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SUMMARY:ST CATHARINE'S POLITICAL ECONOMY SEMINARS: STEVEN FAZZARI - Steven
  Fazzari
DTSTART:20140319T180000Z
DTEND:20140319T193000Z
UID:TALK50745@talks.cam.ac.uk
CONTACT:35751
DESCRIPTION:The next St Catharine's Political Economy Seminar in the serie
 s on the Economics of Austerity\, will be held on Wednesday 19th March 201
 4 - Steven Fazzari will give a talk on 'Inequality\, the Great Recession\,
  and Slow Recovery'. The seminar will be held in the McGrath Centre at St 
 Catharine's College from 6.00-7.30 pm. All are welcome.\n\nSTEVEN FAZZARI 
 is Professor of Economics and Associate Director of the Weidenbaum Center 
 on the Economy\, Government\, and Public Policy at Washington University i
 n St. Louis.  He received his Ph.D. in economics from Stanford University 
 in 1982.  Professor Fazzari's research explores two main areas:  the finan
 cial determinants of investment and R&D spending by U.S. firms and the fou
 ndations of Keynesian macroeconomics.  His published articles appear in a 
 wide variety of academic journals and books.  Fazzari’s co-edited 2013 b
 ook from Cambridge University Press investigates the sources and responses
  to the U.S. “Great Recession” that began in late 2007. A recent searc
 h found more than 1\,800 citations to Fazzari's publications in the Resear
 ch Papers in Economics database (over 8\,000 in Google Scholar).  In addit
 ion\, his research and commentary on economic conditions and public policy
  has been highlighted in the national media. Steven Fazzari teaches macroe
 conomics\, from introductory freshman courses to Ph.D. seminars.  His teac
 hing awards include the Missouri Governor’s award for excellence in univ
 ersity teaching\, the Emerson Award for teaching excellence\, and Washingt
 on University's distinguished faculty award.  He has been active on Univer
 sity committees and task forces throughout his career.\n\nCONTENT: In this
  seminar\, Professor Fazzari will discuss recent research on the effect of
  rising US income inequality on the macroeconomic dynamics that led to the
  Great Recession.  In a paper co-authored with Barry Cynamon\, Steven Fazz
 ari shows that rising inequality reduced income growth for the bottom 95% 
 of the income distribution beginning around 1980\, but that group’s cons
 umption growth did not fall proportionally. Instead\, lower saving put the
  bottom 95% on an unsustainable financial path of rising debt that eventua
 lly triggered the Great Recession. An original decomposition of consumptio
 n and saving across income groups shows that the consumption-income ratio 
 of the bottom 95% fell sharply in the recession\, consistent with tighter 
 borrowing constraints. The top 5% ratio rose\, consistent with consumption
  smoothing. In the recession’s aftermath\, the inability of the bottom 9
 5% to generate adequate demand helps explain the slow recovery. This probl
 em makes the decision to pursue fiscal austerity by the government especia
 lly damaging because higher government spending\, or lower taxes on middle
 -class households\, could mitigate the demand drag caused by rising income
  inequality. But instead\, austerity has magnified the problem.  Although 
 this research focuses on the US case\, Professor Fazzari will discuss simi
 lar dynamics in the UK economy over the same period.\n\nPlease contact the
  seminar organisers Philip Arestis (pa267@cam.ac.uk) and Michael Kitson (m
 .kitson@jbs.cam.ac.uk) in the event of a query. 
LOCATION:The McGrath Centre\, St Catharine's College
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