nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2009‒01‒24
five papers chosen by
Karl Petrick
University of the West Indies

  1. Keynes’s slip of the pen: aggregate supply curve vs employment function By Heller, Claudia
  2. A hidden duel: Gunnar Myrdal and Dag Hammarskjöld in Economics and International Politics 1935-1955 By Appelqvist, Örjan
  3. Micro-Founded Institutions and Macro-Founded Individuals: The Dual Nature of Profit By Alberto Battistini
  4. "Flow of Funds Figures Show the Largest Drop in Household Borrowing in the Last 40 Years" By Gennaro Zezza
  5. The importance of socio-economic status in determining educational achievement in South Africa By Stephen Taylor; Derek Yu

  1. By: Heller, Claudia
    Abstract: This paper focuses on Keynes’s exposition of the Principle of Effective Demand and its generalised mathematical representation – the basis of a Z-D type model. It elaborates on Keynes’s algebraic formulation in the General Theory, relying on interpreters who contributed to the generalisation of his most restrictive hypotheses on competition and returns to scale as well as on those who developed the algebraic argumentation that Keynes left only indicated. Instead of correcting Keynes’s mathematics (which is right), the paper concludes that there has been a “slip of the pen” in his own description of these concepts on the footnote to page 55 of the General Theory. Keynes’s employment function, the inverse of his aggregate supply curve is not the same thing as his aggregate supply function. Therefore, in the controversial footnote, it is not the aggregate supply function but the employment function that is linear with a slope given by the reciprocal of the money-wage.
    Keywords: Principle of effective demand; D/Z-mode´; Aggregate demand; Aggregate supply
    JEL: B31 B22 B2
    Date: 2009–01–18
  2. By: Appelqvist, Örjan (Dept. of Economic History, Stockholm University)
    Abstract: Characterizes conflict and cooperation in the intertwined careers of Gunnar Myrdal and Dag Hammarskjöld as economists, actors in Swedish policy 1940-1947 and international civil servants, Myrdal being Executive Secretary of the UN ECE 1947-1957 and Hammarskjöld being General Secretary of the UN 1951-1961. In economics the difference between dynamic and neoclassical approaches are noted. It contrasts Myrdal’s very early formulation of growth oriented financial policy with the very lasting refusal of counter-cyclical policies of the Swedish government under the influence of Hammarskjöld. In regard to official US postwar policies their differences are highlighted from the pre-cold war period as well as from the early fifties, Myrdal defending a ‘universalist’ position trying to defend the ECE against power policy intrusion whereas Hammarskjöld wanted to ‘proceed with caution’ in regard to what he considered to be ‘a friendly government’. <p>Their differences are traced to personal backgrounds while at the same time expressing principal dilemmas facing civil servants in international organisations in a political climate of strong tensions between national interests.
    Keywords: Swedish economic policy; history of economic ideas; intellectual history of United Nations; Gunnar Myrdal; Dag Hammarskjöld
    JEL: B25 B31
    Date: 2008–12–27
  3. By: Alberto Battistini
    Abstract: Starting from the observation that surplus-value is almost always due to the collective undertaking of non additively separable human capital investments, this paper introduces a theory of the institutional structure of production where groups are taken as units of analysis in a multi-level competition framework inspired by Marx’s critique of the ‘abstract man’. The main result is that monopoly profit is not the only meaningful notion of profit besides the value of individual contribution and, as a consequence, freeentry and competition do not necessarily wipe it out
    Keywords: value, power, conflict, competition, social classes
    JEL: A12 D20 D33 D74 L22 J21 J64
    Date: 2008–12
  4. By: Gennaro Zezza
    Abstract: The Federal Reserve's latest Flow of Funds figures reveal that household borrowing has fallen sharply lower, bringing about a reversal of the upward trend in household debt. According to the Levy Institute's macro model, a fall in borrowing has an immediate effect--accounting in this case for most of the 3 percent drop in private expenditure that occurred in the third quarter of 2008--as well as delayed effects; as a result, the decline in real GDP and accompanying rise in unemployment may be substantial in coming quarters. For further details on the Macro-Modeling Team's latest projections, see the December 2008 Strategic Analysis Prospects for the U.S. and the World: A Crisis That Conventional Remedies Cannot Resolve.
    Date: 2008–12
  5. By: Stephen Taylor (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: The needs to find ways of lifting people out of poverty and to transform the existing patterns of inequality in South Africa are high on the country’s development agenda. Much hope is often vested in education as an opportunity for children from poor households to overcome the disadvantage of their background and escape poverty. The logic of this is often conceived of in terms of the human capital model, according to which education improves an individual’s productivity, which in turn is rewarded on the labour market by higher earnings. However, there is a circularity in the relationship between socio-economic status (SES) and education, in that it is well known that a student’s SES has an important influence their educational achievement. Drawing on data from the recent Progress in International Reading Literacy Study (PIRLS 2006), this paper investigates the extent to which SES affects educational achievement in the case of South Africa, and moves on to consider the implications of this for the ability of the education system to be an institution that transforms existing patterns of inequality rather than reproducing such patterns.
    Keywords: South Africa, socio-economic status, education, educational achievement, educational inequality, economic development
    JEL: I20 I21 I30 O15
    Date: 2009

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