Further Perspectives on Quantitative Easing

Juan Antonio Montecino and Gerald Epstein continue their study of the Federal Reserve’s Quantitative Easing policy (QE) in two new papers. In the first, they investigate which business sectors were expected to gain and lose from QE, indicating, perhaps, political pressures brought to bear on the Fed decisions. In the second, they study the impact of QE on income inequality in the US. Together, these papers indicate that QE helped a broad range of businesses, including finance, as well as the very rich, while having a positive but only modest impact on workers and the middle class. 

>> Read “The Political Economy of QE and the Fed: Who Gained, Who Lost and Why Did it End?”

>> Read “Did Quantitative Easing Increase Income Inequality?” 

>> See also “Have Large Scale Asset Purchases Increased Bank Profits?”

The Public Health Benefits of Climate Policies

Curbing the burning of fossil fuels reduces emissions of hazardous air pollutants as well as carbon dioxide emissions. This means that climate policies can bring about significant public health benefits. A new PERI Research Brief by Brandon Taylor and James K. Boyce estimates the air quality benefits of the Healthy Climate and Family Security Act of 2014. They estimate that by 2050, the Act would prevent 700 thousand premature deaths, 90 million lost work days, and 89 million lost school days, and save an estimated $56-$160 billion per year.

>> Read "Air Pollution Co-Benefits Associated with the Healthy Climate and Family Security Act of 2014"

The New Green Economy

In a cover article in The Nation, Robert Pollin writes that investments aimed at dramatically raising energy-efficiency standards and expanding the supply of clean renewable-energy sources would also generate tens of millions of new jobs in all regions of the world. But if stabilizing the climate is so simple, why do global emissions keep rising? Greed and politics are explanations, he writes, but so are serious misunderstandings on the left as to what can and should be done.  

>> Read “The New Green Economy: Think We Can’t Stabilize the Climate While Fostering Growth? Think Again”

The Theory of Endogenous Money

The Post-Keynesian theory of endogenous money supply is fundamentally different from the conventional approach to the determination of the money supply, writes Thomas Palley. The conventional approach relies on the money multiplier, and bank lending is invisible and passive. Post-Keynesians focus on bank lending, which drives money creation. This paper details the structuralist version of Post-Keynesian theory, which has important implications for monetary policy in terms of short-term and long-term interest rate policy, and credit market policy.

>> Read "The Theory of Endogenous Money: Mechanics and Implications for Macroeconomic Analysis and Monetary Policy"

Unemployment Insurance as a Stabilizing Force in the Eurozone

Lelia E. Davis, Charalampos Konstantinidis and Yorghos Tripodis investigate the prospects for an unemployment insurance system that would span the entire European Monetary Union as one measure that could substantially contribute to effective crisis management in the Eurozone. They estimate the costs of the proposed system under different financing and eligibility scenarios and find that under a variety of reasonable institutional parameters, such a system is fiscally feasible. They conclude that fiscal transfers extended via automatic stabilizers are a productive avenue towards a more stable Eurozone architecture.

>> Read "A proposal for a federalized unemployment insurance mechanism for Europe"