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on Post Keynesian Economics |
| By: | Jan Kregel |
| Abstract: | This paper contrasts the economic incentives implicit in the Keynes-Minsky approach to inherent financial market instability with the incentives behind the traditional equilibrium approach leading to market stability to provide a framework for analyzing the stability induced by the recent changes in bank regulation to modernize financial services and the evolution of financial engineering innovations in the U.S. financial system. It suggests that the changes that have occurred in the profit incentives for bank holding companies have modified the provision of liquidity to the financial system by banks, and the way credit assessment has moved from banks to other actors in the system. It takes the current experience in financial instability created by the expansion, through securitization, of the mortgage market as an example of these changes. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_523&r=pke |
| By: | André Lorentz; Maria Savona |
| Abstract: | The paper aims to account for the empirical stylised facts related to changes in sectoral structures that have led to the growth of services in most advanced countries over recent decades. A growth model with evolutionary micro-founded structural change is developed, which formalises the role of technical change and changes in intermediate demand as they affect the evolution of the sectoral composition of the economy and macro-economic growth. Firstly, we provide a micro-foundation for the Kaldorian Cumulative Causation mechanism. Secondly, we account for (demand-related) macro-constraints affecting the micro-behaviour of firms in the decision to adopt technology. We also formalise the mechanisms transmitting the effects of micro-behaviour on aggregate growth, via changes in the intermediate linkages and sectoral composition of the economy. The simulated results are based on the use of the actual data, including Input-Output (I-O) coefficients in the case of Germany. Three scenarios are identified, which account for the effects of a set of key parameters on changes in the structure of the economy. |
| Keywords: | Economic Growth, Structural change, Growth of Services,Evolutionary Micro-foundation, Input-Output Length 36 pages |
| JEL: | E11 L16 O14 O33 O41 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2007-17&r=pke |
| By: | Thomas I. Palley |
| Abstract: | Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. Financialization transforms the functioning of economic systems at both the macro and micro levels. Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage stagnation. Additionally, there are reasons to believe that financialization may put the economy at risk of debt deflation and prolonged recession. Financialization operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of nonfinancial corporations, and changes in economic policy. Countering financialization calls for a multifaceted agenda that (1) restores policy control over financial markets, (2) challenges the neoliberal economic policy paradigm encouraged by financialization, (3) makes corporations responsive to interests of stakeholders other than just financial markets, and (4) reforms the political process so as to diminish the influence of corporations and wealthy elites. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_525&r=pke |
| By: | Anna Maria Carabelli; Mario Aldo Cedrini (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont) |
| Abstract: | A large number of interpretations has been proposed for current global imbalances, with a variety of future scenarios for world economy. The perspective here adopted tries to be fully respectful of the assumption of global economic interdependence as well as to cope with the complexity of a political, and not exclusively an economic, problem. By the use of the three alternatives outlined by Keynes in his 1945 memorandum "Overseas Financial Policy in Stage III" for the restart of multilateralism at a global level, we propose to rearrange views about current imbalances according to the unilateral, bilateral or multilateral nature of the adjustment they propose - if any - for their unwinding. Comparisons are made between Keynes's "Starvation Corner" and "gloomy views", together with scenarios suggesting the need of unilateral adjustments. Keynes's "Temptation" is used to analyse views stating that global imbalances are sustainable due either to the working of market mechanisms, related to the strength of the American economy, or to the (tacit) agreement of a "revived Bretton Woods system". The parallel with Keynes's "Justice" leads to consider views highlighting shared responsibilities for the imbalances and prompting for collective actions to reduce them. |
| Keywords: | Global imbalances, Adjustment dynamics, US economy, John Maynard Keynes |
| JEL: | F32 F01 B31 F50 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:upo:upopwp:113&r=pke |
| By: | Geoffrey M. Hodgson; Thorbjørn Knudsen |
| Abstract: | This paper builds on previous work within the conceptual framework of a generalized Darwinism that clarifies such concepts as selection and replication. One of its aims is to refine the concept of the interactor. An overview of the conditions under which group selection may occur helps us identify factors such as structural coherence that are useful in defining the interactor. This in turn leads to the question of selection on multiple levels. An additional level of replication emerges when we consider routines within organizations and the social positions related to them. The analysis here establishes that social organizations including business firms are often interactors. Such organizations are more than simply groups because of the existence of routines and social positions. Accordingly, to understand firms and other organizations, we need more that a “dual inheritance” theory; we have to consider the replication of social positions and routines as well. |
| Keywords: | group selection, interactors, organizations, firms, cultural evolution Length 30 pages |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2007-16&r=pke |