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on Post Keynesian Economics |
| 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: | 2008–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00189221_v2&r=pke |
| By: | Engelbert Stockhammer; Erik Klär |
| Abstract: | According to the mainstream view, labour market institutions (LMI) are the key determinants of unemployment in the medium run. The actual empirical explanatory power of measures for labour market institutions, however, has been called into question recently (Baker et al 2005, Baccaro and Rei 2007). The Keynesian view holds periods of high real interest rates and insufficient capital accumulation responsible for unemployment (Arestis et al 2007). Empirical work in this tradition has paid little attention to role of LMI. This paper contributes to the debate by highlighting the role of autonomous changes in capital accumulation as a macroeconomic shock. In the empirical analysis, medium-term unemployment is explained by capital accumulation, labour market institutions and a number of macroeconomic shocks in a panel analysis covering 20 OECD countries. The economic effects of institutional changes, variations in capital accumulation and other macro shocks are compared. Capital accumulation and the real interest rate are found to have statistically significant effects that are robust to the inclusion of control variables and show larger effects than LMI. |
| Keywords: | Unemployment, NAIRU, capital accumulation, labour market institutions, Keynesian economics |
| JEL: | E12 E20 E24 E60 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp834&r=pke |
| By: | Angel Asensio (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII) |
| Abstract: | While the mainstream policies can not be surpassed in the enchanted ‘optimizable’world, (Post) Keynesians have to resign themselves to manage without magic wand inthe uncertain real world. The paper discusses the monetary rules proposed in the recentPost Keynesian literature. It argues that the long-term interest rate is too imperfectlycontrolled for such rules being feasible. Consequently, the quest for credibility isirrelevant, for it makes not much sense to wonder whether authorities will honour theircommitment on an unfeasible ideal target. The right question is whether authoritiespursue convincing objectives so as to move the conventional expectation of the future(and the related interest rate) towards full employment. It is a matter of confidence.The basic principles involved in such an approach to economic policy are discussed. |
| Keywords: | Interest rate rule; Inflation targeting, PostKeynesian, Monetary policy |
| Date: | 2008–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00335560_v1&r=pke |