Steve Fazzari’s recent papers should appear here.  If you are interested in something that you cannot find easily on the web, send e-mail

Updated data based on “Household Income, Demand, and Saving: Deriving Macro Data with Micro Data Concepts” from the 2017 Review of Income and Wealth is available here:

Working Papers and Work in Progress

  • Sustainable Consumption and the Comprehensive Economic Well-Being of American Households (with Daniel Cooper and Barry Cynamon), July 2023
    • This paper develops a comprehensive measure of household economic well-being, “sustainable consumption,” that integrates information on household income, assets, debt, transfer payments, and asset returns. This concept estimates a lifetime consumption path that balances resources with a realistic expenditure path. We calculate sustainable consumption using PSID data and demonstrate that it anchors actual household spending. Following rapid growth from the mid-1980s to the early 2000s, average sustainable consumption stagnated. After the Great Recession, sustainable consumption fell more than actual consumption. Decomposing sustainable consumption identifies the relative importance of different household resources—insights that would be missed when income, wealth, or transfers are considered separately. Taxable income supports the majority of sustainable consumption; however, its share has decreased over time on average while the Social Security share has grown. Lower real asset returns over time also affect the relative contribution of different components of household financial resources.
  • How Large are Hysteresis Effects? Evidence from a Keynesian Growth Model (with Alejandro González), April 2023
    • This paper estimates a demand-led model of macroeconomic growth and fluctuations in which the growth rate of the economy’s supply side converges to the growth rate of demand. Convergence happens because labor supply and productivity growth respond to the degree of slack in the economy. Faster demand growth reduces slack and stimulates supply (and vice-versa). We estimate the model using simulated method of moments and find statistically significant and quantitatively important hysteresis effects: the semi-elasticity of productivity and labor supply to the unemployment rate are 0.73 and 0.26, respectively. For an economy with labor market slack, these estimates imply that supply growth could accommodate a one percentage point increase in the growth rate of demand with a reasonable 0.75 percentage point reduction in the long-run unemployment rate. Additionally, we show the model replicates major features of business cycles as well the response of the economy to autonomous demand shocks, providing further validation of this approach to understanding macroeconomic dynamics.
  • Keynesian Fiscal Policy as the Engine of Growth and Prosperity (with Piero Ferri and Alejandro González), 2022

Recent Published and Forthcoming Papers

  • Hyman Minsky Meets Secular Stagnation, chapter 6 in L.R. Wray and F. Dantas, Handbook of Economic Stagnation, Elsevier, 2022, 103-135.
    • Note: this paper is based on many years of lectures at the Hyman Minsky Summer School held at the Levy Economics Institute of Bard College
  • US Employment Inequality in the Great Recession and the COVID-19 Pandemic (with Ella Needler), European Journal of Economics and Economic Policies: Intervention, 18(2), 2021, 223-239
    • The tables in the paper are based on data through December, 2020. For updated tables with more recent data click here.
    • Abstract: This article compares inequality in US employment across social groups in the Great Recession and the COVID-19 pandemic. We develop an inequality measure that captures both how much employment declines during a recession and the persistence of those declines. The results show a significant shift of job loss from men in the Great Recession to women in the COVID-19 lockdown. White workers fare better than other racial/ethnic groups in both recessions. Black and Hispanic women are hit especially hard in the COVID-19 pandemic. With our job loss measure, less educated workers had modestly worse outcomes in the Great Recession.  However, during COVID-19, less educated workers suffer much more severe employment consequences than more educated groups. We discuss long-term effects of employment inequality and how these findings are relevant to debates about policy responses.
  • Was Keynesian Economics Ever Dead? If So, Has It Been Resurrected, Review of Keynesian Economics, 2020, 8(1), 46-60.
    • Link to final working paper version
    • Abstract: This article reflects on rising interest in Keynesian macroeconomics in the aftermath of the Great Recession. I identify aspects of Keynesian thinking that never were completely banished from the mainstream as well threads of Keynesian macroeconomics that have become more influential since the crisis. However, the way most mainstream analysis continues to invoke the zero lower bound for short-term interest rates and the concept of the “natural” rate of interest implies that any Keynesian resurrection outside of heterodoxy remains incomplete. The future may bring broader recognition of how demand leads economic growth and of ways in which the demand side leads the supply side beyond the typical textbook “short run.”
  • Demand-Led Growth and Accommodating Supply, Cambridge Journal of Economics, 2020, 44, 583–605, doi:10.1093/cje/bez055 (with Piero Ferri and Anna Maria Variato)
    • Link to final working paper version, including empirical and mathematical appendices
    • Abstract: We model demand-led growth with endogenous adjustment of labor supply and productivity to accommodate the demand-led path, reconciling Harrod’s warranted rate of demand growth with supply. The model delivers a range of growth paths and unemployment rates rather than a single “natural rate.” Theoretically, the steady-state growth path may be dynamically stable or unstable, but a detailed empirical calibration favors stability. We show analytically that if demand dynamics are stable, supply will converge to demand. While a minimum unemployment rate ultimately imposes a supply constraint on growth, empirical results show that a wide range of steady-state growth rates are feasible across different demand regimes. The results explain how economies can become trapped with low growth due to weak demand or fiscal austerity and suggest policy responses to stagnant demand.
    • Key words: demand-led growth, autonomous demand, super-multiplier, aggregate demand and supply reconciliation, secular stagnation.
    • JEL codes: E12, O40, E32
  • Rising Inequality, Demand, and Growth in the US Economy (with Barry Cynamon). SSRN link, February 2015 (published in the European Journal of Economics and Economic Policy).
  • Inequality, the Great Recession, and Slow Recovery (with Barry Cynamon).   SSRN link, new version October, 2014 (Cambridge Journal of Economics, 2015, follow this link for access to the on-line published version.)
  • Household Income, Demand, and Saving: Deriving Macro Data with Micro Concepts (with Barry Cynamon).   SSRN link, new version, April 2015  (published in the Review of Income and Wealth, 2017)
  • State-Dependent Effects of Fiscal Policy (with James Morley and Irina Panovska).   SSRN link, new version August, 2014 (forthcoming, Studies in Nonlinear Dynamics and Econometrics)
  • Rising Inequality, Recession, and Slow Recovery: A Sad American Tale (with Barry Cynamon).  Intereconomics, volume 48, number 6 (December, 2013).   Link to Published Version
  • Aggregate Demand, Instability, and Growth (with Piero Ferri, Edward Greenberg, and Anna Maria Variato).  Review of Keynesian Economics, volume 1 (2013), 1-21.   Link to Published Version (pdf)
  • How the Great Moderation Became a (Contained) Depression and What to Do About It (with Barry Cynamon and Mark Setterfield), World Financial Review, March 2013. Link to Published Version
  • (Older paper) Capital Income Taxes and Economic Performance. Proceedings. Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association , Vol. 91 (1998), pp. 433-437