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on Post Keynesian Economics |
| By: | Mark Setterfield (Department of Economics, New School For Social Research, USA); George Wheaton (Department of Economics, New School For Social Research, USA) |
| Abstract: | The Goodwin pattern – a counter-cyclical rotation in real activity × wage share space – is an established stylized fact of capitalist macrodynamics. Existing models typically assume profit-led real-sector dynamics, together with a ‘reserve army’ or profit squeeze mechanism, in order to reproduce this pattern. We extend an animal-spirits-driven business cycle model, in which the demand regime determining real-sector outcomes is wage-led, by adding a reserve army effect determining real wage dynamics. We construct an agent-based simulation of the model and show that we are able to reproduce the Goodwin pattern. Our results add to the literature suggesting that the Goodwin pattern can arise from a variety of different macrodynamic ensembles – including some that feature wage-led real sectors. |
| Keywords: | Goodwin pattern, animal spirits, wage-led demand, reserve army mechanism, profit squeeze, agent-based model, cyclical growth |
| JEL: | C63 E11 E12 E32 E37 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2407&r=pke |
| By: | Davis, John B.; ; (Department of Economics Marquette University; Department of Economics Marquette University) |
| Abstract: | Stratification economics (SE) investigates how economies are organized around group inequalities, especially by race and gender but also by ethnicity, national origin, religion, sexual orientation, etc. Its historical origins and theoretical foundations have both a structural strand that addresses how and a social behavioral strand. SE's structural strand goes back to Ricardo and Marx regarding the relationship between growth and distribution, and then draws on recent economic theory of noncompeting groups and dual economy models of labor market segmentation. SE's structural strand produces an inequality-based understanding of economics' standard goods taxonomy. The social behavioral strand builds on Du Bois's psychological wage concept, Veblen's social ladders theory of emulation, Blumer's theory of prejudice and stereotyping, and current social identity theory. SE's social behavioral strand makes it possible to explain how discrimination selectively stigmatizes people's social identities in order to reinforce existing intergroup inequalities. |
| Keywords: | stratification economics, intergroup inequality, caste, social groups, Ricardo, Marx, Lewis, Du Bois, Veblen, Blumer, social identity theory, goods taxonomy, stigmatization, intersectionality |
| JEL: | D31 D63 I31 J15 J16 Z13 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2024-02&r=pke |
| By: | Walke, Adam |
| Abstract: | Classical political economists developed several different explanations for what they saw as an inherent tendency for the rate of profit to decline over time. In the second quarter of the nineteenth century, some British advocates of colonization developed a corollary to those theories, suggesting that exporting capital to colonies could help arrest and reverse the decline. That argument was championed by the English political economist and promoter of colonization projects Edward Gibbon Wakefield, and it was systematized by John Stuart Mill. Ironically, the view that capital export and colonization played crucial roles in sustaining the rate of profit in advanced economies was later adopted by some Marxist theorists. Parallels between Karl Marx and J.S. Mill may help explain the remarkable theoretical continuity on this topic between nineteenth-century British advocates of colonization and early-twentieth-century Marxist critics of colonialism. |
| Date: | 2024–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:3v8wd&r=pke |
| By: | John A. List; Lina M. Ramírez; Julia Seither; Jaime Unda; Beatriz Vallejo |
| Abstract: | Misinformation represents a vital threat to the societal fabric of modern economies. While the supply side of the misinformation market has begun to receive increased scrutiny, the demand side has received scant attention. We explore the demand for misinformation through the lens of augmenting critical thinking skills in a field experiment during the 2022 Presidential election in Colombia. Data from roughly 2.000 individuals suggest that our treatments enhance critical thinking, causing subjects to more carefully consider the truthfulness of potential misinformation. We furthermore provide evidence that reducing the demand of fake news can deliver on the dual goal of reducing the spread of fake news by encouraging reporting of misinformation. |
| JEL: | C93 D9 D91 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32367&r=pke |
| By: | Steven M. Fazzari |
| Abstract: | This article integrates monetary policy into a very simple dynamic supermultiplier model with an accommodating supply side. Results show that monetary policy guided by a conventional Taylor rule may stabilize an economy around the steady-state path of demand-led growth following temporary demand shocks. However, monetary policy is ineffective in offsetting permanent negative demand shocks even if the lower bound for interest rates is not binding. This outcome contrasts with the prevailing view among policymakers that monetary policy can usually assure full utilization of an economy's resources in the long run. The ineffectiveness of monetary policy is particularly acute if autonomous demand grows more slowly than necessary to generate full employment. In this case, if policymakers recognize the under-utilization of resources, monetary policy leads to interest rates trending necessarily to their lower bound. The analysis also shows how monetary policy may lead to counter-productive responses to supply shocks. The article concludes with observations about how the theoretical results correspond with the history of US monetary policy in recent decades. |
| Keywords: | Supermultiplier, Monetary Policy, Demand-Led Growth, Keynesian Macroeconomics |
| JEL: | E12 E52 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:imk:fmmpap:99-2024&r=pke |
| By: | Reddy, Niall |
| Abstract: | A large literature in heterodox political economy addresses an apparent puzzle in which investment has declined while profits have held up during the financialization era. The dominant answer to this puzzle centers on the rise of shareholder value orientation and the “downsizing and distributing” (DD) imperative it imposes on firms. Yet the detailed empirical literature on the topic - focussed on partial effects - pays precious little attention to actual observed patterns of growth, investment and distribution at a firm level. Digging deep into firm level data and correcting several conceptual and measurement errors, this paper challenges several key stylized facts of the financialization account, revealing a different set of patterns which are very difficult to square with stronger versions of DD theory. It shows that the profit-investment puzzle is not a paradox of the financialization era, but only of the post-2000 period. Similarly, the ramping up of payout rates only happens in a broad way after the turn of the millennium. While financialization theories cannot account for the 2000s watershed I argued that a trifecta of other structural shifts can. Ultimately this paper questions the widespread practice of giving analytical priority to financialization in heterodox political economy. |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:2zy5h&r=pke |