Pub Date : 2023-11-08DOI: 10.1080/05775132.2023.2278348
Laurence Seidman
AbstractWas the 8% rise in U.S. inflation in 2021–2022 mainly caused by 2021 fiscal stimulus? This article presents evidence that 5% of the 8% rise in U.S. and European inflation was caused by two cost pushes: severe supply chain disruptions from covid and a huge rise in the cost of oil. Two percent was caused by higher wage increases to try to keep up with the 5% cost-push. One percent in Europe was caused by a natural gas price spike. U.S. fiscal stimulus in 2021 was the same as in 2020. Only 1% of the U.S.’s 8% rise was caused by 2021 fiscal stimulus.
{"title":"Fiscal Stimulus Caused Only 1% of the 8% Rise in U.S. Inflation","authors":"Laurence Seidman","doi":"10.1080/05775132.2023.2278348","DOIUrl":"https://doi.org/10.1080/05775132.2023.2278348","url":null,"abstract":"AbstractWas the 8% rise in U.S. inflation in 2021–2022 mainly caused by 2021 fiscal stimulus? This article presents evidence that 5% of the 8% rise in U.S. and European inflation was caused by two cost pushes: severe supply chain disruptions from covid and a huge rise in the cost of oil. Two percent was caused by higher wage increases to try to keep up with the 5% cost-push. One percent in Europe was caused by a natural gas price spike. U.S. fiscal stimulus in 2021 was the same as in 2020. Only 1% of the U.S.’s 8% rise was caused by 2021 fiscal stimulus.","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"74 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135342621","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-10-31DOI: 10.1080/05775132.2023.2272541
Suyog Dandekar
AbstractSince the emergence of New Institutional Economics movement, the study of institutions have regained prominence in the field of economic studies. There are three main tenets of institutional economics. First, institutions matter when it comes determining outcomes by guiding interaction among the members of the society. Second, there is a definite link between the welfare of a society and the institutional arrangements that are prevalent there. Basically, institutions act as instruments of welfare. Third, it has been observed that not all institutional arrangements work. Some institutions have performed better than others. The question that this paper tries to address are what is the exact procedure through which institutions improve welfare and why certain institutions work and others do not. With the help of a hypothetical example of an uncertain situation the process of institutions is described. A formal model of the process is then developed which is used to derive efficiency conditions for any institution. Notes1 For more on this see introductory chapter of the book New Institutional Economics A Guidebook by Joskow (Citation2008)2 X could also refer to a bundle of various commodities. For example, X could be comprised of food, clothing, shelter, etc. The interpretation of X either as a single commodity or as a bundle of commodities will not affect the analysis.3 It is not necessary to make this assumption but doing so would make further analysis much simpler.4 Note that this assumption is not too unrealistic. While it is true that configuration 4 is the Nash equilibrium, it however does not mean that other configurations were not played out in this strategic situation. It is possible that other configurations were played out which would have allowed individuals to gather information on the other individual individual’s full production capacity.5 This is because producing output level of 93 necessarily implies that individual 1 has forgone investment in appropriation. Remember, the maximum output that individual 1 can produce after investing time in appropriation is 60. A fact, that will also be known to individual 2 since we have already assumed that each individual has the capacity to learn about the other individual’s production and appropriation capabilities.6 As was mentioned before this belief could be generated through an external agency imposing restrictions on appropriation which will be akin to a formal institution. The important point here is that as long as the belief that other individual will not engage in appropriation there exists a possibility of moving towards a socially desirable outcome.7 This example is taken from Chapter 3 of the book A Cooperative Species: Human Reciprocity And Its Evolution by Bowles and Gintis (Citation2013)8 In this case ∑L will take 4 values. It will be zero when no individual follows the institution. The second possible value of ∑L will be when only individual 1 follows the institution and
{"title":"Institutions as Instruments of Social Welfare","authors":"Suyog Dandekar","doi":"10.1080/05775132.2023.2272541","DOIUrl":"https://doi.org/10.1080/05775132.2023.2272541","url":null,"abstract":"AbstractSince the emergence of New Institutional Economics movement, the study of institutions have regained prominence in the field of economic studies. There are three main tenets of institutional economics. First, institutions matter when it comes determining outcomes by guiding interaction among the members of the society. Second, there is a definite link between the welfare of a society and the institutional arrangements that are prevalent there. Basically, institutions act as instruments of welfare. Third, it has been observed that not all institutional arrangements work. Some institutions have performed better than others. The question that this paper tries to address are what is the exact procedure through which institutions improve welfare and why certain institutions work and others do not. With the help of a hypothetical example of an uncertain situation the process of institutions is described. A formal model of the process is then developed which is used to derive efficiency conditions for any institution. Notes1 For more on this see introductory chapter of the book New Institutional Economics A Guidebook by Joskow (Citation2008)2 X could also refer to a bundle of various commodities. For example, X could be comprised of food, clothing, shelter, etc. The interpretation of X either as a single commodity or as a bundle of commodities will not affect the analysis.3 It is not necessary to make this assumption but doing so would make further analysis much simpler.4 Note that this assumption is not too unrealistic. While it is true that configuration 4 is the Nash equilibrium, it however does not mean that other configurations were not played out in this strategic situation. It is possible that other configurations were played out which would have allowed individuals to gather information on the other individual individual’s full production capacity.5 This is because producing output level of 93 necessarily implies that individual 1 has forgone investment in appropriation. Remember, the maximum output that individual 1 can produce after investing time in appropriation is 60. A fact, that will also be known to individual 2 since we have already assumed that each individual has the capacity to learn about the other individual’s production and appropriation capabilities.6 As was mentioned before this belief could be generated through an external agency imposing restrictions on appropriation which will be akin to a formal institution. The important point here is that as long as the belief that other individual will not engage in appropriation there exists a possibility of moving towards a socially desirable outcome.7 This example is taken from Chapter 3 of the book A Cooperative Species: Human Reciprocity And Its Evolution by Bowles and Gintis (Citation2013)8 In this case ∑L will take 4 values. It will be zero when no individual follows the institution. The second possible value of ∑L will be when only individual 1 follows the institution and ","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"2007 13","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135813934","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-10-27DOI: 10.1080/05775132.2023.2272531
Robert Hockett
{"title":"“Not a Thing” Seven Legal Reasons the Federal “Debt Ceiling” is Null & Void","authors":"Robert Hockett","doi":"10.1080/05775132.2023.2272531","DOIUrl":"https://doi.org/10.1080/05775132.2023.2272531","url":null,"abstract":"","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136317952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-10-26DOI: 10.1080/05775132.2023.2272544
Robert W. Dimand, Bradley W. Bateman
AbstractIn October 1929, the Dutch electronics firm Philips approached John Maynatd Keynes to write confidential reports on the state of the British and world economies, which he did from January 1930 to November 1934, at first monthly and then quarterly. These substantial reports (Keynes’s November 1931 report was twelve typed pages) show Keynes narrating the Great Depression in real time, as the world went through the US slowdown after the Wall Street crash, the Credit-Anstalt collapse in Austria, the German banking crisis (summer 1931), Britain’s departure from the gold exchange standard in August and September 1931, the US banking crisis leading to the Bank Holiday of March 1933, the London Economic Conference of 1933, and the coming of the New Deal. This series of reports has not been discussed in the literature, though the reports and surrounding correspondence are in the Chadwyck-Healey microfilm edition of the Keynes Papers. We examine Keynes’s account of the unfolding events of the early 1930s, his insistence that the crisis would be more severe and long-lasting than most observers predicted, and his changing position on whether monetary policy would be sufficient to promote recovery and relate his reading of contemporary events to his theoretical development. Notes1 “Thursday, October 24, is the first of the days which history – such as it is on the subject – identifies with the panic of 1929” (Galbraith Citation1961, 103–104), but already on Monday, October 21, Irving Fisher had characterized the fall in stock prices as just the “shaking out of the lunatic fringe” and on Tuesday, Charles Mitchell of the National City Bank declared that “the decline has gone too far” (Galbraith Citation1961, 102).2 Philips Incandescent Lamp Works, later Philips Electronics, successor to a firm founded by Lion Philips (originally Presburg), maternal uncle of Karl Marx (Gabriel Citation2011, 44, 110, 291-93, 295, 299, 315, 334, 366). Although relations between uncle and nephew were “strained by politics” (Gabriel Citation2011, 291), Mary Gabriel (Citation2011, 299) refers to Marx’s “fund of last resort, his uncle … He had sold himself to this pragmatic businessman as a successful writer only temporarily short of cash.” Gabriel (Citation2011, 642) remarks that “Marx’s dabbling in the stock market has been questioned by some scholars, who believe he may simply have wanted his uncle to believe he was engaged in ‘capital’ transactions, not Capital.” After the death of Lion Philips, his sons did not reply to Marx’s letter asking for help with his daughter Laura’s wedding (Gabriel Citation2011, 364). Anthony Sampson (Citation1968, 95) reported that the firm’s chairman Frits Philips was “a keen Moral Rearmer and a fervent anti-communist, embarrassed by the fact that his grandfather was a cousin of Karl Marx.”3 For a sense of what £150 a year might have meant to Keynes: Moggridge (Citation1992, 508, 585) and Skidelsky (Citation2003, 417–418, 519, 565) report that
{"title":"John Maynard Keynes Narrates the Great Depression: His Reports to the Philips Electronics Firm","authors":"Robert W. Dimand, Bradley W. Bateman","doi":"10.1080/05775132.2023.2272544","DOIUrl":"https://doi.org/10.1080/05775132.2023.2272544","url":null,"abstract":"AbstractIn October 1929, the Dutch electronics firm Philips approached John Maynatd Keynes to write confidential reports on the state of the British and world economies, which he did from January 1930 to November 1934, at first monthly and then quarterly. These substantial reports (Keynes’s November 1931 report was twelve typed pages) show Keynes narrating the Great Depression in real time, as the world went through the US slowdown after the Wall Street crash, the Credit-Anstalt collapse in Austria, the German banking crisis (summer 1931), Britain’s departure from the gold exchange standard in August and September 1931, the US banking crisis leading to the Bank Holiday of March 1933, the London Economic Conference of 1933, and the coming of the New Deal. This series of reports has not been discussed in the literature, though the reports and surrounding correspondence are in the Chadwyck-Healey microfilm edition of the Keynes Papers. We examine Keynes’s account of the unfolding events of the early 1930s, his insistence that the crisis would be more severe and long-lasting than most observers predicted, and his changing position on whether monetary policy would be sufficient to promote recovery and relate his reading of contemporary events to his theoretical development. Notes1 “Thursday, October 24, is the first of the days which history – such as it is on the subject – identifies with the panic of 1929” (Galbraith Citation1961, 103–104), but already on Monday, October 21, Irving Fisher had characterized the fall in stock prices as just the “shaking out of the lunatic fringe” and on Tuesday, Charles Mitchell of the National City Bank declared that “the decline has gone too far” (Galbraith Citation1961, 102).2 Philips Incandescent Lamp Works, later Philips Electronics, successor to a firm founded by Lion Philips (originally Presburg), maternal uncle of Karl Marx (Gabriel Citation2011, 44, 110, 291-93, 295, 299, 315, 334, 366). Although relations between uncle and nephew were “strained by politics” (Gabriel Citation2011, 291), Mary Gabriel (Citation2011, 299) refers to Marx’s “fund of last resort, his uncle … He had sold himself to this pragmatic businessman as a successful writer only temporarily short of cash.” Gabriel (Citation2011, 642) remarks that “Marx’s dabbling in the stock market has been questioned by some scholars, who believe he may simply have wanted his uncle to believe he was engaged in ‘capital’ transactions, not Capital.” After the death of Lion Philips, his sons did not reply to Marx’s letter asking for help with his daughter Laura’s wedding (Gabriel Citation2011, 364). Anthony Sampson (Citation1968, 95) reported that the firm’s chairman Frits Philips was “a keen Moral Rearmer and a fervent anti-communist, embarrassed by the fact that his grandfather was a cousin of Karl Marx.”3 For a sense of what £150 a year might have meant to Keynes: Moggridge (Citation1992, 508, 585) and Skidelsky (Citation2003, 417–418, 519, 565) report that","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136381612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-14DOI: 10.1080/05775132.2023.2243764
{"title":"Notice of duplicate publication: “Globalization and the Labor Market: An Economic Approach.”","authors":"","doi":"10.1080/05775132.2023.2243764","DOIUrl":"https://doi.org/10.1080/05775132.2023.2243764","url":null,"abstract":"","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134910834","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-20DOI: 10.1080/05775132.2023.2223061
R. Benedikter
{"title":"Artificial Intelligence, New Human Technologies, and the Future of Mankind","authors":"R. Benedikter","doi":"10.1080/05775132.2023.2223061","DOIUrl":"https://doi.org/10.1080/05775132.2023.2223061","url":null,"abstract":"","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72732184","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-04DOI: 10.1080/05775132.2023.2185395
R. Repetto
Abstract To justify its enormous cost, the defense sector promotes China as a deadly military threat, noneother being available This is a potentially fatal error. The Biden administration should recognize China’s sphere of influence and strengthen control over the national security establishment. Like all other government agencies, the national security agencies fight relentlessly to defend their programs, prerogatives and budgets. To that end, they use the world’s largest public relations budget, a flotilla of supporting think tanks, associations, institutes and columnists, and an army of defense industry lobbyists. Despite having never clearly won a war since World War II (not counting the farcical invasion of Grenada) and having clearly lost at least two despite a seemingly overwhelming advantage of force (Vietnam, Afghanistan and arguably Iraq), the military nonetheless has been so spectacularly successful in its political mission that we now spend more on the military than do all other countries combined – an incredible eight hundred and sixteen billion dollars per year.
{"title":"Regaining Control of the National Security Establishment","authors":"R. Repetto","doi":"10.1080/05775132.2023.2185395","DOIUrl":"https://doi.org/10.1080/05775132.2023.2185395","url":null,"abstract":"Abstract To justify its enormous cost, the defense sector promotes China as a deadly military threat, noneother being available This is a potentially fatal error. The Biden administration should recognize China’s sphere of influence and strengthen control over the national security establishment. Like all other government agencies, the national security agencies fight relentlessly to defend their programs, prerogatives and budgets. To that end, they use the world’s largest public relations budget, a flotilla of supporting think tanks, associations, institutes and columnists, and an army of defense industry lobbyists. Despite having never clearly won a war since World War II (not counting the farcical invasion of Grenada) and having clearly lost at least two despite a seemingly overwhelming advantage of force (Vietnam, Afghanistan and arguably Iraq), the military nonetheless has been so spectacularly successful in its political mission that we now spend more on the military than do all other countries combined – an incredible eight hundred and sixteen billion dollars per year.","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"10 1","pages":"23 - 26"},"PeriodicalIF":0.0,"publicationDate":"2023-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82608542","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-04DOI: 10.1080/05775132.2023.2213103
A. Focacci
Abstract COVID 19 pandemic will cause a global economic contraction. The magnitude of shocks will impact the fiscal deficit and the public debt in all Countries. This paper provides an insight into the dynamic relationship between money growth and inflation for several Countries. The Morlet wavelet coherence model is employed since it allows the simultaneous examination of lead-lag effects and co-movements between the couple of variables in the different Countries. The overall results do not evidence a clear impact of the money growth on inflation. This outcome has relevant economic policy consequences considering that the monetization of the public debt can sustain the economic recovery. Thus, the pure monetary nature of the inflationary phenomenon can hardly be considered as a constraint in designing the measures to counteract the issue.
{"title":"Money Growth and Inflation: A Wavelet Analysis for a Monetization Approach to COVID 19","authors":"A. Focacci","doi":"10.1080/05775132.2023.2213103","DOIUrl":"https://doi.org/10.1080/05775132.2023.2213103","url":null,"abstract":"Abstract COVID 19 pandemic will cause a global economic contraction. The magnitude of shocks will impact the fiscal deficit and the public debt in all Countries. This paper provides an insight into the dynamic relationship between money growth and inflation for several Countries. The Morlet wavelet coherence model is employed since it allows the simultaneous examination of lead-lag effects and co-movements between the couple of variables in the different Countries. The overall results do not evidence a clear impact of the money growth on inflation. This outcome has relevant economic policy consequences considering that the monetization of the public debt can sustain the economic recovery. Thus, the pure monetary nature of the inflationary phenomenon can hardly be considered as a constraint in designing the measures to counteract the issue.","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"49 1","pages":"27 - 48"},"PeriodicalIF":0.0,"publicationDate":"2023-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83179715","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-20DOI: 10.1080/05775132.2023.2179166
John Komlos
A classic statement of the pure theory of public finance was formulated circa 45 years ago by Richard Musgrave (Musgrave 1959 Musgrave, Richard. 1959. The Theory of Public Finance. New York: McGraw/Hill. [Google Scholar]). He conceptualized the role of public finance as falling into three primary functions of government: (a) to provide for public goods, (b) to provide for an equitable distribution of income, and (c) to stabilize the economy. In its simplicity, this tripartite division “has been invaluable” and remains the “gold standard” in economics to this day. But is something missing? The author argues that we badly neglect distribution.
{"title":"Viability of the Political System: A Neglected Issue in Public Finance","authors":"John Komlos","doi":"10.1080/05775132.2023.2179166","DOIUrl":"https://doi.org/10.1080/05775132.2023.2179166","url":null,"abstract":"A classic statement of the pure theory of public finance was formulated circa 45 years ago by Richard Musgrave (Musgrave 1959 Musgrave, Richard. 1959. The Theory of Public Finance. New York: McGraw/Hill. [Google Scholar]). He conceptualized the role of public finance as falling into three primary functions of government: (a) to provide for public goods, (b) to provide for an equitable distribution of income, and (c) to stabilize the economy. In its simplicity, this tripartite division “has been invaluable” and remains the “gold standard” in economics to this day. But is something missing? The author argues that we badly neglect distribution.","PeriodicalId":88850,"journal":{"name":"Challenge (Atlanta, Ga.)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135081293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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