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on Post Keynesian Economics |
| By: | Philip Arestis; Michail Karouglou; Kostas Mouratidis (Department of Economics, The University of Sheffield) |
| Abstract: | This paper estimates central bank policy preferences in the case of the European Monetary Union and of the UK. We do so, by adopting the framework suggested by Cecchetti and Ehrmann (1999), which, however, we extent in two respects. First, we allow policy preferences to be asymmetric by assuming that inflation and output follow a Markov process. Second, following Bean (1998) we introduce dynamics in the supply and demand relationships. In doing so we estimate state-dependent policy frontiers. Empirical results from the static model show that monetary policy in the European Monetary Union and in the UK put a lot of weight on price stability. However, there is evidence of 'price puzzle' especially in the high volatility regime. The price puzzle might be the by-product of frequent realignments in the European Monetary System currency crises in 1992, 1993 and 1995 and of the more recent 2008 financial crisis. Estimates of the optimal policy frontier suggest that although the UK enjoys higher anti-inflatonary credibility, it also faces a higher trade-off between inflation and output variability than the European Monetary Union. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2011019&r=pke |
| By: | Rodrik, Dan (Harvard University) |
| Abstract: | Novelists have a better track record than economists at foretelling the future. Consider then Gary Shteyngart's timely comic novel "Super Sad True Love Story" (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy. The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin. The country's bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore. China and sovereign wealth funds have parceled America's most desirable real estate among themselves. Poor people are designated as LNWI ("low net worth individuals") and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. This is sheer fantasy of course, but one that seems to resonate well with the collective mood. A future in which the U.S and other advanced economies are forced to play second fiddle to the dynamic emerging economies in Asia and elsewhere is rapidly becoming cliche. This vision is based in part on the very rapid pace of economic growth that emerging and developing economies experienced in the run-up to the global financial crisis of 2008-2009. Latin America benefited from a pace of economic development that it had not experienced since the 1970s, and Africa began to close the gap with the advanced countries for the first time since countries in the continent received their independence. Even though most of these countries were hit badly by the crisis, their recovery has also been swift. Optimism on developing countries is matched by pessimism on the rich country front. The United States and Europe have emerged from the crisis with debilitating challenges. They need to address a crushing debt burden and its unpleasant implications for fiscal and monetary policy. They also need to replace growth models which were based in many instances on finance, real estate, and unsustainable levels of borrowing. Japan has long ceased to exhibit any growth dynamism. And the eurozone's future remains highly uncertain--with the economic and political ramifications of its unraveling looking nothing less than scary. In such an environment, rapid growth in the developing world is the only thing that could propel the world economy forward and generate increasing demand for rich-country goods and services--the only silver lining in an otherwise dreary future. The question I address in this paper is whether this gap in performance between the developed and developing worlds can continue, and in particular, whether developing nations can sustain the rapid growth they have experienced of late. I will not have anything to say on the prospects for the advanced economies themselves, assuming, along with conventional wisdom, that their growth will remain sluggish at best. My focus is squarely on the developing and emerging countries and on the likelihood of continued convergence. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-033&r=pke |
| By: | C. J. Polychroniou |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_688&r=pke |
| By: | Marjit, Sugata; Mandal, Biswajit |
| Abstract: | The existing literature on poverty has discussed about the conflict between income-based measure and nutrition-based measure. However, the role of social inequality in influencing individual’s consumption and inducing greater consumption of the so called status good has been relatively undermined. This paper attempts to show that in presence of inequality a status driven utility function reconciles the conflict between income based and nutrition based measures of poverty. |
| Keywords: | Inequality; Utility; Poverty |
| JEL: | D11 D63 I3 I32 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33745&r=pke |
| By: | Gustavo Britto (Cedeplar/UFMG); João Prates Romero (FACE/UFMG) |
| Abstract: | This paper presents growth models based on Kaldor´s inaugural lectures, as well as their most recent extensions. Beyond the display of the evolution of such models, the paper intends to demonstrate that the original kaldorian models have served as a solid foundation over which new formulations have been built, continually demonstrating the relevance of the author’s ideas. The model’s extensions, other than allowing for the incorporation of an increasing number of economic characteristics originally proposed by Kaldor, also have considerably increased the analytical scope of the field by establishing theoretical links with other schools of thought. A neo-schumpeterian view is possible via the introduction of the impacts of technological gaps and innovation into the models. In its turn, a structuralist perspective is obtained by decomposing trade elasticities. Finally, from kaleckian growth models, the importance of a multi-sectoral analysis and of distinct distributive regimes over economic growth is brought to the models. |
| Keywords: | Kaldor, Income Elasticities, Growth, Structural Change |
| JEL: | F43 L16 O11 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td449&r=pke |