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on Post Keynesian Economics |
| By: | Jochen Hartwig (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | The Review of Political Economy (ROPE) welcomed the year 2009 with an issue in which the first two articles use an interesting yet not very popular modeling framework, namely the aggregate demand/aggregate supply (D/Z) model from Chapter 3 of Keynes’s General Theory. Unfortunately, as I intend to show in this paper, the interpretations of Keynes’s D/Zmodel proposed by these two articles contradict each other. To resolve this unsatisfactory state of affairs, I will offer an evaluation of which of the two interpretations is more in line with Keynes’s own suggestions. |
| Keywords: | Keynes’s D/Z model, effective demand, Post Keynesianism |
| JEL: | E12 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:09-243&r=pke |
| By: | Giancarlo Bertocco (Department of Economics, University of Insubria, Italy) |
| Abstract: | Contemporary monetary theory, by accepting the theses of the Loanable funds theory, distances itself from Keynes, who considered the rate of interest as an exclusively monetary phenomenon, and overlooks the arguments Keynes used, following publication of the General Theory, to respond to the criticism of supporters of the Loanable funds theory such as Ohlin and Robertson. This paper aims to assert that the explicit consideration of the role of banks in financing firms‘ investments connected with the specification of the finance motive does not imply acceptance of the LFT, which holds that the interest rate is a real phenomenon determined by saving decisions, but makes it possible to elaborate a theory of credit alternative to the LFT and a sounder theory of the non neutrality of money than the one based on the liquidity preference theory. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ins:quaeco:qf0904&r=pke |
| By: | Elisabetta De Antoni |
| Abstract: | The heterodoxy of Robert Clower, Axel Leijonhufvud and Hyman Minsky consisted in dispensing with the dominant assumption according to which the system spontaneously tends to a situation of full coordination. In analysing the effective disequilibrium behaviour of the system, all three came to the conclusion that monetary and financial forces have a crucial importance for coordination and that their role can be highly destabilising. Contrary to the dominant theory, all three offer useful insights to understand what is happening today. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0908&r=pke |
| By: | Andrew Sharpe; Jean-François Arsenault |
| Abstract: | This report looks at how the economic crisis has unfolded in Canada and what will be the impacts on economic wellbeing. The shortfall is estimated to be approximately $12,000 ($2007) per capita. In other words, given no economic crisis, GDP per capita in Canada would have likely been $1,736 higher on average each year over the 2008-2014 period. Between October 2008 – the month at which employment peaked in Canada – and May 2009, net employment fell by 362,500 persons. The negative effects of unemployment go well beyond loss of income. Roughly 60 per cent of the newly unemployed, compared to about 40 per cent in recent years, receive regular EI benefits, reflecting the concentration of employment losses among long term full-time employees (e.g. auto workers). Based on the experience of the recession of the early 1990s, we should expect an increase of about 4 percentage points in the after-tax poverty rate, which would reach 13.2 per cent in 2010. |
| Keywords: | Living standards, quality of life, income, housing affordability, wealth, inequality, poverty, net worth, income, disposable income, low income, labour market, economic security, employment, unemployment, economics crisis |
| JEL: | D63 D60 D30 D31 J30 R20 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:0906&r=pke |
| By: | Marco Guerrazzi |
| Abstract: | Following the Farmer’s (2008a-b, 2010) micro-foundation of the General Theory, I build a competitive search model in which output and employment are demand-driven, prices are flexible, the nominal wage is used as numeraire and agents are divided in two categories: wage and profit earners. Within this framework, I show that the model economy has a continuum of demand constrained equilibria that might be consistent with a certain degree of endogenous real wage stickiness. Moreover, calibrating and simulating the model economy in order to fit the US first-moments data, I show that this setting can provide a rationale for the Shimer’s (2005) puzzle, i.e., the relative stability of real wages in spite of the large volatility of labor market tightness. |
| Keywords: | Stochastic Dynamics, Competitive Search, Old Keynesian Economics, Demand Constrained Equilibrium, Numerical Simulations. |
| JEL: | E12 E24 J63 J64 |
| Date: | 2010–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2010/95&r=pke |