Report

Because we agree that the current economic situation is quite dire, we explore in this Strategic Analysis the possibility of an additional fiscal stimulus of about $450 billion spread over three quarters. more »

Confronted with declining economic conditions driven by downturns in housing, consumer spending, and jobs and income, city finance officers report that the fiscal condition of the nation’s cities has weakened dramatically in 2008.

Among the findings of the National League of Cities’ latest annual survey of city finance officers are:

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Fiscal 2008 marked a turning point for state finances with a significant increase in states seeing fiscal difficulties, in stark contrast to the preceding several years. As the economy has weakened, so has the state revenue and spending picture. The decline of the housing sector along with a weak manufacturing sector have combined to cause significant declines in revenue for a number of states. more »

At least 39 states faced or are facing shortfalls in their budgets for this and/or next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. more »

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The president and Congress are quickly coalescing around a fiscal stimulus plan to shore up the flagging economy. As currently envisioned, the plan is expected to cost at least $150 billion and include a sizable tax rebate, short-term tax incentives for business investment, and temporary increases in unemployment insurance benefits and food stamps. more »

The Green New Deal Group, drawing inspiration from the tone of President Roosevelt’s comprehensive response to the Great Depression, propose a modernised version, a ‘Green New Deal’ designed to power a renewables revolution, create thousands of green-collar jobs and rein in the distorting power of the finance sector while making more low-cost capital available for pressing priorities.

For decades now, we have been improvident, shortchanging our own future by putting too little money with too little
forethought into our essential infrastructure. To give a few salient examples, we need to reinvigorate our air, rail, and more »

Empirical research based on the Bhaduri/Marglin-variant of the Kaleckian model has recently shown that aggregate demand in many medium-sized and large open economies tends to be wage-led in the medium to long run, even in a period of increasing globalisation. In this paper we extend this type of analysis and integrate the effects on productivity growth, theoretically and empirically. Productivity growth is introduced into the theoretical model making use of the Verdoorn effect or of Kaldor’s technical progress function and hence of a positive relationship between GDP or capital stock growth and productivity growth. Further on, a costpush
or Marx/Hicks-effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account. In the empirical part we estimate productivity growth equations for six countries introducing these two effects. Finally, economic policy conclusions are drawn. more »