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on Post Keynesian Economics |
| By: | McCloskey, Deirdre |
| Abstract: | Two centuries ago the world’s economy stood at the present level of Chad. Two centuries later the world supports more than six-and-half times more people. Starvation worldwide is at an all-time low, and falling. Literacy and life expectancy are at all-time highs, and rising. How did average income in the world move from $3 to $30 a day? Economics mattered in shaping the pattern but to understand it economists must know the history and historians must know the economics. Material, economic forces were not the original and sustaining causes of the modern rise, 1800 to the present. Ethical talk runs the world. Dignity encourages faith. Liberty encourages hope. The claim is that the dignity to stand in one’s place and the liberty to venture made the modern world. An internal ethical change allowed it, beginning in northwestern Europe after 1700. For the first time on a big scale people looked with favor on the market economy, and even on the creative destruction coming from its profitable innovations. The world began to revalue the bourgeois towns. If envy and local interest and keeping the peace between users of old and new technologies are allowed to call the shots, innovation and the modern world is blocked. If bourgeois dignity and liberty are not on the whole embraced by public opinion, the enrichment of the poor doesn’t happen. The older suppliers win. The poor remain unspeakably poor. By 1800 in northwestern Europe, for the first time in economic history, an important part of public opinion came to accept creative accumulation and destruction in the economy. People were willing to change jobs and allow technology to progress. People stopped attributing riches or poverty to politics or witchcraft. The historians of the world that trade created do not acknowledge the largest economic event in world history since the domestication of plants and animals, happening in the middle of their story. Ordinary Europeans got a dignity and liberty that the proud man’s contumely had long been devoted to suppressing. The material economy followed. |
| Keywords: | economics; innovation; industrial revolution; bourgeoisie; modern world |
| JEL: | B1 O40 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16805&r=pke |
| By: | Dean Baker |
| Abstract: | The new economic projections from the Congressional Budget Office show the economy remaining well below its potential level of output until 2014. The projections show the unemployment rate averaging 10.2 percent in 2010 and gradually edging down to the long-term sustainable rate of 4.8 percent by 2014. Over this 4 year period, the workforce will face a substantially higher risk of unemployment or underemployment due to insufficient demand in the economy. This paper highlights some of the main implications of CBO’s new economic projections. |
| Keywords: | right to rent, foreclosures, housing |
| JEL: | E E1 E12 E2 E20 E21 E22 E23 E5 E6 H H6 H61 H62 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-29&r=pke |
| By: | Jan Kregel |
| Abstract: | The term BRIC was first coined by Goldman Sachs and refers to the fast-growing developing economies of Brazil, Russia, India, and China--a class of middle-income emerging market economies of relatively large size that are capable of self-sustained expansion. Their combined economies could exceed the combined economies of today's richest countries by 2050. However, there are concerns about how the current financial crisis will affect the BRICs, and Goldman has questioned whether Brazil should remain within this group. Senior Scholar Jan Kregel reviews the implications of the global crisis for developing countries, based on the factors driving global trade. He concludes that there is unlikely to be a return to the extremely positive conditions underlying the recent sharp increase in growth and external accounts. The key for developing countries is to transform from export-led to domestic demand-led growth, says Kregel. From this viewpoint, Brazil seems much better placed than the other BRIC countries. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_102&r=pke |
| By: | James K. Galbraith |
| Abstract: | A group of experts associated with the Economists for Peace and Security and the Initiative for Rethinking the Economy met recently in Paris to discuss financial and monetary issues; their viewpoints, summarized here by Senior Scholar James K. Galbraith, are largely at odds with the global political and economic establishment. Despite noting some success in averting a catastrophic collapse of liquidity and a decline in output, the Paris group was pessimistic that there would be sustained economic recovery and a return of high employment. There was general consensus that the precrisis financial system should not be restored, that reviving the financial sector first was not the way to revive the economy, and that governments should not pursue exit strategies that permit a return to the status quo. Rather, the crisis exposes the need for profound reform to meet a range of physical and social objectives. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_103&r=pke |
| By: | Eric Tymoigne |
| Abstract: | This study analyzes the trends in the financial sector over the past 30 years, and argues that unsupervised financial innovations and lenient government regulation are at the root of the current financial crisis and recession. Combined with a long period of economic expansion during which default rates were stable and low, deregulation and unsupervised financial innovations generated incentives to make risky financial decisions. Those decisions were taken because it was the only way for financial institutions to maintain market share and profitability. Thus, rather than putting the blame on individuals, this paper places it on an economic setup that requires the growing use of Ponzi processes during enduring economic expansion, and on a regulatory system that is unwilling to recognize (on the contrary, it contributes to) the intrinsic instability of market mechanisms. Subprime lending, greed, and speculation are merely aspects of the larger mechanisms at work. It is argued that we need to change the way we approach the regulation of financial institutions and look at what has been done in other sectors of the economy, where regulation and supervision are proactive and carefully implemented in order to guarantee the safety of society. The criterion for regulation and supervision should be neither Wall Street's nor Main Street's interests but rather the interests of the socioeconomic system. The latter requires financial stability if it's to raise, durably, the standard of living of both Wall Street and Main Street. Systemic stability, not profits or homeownership, should be the paramount criterion for financial regulation, since systemic stability is required to maintain the profitability--and ultimately, the existence--of any capitalist economic entity. The role of the government is to continually counter the Ponzi tendencies of market mechanisms, even if they are (temporarily) improving standards of living, and to encourage economic agents to develop safe and reliable financial practices. See also, Working Paper No. 573.2, "Securitization, Deregulation, Economic Stability, and Financial Crisis, Part II: Deregulation, the Financial Crisis, and Policy Implications." |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_573_1&r=pke |
| By: | Villaveces Niño, Juanita; Rodríguez Lesmes, Paul Andrés |
| Abstract: | May cartoons be considered as a viable and credible source for the study of economics? There is hardly any research on the subject, even though there is a quite significant amount of cartoons with economic content. This suggests that economics (and economists) have not paid enough attention and do not incorporate in their analysis a relevant primary source. The present paper aims to explore the value of using cartoons as a complementary primary source in economic analysis. We present a way of analyzing economic history through cartoons; first, reviewing cartoons which describe particular historical circumstances and second, examining cartoons that represent generic economic situations and are not necessarily linked to a historical period. We choose 17 cartoons, from different cartoonist, especially Colombian cartoonists that may give us an idea of economic matters and economic history. |
| Date: | 2009–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:005746&r=pke |
| By: | Kaushik Basu |
| Abstract: | The financial crisis of 2007-09 began as a local problem in the mortgage finance market in the United States and Europe but, within months, escalated into a general global financial crisis, resulting in collapsing investment not just in developed nations but also in Shanghai, Rio and Mumbai, and has led to a general recession worldwide. The paper builds a rational-expectations, microeconomic model of why the local crisis escalated into a general freeze in credit flows. It then isolates two very different kinds of interventions needed to restore the economy back to health, arguing that government stimulus policy has not had enough impact because a failure to understand the need for the dual intervention. |
| Keywords: | United states, financial crisis, recession, multiple equilibria, credit markets, credit ratings, mortgage finance, finance, Mumbai, developed nations, Shanghai, Rio, microeconmic, economy, health, government, credit, investment, market, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2179&r=pke |