Program:

10.55-11.00	Welcome
11.00-11.45	Dr Tom Palley - Chief Economist for the US-China Economic and Security Review Commission in Washington, USA Economics of Deflation - Paper download Abstract: Deflation is difficult to analyse because of the need (i) to distinguish between different types of deflation, and (ii) to recognize that deflation differentially impacts agents and sectors. Nominal debt effects are central to the deflation process. Deflation has positive and negative effects on aggregate demand, making its ultimate impact theoretically ambiguous. Under reasonable assumptions it increases unemployment. This challenges the conventional wisdom that Keynesian unemployment is a special case resting on downward nominal wage and price rigidity. Flexible prices can aggravate unemployment. This speaks for institutions promoting downward rigidity of prices and nominal wages, but allowing upwardly flexible relative prices.
11.45-12.30	Assoc. Prof. Peter Kriesler, School of Economics, University of New South Wales Does "bad" macroeconomic policy matter in the long run? - Full paper coming. Abstract: In mainstream theory macroeconomic policy, associated with monetary policy, can influence the real economy in the short run, but has no influence in the long run due to the long run neutrality of money. Short run policy can cause deviations of output from its potential level (and unemployment from NAIRU) but in the long run, output will return to its potential level (and the level of unemployment to NAIRU). In other words, policy mistakes will not have any impact on the economy in the long run. However, if potential output is determined by the path of actual output, then this result will not hold. The idea of inappropriate policy having longer run implication is extended to a Post Keynesian model with a horizontal Phillips curve over the normal range of output. It is shown that, by influencing the output level at which full capacity is reached that path determinacy plays an important role in the longer run impacts of policy. The result is even stronger in an open economy subject to a current account constraint.
12.30-13.30	Lunch - in Workshop venue
13.30-14.15	Prof. Bill Mitchell, CofFEE, University of Newcastle and and Warren Mosler, Centre of Economic and Public Policy, University of Cambridge Essential elements of a modern monetary economy - Paper download Abstract: This paper maps out the major building blocks of a modern macroeconomics and applies it to the spurious debates about social security privatisation in the USA and the intergenerational budget stress in Australia. The major positions being pushed by the respective federal governments are found to have no application - and rely on the false assumption that the government can go bankrupt.
14.15-15.00	James Juniper - CofFEE, University of Newcastle Defending Liquidity Preference and Keynesian Notions of Fundamental Uncertainty - Paper download and Technical Appendix Abstract: This paper argues for the continuing theoretical and policy relevance of the (inter-related) notions of liquidity preference and fundamental uncertainty for the analysis of monetary production economies, including those operating with a fiat currency issued by the national government under a floating exchange rate regime. The paper examines the role played by the notions of liquidity preference and fundamental uncertainty in The General Theory. This is followed by a discussion of Hyman Minsky's analysis of these issues in his 1975 book on Keynes. Chartalist views on fiat currency are set out. Theories of endogenous money are briefly reviewed to see why some 'horizontalists' have questioned relevance of liquidity preference. A simple asset-demand model is used to investigate the effects of an increase in liquidity preference. The effects of fundamental uncertainty on non-financial investment are then considered drawing on an analysis of how real options theory can be extended to account for uncertainty aversion. The paper concludes with a discussion of current developments in financial economics and econophysics, which have the potential to transform ways that fundamental uncertainty is formally modelled in macroeconomics and finance.

Getting to the Workshop

The Shortland Union building is marked US at map reference J4 on the map of the university available here.

Please note that should you be driving to the Workshop, the closest carpark is C5 but this provides very limited and short-term parking only.

Carpark C2 is close to the main roundabout entrance of the University and is a large all day carpark. As with parking around any major University, patience may be necessary to find a space! Visitors will need to obtain a parking permit from a vending machine in the carpark. These permits cost $3. More information about parking on-campus is available here.

If you need further directions, such as driving to the University from Sydney, please consult the information here.

We look forward to seeing you there!

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