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on Post Keynesian Economics |
| By: | James K. Galbraith |
| Abstract: | Unemployment in the European Union (EU) is a serious problem that threatens to disrupt the integration of accession countries, the character of individual countries, and the continued existence of the EU. According to Senior Scholar James K. Galbraith, European integration poses a huge conundrum for European employment because the conventional theory explaining unemployment in EuropeÐlabor market rigiditiesÐis wrong. The application of this policy will not cure European unemployment, but it could destroy the economic promise of the EU for its poorer regions and the accession countries. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_87&r=pke |
| By: | Robert W. Parenteau |
| Abstract: | Over the past decade, deficit spending by U.S. households has supported the U.S. economy. Research Associate Robert W. Parenteau analyzes the financial balance of U.S. households and finds that the pace of deficit spending is likely to stall and, possibly, reverse course. This reversion will jeopardize U.S. profit and economic growth, as well as the growth of countries dependent on export-led development strategies. His research supports the position of other Levy Institute scholars who have urged policymakers to recognize the consequences of current imbalances in the U.S. economy. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_88&r=pke |
| By: | Thomas I. Palley |
| Abstract: | According to Research Associate Thomas A. Palley, global outsourcing represents a new economic challenge that calls for a new set of institutions. In this brief, he expands upon the problems of offshore outsourcing as outlined in Public Policy Brief no. 86 and focuses on the microeconomic foundations. He argues that outsourcing is a central element of globalization that is best understood as a new form of competition. Palley urges policymakers to understand the economic basis of outsourcing in order to develop effective policies, and suggests that they focus on enhancing national competitiveness and establishing new rules that govern the nature of global competition. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_89&r=pke |
| By: | Dimitri B. Papadimitriou; L. Randall Wray |
| Abstract: | Anyone who reads a newspaper knows that most Americans have accumulated excessive levels of debt, and realizes that as interest rates climb, it becomes more difficult to service financial liabilities. To add insult to injury, wage growth has been slow, while pricesÑespecially for energyÑhave risen sharply. What is not clear, however, is the fact that taxes have also been rising rapidly, relative to both income and government spending. In this Policy Note, we concentrate on the last issue, and argue that many middle-income earners will find themselves unprepared for the coming surprise in April. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:07-1&r=pke |
| By: | Jan Toporowski |
| Abstract: | This paper reviews the recently published Ph.D. thesis of Hyman P. Minsky, summarizing its main contributions to methodology and microeconomics. These were aspects of economics with which Minsky is not usually associated, but which lie at the foundation of his later work. They include critical remarks on Cambridge economics. The paper then draws out some antecedents of Minsky's ideas in the work of Henry Simons, and highlights the Marshallian monetary analysis that he adopted. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_480&r=pke |
| By: | Eric Tymoigne |
| Abstract: | By providing five different criticisms of the notion of real rate, the paper argues that this concept, as Fisher defined it or as a definition, is not relevant to economic analysis. Following Keynes and other post-Keynesians, the article shows that the notion of real rate is microeconomically and macroeconomically unfounded. Adjusting interest rates for inflation does not protect the purchasing power of wealth, and it is impossible to do so at the macroeconomic level. In addition, an empirical interpretation of the break in the correlation between interest rates and inflation since 1953 is provided. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_483&r=pke |
| By: | Jan Toporowski; Giovanni Cozzi |
| Abstract: | This paper contrasts the conventional balance sheet approach to the analysis of economic disturbances in emerging markets with the alternative balance sheet approach that applies and extends Minsky's Financial Instability Hypothesis to (open) emerging market economies. Earlier balance sheet studies are found to be flawed because of a failure to disaggregate firms' balance sheets. Examination of such balance sheets in Thailand, Malaysia, Indonesia, Singapore, and Hong Kong suggests that firms in the three crisis countries did share common causes of financial fragility, but that the level of financial development and the particular domestic economic and political situation also affected their situation. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_485&r=pke |
| By: | Edward N. Wolff; Ajit Zacharias |
| Abstract: | Existing empirical schemas of class structure do not specify the capitalist class in an adequate manner. We propose a schema in which the specification of capitalist households is based on wealth thresholds. Individuals in noncapitalist households are assigned class locations based on their position in the labor process. The schema is designed to address the question of the relationship between class structure and overall economic inequality. Our analysis of the U.S. data shows that class divisions among households, especially the large gaps between capitalist households and everyone else, contribute substantially to overall inequality. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_487&r=pke |
| By: | L. Randall Wray |
| Abstract: | In a series of articles and books, Harold Vatter and John Walker attempted to make the case that the U.S. economy suffers from chronically insufficient demand that leads to growth below capacity. Of particular interest are a 1989 Journal of Post Keynesian Economics article that extends DomarÕs work on the supply side effects of investment spending and a 1997 book that provides a comprehensive analysis of the evolution of the U.S. ÒmixedÓ economy. Their analysis of secular growth complements the well-known writings of Hyman Minsky, who also emphasized the role of the Òbig governmentÓ and the Òbig bankÓ in stabilizing an unstable economy over the cycle. This article will summarize, provide support for, and extend the Vatter and Walker approach, concluding with an examination of some of the dangers facing the U.S. economy today. As appropriate, the ideas of Minsky will be used to supplement the argument. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_488&r=pke |
| By: | C. Sardoni; L. Randall Wray |
| Abstract: | This paper provides an analysis of KeynesÕs original ÒBancorÓ proposal as well as more recent proposals for fixed exchange rates. We argue that these schemes fail to pay due attention to the importance of capital movements in todayÕs economy, and that they implicitly adopt an unsatisfactory notion of money as a mere medium of exchange. We develop an alternative approach to money based on the notion of currency sovereignty. As currency sovereignty implies the ability of a country to implement monetary and fiscal policies independently, we argue that it is necessarily contingent on a countryÕs adoption of floating exchange rates. As illustrations of the problems created for domestic policy by the adoption of fixed exchange rates, we briefly look at the recent Argentinean and European experiences. We take these as telling examples of the high costs of giving up sovereignty (Argentina and the European countries of the EMU) and the benefits of regaining it (Argentina). A regime of more flexible exchange rates would have likely produced a more viable and dynamic European economic system, one in which each individual country could have adopted and implemented a mix of fiscal and monetary policies more suitable to its specific economic, social, and political context. Alternatively, the euro area will have to create a fiscal authority on par with that of the U.S. Treasury, which means surrendering national authority to a central governmentÑan unlikely possibility in todayÕs political climate. We conclude by pointing out some of the advantages of floating exchange rates, but also stress that such a regime should not be regarded as a sort of panacea. It is a necessary condition if a country is to retain its sovereignty and the power to implement autonomous economic policies, but it is not a sufficient condition for guaranteeing that such policies actually be aimed at providing higher levels of employment and welfare. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_489&r=pke |
| By: | Mariko Frame (GSIS , University of Denver); Haider A. Khan (GSIS , University of Denver) |
| Abstract: | The main purpose of this paper is to offer a somewhat novel theory of deep democracy from a political and social economy perspective. The theory of deep democracy presented here makes a distinction between formal aspects of democracy and the deeper structural aspects. In order for democracy to be deep, democratic practices have to become institutionalized in such a way that they become part of normal life in a democratic society. In this sense, ontologically, deep democracy overlaps with Barber's (1984) idea of "strong" democracy. There are, however, epistemological differences as well as differences of emphasis, particularly in the economic sphere. Cluster conditions for deep democracy include both cultural-political and socio-economic conditions. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2007cf469&r=pke |
| By: | Haider A. Khan (GSIS, Department of Economics, University of Denver) |
| Abstract: | In this paper we offer the social capabilities based approach to women's rights as human rights. We begin with the standard approach and discuss the universal human rights model before developing the social capabilities approach followed throughout the rest of this paper. In this paper by political economy we mean the classical state and civil society and their interactions. By social economy we mean the underlying social basis of the political economy including the family structure. Khan(1994a,b,1998,2007) presents deep democracy as a structure in addition to formal democratic apparatus such that the practice of such democratic life can be reproduced with the basic values intact. Change is not precluded. But all such changes should deepen democracy, not weaken it. Deep democracy in this sense is intimately connected with economic and social justice. We show that the social capabilities approach, women's rights and deep democracy are related in an intimate way. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2007cf475&r=pke |
| By: | Finn Olesen (Department of Environmental and Business Economics, University of Southern Denmark) |
| Abstract: | In February 1936 John Maynard Keynes gave birth to modern macroeconomics when he published The General Theory of Employment, Interest and Money. In some ways Oskar Lange was seemly also very critical of mainstream neoclassi-cal thinking although known as a working marginalist for the greater part of his life. In this note we try to identify what Lange might have had so say of Keynesian nature especially in an important contribution from 1938. I would like to thank Danuta Tomczak, Oestfold University College Remmen, Halden, Norway, and Heine Ruppert, Department of Environmental and Busi-ness Economics, for comments to an earlier draft of this paper. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:sdk:wpaper:74&r=pke |
| By: | Valeria Costantini; Salvatore Monni |
| Abstract: | Over the last few years, environmental issues have entered into policy design, particularly development and growth policies. Natural resources are considered necessary production inputs and environmental quality is considered a welfare determinant. The integration of environmental issues into economic growth and development theories and empirics is currently widely analyzed in the literature. The effects of natural resources endowment on economic growth are mainly analyzed through the so-called Resource Curse Hypothesis (RCH) whereas the effects of economic growth on environmental quality are part of the Environmental Kuznets Curve (EKC). Furthermore, recent contributions on RCH and EKC have shown the important role of institutions and human development dimensions in building a sustainable development path. In this paper, we attempt to analyze the causal relationships between economic growth, human development and sustainability combining the RCH and EKC models and adopting a human development perspective. |
| Keywords: | Natural resources, Sustainability, Human Development, Trade |
| JEL: | O15 Q01 Q56 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0062&r=pke |