Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209174 
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 931
Publisher: 
Levy Economics Institute of Bard College, Annandale-on-Hudson, NY
Abstract: 
This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the "costs" of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as well as shifting resources from current destructive and inefficient uses to GND projects. We argue that financial affordability cannot be an issue for the sovereign US government. Rather, the problem will be inflation if sufficient resources cannot be diverted to the GND. And if inflation is likely, we need to put in place anti-inflationary measures, such as well-targeted taxes, wage and price controls, rationing, and voluntary saving. Following Keynes, we recommend deferred consumption as our first choice should inflation pressures arise. We conclude that it is likely that the GND can be phased in without inflation, but if price pressures do appear, deferring a small amount of consumption will be sufficient to attenuate them.
Subjects: 
Green New Deal
Keynes
How to Pay for the War
Modern Money Theory
JEL: 
B50
E0
E2
E3
H6
Q0
Document Type: 
Working Paper

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