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on Post Keynesian Economics |
| By: | Mark Setterfield (Department of Economics, New School for Social Research); Joana David Avritzer (Department of Economics, New School for Social Research) |
| Abstract: | Kaleckians describe a normal rate of capacity utilization that is subject to hysteresis effects. This means that the normal rate varies directly with the actual rate of capacity utilization, ensuring that steady-state equilibrium conditions in the Kaleckian model are fully adjusted (the actual and normal rates of capacity utilization are equalized) but without this last condition implying that the rate of capacity utilization is constant in the long run. The relationship between distribution and growth unique to the Kaleckian model is thus preserved. The hysteresis mechanism has been criticized from various quarters, however, these criticisms focusing on its alleged lack of behavioural foundations. This paper shows that consistent with the stylized facts, variation in the normal rate of capacity utilization in response to variation in the actual capacity utilization rate can be derived from the links between both variables and the volatility of the macroeconomic environment - volatility, in the presence of fundamental uncertainty, being an important reason why firms deliberately under-utilize capacity (even in the long run) in the first place. The result is an empirically-grounded behavioural foundation for hysteresis in the normal rate of capacity utilization. |
| Keywords: | Normal rate of capacity utilization, Harrodian instability, hysteresis, Kaleckian growth theory |
| JEL: | E11 E12 O41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1907&r=all |
| By: | Clara Mattei (Department of Economics, New School for Social Research) |
| Abstract: | The framework of the Philosophy of Praxis sheds light on a fundamental Marxian insight: the approach to knowledge is deeply political. This paper studies the Philosophy of Praxis as offering a potent two-fold device. First, understood as a framework of critical analysis, the philosophy of praxis allows us to capture the strength of “pure economics” (especially in its proposed methodology) to bolster bourgeois hegemony in a critical moment for the history of capitalism, the crisis of authority of the Liberal institutions after WWI. Secondly, As the “science of dialectics” or “philosophy of knowledge” (SPN 431), the philosophy of praxis offers a tangible proposal for a radically emancipatory approach to knowledge. Such a project is certainly applicable to economics today. The paper develops a multifaceted comparison between “pure economics” and “critical economics”. While the former is the approach that characterized Marginalist thinkers and is still dominant today, the latter is inspired by the philosophy of praxis as a positive alternative. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1908&r=all |
| By: | David Maddy (ProCredit Holding); Clara Mattei (Department of Economics, New School for Social Research) |
| Abstract: | We offer an interpretative framework to analyze a recurrent phenomenon of capitalism: working classes oft e n a ppro ve of polici es that are detrimental to their material conditions. We focus on the mechanism of t he diffusion of economic ideas from treatise to the domain of public opinion. The work of novelist Ayn Rand popularizes market liberal, inequality-based economic doctrines present in the work of Ludwig von Mises. We argue that the economic justification of inequalit y was successfully tra nsmit ted through the mechanism of pov ert y sha me that emerges out of Rand 's influential Atlas Shrugged. Through its didactic narrative and abusive language the reader is powerfully taught that if they are not successful in the market society, the reason lies in their own personal deficiency and inferiority. This conception is internalized chiefly through the emotion of shame. Through the mechanism of "ot hering " class solidarity breaks down and social demands languish, thus the unequal status quo is preserved. |
| Keywords: | Ayn Rand, Ludwig von Mises, Self-Help, American Conservative Movement , Poverty Shame |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1910&r=all |
| By: | François Denuit |
| Abstract: | It is widely agreed that a society must guarantee a social minimum to all its members. Yet, the organisation of social protection within the European Union (EU) is insufficient to protect all Europeans effectively against the risk of poverty and social exclusion. Against this backdrop, this thesis investigates whether a European universal basic income (EUBI) is, if at all, a worthwhile policy to address the problem of poverty in the EU.The central claim of the study posits that there are strong reasons to consider a partial EUBI as a desirable instrument for EU-wide poverty alleviation. Under this scenario, the EU works as a complementary welfare layer offering systemic support to its Member States’ welfare models whilst respecting the diversity of national social protection arrangements. At the same time, as an instrument of pan-European solidarity, the EUBI provides substance to EU social citizenship.The method used is problem-oriented and interdisciplinary, combining insights from political theory, political economy and EU studies writ large. After having layed out the various dimensions underpinning the problem of poverty in the EU and clarified the contours of the solution under scrutiny, the thesis confronts the EUBI with a series of challenges, ranging from normative issues associated with the unconditionality of the basic income and the pursuit of social justice in the EU, to the institutional hurdles pertaining to the legal feasibility of the proposal, via the macroeconomic difficulties related to the diversity of interdependent economies.Overall, this contribution examines an idea which remains unexplored in EU studies and proposes a new approach to European anti-poverty strategy. It also bridges the gap between EU social policy and basic income literatures, beyond established boundaries of research compartmentalisation. As such, it prepares the ground for further fine-tuned research in the areas covered by this comprehensive multi-dimensional analysis. |
| Keywords: | Basic income; Social Europe; Minimum income; Solidarity; Poverty; Social exclusion; European Union; Social protection; Revenu de base; Allocation universelle; Pauvreté; Exclusion sociale; Revenu minimum; Solidarité; Protection sociale; Europe sociale; Union européenne |
| Date: | 2019–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/284009&r=all |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - UGA - Université Grenoble Alpes) |
| Abstract: | The mainstream of economics has a double implicit postulate: peace is a normal state and economic development reinforces this situation. However, if primitive, slave or colonialist predations have been philosophically condemned, military, economic or cultural power struggles remain very present in the modern world. Extreme greed as a social form of maximum profit performance cannot be the ultimate goal of human beings in the long run. Social inequalities are growing rapidly and the assets of a dozen families exceed those accumulated by the poorest half of humanity. The twentieth century has experienced both moments of extreme barbarism and wars and unquestionable epistemological leaps. Economics is an ideology that hides the reality of political economy. It develops hypotheses that encourage the more virulent forms of inequality. Wars have followed one another, the USSR has collapsed, economic crises have accelerated, financial bubbles are putting all of humanity in a precarious situation, the intervention of the State is still strongly criticized. Dominant thought, mathematical virtuosity and postulates are at the service of an economic system that is difficult to amend without the recognition of the utility of public goods. The US leadership is clearly established in terms of information, standards control and artificial intelligence, the European Union continues to weaken and be dependent, with a "Germanic" euro and public deficits that produce threatening internal crises for the stability of the political ensemble, and BRICS in situations of great precariousness and heterogeneous interests. In addition, several revolutions are announced, concerning the violent advance of digital technology and robotics, the excessive advance of monopolies and global oligopolies, the emergence of new forces advocating a social revolution, and the environmental and climate crisis. |
| Abstract: | Le courant dominant de la science économique fait un double postulat implicite : la paix est un état normal et le développement économique renforce cette situation. Pourtant, si les prédations primitives, esclavagistes ou colonialistes ont été philosophiquement condamnées, les rapports de force militaires, économiques ou culturels restent bien présents dans le monde moderne. La cupidité extrême comme forme sociale de la performance du profit maximal ne peut constituer, sur le long terme, le but ultime des êtres humains. Les inégalités sociales croissent rapidement et les patrimoines d'une dizaine de personnes dépassent ceux cumulés de la moitié la plus pauvre de l'humanité. Le XXe siècle a expérimenté à la fois des instants d'extrême barbarie et de guerres et des sauts épistémologiques incontestables. La science économique est une idéologie qui cache la réalité de l'économie politique. Elle développe des hypothèses qui sont autant d'encouragement aux formes plus virulentes des inégalités. Les guerres se sont succédées, l'URSS s'est effondrée, les crises économiques se sont accélérées, les bulles financières met l'ensemble de l'humanité en situation de précarité, l'intervention de l'Etat est toujours aussi fortement critiquée. La pensée dominante, la virtuosité mathématique et les postulats sont au service d'un système économique difficilement amendable sans la reconnaissance de l'utilité des biens publics. Le leadership américain est clairement établi en termes d'information, de contrôle des normes et d'intelligence artificielle, l'Union européenne ne cesse de s'affaiblir et d'être dépendante, avec un euro « germanique » et des déficits publics qui produisent des crises internes menaçantes pour la stabilité de l'ensemble politique et des BRICS en situation de grande précarité et d'intérêts hétérogènes . En outre, plusieurs révolutions sont annoncées, concernant l'avancée parfois violente du numérique et de la robotique, l'avancée excessive des monopoles et des oligopoles mondiaux, l'émergence de forces nouvelles prônant une révolution sociale, et la crise environnementale et climatique. |
| Keywords: | Political economy,economic science,economic and social crises,wars,power of the states,heritage,climate,economic development,inequalities.,crises économiques et sociales,guerres,Science économique,Economie politique,inégalités,développement économique,climat,patrimoine,puissance des Etats |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02127938&r=all |
| By: | : Andrew Minster; Danielle Kavanagh-Smith; Lara-Zuzan Golesorkhi (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | This paper recognizes additional complicating factors, like social policy and employers' power to shape job prospects, to more accurately characterize the relationship between the labor market and migration. The authors discuss the need to improve the status of unions, create state-funded jobs guarantees, and reform retirement policy to support all workers in the face of growing employer influence. |
| Keywords: | immigration, job markets, undocumented, compensation, immigration economics, labor |
| JEL: | J6 J3 J5 J7 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2018-01&r=all |
| By: | Prados de la Escosura, Leandro |
| Abstract: | This paper provides a long run view of human development as a capabilities measure of well-being for the last one-and-a-half centuries on the basis of an augmented historical human development index [AHHDI] that combines achievements in health, education, living standard, plus liberal democracy, and provides an alternative to the UN Human Development Index, HDI. The AHHDI shows substantial gains in world human development since 1870, especially during 1913-1970, but much room for improvement exists. Life expectancy has been the leading force behind its progress, especially until 1970. Human development spread unevenly. The absolute gap between western Europe and its offshoots plus Japan -the OECD- and the Rest of the world deepened over time, though fell in relative terms, with catching-up driven by longevity during the epidemiological transition and by democratisation thereafter. This result compares favourably with the growing income gap. Economic growth and human development do not always go hand-in-hand. |
| Keywords: | Health Transition; Human Development; Liberal democracy; Life Expectancy; schooling; Well-being |
| JEL: | I00 N30 O15 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13744&r=all |
| By: | Roger E A Farmer |
| Abstract: | This article surveys a subset of literature in macroeconomics which embraces the existence of multiple equilibria. This indeterminacy agenda in macroeconomics uses multiple-equilibrium models to integrate economics with psychology. Economists have long argued that business cycles are driven by shocks to the productivity of labour and capital. According to the indeterminacy agenda, the selffulfilling beliefs of financial market participants are additional fundamental factors that drive periods of prosperity and depression. The indeterminacy agenda provides a microeconomic foundation to Keynes’ General Theory that does not rely on the assumption that prices and wages are costly to change. |
| Keywords: | macroeconomics, multiple equilibria, psychology, business cycles, labour and capital |
| JEL: | D5 E40 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:507&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); 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:abh:wpaper:18/022&r=all |
| By: | Roger E A Farmer; Giovanni Nicolo |
| Abstract: | Farmer and Nicolò (2018) show that the Farmer Monetary (FM)-Model outperforms the threeequation New-Keynesian (NK)-model in post war U.S. data. In this paper, we compare the marginal data density of the FM-model with marginal data densities for determinate and indeterminate versions of the NK-model for three separate samples using U.S., U.K. and Canadian data. We estimate versions of both models that restrict the parameters of the private sector equations to be the same for all three countries. Our preferred specification is the constrained version of the FMmodel which has a marginal data density that is more than 30 log points higher than the NK alternative. Our findings also demonstrate that cross-country macroeconomic differences are well explained by the different shocks that hit each economy and by differences in the ways in which national central banks reacted to those shocks. |
| Keywords: | Phillips curve, Keynesian economics |
| JEL: | E3 E4 F0 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:505&r=all |