nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2008‒04‒15
four papers chosen by
Karl Petrick
University of the West Indies

  1. "Financial Markets Meltdown: What Can We Learn from Minsky" By L. Randall Wray
  2. Keynesian hospitals? Public employment and political pressure By Andrew E. Clark; Carine Milcent
  3. Inflation and Unemployment in the Long Run By Aleksander Berentsen; Guido Menzio; Randall Wright

  1. By: L. Randall Wray
    Abstract: According to this new Public Policy Brief by Senior Scholar L. Randall Wray, the current crisis in financial markets can be traced back to securitization (the "originate and distribute" model), leverage, the demise of relationship-based banking, and the dizzying array of extremely complex instruments that--quite literally--only a handful understand.
    Date: 2008–04
  2. By: Andrew E. Clark; Carine Milcent
    Abstract: This paper uses an unusual administrative dataset covering the universe of French hospitals to consider hospital employment: this is consistently higher in public hospitals than in Not-For-Profit or private hospitals, even controlling for many measures of hospital output (such as the type of operations and care provided, and the bed capacity rate). Public-hospital employment is positively correlated with the local unemployment rate, whereas no relationship is found in non-Public hospitals. This is consistent with public hospitals providing employment in depressed areas. We appeal to the Political Science literature and calculate local political allegiance, using expert evaluations on various parties political positions and local election results. The relationship between public hospital employment and local unemployment is stronger the more left-wing the local municipality. This latter result holds especially when electoral races are tight, consistent with a concern for re-election.
    Date: 2008
  3. By: Aleksander Berentsen; Guido Menzio; Randall Wright
    Abstract: We study the long-run relation between money, measured by inflation or interest rates, and unemployment. We first discuss data, documenting a strong positive relation between the variables at low frequencies. We then develop a framework where both money and unemployment are modeled using explicit microfoundations, integrating and extending recent work in macro and monetary economics, and providing a unified theory to analyze labor and goods markets. We calibrate the model, to ask how monetary factors account quantitatively for low-frequency labor market behavior. The answer depends on two key parameters: the elasticity of money demand, which translates monetary policy to real balances and profits; and the value of leisure, which affects the transmission from profits to entry and employment. For conservative parameterizations, money accounts for some but not that much of trend unemployment -- by one measure, about 1/5 of the increase during the stagflation episode of the 70s can be explained by monetary policy alone. For less conservative but still reasonable parameters, money accounts for almost all low-frequency movement in unemployment over the last half century.
    JEL: E24 E52
    Date: 2008–04
  4. By: Gabriele, Alberto; Schettino, Francesco
    Abstract: This paper argues that, during the present historical period, only one mode of production is sustainable, which we call the modern mode of production (MMP). Nevertheless, there can be (both in theory and in practice) enough differences among the specific forms of MMP prevailing in different countries as to justify the identification of distinct socioeconomic formations, one of them being market socialism (MS). In its present stage of evolution, MS in China and Vietnam allows for a rapid development of productive forces, but it is seriously flawed from other points of view. We argue that the development of a radically reformed and improved form of MS is far from being an inevitable historical necessity, but constitutes a theoretically plausible and auspicable possibility
    Keywords: Socialism, Mode of Production, Market Socialism
    JEL: P11 P36
    Date: 2007–09–14

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