New Book In the Tradition of Jane D’Arista

Banking, Monetary Policy and the Political Economy of Financial Regulation: Essays in the Tradition of Jane D’Arista is a new book edited by PERI Co-Director Gerald Epstein, Tom Schlesinger and Matías Vernengo. Most of the essays in the volume were first presented at a May 2008 conference at PERI held in honor of Jane D’Arista. For decades, Jane D’Arista has identified, analyzed, and warned against the forces that had led to the Great Recession, which was unfolding at the time of the conference. Contributors to this volume both examine the causes of the crisis as well as advance new policy perspectives on financial markets and macroeconomics that are capable of enhancing well-being for vast majority of people rather than only the "fortunate few" that currently control the financial system. 

>> Read more about the book, including an excerpt, here

Carbon Dividends: A Common Sense Solution to Climate Change

James Boyce, Director of PERI’s Program on Development, Peacebuilding, and the Environment, published a New York Times opinion piece on new federal climate legislation introduced by Rep. Chris Van Hollen (D-MD) based around the idea of “cap and dividend.” The legislation would cap carbon pollution by requiring coal, oil and natural gas companies to buy permits from the federal government for each ton of carbon in the fuels they sell. The government then returns 100 percent of the proceeds straight to the American people as equal dividends. “If any climate bill should win bipartisan support, this is it,” Boyce writes.

>> Read "The Carbon Dividend", The New York Times

>> Read the Baltimore Sun's endorsement of the bill

Financial Interconnectedness and Systemic Risk

The financial crisis introduced the idea that some banks are “too big to fail.” It was not just their size, but their interconnectedness that proved disastrous—shocks suffered by large banks spread quickly throughout the financial system, and then to the whole economy. The Federal Reserve has begun disseminating data on large banks and intra-financial activity. The blog Naked Capitalism features a post by Nikhil Rao, Juan Montecino, and PERI Co-Director Gerald Epstein. They examine an unprecedented level of detail in the Fed’s new report—and find that seven of the largest banks are also the most interconnected. 

>> Read “Financial Interconnectedness and Systemic Risk”

Savings, Capital Flight, and African Development

Historically, countries that achieve and sustain high growth rates maintain high domestic saving rates, enabling domestic investment and job creation. But saving in African countries has remained low, leading to high investment-savings gaps, and increased dependence on external capital. This analysis by Léonce Ndikumana, Director of PERI’s African Development Policy Program, suggests that strategies to address domestic savings should include policies to curb and prevent further capital flight (the leakage of financial resources) from Africa, the levels of which have exploded over the past decade.

>> Read "Savings, Capital Flight, and African Development"

The Causes of China’s Export-Led Growth

There is consensus among economists, international organizations and the Chinese government that China’s export- and investment-led growth model is unsustainable. Exchange rate manipulation is often named as the major cause of China’s massive trade surpluses. But there is no agreement about the extent to which the Renminbi is actually undervalued, and if an exchange rate appreciation would significantly reduce China’s current account surplus. In this working paper, Simon Sturn finds that the central policy challenge for correcting China’s trade imbalances is not simply to appreciate the Renminbi, but to increase reduce inequality and increase average household incomes.  This will increase China’s domestic consumption level relative to exports.

>> Read "From Internal Imbalances to Global Imbalances: A Survey on the Causes of China’s Export-Led Growth"