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on Post Keynesian Economics |
| By: | Yasuhiro Sakai (Faculty of Economics, Shiga University) |
| Abstract: | This paper is concerned with the important question of how and to what extent great economists such as Keynes, Knight, Hicks, Samuelson, Takata, and Morishima have been intermingled with each other. Our discussion focuses on the two key concepts in the labor markets; involuntary unemployment and "involuntary employment." On the one hand, there are so many persons in the street who are willing to work at the existing wages but cannot find jobs because of a shortage of the effective demand as a whole. This is clearly the issue of involuntary unemployment, which has been energetically tackled by J. M. Keynes and his followers since the 1930s.On the other hand, since the 1990s, there also have emerged so many people who must work unwillingly for their survivals at the minimal level of wages. This is a new issue of "involuntary employment" or "non-regular workers", which has recently been investigated by Nobuaki Takahashi, a rising Japanese economist. Although the Takahashi approach is an attractive one, it nevertheless seems to remain at the embryo stage, thus requiring further developments in many ways. The second Keynes would urgently be needed. |
| Keywords: | Keynes, involuntary unemployment,Takata,sociological factors,non-regular workers,Takahashi, "involuntary employment" |
| JEL: | B22 E12 E24 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:shg:dpapea:25&r=pke |
| By: | Mehrdad Vahabi (Centre d'Economie de l'Université de Paris Nord (CEPN)) |
| Abstract: | This paper explores the evolution of Kornai’s thought on General Equilibrium Theory (GET) and his position on mainstream economics. Three moments in this evolution will be highlighted starting by rejecting GET and advocating disequilibrium in Anti-Equilibrium (1971). While Kornai does not treat the ‘equilibrium paradigm’ as irrelevant, he suggests an alternative paradigm, namely economic systems theory that he further develops in the eighties as ‘system paradigm’. Economics of Shortage (1980) marks a second phase in which Kornai distinguishes Walrasian equilibrium from normal state or Marshallian equilibrium. In this phase, he supports Marshallian equilibrium rather than disequilibrium. Finally By Force of Thought (2006) is a critical self-appraisal in which Kornai considers Anti-Equilibrium as a ‘failure’ and acknowledges GET as a benchmark of an ideal competitive market. He now advocates a Walrasian equilibrium as an abstract reference model but refuses to consider this model as a description of reality. In this sense, he refuses the New Classical economics. Paradoxically however, his original heterodox concept of ‘soft budget constraint’, irreconcilable with standard microeconomics, has been integrated in new microeconomics as an optimal intertemporal strategy of a maximizing agent in the absence of credible commitments. It will be argued that Kornai’s so-called failure is rather related to his half-in, half-out mainstream position, while his institutionalist system paradigm is still a heterodox research project of the future. |
| Keywords: | Disequilibrium, Economic Systems Theory, General Equilibrium Theory, Marshallian and Walrasian Equilibrium, New Microeconomics, Normal State, System Paradigm |
| JEL: | B3 D5 E1 P2 P5 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:upn:wpaper:2017-16&r=pke |
| By: | Franck, Raphael; Galor, Oded |
| Abstract: | This research explores the long-run effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has had a detrimental effect on standards of living in the long-run. Exploiting exogenous geographic and climatic sources of regional variation in the diffusion and adoption of steam engines during the French industrial revolution, the research establishes that regions in which industrialization was more intensive experienced an increase in literacy rates more swiftly and generated higher income per capita in the subsequent decades. Nevertheless, intensive industrialization has had an adverse effect on income per capita, employment and equality by the turn of the 21st century. This adverse effect reflects neither higher unionization and wage rates nor trade protection, but rather underinvestment in human capital and lower employment in skilled-intensive occupations. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization. Thus, developing economies may benefit from the allocation of resources towards human capital formation rather than towards the promotion of industrial development. |
| Keywords: | Economic Growth; Human Capital; Industrialization; Steam Engine |
| JEL: | N33 N34 O14 O33 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12278&r=pke |
| By: | Joseph E. Stiglitz |
| Abstract: | The economics of information has constituted a revolution in economics, providing explanations of phenomena that previously had been unexplained and upsetting longstanding presumptions, including that of market efficiency, with profound implications for economic policy. Information failures are associated with numerous other market failures, including incomplete risk markets, imperfect capital markets, and imperfections in competition, enhancing opportunities for rent seeking and exploitation. This paper puts into perspective nearly a half century of research, including recent advances in understanding the implications of imperfect information for financial market regulation, macro-stability, inequality, and public and corporate governance; and in recognizing the endogeneity of information imperfections. It explores the consequences of recent advances in technology and the policy challenges and opportunities they present for competition policy and policies regarding privacy and transparency. The paper notes the role that information economics played in stimulating other advances in economics, including contract theory and behavioral economics. It reinvigorated institutional economics, showing how institutions mattered, in some cases explaining institutional features that could not be well-understood in the conventional paradigm, and in others showing how institutional responses to market failures might or might not be welfare enhancing. The paper argues that the new paradigm provides a markedly different, and better, lens for looking at the economy than the older perfect markets competitive paradigm. |
| JEL: | B21 D82 D83 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23780&r=pke |
| By: | Robert C. Allen |
| Abstract: | A new basis for an international poverty measurement is proposed based on linear programming for specifying the least cost diet and explicit budgeting for non-food spending. This approach is superior to the World Bank’s ‘$-a-day’ line because it is (1) clearly related to survival and well being, (2) comparable across time and space since the same nutritional requirements are used everywhere while non-food spending is tailored to climate, (3) adjusts consumption patterns to local prices, (4) presents no index number problems since solutions are always in local prices, and (5) requires only readily available information. The new approach implies much more poverty than the World Bank’s, especially in Asia. |
| Keywords: | absolute poverty,diet problem,linear programming,World Bank poverty line |
| JEL: | I12 I32 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:706&r=pke |
| By: | Ji Young Kang |
| Abstract: | Despite growing interest in the effects of variations in work and family reconciliation policies on female employment across countries, the questions in what way and to what extent production regimes influence female employment provide an important backdrop to the current research. Drawing on Varieties of Capitalism (VoC) literature, I examine the effects of production regimes and work and family reconciliation policies on the gender employment gap simultaneously in 15 Organization for Economic Co-operation and Development (OECD) countries using the Luxembourg Income Study (LIS). Childcare is associated with a lesser degree of gender gap in employment participation and leave generosity has a curvilinear relation with the gender employment gap. Whereas the coordinated market economies themselves are associated with smaller gender gaps in employment participation, in the coordinated market economies leave generosity produces a higher gender employment gap than in the liberal market economies. This research highlights the importance of production regimes in understanding female employment and the interactive effects of leave generosity by production regimes. |
| Keywords: | Gender employment gap,Varieties of Capitalism (VoC),production regimes,work and family reconciliation policies (leave generosity, public childcare) |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:709&r=pke |
| By: | Bryan A. Stuart |
| Abstract: | This paper examines the long-run effects of the 1980-1982 recession on education and income. Using confidential Census data, I estimate generalized difference-in-differences regressions that exploit variation across counties in the severity of the recession and across cohorts in age at the time of the recession. I find that children born in counties with a more severe recession are less likely to obtain a college degree and, as adults, earn less income and experience higher poverty rates. The negative effects on college graduation are most severe and essentially constant for individuals age 0-13 in 1979, suggesting that the underlying mechanisms are a decline in childhood human capital or a long-term decline in parental resources to pay for college. I find little evidence that states with more generous or more progressive transfer systems mitigated these long-run effects. The magnitude of my estimates and the large number of affected individuals suggest that the 1980-1982 recession depresses aggregate economic output today. |
| Keywords: | human capital development, income, education, recessions |
| JEL: | E32 I20 I30 J13 J24 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:17-52&r=pke |
| By: | Richard R. Nelson |
| Date: | 2017–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2017/18&r=pke |
| By: | Joseph E. Stiglitz |
| Abstract: | Most recessions are a result of some shock to the economic system, typically amplified by financial accelerators, and leading to large balance sheet effects of households and firms, which result in the effects persisting. But, over time, the balance sheets get restored. Even banks recover. But episodically, the “shock” is deeper. It is structural. Among advanced countries, the movement from agricultural to manufacturing in the last century, and the more recent movement from manufacturing to the service sector reflect such a large economic transformation. The associated downturns are longer lasting. The usual responses, in particular, monetary policy, are only of limited efficacy. Policies have to be designed to facilitate such transformations: markets on their own typically do not do well. This paper explains why such transformations are associated with persistently high unemployment, and describes the effects of particular government policies. It looks at the lessons of the Great Depression both for the advanced countries and the developing countries as they go through their structural transformations. |
| JEL: | G01 L52 N12 O14 O25 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23794&r=pke |
| By: | Carlos Eduardo Suprinyak (Cedeplar-UFMG); Thiago Dumont Oliveira (Università degli Studi di Siena) |
| Abstract: | The early decades of the 20th century in Europe witnessed a wealth of discussion on the epistemology of the social sciences. Not only were the boundaries between different disciplinary fields being redrawn, but also the nature of scientific knowledge about human and social affairs came under careful scrutiny. One prominent issue in debate was the separation between positive and normative analysis, and the legitimacy of the prescriptive claims often advanced by social scientists. The paper attempts to investigate this process through the lenses of contemporary debates on international politics. During the interwar years, the reconstruction of the world order provided a topic over which social analysts of different backgrounds and persuasions could debate and interact, thus exploring the limits of the knowledge they produced. In England, authors as diverse as Bertrand Russell, Graham Wallas, Harold Laski, Karl Mannheim, John Hobson, and Lionel Robbins were all part of this conversation, which transgressed most disciplinary boundaries. As a pressing issue in the European agenda at the time, however, international politics also made it more difficult to sustain a clear distinction between positive analysis and policy prescription. In the works of Robbins, one can see the topic treated as part of the applied domain of political economy. |
| Keywords: | international politics, political economy, positive analysis, expertise, social sciences, Lionel Robbins. |
| JEL: | B20 B41 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td566&r=pke |