Steven Pressman

Reform in Eastern Europe

How can the new governments of Eastern Europe succeed in moving from centrally planned to freemarket economies? This incisive report identifies and describes the major policy choices to be made and discusses what will work and what will not.Reform in Eastern Europe provides a comprehensive, easily read statement of reform policy that stands in the mainstream of modern Western economics. Based on their experience with stabilization policies in other countries, the authors show how Eastern Europe can reduce unemployment during the painful adjustment process, create effective and socially acceptable mechanisms to subject enterprises to market discipline, and replace barter trade under CMEA with market-based international trade.

The Decline of the Middle Class: An International Perspective

Did the US middle class benefit from the 1990s economic boom? Did this halt or reverse a middle class decline from the previous decade or more? Is a shrinking middle class strictly a US phenomenon with domestic causes, or is a problem that has plagued most of the world economy? This paper will explore these issues. Section II describes previous attempts at defining the middle class. Section III then examines four possible causes of the declining middle class--changing demographic factors, structural economic changes, macroeconomic conditions, and a more Keynesian explanation which depends on the importance of government spending. Section IV describes the Luxembourg Income Study (LIS), which will be used to measure the middle class and to seek the cause of middle class decline in the US and other countries. Section V provides measurements of the middle class for a number of countries using the LIS. Because of the controversy surrounding definitional matters, several different definitions of the middle class are employed. Using the LIS, section VI empirically examines the four different explanations for the shrinking middle class set forth in section III. Finally, we conclude with some policy implications.

The Economic Contributions of Amartya Sen

This paper examines the major economic contributions of Amartya Sen. Sens contributions fall into three main areas: a philosophical critique of traditional economic assumptions, an attempt to build a more realistic economic science based on the notion of entitlements and human capabilities, and a long series of practical contributions to welfare economics that follow from the capabilities approach - how to measure poverty and inequality better, how to understand famine and hunger, the importance of gender in economic development, and the differences between economic development and economic growth. The paper concludes with a brief assessment of the significance of Sens work.

Explaining the Gender Poverty Gap in Developed and Transitional Economies

This article employs the Luxembourg Income Study (LIS) to compare poverty rates for female-headed households (FHHs) with poverty rates for other households in a number of developed and transitional economies. It then seeks to explain why, in some countries, female-headed households are so much more likely to be poor compared to other families. The next two sections describe the LIS and discuss some of the problems encountered in measuring poverty. The paper then computes poverty rates in individual countries for female-headed households and for all other households using the LIS database. Given the problems associated with measuring poverty, we present several estimates of poverty for both types of household. Two sections then look at two theoretical explanations for the gender poverty gap-human capital theory and a Keynesian approach that emphasizes the importance of fiscal policy as an antipoverty tool. The last section summarizes the main findings and draws some policy conclusions.

Feminist explanations for the feminization of poverty

It is well known that women are much more likely to be poor than men. This is true in the US and in most developed nations. But the causes of this phenomenon remain a matter of dispute. This paper looks at two feminist explanations for the feminization of poverty. First, there is the issue of household structure. Second, there is the issue of occupational sex segregation. This paper seeks to examine if either household structure or occupational sex segregation can help explain the relatively high poverty rates experienced by female-headed families.

Consumer Debt and the Measurement of Poverty and Inequality in the US

Abstract This paper argues that interest on consumer debt must be taken into account when measuring poverty and inequality. These interest payments cannot be used to support household living standards. This makes middle- and low-income households worse off. Recent increases in consumer debt means that this deterioration in living standards is not captured by conventional government statistics. Using the Survey of Consumer Finances, we make estimates of poverty and inequality that take into account rising interest payments on consumer debt and discuss some of the implications of these estimates.

The gender poverty gap in developed countries: Causes and cures

This paper compares poverty rates for female-headed families and for other families in a number of developed countries. The author concludes that there are many different reasons female-headed families suffer relatively greater poverty in some countries but not in other countries. One implication of this analysis is that it is less important what gets done to help female-headed families, and more important that some policy be implemented to benefit female-headed families.

Post Keynesian and Ecological Economics

It is argued that mainstream economics, with its present methodological approach, is limited in its ability to analyze and develop adequate public policy to deal with current environmental problems and sustainable development. This book provides an alternative approach. Building on the strengths and insights of Post Keynesian and ecological economics and incorporating cutting edge work in such areas as economic complexity, bounded rationality and socio-economic dynamics, the contributors to this book provide a trans-disciplinary approach to deal with a broad range of environmental concerns.

The Middle Class Throughout the World in the Mid-2000s

This paper updates and extends my earlier work on how the middle class fares throughout the world based on the microdata sets that comprise the Luxembourg Income Study (LIS). Wave #6 LIS data, recently released and centered around 2004, provides an opportunity to assess what has happened to the size of the middle class around the world in the early 2000s. In contrast to the 1980s and 1990s, there was no noticeable decline in the middle class during the early 2000s. The paper provides further evidence that the size of the middle class in each nation depends mainly on government tax and spending policies. In particular, it shows the key role played by family allowances and paid family leave in supporting a national middle class.

Consumption, Income Distribution and Taxation: Keynes’ Fiscal Policy

The General Theory argued that income distribution affected consumption. Greater income inequality put more money into the hands of people with higher MPCs, leading to increased consumption; and inequality had the reverse impact. Yet, of the six objective factors that Keynes identified as affecting consumption, only distribution has failed to become part of the mainstream consumption theory. This paper examines the reasons why this is so, and then develops a model incorporating the after-tax distribution into a Keynesian consumption function. Empirical tests of this model find that after-tax income distribution is a significant determinant of consumption.