHER]

We use theSurvey of Consumer Financesto analyze changes in U.S. household debt between 1989 and 2013. We focus on how income and debt levels have changed, and what this means for future economic growth and living standards. Prior to the Great Recession, U.S. households had record high debt levels and record low savings rates. Highly leveraged consumption boosted economic growth. However, large debt burdens have led many families to deleverage. Our study finds that deleveraging has been insufficient. Although debt payments have fallen relative to household income, this is mainly due to low interest rates. Debt levels, especially for home mortgages, remain high by historical standards and portend continued stagnation due to lower consumer spending. [ABSTRACT FROM AUTHOR]

Every developed country other than the United States offers parental leave for mothers and fathers paid out of the national budget. The authors say the payments directly reduce child poverty. Is it too costly for the United States? These two economists think not. [ABSTRACT FROM AUTHOR]

Even progressives these days are discussing ways to increase tax revenues that do not require an increase in progressive income taxes. The reason is that increasing income taxes on the rich is a no-go politically. But is a flat tax a reasonable replacement? Not at all, argues this economist. [ABSTRACT FROM AUTHOR]

The article offers information on the publication of the journal "Review of Political Economy" from 1988 to 2013.

Child poverty in the United States has averaged around 20% since the late 1970s. During this time period, it has been consistently and considerably higher than poverty rates for other age groups. The case is often made that poverty in the United States is greatly underestimated. The many problems involved in measuring aggregate poverty rate also plague measures of child poverty. This article focuses on how interest payments on prior consumer debt affect government calculations of child poverty. After summarizing the negative consequences of child poverty, we use the Federal Reserve's Survey of Consumer Finances to estimate child poverty rates by subtracting interest payments on consumer debt from household income. The article concludes with some policy proposals for reducing child poverty and the number of households (especially those with children) who are “debt poor.” [ABSTRACT FROM AUTHOR]

Our previous work argued that the official U.S. poverty definition is flawed because it ignores interest paid on household debt. When it was developed in the early 1960s, this was not a problem because U.S. households had little consumer debt. Today, most households have considerable consumer debt and are paying high interest rates on that debt. This paper argues that what is true of poverty is likewise true of income inequality indices, such as the gini coefficient and the percentage of middle-class families. Interest payments on past debt reduce the income that households have to maintain a certain standard of living. A problem (such as a bout of unemployment, the expenses of having a new baby, or a health problem) leads to borrowing that tends to reduce household living standards in the long run. This phenomenon is not captured in standard measures of income equality. We then use the Survey of Consumer Finances to correct this problem, estimating income inequality both before and after subtracting interest payments on consumer debt. Finally, we discuss why these different measures have increased over time and conclude with some policy proposals to deal with the problem of substantial consumer debt interest payments. [ABSTRACT FROM AUTHOR]

This paper discusses the regressive nature of tax exemptions for children compared to child allowances and estimates the decline in child poverty in several developed countries due to child allowances. The paper then estimates the decline in child poverty in the United States due to tax exemptions for children and simulates the impact of various possible child allowance programs on child poverty in the United States. It finds that a $3000 to $4000 child allowance would reduce child poverty in the United States to the level of other developed nations and, due to the costs associated with child poverty, be a cost effective policy change. [ABSTRACT FROM AUTHOR]

This paper examines how consumer debt impacts middle-class households. Interest payments on this debt reduce spendable income and household living standards. We argue that it is necessary to account for interest payments on consumer debt when measuring income inequality and the size of the middle class, and then estimate the impact of doing this using the Survey of Consumer Finances datasets since the 1980s. We find that both greater income inequality and rising interest payments on past debt are squeezing the middle class, with interest becoming more important in the 2000s. We conclude with some policy proposals to aid middle-class households. [ABSTRACT FROM AUTHOR]

Some researchers contend the poor in the United States are not all that poor. But their studies are misleading. Steven Pressman explains why and then sets the record straight. [ABSTRACT FROM AUTHOR]

This paper updates and extends my earlier work on how the middle class fares throughout the world based on the microdata sets that comprise the Luxembourg Income Study (LIS). Wave #6 LIS data, recently released and centered around 2004, provides an opportunity to assess what has happened to the size of the middle class around the world in the early 2000s. In contrast to the 1980s and 1990s, there was no noticeable decline in the middle class during the early 2000s. The paper provides further evidence that the size of the middle class in each nation depends mainly on government tax and spending policies. In particular, it shows the key role played by family allowances and paid family leave in supporting a national middle class. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses french economist, Thomas Piketty's capital laws and his book "Capital in the Twenty-First Century".

This paper argues that interest on consumer debt must be taken into account when measuring poverty and inequality. These interest payments cannot be used to support household living standards. This makes middle- and low-income households worse off. Recent increases in consumer debt means that this deterioration in living standards is not captured by conventional government statistics. Using the Survey of Consumer Finances, we make estimates of poverty and inequality that take into account rising interest payments on consumer debt and discuss some of the implications of these estimates. [ABSTRACT FROM AUTHOR]

Our previous research argued that interest payments on consumer debt should be subtracted from household income to measure poverty. We estimated 4 million additional poor Americans in 2007, calling them "debt poor." This paper finds that the debt poor are somewhat like the poor (they are unlikely to own a home or have private health insurance), somewhat like middle-class households (race), and in-between in other ways (education levels). Debt poor households were likely middle class once, having access to considerable consumer credit; but following a loss of income, their large debt burden put their living standard below their poverty threshold. [ABSTRACT FROM AUTHOR]

This paper discusses some of the key contributions of John Kenneth Galbraith to economics and puts them into an historical context. It argues that the work of Galbraith should be recognized as making major contributions to the Post Keynesian paradigm. His work expands on the contributions made by John Maynard Keynes and is consistent with the main ideas of Post Keynesian thought. Much of his work can be thought of as a Post Keynesian microeconomics that needs to be added on to the Post Keynesian macroeconomics begun by Keynes. This work encompasses an understanding of how people behave and how firms behave, a recognition of the importance of uncertainty in the real world, and an emphasis on income effects being more important than substitution effects. The paper then points out how Galbraith has provided a Post Keynesian approach to key macroeconomic issues. The paper concludes with a brief summary of the other articles that make up this special issue to honor John Kenneth Galbraith on the hundredth anniversary of his birth. [ABSTRACT FROM AUTHOR]

This article discusses the economic analysis of crime. Neoclassical approaches to the analysis of crime and punishment, which attempt to quantify punishment as an economically measurable deterrent to crime, are considered as they relate to post-keynsian understandings of the issue. Questions of consumption driven choices in dealing with crime are addressed. The comparative importance of deterrence and competing economic opportunities in the determination of the crime rate is analysed. The possibility that uncertainty plays a greater role than risk in determining criminality is considered in light of the hypothesis that social definitions of rationality play a greater role than individual approaches to the issue.

Can we get grade inflation under control? Jawboning doesn't seem to work. But economic policy may offer some other lessons. [ABSTRACT FROM AUTHOR]

This paper sets forth some Post Keynesian policy proposals concerning education. It first reviews U.S. education problems and the neoclassical solution to them, which relies on increasing competition and consumer choice. The paper then reviews the empirical literature on these topics, and concludes by setting forth a Post Keynesian approach to the U.S. education problems that is supported by these empirical findings. This approach would focus more on providing sufficient income to children of low-income households as well as additional educational spending. It would reject tracking students, and support standards and funding at larger levels of government than the local level. [ABSTRACT FROM AUTHOR]

The article talks about the economic contributions of John Kenneth Galbraith, a distinguished Harvard economist, diplomat, political activist, confidant and adviser to presidents, novelist, and a best-selling economic writer. Galbraith's contributions include his analysis of the significant economic power held by large firms in the U.S. economy and the social and environmental problems created by this concentration of power. Galbraith's recognition of the firms' manipulation of the consumers and the unequal distribution of income and social goods are discussed.

The author draws key distinctions between current neoclassical economics and post-Keynesian economics, in which the exercise of power plays an integral role. In contrast to the traditional view, in which firms respond to or are controlled by the market, post-Keynesian economists see firms seeking to control the market and frequently succeeding. When firms' economic power is recognized, its undesirable social, political, and environmental effects may be constrained or mitigated by collective political action. Keynes rejected the idea of a self-adjusting economy and argued that the state could and should address economic issues. The author describes the debate between the two theories and names key advocates, including James Buchanan and John Kenneth Galbraith.

The voting paradox has been a problem for both the public choice and rational choice schools. A recent attempt to deal with this paradox argues that voting is like applauding at a concert and is therefore expressive rather than rational behavior. This paper argues that such a move fails because: (1) there are many essential differences between voting and clapping; (2) philosophical problems arise from trying to divorce voting from rational behavior; and (3) there are a number of empirical problems with this position. The paper concludes that expressionism approaches the voting paradox from the wrong side. Problems arise not because of what people do when they vote but because the rational choice and public choice schools have a wrong‐headed view of rationality. [ABSTRACT FROM AUTHOR]

This article introduces the Review of Social Economy symposium on the basic income guarantee (BIG). It argues that there are several ways in which the BIG is consistent with social economics. First, the BIG is an attempt to meet the minimum material needs of US citizens and contribute to the common good. Second, important arguments for a BIG move beyond the positive-normative dichotomy. Finally, the BIG would help individuals function as social citizens. [ABSTRACT FROM AUTHOR]

Galbraith's principal theoretical contribution is foreshadowed in American capitalism and unfolds more clearly into view in his trilogy The Affluent Society, The New Industrial State and Economics and the Public Purpose . His thesis is that the economic ideas that once explained a world of poverty have not adjusted to a world of affluence dominated by the modern corporation. His main themes are the concentration of economic power in the large corporation and the social and environmental imbalance that results from the large corporation. Galbraith attempts to tease out the implications of the uneven development of modern affluence and outlines an emancipatory case for social change. [ABSTRACT FROM AUTHOR]

Three problems plague the public choice perspective. First, it cannot explain why people vote, changes in voting behavior, or the actual votes of people. Second, public choice cannot predict the behavior of politicians. It cannot help us understand the sorts of people who run for public office, why candidates run for office promising less government, nor help us understand the actual votes cast by elected politicians. Finally, evidence about the growth of government runs counter to the claims of the public choice school. The paper concludes with some suggestions about how and why public choice has gone wrong. [ABSTRACT FROM AUTHOR]

This paper argues that providing alternative perspectives, such as Post Keynesian economics, is important to students and for the success of the economics profession. Comparing and contrasting different views allow stu-dents to develop critical reasoning skills that they will need later in their lives. Such knowledge is important to students in understanding how changes occur in economic thinking. Finally, it is explained how a student-oriented supple-mentary volume is one way to enrich an economics course. [ABSTRACT FROM AUTHOR]

Discusses the capability approach theory of economist Amartya Sen. Description of interrelated concepts in capability approach; Distinction between entitlements based on production and exchange; Useful applications of entitlements; Analysis of famines by Sen; Role of capability approach in the development of Human Development Index; Analysis of Sen's theory by various economists.

This paper examines the major economic contributions of Amartya Sen. Sen's contributions fall into three main areas: a philosophical critique of traditional economic assumptions, an attempt to build a more realistic economic science based on the notion of entitlements and human capabilities, and a long series of practical contributions to welfare economics that follow from the capabilities approach - how to measure poverty and inequality better, how to understand famine and hunger, the importance of gender in economic development, and the differences between economic development and economic growth. The paper concludes with a brief assessment of the significance of Sen's work. [ABSTRACT FROM AUTHOR]

Examines the contributions made to economics by David Gordon. Detailed information on his work; Conclusions of examination.

According to orthodox economic wisdom, fiscal policy is incapable of solving the unemployment problem because government deficits crowd out consumer spending, business investment and net exports. This paper argues that neither theoretical nor empirical support exists for such claims. In addition, misplaced and mistaken fears about government deficits have kept national governments from employing fiscal policy when necessary. By abandoning fiscal policy, national governments have contributed to rising unemployment in the developed world. [ABSTRACT FROM AUTHOR]

Introduces the papers concerning unemployment trends in the Group of Seven countries from 1955 to 1994. Implications of the incorrect view of labor market; Reduction of the individual components of demand for the wrong reasons; Unemployment trends.

This paper divides USA government expenditures into an investment component and a consumption component in three different ways, and seeks to determine whether this distinction has any real world impact. Greater government investment spending is not more likely to get politicians re-elected. Nor does government investment have a larger macroeconomic effect than government consumption spending. Government investment does, however, tend to increase business productivity; government consumption, in contrast, tends to reduce business productivity. [ABSTRACT FROM AUTHOR]

Interviews economist, Edward J. Nell on transformational economic growth. Nature of transformational growth; Impact of transformational growth on economy; Outlook on theory of long-term demand and long term-growth; Connections between transformational growth and neo-Ricardian economics.

Interviews U.S. economist, John Kenneth Galbraith. Difference between good economics and bad economics; Factors influencing his views on economics; Views about women and the role of women in the economy; Contemporary economic issues and problems; Views on the proposed value-added taxes; Problems in the deregulation of various industries.

Focuses on a study that examines the Luxembourg Income Study (LIS) to compare poverty rates for female-headed families and for other families in a number of developed countries. Details on the Luxembourg income study; Poverty calculations using the LIS; Causes of the gender poverty gap; Testing alternative theories of the gender poverty gap; Alternative approach to the gender gap poverty.

Comments on the impact of the Economic Recovery and Tax Act of 1981 on taxpayers in the United States. Large budget deficits that followed the tax cuts; Arguments by supply-side economists of why the cuts did not provide earning incentives for the very wealthy; Prohibitive range of the Laffer curve.