- On Capitol Hill
- On Wall Street
- In the Press
- Policy Reform Work
Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
SCEPA Director Teresa Ghilarducci takes on an old and misinterpreted explanation for people's failure to adequately prepare for retirement in,"The Real Reason People Don't Save Enough for Retirement." Put simply, it's because we are different. Some of us have characteristics that lead us to save more, others don't.
The topic here is the Big Five Personality Traits, known as OCEAN (or CANOE), which stands for Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism. Angela Duckworth, a professor of psychology at the University of Pennsylvania, has researched the connection between personality types and savings. Her findings are not tremendously surprising: those who are most conscientious--efficient, organized, and careful--are most likely to be successful savers.
What does this mean for retirement policy? Victorian-era social reformers enacted financial literacy campaigns, especially for young girls, to thrust conscientious upon them. Today, most boards of education impose compound interest exercises on their elementary school students to imprint good saving behavior in their DNA. Several states make their fourth graders play stock-market and IRA-inspired games in class.
Changing personalities is hard at best. And is it a worthy goal? Diverse personalities produce the variation in opinions, ideas, and products that make life interesting and exciting. Instead, we should implement retirement reform that is effective regardless of personality type by creating Guaranteed Retirement Accounts: mandatory, pooled savings accounts into which workers and their employers contribute every year. GRAs would allow Americans to enjoy the dignified retirements they deserve, regardless where they come down in the "Big Five."
Economists Jasmina Arifovic and Janet Hua Jiang found that public information, regardless of its validity, can affect how people make decisions during times of financial crisis.
On October 13th, Arifovic presented a lecture on her research as part of an economics seminar series jointly hosted by SCEPA and The New School's Economics Department. Arifovic currently serves as director of the Centre for Research in Adaptive Behaviour in Economics and professor of economics at Simon Fraser University.
Economists have long been interested in whether non-fundamental economic factors, known as "sunspots," can cause or exacerbate financial crisis. Though the concept seems to run counter to the standard economics assumption of rationality, sunspots have been incorporated into important theoretical models of economic crises.
Arifovic's research focuses on measuring the effects of sunspots through controlled experiments. She enlists undergraduates to play a simple game. Given a "bank account" and information about possible rates of return, they decide whether or not to withdraw their funds.
A sunspot is then introduced: a sequence of randomly generated public announcements forecasting how many people will choose to withdraw. When economic conditions are safe or precarious, participants ignore the sunspot. But when conditions are uncertain, they incorporate it into their decisions.
She concludes that in times of uncertainty, behavior is sensitive to publicly available information, even when the information is unrelated to economic fundamentals. The policy implications are clear: public officials and business leaders should pay close attention to the wording of their public statements during times of crisis or uncertainty, when those statement may be more potent than usual.
On October 6th, The New School hosted the release of the United Nations Conference on Trade and Development's (UNCTAD) 2015 Trade and Development Report, which made the bold conclusion that the international financial and monetary systems are failing to foster sustainable international development and require immediate reform to avoid persistent stagnation.
According to UNCTAD's Elissa Braunstein, economics professor at Colorado State University, any economic statistic - such as GDP, debt levels, or trade volume - will prove that developing countries have not fully recovered from the financial crisis and global recession. She described three main challenges confronting the international monetary system: 1) regulating international liquidity, 2) managing shocks; and 3) easing the burden of current account adjustment.
While these challenges are best solved by long-term financing and productive investment, the current system is dominated by private capital, which is focused on short-term, low-risk investments and pro-cyclical, exacerbating downturns.
"Managing the persistent volatility of financial short-term flows requires an internationally coordinated policy response," UNCTAD Secretary-General Mukhisa Kituyi said, not merely a financial correction with few serious consequences for the real economy.
The report calls for reforms at the national level, including the "judicious use" of capital controls and credit allocation policies, supplemented by global measures that discourage speculative financial flows and at the regional level, including more substantial mechanisms for credit support and shared reserve funds.
The event was sponsored by the New School for Social Research. William Milberg, dean of The New School for Social Research, provided introductory and closing remarks.