nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2007‒10‒06
seven papers chosen by
Karl Petrick
University of the West Indies

  1. Nanofoundations of macroeconomics: Keynes and the institutional elements in the General Theory By Pessali, Huascar
  2. How to Save Globalization from its Cheerleaders By Rodrik, Dani
  3. Goodwin’s Structural Economic Dynamics: Modelling Schumpeterian and Keynesian Insights By Michael Landesmann; Robert Stehrer
  4. Economics Against Democracy By Manuel Couret Branco
  5. Successes and Failures of Monetary Policy Since the 1950s By David Laidler
  6. History of Economics or a Selected History of Economics? By Palma, Nuno
  7. Poverty in Britain in 1904: An Early Social Survey Rediscovered By Ian Gazeley; Andrew Newell

  1. By: Pessali, Huascar
    Abstract: Chapter 12 of Keynes´ General Theory has concepts and analytical links with strong identification with the ones used by the so-called institutional approaches. This essay emphasises what seems to have been anticipated by Keynes on the research core of institutional economics, mainly based on his behavioural assumptions.
    Keywords: Keynes; keynesianismo; comportamento dos agentes; instituições; institucionalismo
    JEL: B52 B25 B31
    Date: 2006–07–01
  2. By: Rodrik, Dani
    Abstract: The new conventional wisdom on globalization emphasizes that reaping the benefits of trade and financial integration is not automatic, and requires better domestic institutions, essentially improved safety nets in rich countries and improved governance in the poor countries. The prevailing strategy is predicated on the presumption that insufficiently open markets continue to pose an important constraint on the world economy. In reality, lack of openness is no longer the binding constraint for the global economy. The gains to be reaped by further liberalization of markets are meager for poor and rich countries alike. An alternative approach to globalization would focus on enhancing policy space rather than market access, and on devising the rules of the game to better manage the interface between national regulatory and social regimes. It is possible to envisage such rules without slipping back into protectionism.
    Keywords: globalization; policy space
    JEL: F02 F15 F33
    Date: 2007–09
  3. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: In this paper we pursue the work started jointly with Richard M. Goodwin in the 1990s. Goodwin’s later work went very much in the direction of modelling Schumpeter's insights into structural and technological transformations in the context of disaggregated models while allowing for non-full employment outcomes and macroeconomic cyclical patterns to develop alongside these transformations. In a series of papers we have followed up this work for closed and open economies, drawing out in particular the implications of structural transformations for macrodistributional dynamics and effective demand problems. This has been analysed for advanced and catching-up economies and their interdependencies on the global stage. We shall review our modelling efforts in this respect and trace these back to Goodwin's life-long preoccupation with synthesizing disaggregated (linear) modelling with macro-dynamic analysis.
    Keywords: Richard Goodwin, structural economic dynamics, modelling global economic integration
    JEL: C61 F02 F43 F47 O11 O41
    Date: 2006–10
  4. By: Manuel Couret Branco (Department of Economics, University of Évora)
    Abstract: I believe that freedom of choice constitutes a pillar of rational choice in economic theory, regardless of the definition of rational choice one adopts. On the other hand, economics being socially embedded, free choice in economics seems senseless without political freedom of choice. Democracy, therefore, plays an important role in economic efficiency as much as in social fairness. Following this line of thought one should expect that economics, both in theory and in practice, should permanently strengthen the role of democracy in its institutional construction. Unfortunately it does not seem to be the case. Although historically many of the democratic achievements in the past two centuries have been intimately connected to the development of liberal economics, one can assert that mainstream liberal economics is intrinsically contradictory with the democratic ideal. The first stage of the demonstration of this thesis concerns the dismounting of the naturalization process that economics has undergone with the purpose of transforming economic decisions into plain technical issues supposedly free from democratic debate.The second stage concerns the ways in which the market has managed to legitimise its hegemony in society and the reasons why this contributes to the erosion of democracy. Within this hegemony five aspects will be dealt with; the imposition of a market jurisdiction; the deregulation of the economy; the process of political and economic unaccountability; the de-politicization of free choice and the conflict between the territorialization of democracy and the de-territorialization of economics.
    Keywords: Democracy, Market, Politics, Liberal Economics, Participation
    JEL: A1 B4 H4 H5 I3 J8 K0
    Date: 2007
  5. By: David Laidler (University of Western Ontario)
    Abstract: Successes and failures in monetary policy stem mainly from coherence or lack thereof in the monetary order, rather than the tactical skills of policy makers. Crucial here are questions of consistency among the economic ideas that the policy regime embodies, the way in which the economy actually functions, and the beliefs of private agents and policy makers about these matters. These postulates are used to frame accounts of the Bretton Woods System and its collapse, the Great Inflation that followed, the subsequent disappointing performance of money-growth targeting, the breakdown of the Japanese "bubble economy" the onset of theEMS crisis at the beginning of the 1990s, and since then, the launch of the Euro and the apparent success of inflation targeting. Though monetary policy seems rather successful at present, certain weaknesses in currently prevailing monetary orders are noted.
    Keywords: monetary policy; policy regimes; crises; pegged exchange rates; flexible exchange rates; inflation; inflation targets; money supply; central banks, central bank independence.
    JEL: E42 E58 E65 F33
    Date: 2007
  6. By: Palma, Nuno
    Abstract: While research on the history of economics can be important to modern economics, the work of historians of economics is more often than reasonable associated with either non-contemporary or heterodox issues. I provide quantitative evidence of this, by analyzing the publications in the three main history of economics journals over the last fourteen years (1993-2006). This trend must change if the work of historians of economics is to be taken seriously by mainstream economists.
    Keywords: History of Economics
    JEL: B4 B0
    Date: 2007–09–10
  7. By: Ian Gazeley (University of Sussex); Andrew Newell (University of Sussex and IZA)
    Abstract: Until now there have been no national estimates of the extent of poverty in Britain at the turn of the 20th century. This paper introduces a newly-discovered household budget data set for the early 1900s. These data are more representative of urban working households in Britain in the period than any other existing record, although they are not without deficiencies. We use these data to estimate urban poverty in the British Isles in 1904. Applying Bowley’s poverty line we find that about fifteen percent of people in urban working class households had income insufficient to meet minimum needs. This is close to Rowntree’s estimate of primary poverty for York 1899 and in the range that Bowley found in Northern towns in 1912- 3. This average masks a heavy concentration of poverty among the unskilled and those with large families.
    Keywords: poverty, Britain, 1904
    JEL: N33 O15
    Date: 2007–09

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