nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2005‒10‒04
four papers chosen by
Karl Petrick
Leeds Metropolitan University

  1. An Essay on the Interactions between the Bank of England's Forecasts, The MPC's Policy Adjustments, and the Eventual Outcome By Charles Goodhart
  2. Globalization, Women’s Economic Rights and Forced Labor By Eric Neumayer; Indra de Soysa
  3. Marx and the Mechanism of Functioning of a Socialist Economy By Oldrich Kyn
  4. On the indeterminacy of New-Keynesian economics By Andreas Beyer; Roger E. A. Farmer

  1. By: Charles Goodhart
    Abstract: No abstract available.
    Date: 2005–10
  2. By: Eric Neumayer (London School of Economics); Indra de Soysa (Norwegian University of Science & Technology NTNU , Norway)
    Abstract: Globalization critics are concerned that increased trade openness and foreign direct investment exacerbate existing economic disadvantages of women and foster conditions for forced labor. Defenders of globalization argue instead that as countries become more open and competition intensifies, discrimination against any group, including women, becomes more difficult to sustain and is therefore likely to recede. The same is argued with respect to forced labor. This article puts these competing claims to an empirical test. We find that countries that are more open to trade provide better economic rights to women and have a lower incidence of forced labor. This effect holds in a global sample as well as in a developing country sub-sample and holds also when potential feedback effects are controlled via instrumental variable regression. The extent of an economy’s ‘penetration’ by foreign direct investment has no statistically significant impact. Globalization might weaken the general bargaining position of labor such that outcome-related labor standards might suffer. However, being more open toward trade is likely to promote rather than hinder the realization of two labor rights considered as core or fundamental by the International Labour Organization, namely the elimination of economic discrimination and of forced labor.
    JEL: J
    Date: 2005–09–27
  3. By: Oldrich Kyn (Boston University)
    Abstract: This paper was presented at the Belgrade conference for one hundred years anniversary of 'Das Kapital'. Marx himself said very little about the concrete organization of a socialist economy. His general remarks about socialism were 'elaborated' by his followers by inference from Marx's criticism of capitalism and by inclusion of principles that did originate with other socialist or 'Marxist' thinkers. This explains why certain views about the organization of the socialist economy that are today presented as 'Marxian' may be in direct contradiction to some of Marx's own views. Marx could not disengage himself completely from his own historical determination. It is quite obvious that to a large extent he was influenced by the topics and analytical tools of his theoretical forerunners and contemporaries. But the evolution of economic theory continued after Marx. New problems appeared and new methods were developed, especially mathematical methods, which Marx could not have used in his time. Marx believed that market must be replaced by a rational planned control of the economy because he saw the market mechanism as functioning purely on ex post basis and that the lack of ex ante coordination of production decisions leads necessarily to the spontaneous imbalances and cyclical fluctuations in market economies. But market does not function solely in an ex post manner. No producer works completely 'in the dark', he always has some information, albeit incomplete, that allows him to anticipate demand and thus determine what is to be produced. The quality of the coordination done by the market depends on how good is the anticipation of future demand. In the XXth century forecasting methods have undergone fast development. Methods of demand analysis make it possible to predict changes in demand for individual types of commodities. Those and many other new developments greatly anhance the available information and improve the ex ante decision-making of firms and thus limit necessary corrections which the market must make ex post.
    Keywords: Marx, Market Economy, Socialism, Central Planning, Alienation,
    JEL: B
    Date: 2005–09–26
  4. By: Andreas Beyer (European Central Bank, Kaiserstr. 29, D-60311 Frankfurt am Main, Germany); Roger E. A. Farmer (UCLA, Dept. of Economics, 8283 Bunche Hall, Box 951477, Los Angeles, CA 90095-147,USA)
    Abstract: We study identification in a class of three-equation monetary models. We argue that these models are typically not identified. For any given exactly identified model, we provide an algorithm that generates a class of equivalent models that have the same reduced form. We use our algorithm to provide four examples of the consequences of lack of identification. In our first two examples we show that it is not possible to tell whether the policy rule or the Phillips curve is forward or backward looking. In example 3 we establish an equivalence between a class of models proposed by Benhabib and Farmer [1] and the standard new-Keynesian model. This result is disturbing since equi- libria in the Benhabib-Farmer model are typically indeterminate for a class of policy rules that generate determinate outcomes in the new-Keynesian model. In example 4, we show that there is an equivalence between determi- nate and indeterminate models even if one knows the structural equations of the model.
    Keywords: Identification; Indeterminacy; Transparency; New-Keynesian model.
    JEL: C39 C62 D51 E52 E58
    Date: 2004–03

This nep-pke issue is ©2005 by Karl Petrick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.