When the ‘Wise Men’ of the Chancellor’s panel are dispersed, Godley’s intellectual base becomes the Levy Institute, his family moving to the New York for extended periods as he engages with the followers of Minsky who are re-thinking the macroeconomy around a fuller understanding of endogenous money. He works on developing their forecasting model, introducing stock-flow-consistent treatment in time to detect that the lauded budget surpluses built up by President Clinton are the counterpart of rising private-sector deficits. Calculating that these will lead to sharp downturn when the debt-to-income ratio goes too far above sustainable norms, Godley and his Levy team accurately anticipate the turn-of-the-century stock market downturn. When fiscal and monetary expansion keep the ensuing recession much shallower than expected, they focus on the emerging combination of public and private-sector deficits, which seem to point the way to an even bigger crash. The Godleys also find in New York life a cultural and social dimension that was lacking in Cambridge, with Kitty finally realising her own artistic talent.
- Barro, R. (1974). Are government bonds net wealth? Journal of Political Economy, 82(6), 1095–1117.Google Scholar
- Cameron, G., Muellbauer, J., & Murphy, A. (2006). Was There a British House Price Bubble? Evidence from a Regional Panel (CEPR Discussion Paper 5619). London: Centre for Economic Policy Research.Google Scholar
- Godley, W. (1998, April 26). Why the world could still catch Asian flu. Observer.Google Scholar
- Godley, W. (1999). Seven unsustainable processes: Medium term prospects and policies for the US and the world (Special Report). Levy Economics Institute. Online at http://www.levyinstitute.org/pubs/sevenproc.pdf. Reprinted in M. Lavoie & G. Zezza (Eds.) (2012).
- Godley, W. (2001, December). The developing recession in the United States. Banco Nazionale del Lavoro Quarterly Review, 54(219), 417–425.Google Scholar
- Godley, W. (2003, August 17). The awful warning of the Lawson boom. Financial Times.Google Scholar
- Godley, W., & Izurieta, A. (2004, December 3). Deficits that need a global answer. Financial Times.Google Scholar
- Greenspan, A. (2008). The Age of Turbulence (2nd ed.). London: Penguin.Google Scholar
- Johnson, H. G. (1977). The monetary approach to balance of payments theory and policy: Explanation and policy implications. Economica 44, 217–229.Google Scholar
- Minsky, H. (1982). Can ‘It’ Happen Again? Essays on instability and finance. London: Routledge.Google Scholar
- Minsky, H. (1986). Stabilizing an Unstable Economy. New Haven: Yale University Press.Google Scholar
- Papadimitriou, D. B., & Wray, L. R. (2008). Minsky’s stabilizing an unstable economy: Two decades later. In H. Minsky (Eds.), Stabilizing and Unstable Economy (2nd ed., pp. xi–xxxv). New York: McGraw-Hill.Google Scholar
- Rumbaugh, T., & Blancher, N. (2004). China: International Trade and WTO Accession (IMF Working Paper 04/36). Washington, DC: International Monetary Fund.Google Scholar
- Turner, A. (2016). Between Debt and the Devil: Money, Credit and Fixing Global Finance. Princeton: Princeton University Press.Google Scholar