nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2006‒08‒05
five papers chosen by
Karl Petrick
Leeds Metropolitan University

  1. Is the NAIRU theory a Monetarist, New Keynesian, Post Keynesian or a Marxist theory? By Engelbert Stockhammer
  2. Mutual Monitoring in Teams: Theory and Experimental Evidence on the Importance of Reciprocity By Jeffery Carpenter; Samuel Bowles; Herbert Gintis
  3. IMF and Economic Growth: The Effects of Programs, Loans, and Compliance with Conditionality By Dreher, Axel
  4. Privatization and Efficiency: from Principals and Agents to Political Economy By Alberto Cavaliere
  5. Trade, Inequality, and the Political Economy of Institutions By Andrei A. Levchenko; Quý Toàn Ðo

  1. By: Engelbert Stockhammer (Institute for Public Economics, Monetary and Fiscal Policy, Vienna University of Economics & B.A.)
    Abstract: The NAIRU theory has become the mainstream theory in explaining unemployment in Europe and is often used to justify demands for a cutback of the welfare state, reducing unemployment benefits, reducing minimum wages, decentralizing collective bargaining etc. Close inspection reveals that it nonetheless shares some arguments with Post Keynesian and even Marxist theory. The paper proposes an underdetermined, encompassing NAIRU model, which is consistent with several theoretical tradtions. Depending on the closure with respect to demand formation and determination of the NAIRU itself, the model allows for New Keynesian, Post Keynesian and Marxist results.
    JEL: B50 E12 E24
    Date: 2006–03
  2. By: Jeffery Carpenter; Samuel Bowles; Herbert Gintis
    Abstract: Monitoring by peers is often an effective means of attenuating incentive problems. Most explanations of the efficacy of mutual monitoring rely either on small group size or on a version of the Folk theorem with repeated interactions which requires reasonably accurate public information concerning the behavior of each player. We provide a model of team production in which the effectiveness of mutual monitoring depends not on these factors, but rather on strong reciprocity: the willingness of some team members to engage in the costly punishment of shirkers. This alternative does not require small group size or public signals. An experimental public goods game provides evidence for the behavioral relevance of strong reciprocity in teams.
    Date: 2006–08
  3. By: Dreher, Axel
    Abstract: In theory, the IMF could influence economic growth via several channels, among them advice to policy makers, money disbursed under its programs, and its conditionality. This paper tries to disentangle those effects empirically. Using panel data for 98 countries over the period 1970-2000 it analyzes whether IMF involvement influences economic growth in program countries. Consistent with the results of previous studies, it is shown that IMF programs reduce growth rates when their endogeneity is accounted for. There is only weak evidence that compliance with conditionality mitigates this negative effect. IMF loans have no statistically significant impact.
    Keywords: IMF programs, growth, compliance, conditionality
    JEL: F33 F34 O57
    Date: 2005
  4. By: Alberto Cavaliere (Università di Pavia)
    Abstract: We survey the theoretical literature on privatization and efficiency by tracing its evolution from the applications of agency theory to recent contributions in the field of political economy. The first ones extend the theory of regulation with incomplete information to address privatization issues, comparing State Owned Entreprises (SOEs) with private regulated firms. The benefits of privatization may either derive from the constraints it places on malevolent agents or to the impossibility of commitment by a benevolent government because of incomplete contracts. Contributions dealing with political economy issues separate privatization from restructuring decisions. They either explore bargaining between managers and politicians or analyze the impact of privatization shaped by political preferences on efficiency. The theoretical results regarding the relation between privatization and efficiency do not lead to any definitive conclusion. Privatization may increase productive efficiency when restructuring takes place whereas its effects on allocative efficiency still remain uncertain.
    Keywords: Regulation, Imperfect Information, Political Preferences
    JEL: L33 D82 P26
    Date: 2006–06
  5. By: Andrei A. Levchenko; Quý Toàn Ðo
    Abstract: We analyze the relationship between international trade and the quality of economic institutions, such as contract enforcement, rule of law, and property rights. In our model, firms differ in their preferences for institutional quality, which is determined endogenously in a political economy framework. We show that trade opening can worsen institutions when it increases the political power of a small elite of large exporters who prefer to maintain bad institutions. The detrimental effect of trade on institutions is most likely to occur when a small country captures a sufficiently large share of world exports in sectors characterized by economic profits.
    Date: 2006–03–14

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