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on Post Keynesian Economics |
| By: | Eric Tymoigne |
| Abstract: | Recently, national newspapers all over the world have suggested that we should reread John Maynard Keynes, and that Hyman P. Minsky provides a valuable framework for understanding the world in which we live. While rereading Keynes and discovering Minsky are noble goals, one should also remember the mistakes that were made in the past. The mainstream interpretation and implementation of Keynes's ideas have been very different from what Keynes proposed, and they have been reduced to simple "fiscal activism." This led to the 1950s and 1960s "Keynesian" era, during which fine-tuning was supposed to be a straightforward way to fix economic problems. We know today that this is not the case: just playing around with taxes and government expenditures will not do. On the contrary, problems may worsen. If one wants to get serious about Keynes and Minsky, one should understand that the theoretical and policy implications are far-reaching. This paper compares and contrasts Minsky's views of the capitalist system to the tenets of the New Consensus, and argues that there never has been any true Keynesian revolution. This is illustrated by studying the Roosevelt and Kennedy/Johnson eras, as well as Keynes's reaction to the former and Minsky's critique of the latter. Overall, it is argued that the theoretical framework and policy prescriptions of Irving Fisher, not Keynes, have been much more consistent with past and current government policies. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_547&r=pke |
| By: | Angel Asensio (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII) |
| Abstract: | Recent developments in econometrics and economic theory attest the growing evidence of strong uncertainty. The paper argues that these developments both question seriously the methodological foundations of the mainstream macroeconomics and support Keynes’s powerful concepts and theory. It emphasizes how replacing ‘risk’ with strong uncertainty suffices to transform the standard four-macro-markets system into a shifting demand-driven system, with the result that price rigidity is not to be considered the cause of the effective demand leadership (although, as Keynes pointed out, some rigidity is required to give us some stability in a monetary economy). As it is not based on a restrictive definition of uncertainty, Keynes’s theory is more realistic than the mainstream. It is also more general, for the equilibrium level of employment depends on the views about the future, instead of having a unique ‘natural’ anchor. |
| Keywords: | General equilibrium, Uncertainty, Post-Keynesian |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00189221_v2&r=pke |
| By: | Engelbert Stockhammer (Vienna University of Economics and Business Administration); Simon Sturn (IMK at the Hans Boeckler Foundation) |
| Abstract: | This paper investigates the hypothesis that the extent to which hysteresis occurs in the aftermath of recessions depends on monetary policy reactions. The degree of hysteresis is explained econometrically by the extent of monetary easing during a recession and by standard variables for labour market institutions in a pooled cross-country analysis using quarterly data. The sample includes 40 recessions in 19 OECD countries for which the required data is available. The time period lasts from 1980 to 2007. The paper builds on Ball (1999) and extends the sample of countries, the time period under investigation and the set of control variables. |
| Keywords: | monetary policy, NAIRU, structual unemployment, hysteresis, endogenous NAIRU |
| JEL: | E24 E39 E50 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:15-2008&r=pke |
| By: | Zhao, Liang |
| Abstract: | Building on the predecessors' thoughts and modern researches from empirical disciplines, and with thinking over the behavior assumption usually held and used by mainstream economics, the paper generalizes three basic assumptions and one explanatory framework on human individual behavior and its process, and stresses hierarchical characteristics in preferences, heterogeneity between learning capacity and learning and, human dealing with and reducing uncertainty from environments in the process of natural evolution, and rethinks the questions of individual rationality, acquirement of behavior mode, intellectual history on "knowledge" in the level of experientialism. The purpose is that along the path of "falsifying a theory" and with the help of empirical results, the paper trys to propose behavioral presuppositions and thinking framework, so that enhancing the effectiveness of economic theory on explaining individual behavior in real situations, and in the end advancing transdisciplinary researches between the empirical and social sciences. |
| Keywords: | assumption; explanatory framework; individual behavior; hierarchical preference; learning capacity; knowledge; evolutionary process; empirical substrate; transdiscipline |
| JEL: | B21 B31 A12 D8 B59 Y80 D01 |
| Date: | 2008–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11152&r=pke |
| By: | Houck, James P. |
| Abstract: | Few institutions puzzle outsiders as much as the modern university. Even insiders may not grasp the primal essence of its life and behavior. The sheer size and diversity of many universities defeats orderly consideration. We adopt crude simplifications or, worse, numbing obfuscation. This is entirely unnecessary. The core of university life can be illuminated clearly through the prism of a rich and beguiling metaphor. This metaphor requires only that we see today's university as a thinly disguised feudal society such as existed in Europe during the 11th or 12th century A.D. In this medieval context, many otherwise baffling modern mysteries in academe become transparent. |
| Keywords: | Teaching/Communication/Extension/Profession, |
| Date: | 2007–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaemp:8443&r=pke |
| By: | Giovanni Dosi; Giorgio Fagiolo; Andrea Roventini |
| Abstract: | This paper studies an agent-based model that bridges Keynesian theories of demand generation and Schumpeterian theories of technology-fueled economic growth. We employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply, demand and the "fundamentals" of the economy. We find that the complementarities between factors influencing aggregate demand and drivers of technological change affect both "short-run" fluctuations and long-term growth patterns. From a normative point of view, simulations show a corresponding complementarity between Keynesian and Schumpeterian policies in sustaining long-run growth paths characterized by mild fluctuations and acceptable unemployment levels. The matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct "regimes" of growth (or absence thereof) characterized by different short-run fluctuations and unemployment levels. |
| Keywords: | Endogenous Growth; Business Cycles; Growth Policies; Business Cycle Policies; Evolutionary Economics; Agent-Based Computational Economics; Post-Walrasian Economics; Empirical Validation; Monte-Carlo Simulations. |
| JEL: | E32 E6 O3 O4 |
| Date: | 2008–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2008/21&r=pke |
| By: | Angel Asensio (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII) |
| Abstract: | Orthodox economics rests on the belief that if markets were fully competitive, there would be general efficiency. The current financial malfunctions, accordingly, would not result from free competition, but rather from insufficient competition. This statement is strong, for it rests on a sophisticated conceptual framework within which there is no dysfunction when perfect competition prevails. But it is also strongly unrealistic, for it rejects public interventions even when markets obviously lost there bearings in the storm. In fact much of those who referred to the orthodox approach before the financial crisis, are now, inconsistently, claiming for public interventions. This short paper argues that there is a consistent way of thinking about necessary public interventions. Indeed, John Maynard Keynes focus on fundamental uncertainty consequences questioned the supposed virtues of competition and offered the most elaborated alternative as for thinking about the current turnmoils and designing the necessary stabilizers. |
| Keywords: | Equilibrium, competition, stability, institutional stabilizers |
| Date: | 2008–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00332381_v1&r=pke |
| By: | Committee, Nobel Prize (Nobel Prize Committee) |
| Abstract: | Scientific Background, The Nobel Prize in Economic Sciences 2008. Over the centuries, international trade and the location of economic activity have been at the forefront of economic thought. Even today, free trade, globalization, and urbanization remain as commonplace topics in the popular debate as well as in scholarly analyses. Traditionally, trade theory and economic geography evolved as separate subfields of economics. More recently, however, they have converged become more and more united through new theoretical insights, which emphasize that the same basic forces simultaneously determine specialization across countries for a given international distribution of factors of production (trade theory) and the long-run location of those factors across countries (economic geography). |
| Keywords: | Trade; Geography; |
| JEL: | F10 |
| Date: | 2008–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nobelp:2008_002&r=pke |
| By: | Ernesto Screpanti |
| Abstract: | Marx develops two alternative theories of the employment contract: one treats it as an agreement of commodity exchange, and one as a relational arrangement. In the former theory Marx introduces the notion of 'labour power' as a physical stock of labour capacity. Then he argues that the worker, in exchange for a wage, sells a flow of labour whose use-value consists in the capacity to produce value. He calls this flow "abstract labour" and regards it as a "natural" abstraction, i.e. as an objective good which can be bought in the market as a commodity and used in a factory as a productive force. Exploitation emerges because the value of the flow of labour power is lower than the value-creating capacity of abstract labour. The theory produces various inconveniences, for example: an essentialist theory of value; a notion of value which makes it insensitive to changes in income distribution; and the transformation problem. Its origin, contrary to common opinion, is not just Ricardian. Saint-Simon's propensity to treat labour as a productive force had some influence on Marx's theory of abstract labour as a value-creating power. Hegel's influence is still more important. Marx, in fact, tries to justify the 'natural' character of labour abstraction by resorting to Hegel's doctrine of the 'posited presuppositions', by which a universal and abstract category effectively generates (posits) the empirical phenomena in which it shows itself. On the other hand this way of treating wage labour clearly originates from Hegel's propensity to reduce the employment contract to a contracts for services. In the second theory the employment contract does not consist of an exchange of commodities. Rather it is seen as an institution shaping the conditions for a formal subsumption of labour under capital. This kind of subsumption entails a relation of real subordination of the worker to the capitalist in the production process. Now wage labour is treated as a real abstraction not in a natural sense but only in a historical sense, i.e. as an effectual institution which is typical of capitalist social relations. Exploitation is seen as based on the power relationship by which the capitalists use labour activity in the production process. The theory is not fully elaborated by Marx, but is developed well enough to make it the earliest anticipation of the modern theory of the employment contract as an institution which generates an authority relationship. Furthermore, it is not exposed to criticisms of essentialism and hypostatisation, whilst it is apt to uphold a consistent and enlightening theory of value and exploitation |
| JEL: | B14 B24 J41 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:546&r=pke |