newSchool 0148 scepa 12132010


SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 01 Preliminaries. The first lecture consists of technical topics essential to the rest of the course, including philosophy of social science, Bayesian and Information theory.

At the beginning of the course, the philosophy of social science in correspondence to its deviation from the natural science is debated, focusing on if science should address people in a different way than animals. Moreover, the subjects of the meaning of frequency and probability are examined. Afterwards, an overview of the Bayesian Theory is discussed, complementary to its limitations reaching reality and how this view is linked to the econometric theory, which is based on the former. The first lecture ends raising the topic of elementary information theory (Shannon’s entropy) within a historical framework.

Advanced Microeconomics: Information and Behavior in Political Economy | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Lecture 01 Introduction | Spring 2016

SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 02 Entropy-constrained behavior. The central point of discussion in the second lecture is the basic economic framework of human behavior developed based on the entropy-constrained theory and its advantages over the marginal utility theory of economics.

The lecture begins pointing out the significant impact of the entropy theory on a variety of scientific fields. Moving on, the focus shifts to the economic approach and the audience is presented with two examples of the behavior model. In the first case an individual maximizes her pay-off function through a single choice, whereas, in the second case the payoff maximization occurs via a set of mixed actions. Afterwards, the utilitarian theory is contrasted to the mainstream marginal utility theory. The former advocates that the welfare is comparable among individuals, in contrast to the latter which argues that the interpersonal comparisons of welfare are impossible due to the inherently subjective aspects of welfare. This raises the ground to legitimately taxation of the richest people, in case that people approximately have the same temperature. The second class ends with some simple examples and applications of this theory.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 02 Entropy Constrained Behavior | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016

SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students.

Class 03 Applications of the entropy-constrained behavior model. The biggest part of third lecture dedicated to answering students questions essential to the topic and for the rest we are presented with applicable examples of the behavior model. This lecture provides fundamental information to anyone who wishes to comprehend the ideas that are discussed in previous lectures in greater depth.

At the beginning, the audience is presented with a detailed review of the entropy constrained behavior model, emphasizing on the description of the behavior temperature. Many important points are clarified, such as if the behavior temperature of people tends to be the same or if a fluctuation in behavior temperature changes the utility function, as well as how much will one’s behavior temperature would be affected if a tiger would appear in front of them! Moreover, in this lecture Gibbs distribution is examined more thoroughly. Afterwards, a definition of the expected utility theory is presented by using Von Neumann and Morgenstern’s lottery paradigm. Duncan Luce and Patrick Suppes attempt to experimentally prove the main point of the expected utility theory. However, the experiment did not show the sharp-step function behavior predicted by the expected utility theory. Thus, their experiment seems more precise with the use of the entropy behavior theory, where a choice with a greater payoff is just more plausible to occur. Additionally, some more mathematical applications are explained. In the end, the conversation zooms in the Gaussian method of analysis, which he uses in order to describe his foundation of normal distribution. The third lecture ends raising the question if the Gaussian method in astronomy works as well in social science.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 03 Applications of the Entropy Constrained Behavior Model | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016

SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 04 Social Interaction (Part Α). The fourth class consists of a review of the entropy constrained behavior model, the completion of the expected utility theory and an introduction to the Social Interaction behavior.

The fourth lecture begins with a brief summary of the entropy-constrained behavior model and moves on to re-examining the expected utility function via Von Neumann and Morgenstern’s lottery example. Additionally, two more applications of the entropy-constrained theory are analyzed and visualized graphically. One is able to comprehend the weakness of the econometric models via this analysis. The econometric models ignore the constrains of real life and assume an asymmetry in error deviations, which cannot always lead to accurate results. The lecture ends with the explanation of the basic ground of the social interaction of the models and how this framework could be introduced in economics, something that until now has not been resolved by the mainstream utility theory.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 04 Social Interaction (Part A) | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016

SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 05 Social Interactions (Part Β). The fifth class studies the functionality of the canonical social interaction model and examines a major topic in Political Economics – The Tragedy of the commons.

The fifth lecture begins with an analytical presentation of the canonical social interaction model. The model integrates social interaction into economics and answers the question of what would happen in a social coordination case, in which all people gathered together and decided what to do. The subject of what is the best response for each individual in a variety of cases is also examined. After the theoretical analysis, the lecture focuses on the mathematical framework of the model and an accurate graphical visualization is given by presenting on what extent the certain parameters can affect the model’s fluctuation. Through this approach, they are able to explain in which cases there is a strategic complementarity between agents and in which cases there is not. Prisoner’s dilemma is just a subset of this theory. In the last part of the class, the major topic of the Tragedy of Commons in Political Economy is discussed as an example that integrates this model into real life.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 05 Social Interaction (Part Β) | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016

SCEPA and INET are proud to present an online, semester-long economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 06 Social Interaction (Part C). The sixth class consists of various examples through which they examine the results that could be reached by modifying the canonical social interaction model.

At the beginning of the sixth lecture, the canonical social interaction model and studies are reviewed and different cases are visualized graphically in order to precisely define the meaning of the strategic contementarity and the strategic substatibility in the model. In the former strategic, the more the people that follow the same action the better the result, whereas in the latter, the more the people that follow an action, the less the chances are that one would wish to follow the same strategy. Additionally, an accurate description is given based on the quantal decision response. The Hawk and Dove cases are also presented as an algebraical example of how a biological chain of these two species tends to be in harmony and why none of the two species has an evolutionary advantage over the other. In the end, the audience is presented with examples of a strong strategic contementarity, in which the path dependence determinates to a great extend the winners.

Advanced Microeconomics: Information and Behavior in Political Economy | Class 06 Social Interaction (Part C) | Social Interaction Model | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research (NSSR) | Spring 2016

Ottmar EdenhoferRepresentatives from over 155 countries gathered at the United Nations on Earth Day 2016 to sign the historic COP21 climate change agreement negotiated in Paris last year.

Now what?

The backbone of the agreement is a commitment to limit global warming to under two degrees Celsius above preindustrial levels. To do so would require a worldwide switch from fossil fuels to renewable energy.

Ottmar Edenhofer, co-chair of the Intergovernmental Panel on Climate Change (IPCC), will join SCEPA’s Economics of Climate Change lecture series to share his road map for bringing the Paris agreement to life. He will discuss how the agreement will change the institutional landscape of global climate governance and how to bring the economics and politics of climate stability to action.

Edenhofer is a leading international expert on climate policy at the Technical University of Berlin. He is director of the Mercator Research Institute on Global Commons and Climate Change, a fellow of the German Academy of Sciences, and deputy director and chief economist of the Potsdam Institute for Climate Impact Research.

The event will be followed by a reception featuring the premiere of “The Warming Earth,” a jazz piece composed by Rich Shemaria.

5:00pm, Monday, May 23rd
The New School
University Center
65 Fifth Avenue, room UL102
New York, NY
Livestream - Watch online if you can't attend in person

Follow the conversation on Twitter with @SCEPA_economics using #CCecon

“Climate Policies After Paris” is hosted by SCEPA's Economics of Climate Change Project and generously sponsored by the Tishman Enviromental and Design Center (TEDC), the Institute for New Economic Thinking (INET), the Fritz Thyssen Foundation and the German Research Foundation (DFG).

SCEPA is proud to support an upcoming conference, "Debating Development," on the regional challenges and competing theories behind development economics. The event is co-hosted by The New School's Economic Student Union (ESU) and the Institute for New Economic Thinking's (INET) Young Scholars Initiative (YSI).

1:00pm, Friday, April 22nd
The New School
6 East 16th Street, Room 1009
New York, NY
Follow the conversation on Twitter using #YSIDev

Conference Program
1:00pm Introductory remarks by Sanjay Reddy, The New School

1:30pm Regional Developmental Challenges

Sub-Saharan Africa by Rex McKenzie, Kingston University
Middle East and North Africa by Jennifer Olmstead, Drew University
India and China by Sanjay Ruparelia, The New School
Latin-America by Marcos Vinicius Chiliatto Leite, Inter-American Development Bank

4:00pm Competing Theories of Development

Dependency Theory by Ian Taylor, University of St. Andrews
Classical Political Economy by Anwar Shaikh, The New School
Post-Colonial Theory by LHM Ling, The New School
Law and Development by Jamee Moudud, Sarah Lawrence College

6:00pm Reception

The conference is also supported by The New School Student Senate, The Graduate Faculty Student Senate, ESU, and YSI.

The Advanced Research Collaborative (ARC) at CUNY's Graduate Center launched the Global Consumption and Income Project (GCIP) in conjuntion with SCEPA Economist Sanjay Reddy. The project is an online compilation of data describing income and consumption of more than 160 countries from 1960 to the present.

The project's unprecedented data on material living standards provides a resource for scholars, public policy analysts, activists, journalists and the general public. The data can be used for analyses of population living standards, poverty, inequality, and inclusivity of growth and development in individual countries, regions, and the world as a whole.

The datasets at the core of the project present estimates of monthly real consumption and income of various portions (or quantiles) of the population (a 'consumption/income profile') in comparable units for the vast majority of countries in the world (more than 160) for every year for more than half a century (1960-2015).

The project is led by Sanjay Reddy of The New School and former ARC Distinguished Visiting Fellow, Arjun Jayadev of The University of Massachusetts, Boston, and Azim Premji of The University Rahul Lahoti University of Goettingen. 

Yanis Varoufakis delivered SCEPA's annual Robert Heilbroner Memorial Lecture, "The Future of Capitalism" on Monday, April 25th, 2016.

We all know Varoufakis as the former Greek Finance Minister and media sensation who stood up to Europe in the fight against austerity. His lecture highlighted themes his new book, "And The Weak Suffer What They Must?," including the origins of a crisis that has affected not only Greece, but all of Europe.

The lecture was followed by a panel discussion featuring New School Professor of Economics Mark Setterfield and economics student Ebba Boye.

Follow the conversation on Twitter with @SCEPA_economics using #YanisTNS.

Varoufakis’ career has spanned academia, public service, and the private sector. After three decades in academia, he was elected to the Hellenic Parliament in 2015 as a member of the Syriza Party and became Minister of Finance in Alexis Tsipras’ government. He currently serves as professor of economics at the University of Athens and as a consultant for the Valve Corporation.

SCEPA's Robert Heilbroner Memorial Lecture on the Future of Capitalism:

The Heilbroner lecture honors the work of Robert Heilbroner, who was both a student and a professor in the economics department of The New School for Social Research. This event is dedicated to understanding questions of economic justice and how the profit-seeking activities of private firms might also serve broader social goals. To use Heilbroner’s words, “capitalism’s uniqueness in history lies in its continuously self-generated change, but it is this very dynamism that is the system’s chief enemy.”

The event is free and open to the public.

David HowellLydia DePillis, writing for the Washington Post’s WonkBlog, quotes economist David Howell, professor of urban policy at The New School, in “The $15 Minimum Wage Sweeping the Nation Might Kill Jobs - and that’s Okay.”

While liberal economists agree the minimum wage should be raised, they differ over how high it should go. Mark Levinson, chief economist at the Service Employees International Union (SEIU), is a vocal proponent of a national $15 per hour minimum wage. Alan Krueger, a former Obama Administration official, supports a $12 per hour minimum, but worries that $15 would lead to job loss in some parts of the country.

Howell offers a different perspective. “Why shouldn’t we in fact accept job loss? What’s so bad about getting rid of crappy jobs, forcing employers to upgrade, and having a serious program to compensate anyone who is in the slightest way harmed by that?” he told DePillis. Howell is a proponent of a program similar to Trade Adjustment Assistance (TAA), which helps workers who lose their jobs to foreign trade.

So far, capital has been resistant to the regulation of time. Rather than balance the demands of work and life, US capitalism was dependent on the hidden subsidy of the American wife, a behind-the-scenes, stay-at-home fixer of what economists call market failures. When women left the home—out of desire and necessity—the old system fell apart. Families and the larger economy have yet to recover, and employers' demands for more of their employees’ time is a growing reality in US capitalism.

Economist Heather Boushey, a New School PhD and outside advisor to the Hillary Clinton campaign, presented SCEPA's annual Irene & Bernard L. Schwartz Lecture, “The Political Economy of Time and Work-Life Conflict” on April 6th, 2016. 

Boushey argued that economic efficiency and equity are not natural enemies. In fact, they must be reconciled to fulfill our country’s economic potential. In her new book, Finding Time, Boushey presents innovations to help Americans find the time they need and help businesses attract more productive workers.

The lecture was followed by a panel discussion with Economics PhD student Katherine Moos and moderated by New School Economics Professor Teresa Ghilarducci.

Boushey is executive director and chief economist of the Washington Center for Equitable Growth and senior fellow at the Center for American Progress. The New York Times called Boushey one of the “most vibrant voices in the field.” She testifies often before Congress on economic policy issues and received her PhD in economics from The New School.

Follow the conversation on Twitter with @SCEPA_economics using #worklife.

SCEPA's annual Irene & Bernard L. Schwartz Lecture works to contribute to discussion of the crucial policy issues facing the U.S. and world economies by bringing a distinguished speaker or panel to the university. Past speakers include Thomas Piketty, Paul Krugman, Robert Rubin, Andy Stern and Laura Tyson.

The event is free and open to the public.

University of Massachusetts Amherst economist Gerald Friedman is at the center of a heated debate on the economic impact of presidential candidate and U.S. Senator Bernie Sanders’ economic platform and the role of outside policy experts in political campaigns.

Friedman analyzed Sanders’ proposals and found large, positive economic effects from increased government spending, such as a real GDP-growth rate of 5.3%, which is higher than the U.S. economy has ever sustained. To some, Friedman’s results seem implausible. However, his GDP growth rate is the result of standard modeling techniques and the size a consequence of the scale and scope of Sanders’ ambitions.

In response, four former chairs of the Council of Economic Advisors (CEA) under Presidents Obama and Clinton called on Sanders to distance himself from Friedman’s proposals on the basis of their apparent implausibility. Rather than disputing Friedman’s methods, they claimed the exorbitant results risk damaging the Democrats’ reputation as the “party of evidence-based economic policy.” The former CEA economists equated Friedman’s conclusions regarding the growth rate with the “grandiose predictions” made by outside experts supporting Republican’s economic proposals, including those using a supply-side, tax-cut model to support the growth potential of tax cuts.

In a series of blog posts, New York Times columnist Paul Krugman supported the position of the former CEA chairs, questioning both Friedman’s and Sander’s motives.

In turn, the CEA letter and Krugman’s columns generated a backlash of their own. Jamie Galbraith responded with an open letter. Friedman himself wrote directly to Krugman and Mother Jones’ Kevin Drum summarized the controversy.

New School economists and scholars are dedicated to scrutiny and debate, and believe this process should apply to Friedman’s results just as it should apply to any economist’s results. In this case, the quick jump to questioning political motives appears to have skipped over this exercise in rigor that is the hallmark of economists’ professional ethos.

This is why we have invited Gerald Friedman to speak at The New School Department of Economics seminar series at 4:00pm on May 3, 2016. Friedman’s lecture is tentatively titled, “What would Sanders Do? Or, How a Naive College Professor Stumbled into a Professional and Media Buzzsaw." The lecture will be held at 6 East 16th Street in room 1009.

Capitalism: Competition, Conflict and Crisis” is a new book on modern capitalist economies by Anwar Shaikh, professor and chair of the economics department at The New School for Social Research.

Based on fifteen years of research, Shaikh documents how standard economic assumptions - perfect competition, perfect firms, perfect knowledge and rational expectations - don’t describe or reflect reality.

Instead, he does something new. He develops theory from real behavior and real competition. From this fresh and practical perspective, he redefines conventional economic ideas such as supply and demand, wage and profits, growth, unemployment, inflation, inequality, and the recurrence of economic crises to offer an alternative framework for understanding the economics of capitalism. Below is the video recording from his book launch. 

Shaikh is a professor of economics at the New School for Social for Social Research. He is an associate editor of the Cambridge Journal of Economics, and was a senior scholar and member of the Macro Modeling Team at the Levy Economics Institute of Bard College from 2000 to 2005. In 2014, he was awarded the NordSud International Prize for Literature and Science from Italy’s Fondazione Pescarabruzzo. His intellectual biography appears in the most recent edition of Eminent Economists II published by Cambridge University Press (2014), along with similar essays from thirty prominent economists including seven current Nobel Prize Laureates.

Sanjay ReddyNew School Economics Professor Sanjay Reddy is known for his multidisciplinary approach to economics, looking at the mathematical and philosophical underpinnings of economic theories and policies. It’s no surprise, then, that his new INET blog post, “Externalities and Public Goods: Theory OR Society?,” investigates these two concepts from all angles.

The essay is part of Reddy’s “Reading Mas-Colell” blog series, for which he and New School PhD student Raphaele Chappe provide critical commentary on the widely used microeconomics textbook “Microeconomic Theory” by Andreu Mas-Colell, Michael Whinston, and Jerry Green. In this installment, he explores the historical development and competing definitions of the concepts of externalities and public goods.

Many economists view externalities and public goods as technical concepts with precise definitions, but Professor Reddy reminds us that social issues are generally subjective. “The extent to which public goods are provided depends on who we see as part of ‘ourselves’ and what we see as ‘ours.’” Policy responses to simple externalities, such as congested roads or localized pollution, are relatively straightforward. But solutions to epochal challenges like climate change require social, political, and institutional perspectives. In these cases, the “right” answer is more elusive.

Matthew P DrennanIt’s well known that the causes of the crash of 2008 and the subsequent Great Recession were a housing bubble and a financial crisis. But what were the long-term trends that brought the American economy to the edge of the cliff?

In the November 24th seminar hosted by SCEPA and The New School Economics Department, UCLA Professor of Urban Planning Matthew Drennan named income inequality as the decisive factor behind the crisis. In a talk based on his recently released book, “Income Inequality: Why it Matters and Why Most Economists Didn’t Notice,” Drennan argued that growing inequality directed income gains to the top sliver of the income distribution, leaving middle-class workers experiencing stagnant or falling incomes. To keep up with consumption, these households took on unsustainable debt, often leveraged through home equity.  As we know, the collapse of the housing market then caused indebted households to default at unprecedented rates, setting off a massive global financial crisis.

Drennan focused on the average propensity to consume (APC), an economic statistic that measures the ratio of total consumption to total income. When the APC rises, workers are either saving less or going into debt. Many mid-twentieth century economists had predicted that the APC would remain constant. Instead it rose quickly, as income gains accrued mostly to the wealthy, and middle- and low-income earners spent more of their take-home pay to keep up. For Drennan, this was because stagnant or falling wages forced most Americans to reduce savings rates or take on the unsustainable debt that was the root cause of the financial crisis.

Sanjay ReddyWhat’s the best way to evaluate international differences in living standards? How can we compare the value of 100 dollars to an American with 100 taka to a Bangladeshi?

In the November 17, 2015 seminar hosted by SCEPA and The New School Economics Department, New School Economics Professor Sanjay Reddy presented his research on the most appropriate choice of price index. According to Reddy, the most commonly used price indices are deeply flawed. However, with careful reasoning, informative and honest indices are achievable.

Reddy is critical of the most widely used methods for constructing price indices. While cynics claim that a perfect index number doesn’t exist, so anything goes, Reddy argues that certain indices are most appropriate for certain circumstances. Just as we use scales to measure weights and rulers to record heights, we should use different indices for different purposes as long as they fit the task at hand and are used consistently. For example, you can’t answer the question “who’s taller?” by measuring one person’s height and another’s weight.

The most widely used approach to constructing price indices is a “representative agent” model, where researchers assume that individuals are rational utility-maximizers, and infer budget constraints and utility functions from observed consumption behavior. According to Reddy, this approach is unconvincing. It may not be an accurate description of how people make decisions, and it fails to satisfy the axioms of the consumer choice theory on which it relies.

Instead, Professor Reddy proposes a set of criteria from which a more reliable price index can be constructed. His own project, The Global Consumption Consumption and Income Project (GCIP), aims to provide a more comprehensive understanding of how a country’s well-being evolves over time and can be compared internationally.

Lopamudra BanerjeeWho is more vulnerable to natural disasters?

At the November 11th economics seminar hosted by SCEPA and The New School’s Economics Department, New School Economics Professor Lopamudra Banerjee argued that a household’s location in the class structure of a social system is a more important indicator of its chance of experiencing physical exposure to an extreme phenomenon in the environmental system, like flood, than the household's geographic location in a region of hazards. 

Banerjee draws on extensive data on natural disasters in Bangladesh, Tanzania, Indonesia, and on her own field research, to better understand why only some households experience exposure to disaster events.

At first pass, the data suggest that exposure to natural disasters is a matter of randomness. Taken alone, a household’s level of education, volume of assets, or value of expenditures doesn’t correlate convincingly with its likelihood of experiencing disaster exposure.

Upon closer look, Banerjee finds that risk of exposure is best predicted by the “composition of capital” owned by a household, rather than its volume of capital, per se. And, it is this composition of capital (which takes into account both non-material embodied assets like the level of education of household members, and material physical assets used as means of production) which indicates the most likely class situation of the household in the social structure. The notion of class situation employed here is a particular reading of German sociologist Max Weber’s ([1922] 1978) original concept.

In terms of her empirical analysis of the patterns of disaster exposure in a population, Banerjee's results suggest that the most vulnerable group are what Weber called the “petty bourgeoisie,” property owners with relatively low income, assets, and education. While the more wealthy members of a population can afford to protect their possessions from natural disasters, and the more poor members have little to lose and the flexibility to relocate; the class of petty bourgeoisie might be less nimble to move away from harm's effect when a disaster event occurs in their region of location; and therefore, bear greater risk of exposure in the event of a disaster. They own just enough that they have something to lose and cannot move, but not enough to protect their property from natural disasters.

Banerjee’s research shows that the more wealthy and well-educated are not necessarily immune from natural disasters. Vulnerability is best understood as a function of the complex intersection of characteristics that determine social class.

*Note: Presentation slides reflect research in progress and are not for citation.

The AtlanticIn “What Happens When Low-Wage Workers are Given a Stake in Their Own Company,” SCEPA Director Teresa Ghilarducci writes about Texas grocery chain HEB’s recent announcement that it will give 15% of the company to its 55,000 employees.

HEB workers who meet a certain tenure threshold will get an equity stake valued at 3% of their salary and an additional $100 in stock per year going forward.

HEB’s move is not without support. Economists on both the left and right advance the idea of efficiency wage theory, or employers offering compensation above market rate to attract talent and reduce turnover. Social theorists have long discussed how worker ownership gives workers a stake in the success of their company. John Stuart Mill advocated industrial cooperatives, and Robert Owen experimented with utopian communities during the industrial revolution. More recently, Democratic presidential candidate Hillary Clinton has proposed a tax break that would encourage companies to share profits with their workers.

But HEB’s decision is best viewed in the context of recent developments in the labor market. The unemployment rate is finally approaching its pre-crisis level, and activists are becoming increasingly vocal about low pay and poor working conditions. If this is what workers get when the unemployment rate is 5%, what might happen if it falls even further?

Economics Professors Mark Setterfield of The New School and Eduardo Bastian of the Federal University of Rio de Janeiro have a message for post-Keynesian economists: take inflation seriously.

Setterfield and Bastian presented their research, “A Simple Analytical Model of the Adverse Effects of Inflation,” at the November 3rd weekly seminar series hosted by SCEPA and The New School Economics Department.

To “poke post-Keynesians in the ribs” so they consider the downsides of higher inflation, Setterfield and Bastian developed a framework to show the negative effects of rapidly rising prices on economic growth. Drawing from conflicting-claims inflation theory and Kaleckian growth theory, their work shows how different “inflation regimes” arise, ranging from low and stable price increases to out of control hyperinflation. The conclusion was clear: if inflation takes off, it can be hard to control and have adverse effects for economic growth.