Alejandro Gonzalez and Esteban Perez Caldentey examine debt and investment in Latin America by comparing two well-known and opposing economic theories: Hyman Minsky's Financial Instability Hypothesis and the Paradox of Debt.   The Financial Instability Hypothesis argues that robust financial structures tend to evolve into highly leveraged fragile financial structures. By contrast, the Paradox of Debt approach argues that upward and downward phases of business cycles need not be characterized by comparable swings of leveraging and deleveraging. Using firm-level data and seemingly unrelated regressions from 12 Latin American countries, they find that the Financial Instability Hypothesis is more consistent with the evidence they have gathered.

Most economists view a carbon tax as an efficient way to reduce greenhouse gas emissions. Nevertheless, this policy approach does not enjoy widespread public support. One factor could be the distributional impacts of a carbon tax.  Under some types of tax design, the carbon tax will be regressive—i.e. the tax will entail higher proportional costs for lower-income households. Anders Fremstad and Mark Paul examine the distributional impacts at the household level of placing an economy-wide tax on carbon dioxide. They compare this with revenue-neutral recycling policies, including a labor tax cut and an Old-Age, Survivor, and Disability Insurance payroll tax cut. They find that a tax-and-dividend policy is the most equitable option, and also the most politically feasible.

In an article for the Institute for New Economic Thinking, James Boyce discusses the negative consequences for the future of America's economy as a result of Trump's withdrawal from the Paris Accord. As the rest of the world moves forward to transition from fossil fuels to clean energy, the US will lag behind in the energy revolution, foregoing opportunities for both cost savings and job creation.