Further Reading

Issue Brief : December 2008 takes up the job losses expected without proper allocations to states in the Economic Recovery Plan.

Read the latest from the COP on TARP.

Read the latest from the COP on TARP.

Our economy now faces the most serious crisis since the Great Depression. The financial crisis that was triggered by the bursting of the housing bubble has now spread to the real economy, and we face a sharp downturn that is spreading across the globe. A serious recession now seems unavoidable in the United States, as well as Europe and Japan. The developing world is already struggling with financial turmoil and economic decline. For the first time since the 1930s, we face a real risk of deep worldwide economic contraction.

Restoring economic growth will require a bold, multifaceted plan. This must begin with a recovery program for Main Street — substantial fiscal expansion to revive the real economy.

America grew up investing in its land and its people. Today, our post-World War II infrastructure is starting to decay, and so is the educational system that helped build our modern middle class. This report comprehensively examines our investment deficit. It documents yesterday’s achievements, today’s problems and tomorrow’s solutions.

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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.

Testimony of John S. Irons, Ph.D., and Policy Director at the Economic Policy Institute, before the U.S. House of Representatives Committee on Transportation and Infrastructure hearing on: “Infrastructure Investment and Economic Recovery,” October 29, 2008.

To put an economy on an equitable growth path, economic development must be based on social efficiency, equity, and job creation. It has been shown that unemployment has far-reaching effects, all leading to an inequitable distribution of well-being. But many economists assume that unemployment tends toward a natural rate below which it cannot go without creating inflation. The paper considers a particular employment strategy: a government job creation program, such as an employment guarantee or employer-of-last-resort scheme, that would satisfy the noninflationary criteria. The paper analyzes the international experience of government job creation programs, with particular emphasis on the cases of Argentina and India. We conclude by considering the application of an employer-of-last-resort policy to the developing world and as a vehicle to meeting the Millennium Development Goals.

Testimony of Jared Bernstein, Senior Economist at the Economic Policy Institute before the House Committee on Education and Labor hearing on “Building an Economic Recovery Package: Creating and Preserving Jobs in America,” October 24, 2008.