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on Post Keynesian Economics |
| By: | Andre Lorentz; Tommaso Ciarli; Maria Savona; Marco Valente |
| Abstract: | We build upon the evolutionary model developed in prior works (Ciarli, Lorentz, Savona and Valente 2010b), which formalises the links between production, organisation and functional composition of the employment on the supply side and the endogenous evolution of consumption patterns on the demand side. The main contribution resulting from the exercise proposed here is to derive the Kaldorian cumulative causation mechanism as an emergent property of the dynamics generated by the micro-founded model. More precisely, we discuss the main transition dynamics to a self-sustained growth regime in a two-stage growth patterns generated through the numerical simulation of the model. We then show that these mechanisms lead to the emergence of a Kaldor-Verdoorn law. Finally we show that the structure of demand (among others the heterogeneity in consumption behaviour) itself shapes the type of growth regime emerging from the endogenous structural changes, fostering or hampering the emergence of the Kaldor Verdoorn law. |
| Keywords: | Structural change; growth; consumption; technological change; cumulative causation; evolutionary economics; Kaldor-Verdoorn Law. |
| JEL: | O41 L16 C63 E11 O14 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2019-15&r=all |
| By: | Jan Kregel |
| Abstract: | In the Western interpretation of democracy, governments exist in order to manage relations of property, with absence of property ownership leading to exclusion from participation in governance and, in many cases, absence of equal treatment before the law. Democratizing money will therefore ensure equal opportunity to the ownership of property, and thus full participation in the democratic governance of society, as well as equal access to the banking system, which finances the creation of capital via the creation of money. If the divergence between capital and labor--between rich and poor--is explained by the monopoly access of capitalists to finance, then reducing this divergence is crucially dependent on the democratization of money. Though the role of money and finance in determining inequality between capital and labor transcends any particular understanding of the process by which the creation of money leads to inequity, specific proposals for the democratization of money will depend on the explanation of how money comes into existence and how it supports capital accumulation. |
| Keywords: | Money; Finance; Financial History; Clearing Systems; Unit of Account |
| JEL: | E42 E51 E52 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_928&r=all |
| By: | Aurélien Goutsmedt (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, Chaire Energie & Prospérité - ENS Paris - École normale supérieure - Paris - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - Institut Louis Bachelier); Erich Pinzón-Fuchs (Universidad de los Andes [Bogota]); Matthieu Renault (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Francesco Sergi (University of Bristol [Bristol]) |
| Abstract: | We illustrate how the Lucas Critique was called into question by Keynesian macroeconomists during the 1970s and 1980s. Our claim is that Keynesians' reactions were carried out from a pragmatic approach, which addressed the empirical and practical relevance of the Critique. Keynesians rejected the Critique as a general principle with no relevance for concrete macroeconometric practice; their rejection relied on econometric investigations and contextual analysis of the U.S. 1970s stagflation and its aftermath. Keynesians argued that the parameters of their models remained stable across this period, and that simpler ways to account for stagflation (such as the introduction of supply shocks into their models) provided better alternatives to improve policy evaluation. |
| Keywords: | History of macroeconomics,Lucas Critique,Keynesian macroeconometrics,Stagflation |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01625169&r=all |
| By: | Stewart Frances |
| Abstract: | This paper reviews the main methodological innovations in Asian Drama. It considers whether Myrdal’s perspectives have been adopted by development analysts, and where fresh thinking is needed, particularly in the light of changes occurring in the half-century since he wrote Asian Drama.The paper concludes that many of his ideas have been accepted, especially among heterodox economists, some themselves putting forward similar arguments. Mainstream economics has, in general, been the least responsive, and renewed emphasis is needed—especially with regard to the effects of positionality on concepts, theories, and policies; and on the inappropriateness of some advanced country economic concepts.In Asian Drama, Myrdal fails to consider that some concepts are inappropriate for the analysis of advanced economies, too. The critical need to take into account environmental considerations in the 21st century provides an additional reason for seeking alternative frameworks for everywhere, whether North or South. |
| Keywords: | Gunnar Myrdal,Institutions |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-109&r=all |
| By: | Khan Mushtaq |
| Abstract: | The role of institutions in Asian development has been intensely contested since Myrdal’s Asian Drama, with later contributions from institutional economics and developmental state theory.Despite much progress, the dominant approaches do not agree about the institutions that matter nor do they explain why similar institutions delivered such different results across countries.Cultural norms and informal institutions clearly matter but the appropriate norms did not already exist in successful countries; they evolved over time. The distribution of holding power across different types of organizations, the ‘political settlement’, can explain the diversity of experiences and help to develop more effective policy. |
| Keywords: | Norms,Organizations,Political settlements,Development,Industrial policy,Institutions |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-132&r=all |
| By: | Fix, Blair |
| Abstract: | What makes the rich different? Are they more productive, as mainstream economists claim? I offer another explanation. What makes the rich different, I propose, is hierarchical power. The rich command hierarchies. The poor do not. It is this greater control over subordinates, I hypothesize, that explains the income and class of the very rich. I test this idea using evidence from US CEOs. I find that the relative income of CEOs increases with their hierarchical power, as does the capitalist portion of their income. This suggests that among CEOs, both income size and income class relate to hierarchical power. I then use a numerical model to test if the CEO evidence extends to the US general public. The model suggest that this is plausible. Using this model, I infer the relation between income size, income class, and hierarchical power among the US public. The results suggests that behind the income and class of the very rich lies immense hierarchical power. |
| Keywords: | hierarchy,power,functional income distribution,personal income distribution,inequality,capital as power,class |
| JEL: | D31 D33 B5 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:capwps:201902&r=all |
| By: | Di Bucchianico, Stefano (Roma Tre University) |
| Abstract: | The present work, by making use of the ‘integrated wage-goods sector’ methodology proposed by Gareg-nani, investigates some channels through which financialization may impact the normal rate of profit. We analyze the effect of a higher profit share in the financial sector, the technical innovations in the financial sector and rising household indebtedness. We find that none of them influences normal profitability, with the exception of one type of technical innovation. We subsequently critically discuss some Marxian strands of analysis that describe financialization as a temporary countertendency to supposed falling gen-eral profitability. We argue in favor of a separate analysis between growth caused by private borrowing and the study of a normal distribution. Finally, a recent attempt to read the ‘sixth’ countertendency to the falling rate of profit listed by Marx as an anticipation of the phenomenon of financialization is criticized, proposing an alternative interpretation. |
| Keywords: | falling profitability; financialization; financial crisis; rate of profit |
| JEL: | B14 B51 P12 |
| Date: | 2019–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sraffa:0036&r=all |
| By: | Akyeampong, Emmanuel (African Economic History Network) |
| Abstract: | Ralph Austen in African Economic History (1987) noted how few African countries explicitly choose capitalism on independence, and for those who did it was a default model or a residual pattern. ‘African socialism’ was popular in the early decades of independence and pursued by several countries, including Ghana, Guinea, Senegal and Tanzania, the cases considered in this paper. The term had multiple meanings, and its advocates were quick to stress that they were not communist, and some said they were not even Marxist. This paper explores the argument that African socialism was a search for an indigenous model of economic development for a generation that was justifiably ambivalent about capitalism, but wary of being put in the communist camp in the Cold War era. Importantly, advocates of African socialism often proposed bold and transformative visions for their countries. These visions might be worth revisiting, devoid of the paradigm of socialism. |
| Keywords: | Socialism; capitalism; independence; Africa; economic history |
| JEL: | N17 N27 N47 |
| Date: | 2017–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:afekhi:2017_036&r=all |
| By: | Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration); Koilo, Viktoriia (HSM/NLA) |
| Abstract: | The present paper applies the financial instability hypothesis in order to explain the financial crises of 2008-2010 in eleven emerging Eastern European economies Also, it seeks to map if institutional frameworks of these countries enabled them to stand against the factors leading into the financial crisis. The paper maps cycles of three macroeconomic indicators representing the real economy, and four indicators representing financial markets. A cycle analysis is conducted with the help of a Hoderick-Prescott filter, made to isolate cycles from trends in time series. The paper concludes that there were substantial positive financial cycles previous to the financial crisis mirrored by similar cycles in the real economy. Similarly, the results show negative cycles in the same parameters during the years of crisis. It seems as an uncontrolled increase in money and credit caused the economy to overheat and thereafter contract in both substantial financial and real economy crises. Also, the paper compiles twelve different indices of institutional development. These are standardized and presented in an institutional development matrix, showing that the institutional framework for the eleven economies was weak previous to and under the melt down of the economy. The construction of an integrated institutional development index on the basis of the same twelve parameters confirm institutional shortcomings, which may have made the economies less able to guard themselves from a crisis initiated by both domestically and internationally financial instability. |
| Keywords: | Financial Crisis; Financial Instability Hypothesis; Institutional Development; Crisis Anatomy; Financial History; Eastern European Economies; Emerging Economies |
| JEL: | E32 E44 E51 E52 G15 N14 N24 |
| Date: | 2019–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_008&r=all |
| By: | Naoki Yoshihara (Department of Economics, University of Massachusetts Amherst); Se Ho Kwak (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | In contrast to Mandler’s (1999a; Theorem 6) impossibility result about the Sraffian indeterminacy of the steady-state equilibrium, we first show that any regular Sraffian steady-state equilibrium is indeterminate in terms of Sraffa (1960) under the simple overlapping generation economy. Moreover, we also check that this indeterminacy is generic. These results are obtained by explicitly defining a simple model of overlapping gener- ation economies with Leontief production techniques, in which we also explain the main source of the difference between our results and Mandler (1999a; section 6). |
| Keywords: | Sraffian indeterminacy |
| JEL: | B51 D33 D50 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2019-04&r=all |
| By: | Thorbecke Erik |
| Abstract: | This paper is essentially autobiographical and describes Erik Thorbecke’s journey through the history of development economics between the 1950s and the present.The paper consists of four parts. First, an introduction reviews briefly his professional career as a development economist and his research interactions with major contributors to the discipline. The next three parts review critically his contributions to research on and training in, respectively, (i) the ongoing process of African development; (ii) income distribution, inequality, and poverty; and (iii) economic structure, interdependence, and quantitative development analysis. |
| Keywords: | Development doctrine,Economic structure,Inequality,Poverty |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-138&r=all |
| By: | Quentin Couix (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | This paper proposes a historical and epistemological account of one of the key controversy between natural resources economics and ecological economics, lasting from early 1970s to the end of 1990s. It shows that the theoretical disagreement on the scope of the economy's dependence to natural resources, such as energy and minerals, has deep methodological roots. On one hand, Solow's and Stiglitz's works are built on a "model-based methodology", where the model precedes and supports the conceptual foundations of the theory and in particular the assumption of "unbounded resources productivity". On the other hand, Georgescu-Roegen's counter-assumption of "thermodynamic limits to production", later revived by Daly, rest on a methodology of "interdisciplinary consistency" which considers thermodynamics as a relevant scientific referent for economic theory. While antagonistic, these two methodologies face similar issues regarding the conceptual foundations that arise from them, which is a source of confusion and of the difficult dialogue between paradigms. |
| Keywords: | natural resources,thermodynamics,growth,sustainability,model,theory,methodology |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01702401&r=all |
| By: | Carbonnier Gilles |
| Abstract: | This paper introduces the origins and scope of humanitarian economics, a vibrant field of study and practice that deals with the economics and political economy of war, disaster, and humanitarian action.To illustrate the field’s scientific and policy relevance, the paper draws on various examples and highlights the potential of humanitarian economics to better understand and address some of today’s thorniest humanitarian challenges. Finally, the paper calls for novel interdisciplinary, cross-sector collaborations to push a pressing research agenda forward. |
| Keywords: | political economy of aid,war economics,disaster economics,Humanitarianism |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-54&r=all |
| By: | Deepankar Basu (Department of Economics, University of Massachusetts Amherst); Leila Gautham (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | This paper uses a novel empirical strategy to present empirical estimates of the effect of an exogenous shock to distribution on demand and accumulation for the US economy from 1973 to 2018. We use recursive vector autoregressions to identify the impact of shocks to the wage share. We impose restrictions motivated by a simple neo-Kaleckian open-economy model, and build on the recursive identification scheme in Christiano, Eichenbaum and Evans (1999) to show that this small set of plausible and transparent assumptions are sufficient to identify the impact of shocks to distribution. We find that positive shocks to the wage share have long-lasting negative impacts on demand and growth. Our results are robust to the inclusion of additional variables and to differences in specification. |
| Keywords: | Demand-distribution dynamics, neo-Kaleckian models, functional income distribution, VAR estimation |
| JEL: | D3 C32 E25 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2019-08&r=all |
| By: | Brodbeck, Karl-Heinz |
| Abstract: | Der Begriff "Arbeit" hat im Marx'schen Werk einen deutlichen Wandel vollzogen. In seiner Frühphilosophie verband Marx eine Aufhebung der Arbeit mit dem Übergang zu einer kommunistischen Gesellschaft. Mit der Ausarbeitung seines Hauptwerkes "Das Kapital" sagte er dagegen, dass Arbeit eine "ewige Naturbedingung" menschlicher Existenz sei, die nur ihre Form verändern könne. In seiner späteren Theorie der Arbeit findet sich zudem ein immanenter Widerspruch: Marx entgeht, dass sich der Begriff der Arbeit nicht von der Form der Vergesellschaftung durch die menschliche Sprache trennen lässt. Unter Rückgriff auf zeitgenössische Autoren von Marx können diese Versäumnisse der Theorie aufgedeckt und "Arbeit" neu interpretiert werden. |
| Keywords: | Marx'sche Frühschriften,geistige und körperliche Arbeit,Sprache und Gesellschaft,Arbeit und Technologie,Andrew Ure,Philosophie der Maschinerie |
| JEL: | B14 B24 J01 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cuswps:oek44&r=all |