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on Post Keynesian Economics |
| By: | Davis, John B. (Department of Economics Marquette University; Department of Economics Marquette University) |
| Abstract: | This chapter discusses how philosophy could influence economists in the future. It emphasizes factors affecting economists’ willingness to incorporate philosophical ideas in economics, and distinguishes a weak case and a strong case for them doing so. Both are tied to behavioral welfare economics’ ‘reconciliation problem’ regarding the relationship between positive and normative economics. The weak case concerns the nature of individual identity in connection with how present bias and weakness of will potentially pit today’s and tomorrow’s selves against one another. The strong case concerns the normative scope of economic policy and expanding policy recommendation beyond its current welfare-only basis. The weak case imposes adjustment on positive economics; the strong case imposes it on normative economics. The paper closes with brief comments on how historically different sciences and fields draw on one another over time. |
| Keywords: | economics, philosophy, reconciliation problem, present bias, individual identity, justice, Rawls, institutions, interdisciplinarity |
| JEL: | A12 A33 B41 D03 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2024-04 |
| By: | Serena Sordi; Ahmad Naimzada; Marwil J. Dávila-Fernández |
| Abstract: | The global recession triggered by the great financial crisis and the response to the COVID-19 emergency have renewed the interest in connecting business cycle dynamics to financial conditions. This paper proposes a simple macro-dynamic behavioural model of the interaction between the stock market (SM) and the economy’s real sector (RS). We innovate by studying the interaction between two alternative sources of persistent fluctuations related to two different types of heterogeneity. The SM is modelled as a market with two heterogeneous speculators – chartists and fundamentalists. On the other hand, the RS is formalised as a simplified discrete-time version of Goodwin’s growth cycle model, distinguishing between labour and capital incomes. The interaction between the RS and the SM is the result of two assumptions: (i ) investment decisions depend on both profits and the stock price; (ii ) the fundamental value of the latter which is used by speculators in their demand functions is proportional to national output. The overlap between financial and real dynamics results in a novel source of economic fluctuations. We show that the dynamics generated by the resulting 2D map depend crucially on the sensitivity of investment to the stock price and a parameter entering the relation between the fundamental value of the stock price and national output. |
| Keywords: | Persistent fluctuations; Heterogeneous agents; Nonlinear dynamics; Stock market; Real-financial interactions |
| JEL: | C02 D84 E32 G12 |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:906 |
| By: | Anton Korinek |
| Abstract: | This paper examines the profound challenges that transformative advances in AI towards Artificial General Intelligence (AGI) will pose for economists and economic policymakers. I examine how the Age of AI will revolutionize the basic structure of our economies by diminishing the role of labor, leading to unprecedented productivity gains but raising concerns about job disruption, income distribution, and the value of education and human capital. I explore what roles may remain for labor post-AGI, and which production factors will grow in importance. The paper then identifies eight key challenges for economic policy in the Age of AI: (1) inequality and income distribution, (2) education and skill development, (3) social and political stability, (4) macroeconomic policy, (5) antitrust and market regulation, (6) intellectual property, (7) environmental implications, and (8) global AI governance. It concludes by emphasizing how economists can contribute to a better understanding of these challenges. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.13168 |
| By: | Waitkus, Nora; Savage, Mike; Toft, Maren |
| Abstract: | Wealth inequalities are increasingly prominent in contemporary societies but they have not been systematically addressed by sociological class analysis. However, class analysis should have a lot to offer: in the literature on wealth inequality, wealth is often approached as a unidimensional distribution – a quantity one can possess more or less of, crystallized in notions of the Top 1%. In this theoretical intervention, we discuss ways in which class analysis can address the gravity of wealth inequality by returning to the origins in the thinking of Marx and Weber, where capital accumulation and property organization were given central stage. Drawing on more recent contributions from Bourdieu, and integrating insights from political economy, theories of racial capitalism and feminist perspectives, we outline ways to enrich class theory through attention to housing, finance, business and debt. Our intervention allows class analysis to embrace accumulation, exploitation, closure and exclusion; making it fit for purpose to address 21st-century social changes. |
| Keywords: | capitalism; class; theory; wealth |
| JEL: | J1 |
| Date: | 2024–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124534 |
| By: | Laurence Scialom; Gaëtan Le Quang; Thomas Lagoarde Segot |
| Abstract: | This paper explores the implications of ecosystemic macroprudential regulations on sustainability in an ecological PK-SFC framework. We first discuss the link between banks and global warming; and present the case for connecting prudential regulation with planetary boundaries. We then report a set of simulations suggesting that in the short run, such ecosystemic prudential regulations could effectively green banks’ balance sheets, credit flows, and curtail brown investment, at the cost, however, of significant short-run losses. In the longer run, the induced green transition appears to set the economy on a more sustainable pathway, to decrease inflationary pressures, and to maintain real GDP at the baseline level, with distributional effects favourable to wage-earners. These results highlight the relevance of ecosystemic prudential regulation to tackle climate change and call for adopting a holistic approach to sustainability policies. |
| Keywords: | ecological finance, SFC modelling |
| JEL: | G00 G28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-28 |
| By: | Mario W. Dávila-Dávila; Marwil J. Dávila-Fernández |
| Abstract: | Public perceptions of the urgency of fighting climate change differ between countries and have fluctuated over time. Heterogeneity in ecological thinking poses a problem because limiting global warming requires cohesion and coordination among the socioeconomic system’s leading players in developed and developing countries. Most studies in the field have wrongly treated advanced and emerging economies as similar systems in different positions of a linear development path. Developing economies are structurally different as they are populated by a large informal sector that accounts for up to half of economic activity. The role of the informal sector in economic development remains controversial, let alone the implications of its existence to a successful green transition. We present a macrodynamic model to study the interplay between informality and heterogeneity in ecological thinking. The model explains the endogenous emergence of four stable equilibria. Two have minor informality but significant differences in green attitudes. We refer to them as the US vs Europe cases in the Global North. In the other two, informality prevails, while we observe sharp differences in general support for mitigation policies, resembling an Asia vs Latin America scenario. Studying the basins of attraction allows us to provide policymakers with additional insights into the political economy of climate change in the Global South |
| Keywords: | Climate change; Informality; Green attitudes, Global South; Development. |
| JEL: | Q01 Q56 O11 O44 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:914 |