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on Post Keynesian Economics |
| By: | Antonio J. Alves Jr.; Gary A. Dymski; Luiz Fernando de Paula |
| Abstract: | This paper aims at clarifying the relationship between individual bank and banking industry behavior in credit expansion. We argue that the balance sheet structure of an individual bank is only partially determined by its management decision about how aggressively to expand credit; it is also determined by the balance sheet positions of other banks. This relationship is explicitly shown by a disaggregation of the variable that enters into the simple money multiplier. The approach developed here opens a way to integrating the micro and macro levels in a Keynesian banking-system analysis. |
| JEL: | E12 E44 E32 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2004:077&r=pke |
| By: | Antonio J. A. Meirelles; Gilberto Tadeu Lima |
| Abstract: | It is developed a mathematical post-keynesian macromodel of capacity utilization and growth in which the supply of credit-money is endogenous and firms' debt position - and thus the financial fragility of the economy - is explicitly modeled. Both the influence of interest rate and indebtedness on capacity utilization and the rates of profit and growth, on the one hand, and the effect of the parameters of the saving and investment functions on financial fragility, on the other hand, are carefully analyzed. |
| JEL: | E12 E22 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2004:094&r=pke |
| By: | Gilberto Tadeu Lima; Antonio J. A. Meirelles |
| Abstract: | It is developed a dynamic macromodel of utilization and growth of productive capacity, in which the supply of credit-money is endogenous and firms' debt position - and thus the financial fragility of the economy à la Hyman Minsky - is explicitly modeled. The rate of interest is set as a markup over the base rate, which is exogenously determined by the monetary authority. Banking markup varies with changes in economic activity, which is measured by capacity utilization, while firms' debt position varies with the rates of interest, profit and capital accumulation. Regarding dynamics, it is shown the possibility of relating the stability properties of a system with the interest rate and the debt ratio as state variables to the type of minskyan regime - hedge, speculative, Ponzi - which prevails. |
| JEL: | E12 E22 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2004:074&r=pke |
| By: | Nelson H. Barbosa Filho |
| Abstract: | This paper presents a one-sector demand-led model where capital and non-capital expenditures determine income growth and distribution. The basic idea is to build a simple dynamical accounting model for the growth rate of the capital stock, the ratio of non-capital expenditures to the capital stock, and the labor share of income. By inserting some stylized behavioral functions in the identities, the paper analyzes the implications of alternative theoretical closures of income determination (effective demand) and distribution (social conflict). On the demand side, two behavioral functions define the growth rates of capital and non-capital expenditures as functions of capacity utilization (measured by the output-capital ratio) and income distribution (measured by the labor share of income). On the distribution side, another two behavioral functions describe the growth rates of the real wage and labor productivity also as functions of capacity utilization and income distribution. The growth rates of total factor productivity and employment follow residually from the accounting identities and, in this way, the demand-led model can encompass supply-driven models as a special case. |
| JEL: | E25 O40 E32 O41 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2004:038&r=pke |
| By: | Louis Lévy-Garboua (TEAM); Claude Meidinger (TEAM); Benoît Rapoport (TEAM) |
| Abstract: | The goal of this paper is to draw some lessons for economic theory from research in psychology, social psychology and, more briefly, in biology, which purports to explain the "formation" of social preferences. We elicit the basic mechanisms whereby a variety of social preferences are determined in a variety of social contexts. Biological mechanisms, cultural transmission, learning, and the formation of cognitive and emotional capacities shape social preferences in the long or very long run. In the short run, the built-in capacities are utilized by individuals to construct their own context-dependent social preferences. The full development of social preferences requires consciousness of the individual's similarities and differences with others, and therefore knowledge of self and others. A wide variety of context-dependent social preferences can be generated by just three cognitive processes : identification of self with known others, projection of known self onto partially unknown others, and categorization of others by similarity with self. The self can project onto similar others but is unable to do so onto dissimilar others. The more can the self identify with, or project onto, an other the more generous she will be. Thus the self will find it easier to internalize and predict the behavior of an in-group than an out-group and will generally like to interact more with the former than with the latter. The main social motivations can be simply organized by reference to social norms of justice of fairness that lead to reciprocal behavior, some kind of self-anchored altruism that provokes in-group favoritism, and social drives which determine an immediate emotional response to an experienced event like hurting a norm's violator or helping an other in need. |
| Keywords: | Formation of social preferences, psychology, social psychology sociale, biology |
| JEL: | B40 D63 D64 D70 D80 Z13 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:bla04010&r=pke |
| By: | Ralf Elsas; Frank Heinemann; Marcel Tyrell |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:fra:franaf:141&r=pke |
| By: | David Laidler (University of Western Ontario) |
| Abstract: | From Henry Thornton (1802), through Walter Bagehot (1873) until Ralph Hawtrey (1932), the lender of last resort function was central to the theory of central bank behaviour. In that role, the bank was urged to aid individual banks in times of crisis, but also and crucially to provide liquidity to the market. In modern circumstances, banking systems are subject to a degree of regulation and oversight that did not exist before the Great Depression, and the first element in the lender of last resort's role has become rather unimportant. The latter element remains crucial in dealing with financial crises, however, even in a world in which, in normal times, monetary policy is executed through interest rates rather than the reserve base. |
| Keywords: | monetary policy; central bank; financial crisis; liquidity |
| JEL: | B12 B22 E5 E58 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:20048&r=pke |
| By: | Samuel Bowles (University of Massachusetts Amherst); Arjun Jayadev (University of Massachusetts Amherst) |
| Abstract: | We explore the exercise of power in perpetuating status quo institutions. We give empirical examples of the economic importance of power and offer a definition of this elusive term. We then investigate the role of power in a modern capitalist economy, borrowing ideas from the classical economists (unproductive labor, profit-driven investment), Marx (the labor-disciplining effect of unemployment) and the contemporary theory of incomplete contracts(the role of monitoring and enforcement rents). Our model suggests that a significant portion of an economy's productive potential may be devoted to the exercise of power and to the perpetuation of social relationships of domination and subordination. We then measure these resources in labor units using the concept of guard labor, finding it to be a significant and growing fraction of the U.S. labor force. We also document substantial cross national differences in the extent of guard labor and the strong statistical association between the extent of income inequality and the fraction of the labor force that is constituted by guard labor. We close with some speculations concerning the role of guard labor in the process of economic development and how economies might function better with more carrot and less stick. |
| Keywords: | enforcement rents, institutions, guard labor, supervision, social conflict, labor-management |
| JEL: | O17 P50 N32 B52 K42 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2004-15&r=pke |
| By: | Samuel Bowles (University of Massachusetts Amherst); Yongjin Park (Connecticut College) |
| Abstract: | We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption taxes. |
| Keywords: | Interdependent utility, relative income, social comparisons, inequality, emulation, Veblen effects, work hours |
| JEL: | H23 D31 D62 J22 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2004-14&r=pke |
| By: | Mauro Boianovsky; Hans-Michael Trautwein |
| Abstract: | The paper discusses the League of Nations's project to produce consensus in the interpretation of aggregate economic fluctuations in the 1930s. G. Haberler started working in 1934 at the League of Nations headquarters in Geneva on a broad enquiry that should lead to a synthesis of the several conflicting explanations of the causes of the business cycles, which culminated with the publication of his classic book in 1937. The paper makes use of archival material hitherto unexplored - such as correspondence and verbatim records of conferences - to show how the discussions with economists at the time were incorporated into Haberler's final report, and to interpret in what extent the attempt to reach a consensus was successful. |
| JEL: | B22 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2004:002&r=pke |
| By: | Karel-Jan Alsem; Steven Brakman; Lex Hoogduin; Gerard Kuper |
| Abstract: | It is sometimes argued that news reports in the media suffer from biased reporting. Mullainathan and Shleifer (2002) argue that there are two types of media bias. One bias, called ideology, reflects a news outlet’s desire to affect reader opinions in a particular direction. The second bias, referred to as spin, reflects the outlet’s attempt to simply create a memorable story. Competition between outlets can eliminate the effect of ideological bias, but increases the incentive to spin stories. We examine whether we find some evidence of spin in Dutch newspaper reporting on the state of the economy. If newspapers are indeed able to create memorable stories this should, according to our hypothesis, affect the opinion of readers with respect to the state of the economy. Sentiments about the actual state of the economy could be magnified by spin. As a result, consumer confidence – a variable that routinely measures the opinion on the state of the economy – can be expected to be affected not only by economic fundamentals, but also by the way these fundamentals are reported. We construct a variable that reflects the way consumers perceive economic news reported in newspapers. We find that this variable indeed has a significant impact on consumer confidence, which is short-lived. |
| JEL: | E20 E21 E30 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1328&r=pke |
| By: | Welch, P.; Dolfsma, W. (Erasmus Research Institute of Management (ERIM), Erasmus University Rotterdam) |
| Abstract: | The development of economic thought is not unlike the development of technological knowledge: paradigms can be discerned over time and across the field. Indeed, in its history economics has experienced paradigm shifts. There is no reason why it will not do so again in the future. In technology, as in economics, paradigms do not emerge from the blue, but build on precursors, possibly from fields other than our own discipline. Recognizing this draws our attention to other fields, preparing us for a possible paradigm shift. Understanding these other paradigms might best be done using historian Wight?s concepts of plot structure, myths, and cultural endowment. A better understanding of different paradigms allows us to combine ideas from other (sub-) fields with our own so that we are likely to come up with better ideas. In the meantime, as the parallel with the composition of music and the playing of chess shows, we compose better articles in the meantime because we are aware of the rules guiding our own compositions, yet. The history of our own field may be the first and best source for such inspiration. |
| Keywords: | Knowledge paradigms;paradigm shifts;myths & plot structure;writing by the rules;history of economics; |
| Date: | 2004–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30001953&r=pke |