Institute for New Economic Thinking

09/22/2026

Why does a country that invented a leading EV battery end up buying its batteries from Asia? William Lazonick, Professor of Economics at UMass Lowell, and Matt Hopkins of the Academic-Industry Research Network give an answer rooted in corporate governance.

In the 1990s, GM had the technology, the partnership, and a working electric car. The authors show how a "maximize shareholder value" mindset took hold under successive CEOs, and how buybacks came to take priority over patient investment in batteries. GM shelved the EV1 in 1999 and sold its battery venture stake in 2000. Rick Wagoner later called axing the program the worst decision he made as CEO.

The story runs through GM's 2009 bankruptcy, a $49.5 billion U.S. Treasury rescue, and a return to buybacks in the years since. It ends with China's EV sales at 16.5 million units in 2025, and with Lazonick and Hopkins asking what it would take for the United States to compete again.

Read the piece here:

General Motors once had the technology, talent, and partnership to lead the electric-vehicle revolution. Instead, it abandoned the EV1 and its battery venture while pouring billions into stock buybacks, helping turn an early American lead into decades of technological dependence.

09/22/2026

No country makes its own inflation. That's the argument from Carlo D'Ippoliti, Professor of Economics at Sapienza University of Rome, Daniele Tori, Assistant Professor of Political Economy at the University of Pisa, and Lucio Gobbi, Assistant Professor of Economics at the University of Trento.

Looking at sixty years of data across eleven advanced economies, the authors find that consumer price inflation moved together through the 1970s inflation, the “long quiet” after 1990, and the 2021 surge and retreat, regardless of each country's own institutions or policies. They trace the pattern to three forces: global value chains weakening labor's bargaining power, global liquidity flows hitting cost structures across economies at once, and surplus countries like Germany, Japan, and China setting a ceiling on tradable goods prices worldwide.

The authors call conventional inflation theory a form of "methodological nationalism," and argue that central banks tightening policy without coordinating with each other end up working against their own goals. Their answer isn't a new domestic policy lever, but rather coordination between countries.

Read their piece and working paper here: https://lnkd.in/g2ZMAhDm

09/11/2026

The doom loop 🔂: Bidenomics was a steady continuation of the Reagan-Bush(s)-Clinton-Obama status quo that has hardwired deep structural inequalities into America’s economic development https://www.ineteconomics.org/perspectives/blog/the-macroeconomic-roots-of-the-collapse-of-the-political-center-in-the-us

09/09/2026

Jerome Powell raised interest rates by more than 500 basis points. Growth held up, and inflation, driven by supply shocks, faded largely on its own.

In a new piece for INET, James K. Galbraith uses that record to make an uncomfortable case: the Federal Reserve's main tool has lost its traction. Responding to new Chair Kevin Warsh's first Jackson Hole speech, he argues that in Paul Volcker's manufacturing-heavy, credit-driven economy, high rates could crush demand, but in today's service-based economy, with federal debt roughly four times larger relative to GDP, raising rates can pump money into the economy rather than cool it.

Galbraith credits Warsh's critical angle, including the admission that the Fed, not the deficit, sets rates. But he argues the Chair is boxed in: he cannot cut rates without appearing to bow to President Trump, and raising them would be pointless. Galbraith's counsel is to do nothing, wait, and open the Fed to genuinely new thinking.

Read the piece:

Kevin Warsh’s call for fresh thinking at the Fed runs up against a deeper problem. The tools and concepts guiding monetary policy may no longer fit an economy reshaped by AI, shifting prices, and the fading power of interest rates.

09/09/2026

Thomas Ferguson joined Background Briefing Ian Masters to discuss why the political center collapsed. What looks like a sudden political crisis, they argue, is the result of an economy and political system that has failed most workers for forty years. Real wages and incomes have stagnated, the labor share of GDP has steadily fallen, and the income share of the top 1 percent has climbed, regardless of which party held the presidency.

Tune in here:

We begin with the embarrassing press conference Jared Kushner and Steve Witkoff held in Kyiv in which they parrotted Kremlin talking points in calling for an end to Puin’s war on his terms and when asked by a Ukrainian reporter why they support a war criminal, Witkoff replied that Putin has always...

09/03/2026

The collapse of America's political center isn't a mystery. It's what happens when an economy abandons most workers for decades. Thomas Ferguson, Servaas Storm, and Jie Chen on the macroeconomic roots of the crisis. New from INET:

The collapse of America's political center isn't a mystery. What looks like a sudden political crisis is really the result of an economy that's been quietly abandoning ordinary workers for decades.

08/19/2026

Microsoft spent $506 billion on buybacks and dividends from 2006 to 2025, 71% of its profits, while laying off thousands. Why would AI pay off any differently in a system built like this? Lynn Parramore on AI and the shareholder-value machine. New from INET:

Silicon Valley promises abundance, but corporate America is built for extraction. The underlying operating system is stuck on making big shareholders rich the expense of everyone else. It’s time for a reboot. *From the “AI and the Future of the American Worker,” a series on how artificial inte...

08/10/2026

Something happened to the American economy long before AI arrived. Almost nobody sees it.

It changed the way companies thought about growth, productivity -- and who should benefit from it. AI is landing right in the middle of that system. The connection is easy to miss, but once you see it, you’ll realize how powerful — and perilous — it is.

Lynn Parramore pulls back the curtain on the system hiding in plain sight.
https://www.ineteconomics.org/perspectives/blog/the-ai-boom-runs-on-an-even-more-dangerous-machine-part-1

08/06/2026

You can't fix American health care by regulating insurers alone. Hospitals and the conglomerates that own them are where enormous amounts of money goes, Phillip Alvelda and Thomas Ferguson argue, in a new memo to the Democratic members of the Senate Finance Committee. New from INET:

Senate Finance Committee Democrats are seeking evidence and proposals to shape health-care legislation. Their critique of insurers has merit, but reforms confined to insurance risk leaving hospitals, conglomerates, and much of the system’s extraction untouched, sets the stage for further disappoin...

07/28/2026

The economy isn't delivering for most people. The question is why, and whether economics as a field is even asking the right questions.

INET was founded after the 2008 financial crisis, when the crash exposed huge blind spots in mainstream economic thinking. The models and predictions failed. Much of the field carried on with business as usual. We were built to do something different.

That means funding researchers who study what actually shapes the economy most people live in: inequality, corporate power, financial instability, and the long-run forces mainstream economics tends to treat as someone else's problem. Our scholars draw on history, political science, sociology, and other disciplines that conventional economics too often leaves out. They've influenced debates in Congress, shaped coverage in the FT, the NYT, and the BBC, and built a global community of 25,000 young economists in 120 countries through our Young Scholars Initiative.

If the official explanations for how the economy works have never quite satisfied you, you're in the right place. New research, sharp analysis, and ideas that take the hard questions seriously. All at https://www.ineteconomics.org/