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on Post Keynesian Economics |
| By: | L. Randall Wray |
| Abstract: | In the current global financial crisis, economists and policymakers have reembraced Big Government as a means of preventing the reoccurrence of a debt-deflation depression. The danger, however, is that policy may not downsize finance and replace money manager capitalism. According to Senior Scholar L. Randall Wray, we need a permanently larger fiscal presence, with more public services. His advice to President Obama is to discard all of former Treasury Secretary Paulson's actions. Wray believes that we can afford any necessary spending and bailouts, and that these actions will not burden our grandchildren. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_99&r=pke |
| By: | Freeman, Alan |
| Abstract: | Since world war II there have been two quite distinct phases of world growth. In about 1965, a long slowdown set in which has still not ended. Robert Brenner (2002, 2003) has re-ignited the debate about its causes, claiming that nothing in either present or past economic theory explains it. He argues for a ‘third explanation’, alternative both to the profit-share hypothesis which dominates today, and the rising output-capital ratio account associated with Marx and Kalecki. Empirically, the evidence overwhelmingly shows the output-capital ratio is a dominant cause of postwar movements in the US profit rate; thus what Brenner maintains is theoretically impossible, is empirically true. The paper dissects this contradiction which, if economics proceeded scientifically, would lead to a radical critique of its own paradigm, but has instead led it to suppress and ignore the only coherent alternative. The paper shows Brenner’s rejection of the Marx-Kalecki framework arises because his theoretical paradigm, adapted uncritically from his critics, cannot allow for the effect of falling prices on capital stocks. His own ‘third explanation’ is incompatible with this same framework and can be sustained only by understanding it as the mechanism behind, or ultimate cause of, the movement of the output-capital ratio in price terms. |
| Keywords: | crisis; inequality; Brenner; Value; profit rate; long waves; world systems; TSSI; temporalism |
| JEL: | B51 E32 O30 B4 |
| Date: | 2009–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14147&r=pke |
| By: | David Colander (Department of Economics, Middlebury College); Hans Föllmer (Department of Mathematics, Humboldt University Berlin); Armin Haas (Potsdam Institute for Climate Impact Research); Michael Goldberg (Whittemore School of Business & Economics, University of New Hampshire); Katarina Juselius (Department of Economics, University of Copenhagen); Alan Kirman (GREQAM, Université d’Aix-Marseille lll); Thomas Lux (Department of Economics, University of Kiel); Birgitte Sloth (Department of Business and Economics, University of Southern Denmark, Odense) |
| Abstract: | The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models. |
| Keywords: | financial crisis; academic moral hazard; ethic responsibility of researchers |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0903&r=pke |
| By: | David Colander |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0902&r=pke |