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on Post Keynesian Economics |
| By: | Eloy Fisher; Javier Lopez Bernardo |
| Abstract: | This paper describes the political economy of shadow banking and how it relates to the dramatic institutional changes experienced by global capitalism over past 100 years. We suggest that the dynamics of shadow banking rest on the distributive tension between workers and firms. Politics wedge the operation of the shadow financial system as government policy internalizes, guides, and participates in dealings mediated by financial intermediaries. We propose a broad theoretical overview to formalize a stock-flow consistent (SFC) political economy model of shadow banking (stylized around the operation of money market mutual funds, or MMMFs). Preliminary simulations suggest that distributive dynamics indeed drive and provide a nest for the dynamics of shadow banking. |
| Keywords: | Political Cycles; Debt and Public Finance; Shadow Banking; Political Economy of Finance; Kaleckian Macrodynamics; Stock-Flow Consistent (SFC) Modeling; Political Macroeconomic Models |
| JEL: | E12 E62 E63 H5 H6 P16 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_801&r=pke |
| By: | Saskia Vossenberg (Consultant Gender and Women's Political Empowerment, NIMD | Netherlands Institute for Multiparty Democracy; External Research fellow 'Women and Entrepreneurship in Developing Countries', Maastricht School of Management; Program manager 'Women's Entrepreneurship Promotion', Maastricht School of Management) |
| Abstract: | How can we move the debate beyond feminist critique and present policy-makers and development practitioners with premises for entrepreneurship promotion in its attempt to overcome issues of gender inequality in economic growth and development? Feminist epistemologies can offer a set of conceptual advances and tools of analysis to define goals, problems and solutions for entrepreneurship promotion. By means of a literature review it is argued that a critical realist approach, as found in standpoint feminism, provides a strong basis for thinking through feminist concerns about entrepreneurship promotion. Consequently, four premises for feminist driven entrepreneurship promotion are presented. |
| Keywords: | feminist theory, female entrepreneurship, developing countries, entrepreneurship promotion, policy. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2014/14&r=pke |
| By: | Olivier Giovannoni |
| Abstract: | This series of working papers explores a theme enjoying a tremendous resurgence: the functional distribution of income--the division of aggregate income by factor share. This first installment surveys some landmark theories of income distribution. Some provide a technology-based account of the relative shares while others provide a demand-driven explanation (Keynes, Kalecki, Kaldor, Goodwin). Two questions lead to a better understanding of the literature: is income distribution assumed constant?, and is income distribution endogenous or exogenous? However, and despite their insights, these theories alone fail to fully explain the current deterioration of income distribution. Subsequent installments are dedicated to analyzing the empirical literature (part II), to the measurement and composition of the relative shares (part III), and to a study of the role of economic policy (part IV). |
| Keywords: | Wage Share; Labor Share; Profit Share; Ergodicity; Technology |
| JEL: | D33 E24 E25 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_803&r=pke |
| By: | Olivier Giovannoni |
| Abstract: | In this second part of our study we survey the rapidly expanding empirical literature on the determinants of the functional distribution of income. Three major strands emerge: technological change, international trade, and financialization. All contribute to the fluctuations of the labor share, and there is a significant amount of self-reinforcement among these factors. For the case of the United States, it seems that the factors listed above are by order of increasing importance. We conclude by noting that the falling US wage shares cointegrates with rising inequality and a rising top 1 percent income share. Thus, all measures of income distribution provide the same picture. Liberalization and financialization worsen economic inequality by raising top incomes, unless institutions are strongly redistributive. The labor share has also fallen, for structural reasons and for reasons related to economic policy. Such explanations are left to parts III and IV of our study, respectively. Part I investigated the theories of income distribution. |
| Keywords: | Wage Share; Labor Share; Profit Share; Technology; International Trade; Finance; Bargaining Power |
| JEL: | D33 E24 E25 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_804&r=pke |
| By: | Thorvald Grung-Moe |
| Abstract: | Central banks responded with exceptional liquidity support during the financial crisis to prevent a systemic meltdown. They broadened their tool kit and extended liquidity support to nonbanks and key financial markets. Many want central banks to embrace this expanded role as "market maker of last resort" going forward. This would provide a liquidity backstop for systemically important markets and the shadow banking system that is deeply integrated with these markets. But how much liquidity support can central banks provide to the shadow banking system without risking their balance sheets? I discuss the expanding role of the shadow banking sector and the key drivers behind its growing importance. There are close parallels between the growth of shadow banking before the recent financial crisis and earlier financial crises, with rapid growth in near monies as a common feature. This ebb and flow of shadow-banking-type liabilities are indeed an ingrained part of our advanced financial system. We need to reflect and consider whether official sector liquidity should be mobilized to stem a future breakdown in private shadow banking markets. Central banks should be especially concerned about providing liquidity support to financial markets without any form of structural reform. It would indeed be ironic if central banks were to declare victory in the fight against too-big-to-fail institutions, just to end up bankrolling too-big-to-fail financial markets. |
| Keywords: | Financial Regulation; Financial Stability; Monetary Policy; Central Bank Policy |
| JEL: | E44 E52 E58 G28 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_802&r=pke |
| By: | Rodrik, Dani |
| Abstract: | The contemporary approach to political economy is built around vested interests -- elites, lobbies, and rent-seeking groups which get their way at the expense of the general public. The role of ideas in shaping those interests is typically ignored or downplayed. Yet each of the three components of the standard optimization problem in political economy – preferences, constraints, and choice variables – rely on an implicit set of ideas. Once the manner in which ideas enter these frameworks is made explicit, a much richer and more convincing set of results can be obtained. In particular, new ideas about policy—or policy entrepreneurship—can exert an independent effect on equilibrium outcomes even in the absence of changes in the configuration of political power. |
| Keywords: | Policy Innovations; Political Economy |
| JEL: | F5 P16 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9734&r=pke |
| By: | Anagol, Santosh; Etang, Alvin; Karlan, Dean S. |
| Abstract: | We examine the returns from owning cows and buffaloes in rural India. We estimate that when valuing labor at market wages, households earn large, negative average returns from holding cows and buffaloes, at negative 64% and negative 39% respectively. This puzzle is mostly explained if we value the household’s own labor at zero (a stark assumption), in which case estimated average returns for cows is negative 6% and positive 13% for buffaloes. Why do households continue to invest in livestock if economic returns are negative, or are these estimates wrong? We discuss potential explanations, including labor market failures, for why livestock investments may persist. |
| Keywords: | Investment; Labor markets; Livestock; Profits; Savings |
| JEL: | E21 M4 O12 Q1 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9639&r=pke |
| By: | Crafts, Nicholas; O'Rourke, Kevin Hjortshøj |
| Abstract: | This paper surveys the experience of economic growth in the 20th century with a focus on technological change at the frontier together with issues related to success and failure in catch-up growth. A detailed account of growth performance based on historical national accounts data is given and is accompanied by a review of growth accounting evidence on the sources of economic growth. The key features of our analysis of divergence in growth outcomes are an emphasis on the importance of ‘directed’ technical change, of institutional quality, and of geography. We provide brief case studies of the experience of individual countries to illustrate these points. |
| Keywords: | catch-up growth; divergence; growth accounting; technical change |
| JEL: | N10 O33 O43 O47 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9633&r=pke |