nep-pke 2005-02-06 papers

on Post Keynesian Economics

Issue of 2005‒02‒06
two papers chosen by
Karl Petrick
Leeds Metropolitan University

Healthy, Educated and Wealthy: Is the Welfare State Really Harmful for Growth? By Beraldo, S.; Montolio, D.; Turati, G.
Is Neoclassical Economics still Entrepreneurless? By Bianchi, Milo; Henrekson, Magnus

Healthy, Educated and Wealthy: Is the Welfare State Really Harmful for Growth?

By:	Beraldo, S.; Montolio, D.; Turati, G. (Universitat de Barcelona)
Abstract:	In this paper, we study how public and private expenditures in health and education affect economic growth by their influence on people’s health, abilities, skills and knowledge. We consider a growth accounting framework in order to test whether welfare expenditures more than offset the efficiency losses caused by distortionary taxation, and whether the effects of public expenditure on economic growth differ from those of private expenditure. Our empirical analysis is based on a panel of 19 OECD countries observed between 1971 and 1998. The results are consistent with the hypothesis that the contribution of welfare expenditures more than compensates for the distortions caused by the tax system; and the estimated positive impact is stronger for health than for education. We also find some evidence that public expenditure influences GDP growth more than private expenditure.
JEL:	H51 H52 I38 O47
Date:	2005
URL:	http://d.repec.org/n?u=RePEc:bar:bedcje:2005127&r=pke

Is Neoclassical Economics still Entrepreneurless?

By:	Bianchi, Milo (Dept. of Economics, Stockholm School of Economics); Henrekson, Magnus (Dept. of Economics, Stockholm School of Economics)
Abstract:	We review and evaluate some recent contributions on the modeling of entrepreneurship within a neoclassical framework, analyzing how and to what extent the fundamental ingredients suggested in the social science literature were captured. We show how these approaches are important in stressing the main elements of a complex picture without being able to completely describe it. However, each modeling attempt focuses only on one specific feature of entrepreneurship. The entrepreneurial function broadly perceived eludes analytical tractability. As a consequence, the models can be useful in analyzing the effect of entrepreneurial behavior at an aggregate level, but not at explaining individual choices. From these observations we highlight how a simplistic interpretation of the existing mainstream approaches incorporating entrepreneurship runs the risk of leading to distortionary policy interventions.
Keywords:	Entrepreneurial Choice; Entrepreneurship; Innovation; Neoclassical Modeling; Uncertainty
JEL:	B41 D81 J23 L23 M13 O31
Date:	2005–01–31
URL:	http://d.repec.org/n?u=RePEc:hhs:hastef:0584&r=pke

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