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on Post Keynesian Economics |
| By: | Engelbert Stockhammer (Kingston University); Rob Jump; Karsten Kohler; Julian Cavallero |
| Abstract: | Theories such as Minsky’s financial instability hypothesis or New Keynesian financial accelerator models assign a key role to financial factors in business cycle dynamics. We present descriptive statistics and a simple estimation framework to examine the financial-real interaction mechanisms that are at the core of these theories. Specifically, we examine cycle frequencies in seven OECD countries over the period 1970 to 2015, and find that interest rates, business debt, and household debt exhibit cycle lengths of 4-6, 8-11, and 14-26 years, respectively. We then estimate bivariate VAR models which provide evidence for financial-real interaction mechanisms, (i) at high frequencies between interest rates and GDP, and (ii) at low frequencies between business debt and GDP. In contrast, there is no evidence for a cycle mechanism between household debt and GDP. |
| Keywords: | Minsky, financial accelerator, financial cycle, business cycle |
| JEL: | E32 G01 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1807&r=pke |
| By: | Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Tania Treibich |
| Abstract: | In this work we study the granular origins of business cycles and their possible underlying drivers. As shown by Gabaix (2011), the skewed nature of firm size distributions implies that idiosyncratic (and independent) firm-level shocks may account for a significant portion of aggregate volatility. Yet, we question the original view grounded on "supply granularity", as proxied by productivity growth shocks - in line with the Real Business Cycle framework-, and we provide empirical evidence of a "demand granularity", based on investment growth shocks instead. The role of demand in explaining aggregate fluctuations is further corroborated by means of a macroeconomic Agent-Based Model of the "Schumpeter meeting Keynes" family (Dosi et al., 2015). Indeed, the investigation of the possible microfoundation of RBC has led us to the identification of a sort of microfounded Keynesian multiplier. |
| Keywords: | business cycles, granular residual, granularity hypothesis, agent-based models, firm dynamics, productivity growth, investment growth |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2018/19&r=pke |
| By: | Jean-Luc Gaffard (Observatoire français des conjonctures économiques); Mauro Napoletano (Observatoire français des conjonctures économiques) |
| Abstract: | We revisit the main building blocks of the theoretical models underlying the monetary policy consensus before the Great Recession. We highlight how the failure of these models to prevent the crisis and to provide guidance during the recession were due to the excessive confidence in the ability of markets to coordinate demand and supply, and to the neglect of the role of finance. Furthermore, we outline the main elements of an alternative approach to monetary policy that put emphasis on the processes driving coordination in markets, and on the externalities transmitted by financial inter-linkages. Many elements of this new approach are captured by new classes of models, namely, agent-based and financial network models. We discuss some insights from these models for the conduct of monetary policy, and for its interactions with fiscal and macroprudential policies. |
| Keywords: | Output-inflation dynamics; New keynesian models; Disequilibrium analysis; Agent based models; Fiscal monetary policy interactions; Quantitative easing policies |
| JEL: | E31 E32 E5 E61 E62 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/3tl6t49e929fla0aa2ukppot8n&r=pke |
| By: | Danny Mackinnon; Stuart Dawley; Andy Pike; Andrew Cumbers |
| Abstract: | A burgeoning strand of Evolutionary Economic Geography (EEG) research is addressing questions of regional path creation, based upon the idea that place-specific legacies and conditions play a critical role in supporting the emergence of new economic activities. Yet there has been little effort thus far to take stock of this emerging body of research. In response, the aims of this paper are to offer a fresh synthesis of recent work and to develop a broader theoretical framework to inform future research. First, it presents a critical appraisal of the state of the art in path creation research. In an effort to address identified gaps in EEG research, this incorporates insights from sociological perspectives, the global production networks (GPN) approach and transition studies. Second, the paper?s development of a systematic theoretical framework is based upon the identification of key dimensions of path creation and their constitutive inter-relations. This contribution is underpinned by a geographical political economy (GPE) approach which provides the ontological basis for the integration of the five key dimensions of path creation within an overarching framework and the positioning of regional processes in relation to the broader dynamics of uneven development. Informed by GPE, the argument is that knowledgeable actors, operating within multi-scalar institutional environments, create paths through the strategic coupling of regional and extra-regional assets to mechanisms of path creation and associated markets. To inform further research, the paper outlines four concrete propositions regarding the operation of path creation processes in different types of regions and explores these through case studies of Berlin and Pittsburgh. |
| Keywords: | Entrepreneurship, Path creation, evolutionary economic geography, geographical political economy, agency, strategic coupling |
| JEL: | R11 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1825&r=pke |
| By: | Gupta, Avinash |
| Abstract: | The article is essentially a book-review of Professor Vijay Joshi's recent work, '"India's Long Road: The Search for Prosperity". In this critical essay, I take a slightly revisionist approach when it comes to a 'typical'book review. For example, the length of this article goes well-beyond the standard convention. The ‘deviation’ from rules, however, has specific objectives. I have critically analyzed Dr. Joshi’s work and in so doing include relevant evidences, debates and questions not just from economics but also from other disciplines such as history and political science. |
| Keywords: | Critical book-review,dominant perspective in economics,underdevelopment |
| JEL: | A |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:179976&r=pke |
| By: | Muriel Gilardone (Condorcet Center for Political Economy, Normandie Univ, UNICAEN, CNRS, CREM, F-14000 Caen, France) |
| Keywords: | Our paper shows that Sen’s (2009) alternative theory of justice is greatly influenced by 1) his work on famines ; 2) his empirical work on gender inequalities, specifically within the Indian society, that helped him to refine his approach to hunger ; and 3) his involvement in the creation of the human development approach. All these engagements — seemingly completely separate from his contribution to the theories of justice — have, in fact, fostered the formulation of a novel approach in which agency and public reasoning are the core elements. |
| JEL: | A13 B31 B41 B54 D63 D78 I32 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cccrwp:2018-01-ccr&r=pke |
| By: | Simplice Asongu (Yaoundé/Cameroun); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study assesses human development thresholds at which mobile banking mitigates poverty and inequality in 93 developing countries for the year 2011. Mobile banking entails: ‘mobile used to pay bills’ and ‘mobile used to receive/send money’, while the modifying policy indicator is the human development index (HDI). The empirical evidence is based on interactive quantile regressions. A summary of the findings shows that with increasing human development: (i) ‘mobiles used to pay bills’ contribute to reducing inequality in countries at the bottom and top ends of the inequality distribution, while (ii) ‘mobiles used to receive/send money’ have an appealing role in promoting inclusive development in all poverty distributions, with the exception of the top-end or 90th decile. The modifying thresholds of the HDI vary from 0.542 to 0.632 and 0.333 to 0.705 in inequality and poverty specifications, respectively. The relevance of the findings is discussed in light of the current transition from Millennium Development Goals to Sustainable Development Goals. |
| Keywords: | Mobile banking, Quality of growth, poverty, inequality |
| JEL: | G20 O40 I10 I20 I32 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:18/022&r=pke |