nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2013‒11‒09
three papers chosen by
Karl Petrick
Western New England University

  1. Bringing Back Subprime? The Hazards of Restructuring the GSEs By Dean Baker; Nicole Woo
  2. Ending 'Too Big to Fail': a proposal for reform before it's too late (with reference to Patrick Henry, complexity and reality) By Richard W. Fisher
  3. Failing the Test? The Flexible U.S. Job Market in the Great Recession By Richard B. Freeman

  1. By: Dean Baker; Nicole Woo
    Abstract: There have been a number of proposals for replacing the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, with a system under which private financial institutions would issue mortgage-backed securities (MBS) that carry a government guarantee. This paper raises a number of questions about the merits of such a system. It points out that both the gains to low-income families seeking to become homeowners from such a system and interest rate savings are likely to be relatively modest, and that there are few obvious safeguards that would make this new system sounder than the system of privately-issued mortgage-backed securities in the bubble years.
    Keywords: housing, gses, mortgages,
    JEL: H H2 H24 G G2 G21 G28
    Date: 2013–10
  2. By: Richard W. Fisher
    Abstract: Remarks before the Committee for the Republic, Washington, D.C., January 16, 2013 ; "The Dallas Fed’s proposal offers an 'about-turn' and a way to mend the flaws in Dodd–Frank.... In a nutshell, we recommend that TBTF financial institutions be restructured into multiple business entities. Only the resulting downsized commercial banking operations—and not shadow banking affiliates or the parent company—would benefit from the safety net of federal deposit insurance and access to the Federal Reserve’s discount window."
    Date: 2013
  3. By: Richard B. Freeman
    Abstract: The Great Recession tested the ability of the “great U.S. jobs machine” to limit the severity of unemployment in a major economic downturn and to restore full employment quickly afterward. In the crisis the American labor market failed to live up to expectations. The level and duration of unemployment increased substantially in the downturn and the growth of jobs was slow and anemic in the recovery. This article documents these failures and their consequences for workers. The U.S. performance in the Great Recession contravenes conventional views of the virtues of market-driven flexibility compared to institution-driven labor adjustments and the notion that weak labor institutions and greater market flexibility offer the best road to economic success in a modern capitalist economy.
    JEL: J0 J01 J08 J64
    Date: 2013–10

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