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on Post Keynesian Economics |
| By: | Bill Gibson (University of Massachusetts Amherst) |
| Abstract: | Professor Crotty once casually observed that in his view economics could not be properly thought of as a science. This paper investigates the implications of this view in light of the question of how the scientific method has recently contributed to the evolution of economic practice. It is argued that agent-based models might provide a platform for an integration of recent micro and macroeconomic theories. |
| Keywords: | Agent-based models, macroeconomics, Keynes, James Crotty. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2008-02&r=pke |
| By: | Bill Gibson (University of Massachusetts Amherst) |
| Abstract: | Since the "closure debate" of the 1980s it is well known that com- parative static derivatives in analytical macro models are highly sensitive to the closure rule selected. This led Keynesians to conclude that Keynesian closures were superior to those favored by the orthodoxy and vice-versa. It is argued that with the advent of agent-based or multi-agent systems, the clo- sure debate is superseded. While elements of both Keynesian and neoclassical models survive the transition to the more synthetic environment, an agent- based approach eliminates the need for drastic simplification that was at the root of the debate from the beginning. |
| Keywords: | Agent-based models, multi-agent systems, macroeconomic closure. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2008-03&r=pke |
| By: | Fabrizio Zilibotti |
| Abstract: | In the heart of the Great Crisis, amidst great uncertainty and concerns surrounding the future of capitalism, John Maynard Keynes launched his optimistic prophecy that growth and technological change would allow mankind to solve its economic problem within a century. He envisioned a world where people would work much less and be less oppressed by the satisfaction of material needs. To what extent have his predictions turned out to be accurate? This essays attempts to provide some answers. |
| Keywords: | Capitalism, Consumption, Environmental Sustainability, Growth, Keynes, Leisure. |
| JEL: | B31 E12 E66 I31 J22 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:344&r=pke |
| By: | Giovanni Cespa (Queen Mary University of London, Università di Salerno, CSEF and CEPR); Xavier Vives (IESE Business School and UPF) |
| Abstract: | We investigate the dynamics of prices, information and expectations in a competitive, noisy, dynamic asset pricing equilibrium model. We look at the bias of prices as estimators of fundamental value in relation to traders' average expectations and note that prices are more (less) biased than average expectations if and only if traders over- (under-) rely on public information with respect to optimal statistical weights. We find that prices are biased in relation to average expectations whenever traders speculate on short-run price move- ments. In a market with long term traders, over-reliance on public information obtains if noise trade increments are correlated enough and/or there is low enough residual uncertainty in the payoff. This defines a “Keynesian” region; the complementary region is “Hayekian” in that prices are less biased than average expectations in the estimation of fundamental value. The standard case of no residual uncertainty and noise trading following a random walk is on the frontier of the two regions. With short-term traders there typically are two equilibria, with the stable (unstable) one displaying over- (under-) reliance on public information. |
| Keywords: | Price bias, long and short-term trading, multiple equilibria, average expectations, higher order beliefs, over-reliance on public information. |
| JEL: | G10 G12 G14 |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:191&r=pke |
| By: | van den Hauwe, Ludwig |
| Abstract: | The economic paradigms of Ludwig von Mises on the one hand and of John Maynard Keynes on the other have been correctly recognized as antithetical at the theoretical level, and as antagonistic with respect to their practical and public policy implications. Characteristically they have also been vindicated by opposing sides of the political spectrum. Nevertheless the respective views of these authors with respect to the meaning and interpretation of probability exhibit a closer conceptual affinity than has been acknowledged in the literature. In particular it is argued that in some relevant respects Ludwig von Mises´ interpretation of the concept of probability exhibits a closer affinity with the interpretation of probability developed by his opponent John Maynard Keynes than with the views on probability espoused by his brother Richard von Mises. Nevertheless there also exist significant differences between the views of Ludwig von Mises and those of John Maynard Keynes with respect to probability. One of these is highlighted more particularly: where John Maynard Keynes advocated a monist view of probability, Ludwig von Mises embraced a dualist view of probability, according to which the concept of probability has two different meanings each of which is valid in a particular area or context. It is concluded that both John Maynard Keynes and Ludwig von Mises presented highly nuanced views with respect to the meaning and interpretation of probability. |
| Keywords: | General Methodology; Austrian Methodology; Keynesian Methodology; Quantitative and Qualitative Probability Concepts: Meaning and Interpretation; Frequency Interpretation; Logical Interpretation; John Maynard Keynes; Ludwig von Mises; Richard von Mises; |
| JEL: | B50 B53 B40 B49 C00 B00 |
| Date: | 2007–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6965&r=pke |
| By: | John Weeks (Professor Emeritus, School of Oriental and African Studies, University of London) |
| Abstract: | During 2005-2006, appreciation of the Kwacha, Zambia?s currency, had a significant negative impact on public income. This exchange-rate effect received little notice in the debate over macroeconomic policy. The appreciation reduced fiscal space largely because of binding IMF conditionalities on monetary polices. The fiscal effect had two major revenue components: a fall in the domestic-currency income equivalent of official development assistance and a fall in trade taxes. In 2005, the negative effect on the public budget of the Kwacha appreciation was largely balanced by the positive impact on reducing external debt service. This positive impact ended, however, with debt relief and was almost zero after 2005. Obviously, these revenue effects, though little noticed, had negative implications for Zambia?s ability to achieve the MDGs. The Zambia experience underscores some important general lessons. It indicates, for example, the necessity to coordinate fiscal, monetary and exchange-rate policy in order to achieve sustained growth, employment generation and poverty reduction. Most important, this experience is also a clear example of the dysfunctional consequences of having low-inflation targets rule monetary policy. In the context of currency appreciation, setting limits on the domestic money supply prevents effective exchange-rate management. This necessarily creates, as a by-product, larger fiscal deficits and, consequently, more public borrowing. And these negative fiscal consequences could significantly constrict the resources that some developing countries need to achieve the MDGs. |
| Keywords: | The Reduction of Fiscal Space in Zambia?Dutch Disease and Tight-Money Conditionalities |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:cstudy:14&r=pke |
| By: | Julian Dormann; Thomas Ehrmann |
| Abstract: | Management scholars have long stressed the importance of evolutionary processses for inter-firm cooperation but have mostly missed the promising opportunity to incorporate ideas from evolutionary theories into the analysis of collaborative arrangements. In this paper, we first present three rules for the evolution of cooperation - kinship selection, direct reciprocity, and indirect reciprocity. Second, we apply our theoretical considerations, enriched with ideas from cultural anthropology, to the context of a specific and particularly attractive type of cooperative arrangement, the franchise form of organization. Third, we provide a preliminary empirical test with regards to conditions under which evolutionary modes can secure cooperative behavior. We conclude by summarizing our results and deriving fertile areas for further research. |
| Keywords: | Length 46 pages |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2008-01&r=pke |