nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2006‒04‒01
five papers chosen by
Karl Petrick
Leeds Metropolitan University

  1. A survey of economic theories and field evidence on pro-social behavior By Stephan Meier
  2. Sraffa's Prices By Sydney Afriat
  3. The road to price stability By Athanasios Orphanides
  4. "Irrational exuberance" in the Pigou cycle under collateral constraints By Keiichiro Kobayashi; Masaru Inaba
  5. Deterrence in the Cold War and the War on Terror By David K Levine; Robert A Levine

  1. By: Stephan Meier
    Abstract: In recent years, a large number of economic theories have evolved to explain people’s pro-social behavior and the variation in their respective behavior. This paper surveys economic theories on pro-social behavior and presents evidence — mainly from the field — testing these theories. In addition, the survey emphasizes that institutional environment might significantly interact with pro-social preferences and explain some of the variation in observed pro-social behavior.
    Keywords: Human behavior ; Interpersonal relations
    Date: 2006
  2. By: Sydney Afriat
    Abstract: First we consider the existence question in Sraffa’s Chapter I dismissed by counting equations and unknowns. A theorem from the theory of Markov processes, applied to distributions not now of probability but of goods to sectors, shows the general existence of non-negative prices satisfying the conditions imposed by the value equation, that value of output equals value of input. The further condition for these to be unique and positive is that the economy be irreducible, or that no independent sub-economy should exist. Sraffa provides a precise formula determining unique prices, he barely escapes imposing too many conditions on them and certainly cannot require more. In the background and giving motive to the enquiry is the Labour Theory of Value, that goes further. It asserts that the value of anything is ultimately equal to the labour that has gone into making it; so it implies the same principle expressed by the value equation, but a further condition has been added about the nature of the unit. Since the value equation alone makes prices fully determined, there is no room for further conditions, so there is an obstacle to the application of the theory. Standing as a canonical text in a revival of interest in the Theory Of Value serving earlier thought and the later concentration of Ricardo, it offers an exercise in labour value arithmetic, where the only fruit is to find the arithmetic is impossible. An extended interdependence, which applies to repeated production, appears as a stability condition for prices in an adjustment process, and so does the existence of what Sraffa calls a standard commodity, one depending on all others for its production. After treating a case where there is a surplus, and joint production, the relation with Leontief and von Neumann is considered.
    Keywords: Schools of Economic Thought and Methodology, Current Heterodox Approaches, Socialist, Marxian, Sraffian
    JEL: B B5 B51
    Date: 2006–03
  3. By: Athanasios Orphanides
    Abstract: Nearly a quarter-century after Paul Volcker's declaration of war on inflation on October 6, 1979, Alan Greenspan declared that the goal had been achieved. Drawing on the extensive historical record, I examine the views of Chairmen Volcker and Greenspan on some aspects of the evolving monetary policy debate and explore some of the distinguishing characteristics of the disinflation.
    Keywords: Anti-inflationary policies ; Monetary policy ; Greenspan, Alan ; Volcker, Paul A.
    Date: 2006
  4. By: Keiichiro Kobayashi; Masaru Inaba
    Abstract: The boom-bust cycles such as the episode of the "Internet bubble" in the late 1990s may be described as the business cycle driven by changes in expectations, which is called the Pigou cycle by Beaudry and Portier (An exploration into Pigou's theory of cycles, Journal of Monetary Economics, 2004). The key feature of the notion of the Pigou cycle is the comovements in the consumption, the labor, and the investment, in response to changes in expectations. We show that with the assumption that firms are subject to the collateral constraint in financing labor input (and investment), a fairly standard neoclassical model can generate the Pigou cycle. We also show that the collateral-constraint model with the private information can generate the "irrational exuberance," i.e., a boom in which each firm correctly anticipates that its own productivity will not rise, while it also believes wrongly that the productivity of the other firms will rise dramatically.
    Date: 2006–03
  5. By: David K Levine; Robert A Levine
    Date: 2006–03–28

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