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on Post Keynesian Economics |
| By: | Eckhard Hein (Macroeconomic Policy Institute (IMK), Hans Boeckler Foundation, Duesseldorf); Engelbert Stockhammer (Department of Economics, Vienna University of Economics & B.A.) |
| Abstract: | New Consensus Models (NCMs) have been criticised by Post-Keynesians (PKs) for a variety of reasons. The paper presents a model that synthesises several of the PK arguments. The model consists of three classes: rentiers, firms and workers. It has a short-run inflation barrier derived from distribution conflict between these classes, which is endogenous in the medium run. Distribution conflict does not only affect inflation but also income shares. On the demand side the income classes have different saving propensities. We apply a Kaleckian investment function with expected sales and internal funds as major determinants. The paper analyses short-run stability and includes medium-run endogeneity channels for the Non-Accelerating-Inflation-Rate-of-Unemployment (NAIRU): persistence mechanisms in the labour market, adaptive wage and profit aspirations, investment in capital stock and cost effects of interest rate changes. The model is used to analyse NCM and PK policy assignments and policy rules. We argue that improved employment without increasing inflation will be possible, if macroeconomic policies are coordinated along the following lines: The central bank targets distribution, wage bargaining parties target inflation and fiscal policies are applied for short- and medium-run real stabilisation purposes. |
| JEL: | E12 E20 E52 E61 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp110&r=pke |
| By: | John Weeks (Professor Emeritus, School of Oriental and African Studies, University of London); Terry McKinley (International Poverty Centre) |
| Keywords: | Macroeconomic; MDG; Sub-Saharan Africa; Poverty |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:pbrief:4&r=pke |
| By: | Chowdhury, Khorshed (University of Wollongong); Saleh, Ali Salman (University of Wollongong) |
| Abstract: | This paper examines the long-run and short-run relationships between the current account deficit, budget deficit, savings and investment gap and trade openness in Sri Lanka using the autoregressive distributive lagged (ARDL) approach. The time series properties of the variables, in the presence of endogenous structural breaks, was previously analysed using Perron’s (1997) additive outlier (AO) and innovational outlier (IO) models. The empirical analysis supports the Keynesian view that a link exists between the current account, budget deficit and savings and investment gap. We found that trade openness has a positive effect on the current account deficit, but is statistically insignificant, and offer some strategies to stabilise the budget deficit and current account deficits in Sri Lanka. |
| Keywords: | twin deficit, structural change, unit roots, ARDL |
| JEL: | E60 E62 C22 F41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp07-09&r=pke |
| By: | Broadberry, Stephen (Department of Economics, University of Warwick) |
| Abstract: | This paper offers a historical appraisal of recent developments in the theory of very long run growth, focusing on three main areas: (1) linkages between wages, population and human capital (2) interactions between institutions, markets and technology and (3) sustaining the process of economic growth once it has started. Historians as well as economists have recently begun to break away from the traditional practice of using different methods to analyse the world before and after the industrial revolution. However, tensions remain between the theoretical and historical literatures, particularly over the unit of analysis (the world or particular countries) and the role of historical contingency |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:818&r=pke |