nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2005‒04‒03
five papers chosen by
Karl Petrick
Leeds Metropolitan University

  1. Critical Realism in Economics and Open-Systems Ontology: A Critique By Andrew Mearman
  2. 'Open-Systems' and Economic Methodology By Andrew Mearman
  3. Monetary Policy Transparency:Too Good to be True? By Iris Biefang-Frisancho Mariscal; Peter Howells
  5. Prebisch-Singer: Debates, Growth Model and Estimates By Mutz,Christine; Ziesemer,Thomas

  1. By: Andrew Mearman (School of Economics, University of the West of England)
    Abstract: This paper examines the treatment of ontology offered by Critical Realism. Three main criticisms are made of the Critical Realist treatment of open systems. It is argued that Critical Realism, particularly in the project in economics emanating from Cambridge, UK, tends to define systems in terms of events. This is shown to be problematic. The exemplar of a closed system provided by Critical Realism of the solar system is shown to be flawed in that it is not closed according to the closure conditions identified by Critical Realism. Second, the negativity of the definitions adopted is problematic for heterodox traditions attempting to build positive programs. The dualism of the definitions is also inconsistent with Dow’s approach. This has ramifications for the coherence of Post Keynesianism. Third, the definitions tend to polarize open and closed systems and ignore the degrees of openness evident in reality. This polarization of systems leads to polarized methodology and unsustainable arguments to reject so-called closed-systems methods.
    Keywords: open systems, closed systems, Critical Realism, Post-Keynesianism, dualism
    Date: 2004–01
  2. By: Andrew Mearman (School of Economics, University of the West of England)
    Abstract: This paper discusses some of the methodological implications of an ‘open-systems’ reality. It presents a possible ontology of open systems which draws on various literatures including, but not limited to, Critical Realism. The paper then extrapolates from the ontology to a set of methodological arguments. Many methods in economics presuppose a degree of closure in their operation. Deductive logic is discussed in this context. This constitutes a disjuncture with reality. It could be argued, therefore, that these methods should be rejected. However, an open-systems methodology is also an open system and it will reflect the impact of other literatures. Thus, based on fallibilism and an avoidance of dualism (in Dow’s terms) rejection of so-called ‘closed-systems methods’ is not an option. Also, given the preponderance of closures in available methods, this would leave little scope for investigation. Thus, a strategy of triangulation should be adopted.
    Keywords: methodology, open-systems, triangulation, Critical Realism, deduction, dualism
    JEL: B4 B5 P0 Z0
    Date: 2004–02
  3. By: Iris Biefang-Frisancho Mariscal (School of Economics, University of the West of England); Peter Howells (School of Economics, University of the West of England)
    Abstract: In the last fifteen years or so the conduct of monetary policy in developed economies has converged in a number of ways which include an increasing emphasis on ‘openness’ and ‘transparency’ in policy-making. There is a widespread belief that transparency in the conduct of UK monetary policy has increased substantially since, and because of, the introduction of inflation targeting and associated institutional reforms in 1992. A large measure of this belief is based upon studies which reveal the increased ability of money market agents to anticipate accurately the change in official rates. In this paper, we have updated one of those studies and show that the findings are largely unaffected by events of the last five years. More interestingly, perhaps, we have floated the possibility that this improved anticipation may be the result of developments other than institutional reforms. For example, it is notable that the Bank of England has made fewer and smaller interest changes since 1992. It is also widely believed (and the behaviour of many macro variables suggests this) that economies have generally become more stable since 1992. If this is true, then macroeconomic forecasts in general should have improved and the increased anticipation would be, partly at least, due to this rather than institutional changes. We test both theses hypotheses with negative results.
    JEL: E58
    Date: 2004–05
  4. By: Leandro Prados de la Escosura
    Abstract: When did Latin America fall behind?. Has the gap between developed countries and Latin America widened over time?. This paper addresses these recurrent questions with the tools provided by the inequality literature. Long-run inter-country inequality is assessed in terms of real (purchasing power-adjusted) GDP per head and of an ‘improved’ human development index as an indicator of welfare for present-day OECD and Latin America. A long term rise in income inequality is observed for this sample of countries with the deepening gap between OECD and Latin America as its main determinant. Contrary to a widespread view, in terms of income, Latin America fell behind in the late twentieth century. Inequality in terms of human development declined over time, but the gap between OECD and Latin America remained largely unchanged.
    Date: 2004–12
  5. By: Mutz,Christine; Ziesemer,Thomas (MERIT)
    Abstract: Prebisch and Singer (henceforth PS) have initiated several debates in economics, which have generated much research. Some of these debates may have converged to a compromise, whereas others are much less researched. We briefly summarize them in the next section in order to point out that the implications for growth theory have been largely neglected. Then we will present a growth model and estimate which show that income and price elasticities matter for long-run growth.
    Keywords: Economics ;
    Date: 2005

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