|
on Heterodox Microeconomics |
|
Issue of 2025–10–27
twenty-two papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | L. Randall Wray |
| Abstract: | This paper examines heterodox theories of the determinants of the value of money. Orthodox approaches that tie money's value to relative scarcity of money or to the price level are rejected as inconsistent with the monetary theory of production embraced by heterodox traditions linked to Marx, Veblen, and Keynes. This paper examines and integrates (1) recent contributions by David Graeber and Duncan Foley that reinterpret Marx's labor theory of value, (2) the interpretation of Keynes's liquidity preference theory as a theory of asset pricing that began with Sraffa and was further developed by Minsky and Kregel, and (3) Modern Money Theory's approach to sovereign currency. As Heilbroner argued, money is central to the internal logic of the capitalist system, and is what makes capitalism truly different from other social organizations. Our theory of value informs our beliefs about how the deep structure of the economic system generates a system of prices denominated in the money of account. |
| Keywords: | Labor theory of value; Modern Money Theory; Liquidity Preference; Monetary Theory of Production; Marx; Keynes; Minsky; Graeber; Foley; Sraffa; Heilbroner |
| JEL: | B14 B24 B25 B51 B52 E11 E12 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1062 |
| By: | Lukas Baeurle (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; Socio-Ecological Transformation Lab, Johannes Kepler University Linz, Austria; Department of Socioeconomics, University of Hamburg, Germany); Sabine Maasen (Department of Socioeconomics, University of Hamburg, Germany) |
| Abstract: | Contemporary societies face a persistent polycrisis in which socioeconomic, ecological, technological, and geopolitical challenges intersect and reinforce each other. This volatility exposes the limitations of linear, mono-paradigmatic responses and places new demands on the production and circulation of knowledge. This is also true for economic matters, policies and rationales: While mainstream economics remains characterised by abstraction, disciplinary closure, and expertocratic policy advisory, an alternative ecosystem has emerged, also in the German-speaking world: the New Economy Space (NES). This article reconstructs the NES as a boundary-spanning dispositif of knowledge production that combines critical resources from pluralist economics with broader societal trends towards transdisciplinarity and impact orientation. Drawing on interviews, organisational documents, and observations of networking events, the study identifies three defining features of NES knowledge production: the continuous establishment of agile addresses, a pronounced orientation towards political impact, and the organisation of transversality across fields. NES think tanks thereby translate heterogeneous knowledges and normative positions into strategically crafted interventions for policymakers, media, and civil society. The article situates NES practices in contrast to academic economics and highlights their potential to reshape the epistemic and institutional foundations of economic expertise. It concludes by reflecting on the implications of this emerging model for the future of economics as a science and as a mode of public intervention. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ico:wpaper:170 |
| By: | Steven N. Durlauf; David McMillon; Scott Page |
| Abstract: | We analyze the potential for complexity theory to produce insights that elucidate the evolution of socioeconomic inequality and point toward effective policies. We position complexity theory as a complement to more traditional economic approaches. Economic models of inequality can fall into four broad categories: models based on individual attributes and technologies, social interaction models, intergenerational models of transfer, and models of institutional and social structure. Within each of these categories, complexity theory can enhance traditional theory. It is of particular value in helping to distinguish between bottom-up systemic and top-down structural causes of inequality. Complexity theory can further enrich our understanding of economic inequality by adopting a complex adaptive system of systems approach in which economic, social, political, and psychosocial systems interact with one another and with institutional and social structures to produce robust inequality, particularly on racial lines. |
| JEL: | D01 D3 D5 J7 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34381 |
| By: | Joerg Bibow |
| Abstract: | This paper revisits Keynes's (1930) essay titled "The economic possibilities for our grandchildren." We discuss the three broader trends identified by Keynes that he expected would come to characterize the socio-economic evolution of advanced countries under individualistic capitalism: first, continued technological progress and capital accumulation as the main drivers of exponential growth in economic possibilities; second, a gradual general rebalancing of life choices away from work; and third, a change in the code of morals in societies approaching an envisioned stationary state of zero net capital accumulation in which mankind has solved its economic problem and enjoys a lifestyle predominantly framed by leisure rather than disutility-yielding work. We assess actual outcomes by 2023 and attempt to peek into the future economic possibilities for this generation's grandchildren. |
| Keywords: | Keynes; technology; growth; work; leisure; capitalism |
| JEL: | B22 B31 E20 J22 N10 Q40 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1038 |
| By: | Laura Lisset Montiel-Orozco |
| Abstract: | This working paper contrasts the neo-Keynesian and post-Keynesian theories of monetary policy for an open economy, highlighting the irrelevance of the orthodox theory and the explanatory capacity of heterodoxy for an emerging economy such as Mexico. It focuses on the role of the central bank and the case of the Mexican currency during the economic recovery after the Great Lockout. In the first section, we criticize two proposals of the 3-Equation New-Keynesian model, concluding that, implicitly, both models reaffirm the extreme neutrality of money and the exchange rate in both the short and the long runs. In contrast, we analyze the post-Keynesian exchange rate model proposed by John T. Harvey (2009). In addition, we rely on the fundamentals of the heterodox school of thought such as the financial instability hypothesis of Hyman Minsky (1994) and the relevance of capital flows for the determination of the exchange rate and its implications for economic growth and prices by Jan Kregel (2008). Finally, the erratic behavior of the excessive appreciation of the Mexican Super Peso against the dollar after the recovery of the COVID-19 crisis and in the context of global risk is presented. |
| Keywords: | Monetary Policy; New Keynesian Economics; post-Keynesian Economics; Foreign Exchange Rate; Mexico |
| JEL: | E31 E52 E10 E12 F31 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1057 |
| By: | Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito |
| Abstract: | This paper examines how the fragmentation of production across Global Value Chains (GVCs) generates both economic and environmental inequalities. Building on the "smile curve" framework (Mudambi, 2008; Meng et al., 2020), we show that developing countries specialize in low-value-added, high-emission production stages, while advanced economies capture high-value, low-emission activities like R&D and design (Riccio et al., 2025). Using OECD ICIO and CO2 emissions data, we demonstrate that GVC integration exacerbates a "double harm": production workers -particularly in middle-stage manufacturing- face wage suppression, while these same stages exhibit higher carbon intensity per unit of value added. This aligns with the Pollution Haven Hypothesis (Cole, 2004), as emissions are displaced to regions with weaker regulations. Our analysis reveals an environmental smile curve, where environmental and economic downgrading co-occur in middle segments of GVCs, reinforcing global inequalities. These disparities intensify with deeper GVC penetration, challenging the decoupling narrative of green growth. By integrating labour and emissions data, we provide novel evidence of how GVCs structurally embed unequal ecological and economic burdens. |
| Keywords: | Smile Curve, Ecological Economics, Global Value Chain, Embodied emissions, Environmental and Income Inequality. |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/35 |
| By: | Tanweer Akram; Khawaja Mamun |
| Abstract: | This paper critically reviews both mainstream and Keynesian empirical studies of interest rate dynamics. It assesses the key findings of a selected number of these studies, surveying the debates between the mainstream and the Keynesian schools. It also explores the debates on interest rate dynamics within the Post Keynesian school of thought. Lastly, the paper identifies the critical questions relevant for future empirical research. |
| Keywords: | Interest Rate Dynamics; Empirical Modeling of Interest Rates; Mainstream Economics; Keynesian Economics |
| JEL: | E43 E50 E58 E60 G10 G12 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1043 |
| By: | Catherine Bodet (La Manufacture Coopérative); Thomas Lamarche (LADYSS - Laboratoire Dynamiques Sociales et Recomposition des Espaces - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité); Nadine Richez-Battesti (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The article highlights the potential of the mesoeconomic approach to simultaneously account for the diversity of SSE enterprises and to discuss the relative autonomy of this mesoeconomic arena in relation to the dominant accumulation regime. The purpose of mesoeconomics is to reveal arenas of production that maintain relative autonomy from the overall dynamics of accumulation. It thus allows us to grasp the endogenous variety of capitalisms and the functioning of different mesoeconomic arenas, whether they remain marginal or are able to expand to macro regimes. Our ultimate goal is to identify the possible contribution of the SSE to socio-ecological transitions. |
| Abstract: | L'article montre la capacité de la démarche mésoéconomique à rendre compte simultanément de la diversité des entreprises de l'ESS et à débattre de l'autonomie relative de cet espace mésoéconomique par rapport au régime d'accumulation dominant. La mésoéconomie a en effet pour objet de mettre en lumière des espaces de production maintenant une autonomie relative vis-à-vis des dynamiques d'ensemble de l'accumulation. Elle permet ainsi de saisir la variété endogène des capitalismes et d'observer le fonctionnement de différents espaces mésoéconomique, qu'ils restent marginaux ou qu'ils soient à même de monter en régime. Notre objet est au final d'identifier la possible contribution de l'ESS aux transitions socio-écologiques à partir de ses logiques propres. |
| Keywords: | mesoeconomy, polycentricity, Social Solidarity Economy, mésoéconomie, transition socio-écologique, polycentricité, socio-ecological transition, Économie sociale et solidaire |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05304968 |
| By: | Krystian Bua; Giovanni Dosi; Maria Enrica Virgillito |
| Abstract: | This paper presents new compelling evidence on the company-level ownership structure of military firms detained by asset managers. Employing a unique firm-level interlinked dataset, connecting publicly listed firms in the aerospace and defense industry, and their corresponding structure of ownership, we give account of the tremendous increase of (i) the market capitalization of the industry, which represents the one achieving the highest variation during the period 2021-2025; (ii) the increasing penetration of asset managers, particularly of the so-called Big Four, in the ownership structure of the military complex. Notably, we find evidence of common ownership dynamics driven by asset managers' holdings in both the aerospace and defense sectors, as well as a temporal co-movement between alternative proxies for corporate performance and the ownership shares held by portfolio managers in the military industry. Our evidence supports the progressive shift of financial capitalism, largely US-based, toward opportunity of profitability in global conflicts, via their ownership of leading international military firms. |
| Keywords: | Financialization, Monopoly capitalism, Financial imperialism |
| Date: | 2025–10–17 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/33 |
| By: | Memmen, Marvin; Ipsen, Leonhard; Schulz-Gebhard, Jan |
| Abstract: | The relationship between firm markups and inflation remains a topic of contention. Empirical findings suggest that many firms were able to maintain or increase their markups and profits amidst the recent wide-ranging cost shocks. This phenomenon, often referred to as sellers' inflation, raises two questions: i) why do firms change their price-setting strategies from previously competing for market shares via lower prices to raising prices in proportion or even excess of a price shock, and ii) why can they do so without impeding their market share and profitability? We argue that current supply-side explanations exhibit several theoretical and empirical shortcomings and instead propose a demand-based alternative based on the textbook argument of distorted price signals. We argue that higher price dispersion during periods of price shocks reflect informational costs for consumers and reduce consumers' price elasticity of demand by deranging the system of relative prices they oversee. Based on an agent-based model, we demonstrate that the combination of boundedly rational consumers and informational costs due to price dispersion enables firms to increase their markups and profits in response to wide-ranging cost-push shocks. As consumers increasingly struggle to monitor price changes, they become less able to adequately punish (or reward) firms for raising (or maintaining) prices. This straightforward mechanism offers a promising explanation for the emergence of sellers' inflation. |
| Keywords: | Inflation, Markups, Agent-based modeling, Consumer behavior, Price dispersion |
| JEL: | E31 E71 D83 C63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bamber:330171 |
| By: | Dirk Ehnts; Jussi Ora |
| Abstract: | In this paper, we discuss the balance sheet mechanics of the Swedish government. We examine spending, government bond purchases, and tax payments. As long as the Swedish central bank, which is created through Swedish laws, supports the Swedish central government, it cannot run out of money. The Swedish government therefore plays a large role in the Swedish economy. It can and should target full employment and price stability, bringing to bear its fiscal power. |
| Keywords: | Riksbank; Swedish crowns; public finance; money creation |
| JEL: | E62 B52 E12 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1035 |
| By: | Chirag Lala |
| Abstract: | The Inflation Reduction Act (IRA) is criticized for "derisking" private investment by increasing the gains to private firms. The derisking critique argues that the IRA insufficiently disciplines private firms; it does not utilize legal or financial penalties which would force firms to undertake green investment and bar emissions-intensive investment. This paper answers that critique by providing a Post-Keynesian theory of capital expenditure. It argues all industrial policies promote investment by removing or mitigating risks in an environment of fundamental uncertainty. Industrial policies tackle different risks and can be assessed or compared on their effectiveness in doing so. An insufficient investment growth rate need not be an indication of their failure, but that complementary policies are required to mitigate risks or make risks calculable. For instance, the IRA's uncapped Investment Tax Credit (ITC) increases clean energy investment by reducing project reliance on expensive debt financing. The ITC does not address other barriers to clean energy investment: transmission and distribution, permitting, or the need for clean firm resources. This is not a failure of discipline, but rather an indication that more state intervention must facilitate rapid decarbonization. The derisking critique's emphasis on disciplining private firms into investment reallocation underestimates real obstacles to investment, particularly how those obstacles shape choices faced by firms. It also affects the character of investment itself, making it inaccurate to describe investment as the allocation of fixed financial resources. The derisking critique lacks a mechanism connecting financial or legal disciplinary measures on firms to an increase in green capital expenditure. This causes the derisking critique to miss a more productive avenue for investigating industrial policy conditionalities: linking them to a broader state-led coordination of varying industrial policy priorities, the timing of capital expenditure to meet them, and seizing of opportunities presented by their success. Originally issued as EDI Working Paper No. 19, March 2024. |
| Keywords: | Tax Credits; IRA; Inflation Reduction Act; Clean Energy; Industrial Policy; Investment Theory; Capital Theory; Risk; Uncertainty |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1069 |
| By: | Jesus Felipe; John McCombie |
| Abstract: | This paper offers a retrospective view of the key pillar of Solow's neoclassical growth model, namely the aggregate production function. We review how this tool came to life and how it has survived until today, despite three criticisms that undermined its raison d'etre. They are the Cambridge Capital Theory Controversies, the Aggregation Problem, and the Accounting Identity. These criticisms were forgotten by the profession, not because they were wrong but because of the key role played by Robert Solow in the field. Today, these criticisms are not even mentioned when students are introduced to (neoclassical) growth theory, which is presented in most economics departments and macroeconomics textbooks as the only theory worth studying. |
| Keywords: | Accounting Identity; Aggregation Problem; Cambridge Capital Theory Controversies; Solow |
| JEL: | B22 B31 B32 B41 E13 E25 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1046 |
| By: | Ibrahim Rym (UJM - Université Jean Monnet - Saint-Étienne, COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | In a context of successive or prolonged crises and the re-evaluation of our productive and democratic models in light of planetary challenges, we consider it more crucial than ever to develop the capacity to support today's and tomorrow's entrepreneurs in the processes of social transformation in which they participate. However, entrepreneurship research is fragmented into a diversity of research streams, whose history has been shaped by various, often outdated, borrowings from neighboring disciplines (sociology, psychology, economic geography, anthropology...), leading to significant conceptual proliferation and the mobilization of knowledge that is sometimes obsolete. These streams (institutional entrepreneurship, intrapreneurship, international entrepreneurship, social entrepreneurship...), which represent sets of entrepreneurial situations that appear distinct but also reflect the concerns and beliefs prevalent at the times they emerged (Gabrielsson et al., 2023), have since developed their own trajectories. As a result, their evolution has sometimes taken divergent paths, making it increasingly difficult to transfer knowledge produced in one domain to another (McMullen et al., 2021; Baker and Welter, 2021). This further complicates the mobilization of these distinct academic corpora to support entrepreneurial processes, during which the situations encountered and the scope of opportunities extend beyond the boundaries delineated by the fields of literature. In this pivotal period presaging the restructuring of our economies and entrepreneurial models, the need for the discipline to consolidate around a comprehensive and parsimonious conceptual core, applicable to a multiplicity of specific situations, has become increasingly apparent (McMullen et al., 2021; Baker and Welter, 2021). This requires developing the capacity to empirically refute certain existing theoretical propositions, to challenge specific conceptual frameworks, to enhance the universality of the knowledge generated, and to specify actionable, non-essentialist categories of situations for practitioners. Such categories should refer to regimes of action - e.g., seeking partners, legitimizing - rather than identities attributed to their manifestations, such as social entrepreneurship, necessity entrepreneurship, or entrepreneurship in the Global South. This pursuit of parsimony – a form of "housekeeping" (Dimov, 2024) involving the sorting and refinement of its foundational elements – justifies turning to contributions from philosophy as a discipline, and more specifically to philosophies of action. Attention must therefore focus on understanding the entrepreneurial process itself, or rather the various forms of successive situations in which it is instantiated, to resist any temptation toward reification. It must also focus on how entrepreneurs perceive this open-ended process, how they project themselves into it, apprehend the situations they encounter, and act within them. Ultimately, interest lies in the interplay between cognition, action, and situation by which the entrepreneurial process is instantiated, as well as in the intersubjectivities that influence its trajectory (Le Pontois and Foliard, 2025). It is only by documenting these dimensions empirically that it will be possible to generate truly relevant knowledge (Thompson et al., 2023). Our fundamental research aims to actively contribute to this ambition of theoretical consolidation through the proposal of an original methodological approach for data collection and analysis, reproducible across various levels of analysis. We seek to demonstrate the value of this methodological approach, which is rarely employed in our discipline (and which we have tested on a small scale), by combining complementary approaches drawn from two distinct disciplinary domains—sociology and ergonomics. |
| Keywords: | Methodology, Epistemology, Agency, Entrepreneurship |
| Date: | 2025–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05313293 |
| By: | Michalis Nikiforos; Simon Grothe |
| Abstract: | The post-pandemic surge in inflation was accompanied by a surge in the corporate share of profits. As a result, several economists and policy makers have given to it names such as "profit-led inflation" or "sellers' inflation." The present paper discusses the extent to which profit-led inflation, as an explanation for the recent surge in inflation, is compatible with what we know about the price-setting behavior of firms, income distribution, and inflation. We do that in juxtaposition to two recent critiques: that the increase in the profit share is the result of cyclical factors, and that the increase in import prices leads to higher profit shares even under constant markups. We show that there is little evidence that the recent surge in profitability is cyclical in nature. Moreover, after outlining the Structuralist/Kaleckian theories of prices and inflation we argue that profit-led inflation does not require an increase in the markup of the firms and is consistent with these theories. In the face of large import and other price shocks even under constant markups, firms are able to pass the burden of adjustment to real wages. Thus, the term profit-led emphasizes the distributional source and consequences of inflation. We also provide an empirical examination of the markups in the post-pandemic period using data from the Compustat database. We show that, on average, firms were able to increase or maintain their markups, although there is significant heterogeneity across sectors or the position of the firms in the distribution of markups. |
| Keywords: | Inflation; Markup; Distribution; Profit-led Inflation |
| JEL: | E11 E12 E31 C67 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1037 |
| By: | Raul A. Carrillo |
| Abstract: | Scholars and affiliates of the Levy Economics Institute have long demonstrated a granular understanding of the "operations" of money, which entails understanding the financial system's law and technology (Grey 2019, Tymoigne 2014, Fullwiler 2010, Bell and Wray 2002-3, Bell 2000). During the dot-com bubble, many Levy-affiliated economists underscored the relationship between government fiscal surpluses and unsustainable private debt (Godley and Wray 1999). Recently, scholars have written about the collapse of Silicon Valley Bank (Grey 2023; Tankus 2023) and resurgent speculation in the tech sector (Veneroso and Pasquali 2021). These are but a few examples. Here, I present some brief thoughts on money as a technology--money itself. I argue there is value in thinking of money not only as a legal institution, political, economic, or social relation but as technology. The exercise sharpens our vision of the future of money even as we continue to believe in radical uncertainty. I address a few points in this essay. First, I make the case for money as technology. I then survey three applications: 1) the trajectory of state money as a technology of public finance and its relationship to the suppression of indigenous and non-state monies, 2) the regulation of money-like liabilities issued by technology companies, which operate according to the accumulative logic of Silicon Valley rather than Wall Street, and 3) money's future as a technology of surveillance, discipline, and punishment. Finally, I call for scholarship to inform a vision of money as a more democratic technology (per the mission of the Economic Democracy Initiative and Levy Economics Institute). |
| Keywords: | Money; Technology; Neochartalism; Privacy; Surveillance; De-monetization |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1070 |
| By: | Nikolaos Rodousakis; Giuliano Toshiro Yajima; George Soklis |
| Abstract: | We argue that the US trade and industry sector has experienced several unsustainable sectoral processes, including (i) a fall in the trade balance in machinery and equipment and high-tech (HT) industries, (ii) a rise in import multipliers in machinery and equipment and HT industries, (iii) a fall in the manufacturing share of GDP in machinery and equipment and HT industries, (iv) a rise in commodities share of GDP, (v) a fall in the wage share, (vi) structural shifts in the consumption share of wages, and (vii) a fall in employment multipliers for the US, particularly in manufacturing. To address these issues, the US must shift toward a more sustainable and value-added economy with a focus on innovation and investment in high-tech industries, renewable energy, and sustainable agriculture. Additionally, policies must be put in place to address the negative impacts of resource extraction and to promote a more equitable distribution of income and wealth. |
| Keywords: | Input–Output Analysis; Industrial Policy; Income distribution |
| JEL: | C67 D57 O25 D33 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1049 |
| By: | Pavlina R. Tcherneva |
| Abstract: | Orthodox economic theory presents the policy maker with an impossible choice: eradicate unemployment at the cost of undesirable inflation or keep prices stable by maintaining some level of involuntary unemployment. This is the canon, as embodied in the natural rate of unemployment theory and the Non-Accelerating Inflation Rate of Unemployment (NAIRU). In the mainstream, there is no alternative. Heterodoxy has long criticized the NAIRU and the natural rate, but has not mounted a robust challenge for lack of a clearly articulated policy alternative that can target both goals: full employment and price stability. Modern Money Theory (MMT) has such a proposal--the federal Job Guarantee. Originally issued as EDI Working Paper No. 02, 2022. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1060 |
| By: | Liudmila Malyshava; B. Oak McCoy |
| Abstract: | This inquiry examines the role of federal policy in gender inequality using the principles of institutional adjustment (Foster 1981; Bush 1987) in the context of the Veblenian dichotomy of habit formation. Specifically, the authors assert that Social Security, though exclusive at its inception in 1935, has undergone significant institutional adjustment. Today, Social Security plays a determining role in providing the appropriate institutional space for not only increasing economic security for older women, but also for reducing gender inequality overall. |
| Keywords: | gender disparities; Social Security; evolutionary policy analysis; economic security; retirement |
| JEL: | B25 B5 I38 J1 N3 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1045 |
| By: | Francesco Zezza |
| Abstract: | Following the Great Financial Crisis of 2008-9, there has been a shift in mainstream economic policy modeling toward "realism, " with dynamic stochastic general equilibrium (DSGE) models partly diverging from the representative agent framework, and large-scale, New-Keynesian structural models addressing real-financial interactions in greater detail. Still, the need for tractability of the former, and the lack of theoretical structure of the latter prevented the complete introduction of a modern--and complex--multi-sector/multi-asset financial system in policy models in use at central banks and treasuries. However, empirical models adopting the Stock-Flow Consistent (SFC) approach resolved most of these complications with a surge in the number of country models over the last few years. The present work lays out the main out-of-sample features of a quarterly SFC model of the Italian economy (MITA). |
| Keywords: | Empirical Stock-Flow Consistent Models; Monetary Policy; Fiscal Policy; Italy |
| JEL: | C54 E12 E17 E44 E58 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1063 |
| By: | Catherine C. Eckel (Texas A&M University); Lata Gangadharan (Monash University); Philip J. Grossman (Monash University); Miranda Lambert (Texas A&M University); Nina Xue (WU Vienna University of Economics and Business,) |
| Abstract: | Motivated by the stereotype that women are more cooperative and less competitive, we investigate how the institutional environment impacts the gender leadership gap. An experiment tests leaders’ impact on earnings under competitive (“winner take all”) versus cooperative (equal earnings distribution) incentive schemes. All leaders enhance efficiency similarly, but a gender gap emerges in the competitive context where women receive lower evaluations for identical advice. This bias disappears in the cooperative context where female leaders are evaluated 50% higher, suggesting that congruence between the environment and gender stereotypes has important policy implications. Men are more willing to lead, regardless of context. |
| Keywords: | gender, leadership, institutional environment, performance evaluation, lab ex- periment |
| JEL: | C92 D91 J16 J71 M14 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2025-13 |
| By: | Tarron Khemraj |
| Abstract: | The Guyana government, from 2015 to 2021, accumulated a large overdraft on its central bank account. It owed this overdraft to a binding debt ceiling limit and fractious political environment that prevented an increase in the ceiling, allowing for the auctioning of Treasury bills to create the liquidity reflux necessary to refill the account. This paper studies the macroeconomic effects of reflux (one-sided sales of Treasury bills) and broken or incomplete reflux (base money expansion) by focusing on domestic inflation, the foreign exchange (FX) rate, and the quantity of FX traded in the local market. The empirical results suggest that the inflation rate is largely driven by foreign price and oil shocks. Nevertheless, the broken reflux adversely affected the local FX market by increasing the demand for foreign currencies, marginally depreciating the exchange rate, and slightly increasing the inflation rate. The latter finding has important implications for the enormous post-2020 budget spending since the discovery of offshore oil. However, reflux was found to have a stabilizing effect on the demand for FX and inflation. Granger predictability tests provide strong evidence that the government spends first from its central bank account before reflux occurs. Finally, the paper discusses a few novel institutional features of Guyana which resemble the monetary circuit framework (with government) of neo-chartalists. |
| Keywords: | neo-chartalism; fiscal-monetary nexus; government account overdraft; inflation; excess liquidity |
| JEL: | B52 E42 E51 E58 F41 H62 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1050 |