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on Post Keynesian Economics |
| By: | Thomas I. Palley (Economics for Democratic & Open Societies, Washington DC) |
| Abstract: | This paper argues that Hyman Minsky's financial instability hypothesis weaves together a medium term Keynesian approach to the business cycles in the spirit of Samuelson (1936) and Hicks (1950) with long cycle thinking of economists such as Schumpeter (1939) and Kondratieff. Post Keynesians have devoted considerable attention to the medium term dimension of Minsky's thinking. The current paper concentrates on the long swing dimension and introduces the idea of "Minsky super-cycles." It is the supercycle that ultimately permits financial crisis. Whereas financially driven business cycles occur every decade, financial crises occur over longer durations reflecting the longer phase of the super-cycle. |
| Keywords: | Minsky, business cycles, financial instability hypothesis |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:5-2009&r=pke |
| By: | Thomas I. Palley (Economics for Democratic & Open Societies, Washington DC) |
| Abstract: | Inside debt is a fundamental feature of capitalist economies. This paper examines the growth effects of consumer and corporate debt using a Cambridge - Kaleckian growth framework. According to the Cambridge - Kaleckian model inside debt has an ambiguous effect on growth. This is counter to the intuition of static short-run macro models in which higher debt levels lower economic activity and shows intuitions derived from short run macroeconomics do not always carry over to growth theory. Growth is faster in endogenous money economies than in pure credit economies, ceteris paribus. That is because lending in endogenous money economies creates money wealth that increases spending and lowers saving. Interest payments from debtors to creditors are a critical channel whereby debt affects growth. In the consumer debt model this interest transfer mechanism exerts a negative influence on growth. However, in the corporate debt model the transfer can raise growth if the marginal propensity to consume of creditor households exceeds the marginal propensity to invest of firms. |
| Keywords: | Growth, Debt, Interest transfers, Cambridge distribution theory, Kaleckian growth theory. |
| JEL: | E12 O40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:2-2009&r=pke |
| By: | Piffaretti, Nadia F. |
| Abstract: | As the global economy undergoes profound changes, it is becoming apparent that the so-called"Revived Bretton Woods System"has increased the overall vulnerability of the global financial architecture. Therefore, it is worth revisiting the origins of the Bretton Woods conference, and pointing out the relevance for today’s framework of Keynes’ original 1942 plan for an International Clearing Union. This note explores the main characteristics of Keynes'original plan, by revisiting his original writings between 1940 and 1944, and outlining its relevance to the current debate on the international financial architecture. The note suggests that reforms of the international financial architecture should include anchoring the international monetary system on sounder institutional ground. |
| Keywords: | Currencies and Exchange Rates,Debt Markets,Banks&Banking Reform,Emerging Markets,Access to Finance |
| Date: | 2009–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5034&r=pke |
| By: | Jay R. Corrigan |
| Abstract: | This classroom exercise illustrates the strengths and weaknesses of various regulatory frameworks aimed at internalizing negative externalities from pollution. Specifically, the exercise divides students into three groups—the government regulatory agency and two polluting firms—and allows them to work through a system of uniform command-and-control regulation, a tradable emissions permit framework, and an emissions tax. Students have the opportunity to observe how flexible, market-oriented regulatory frameworks can outperform inflexible command-and-control. More importantly given the ongoing debate about how best to regulate carbon dioxide emissions, students can also observe how the introduction of abatement-cost uncertainty can cause one market-oriented solution to outperform another. |
| Keywords: | classroom experiments, emissions taxes, pollution, tradable emissions permits |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:ken:wpaper:0902&r=pke |
| By: | Horst Hanusch (University of Augsburg, Department of Economics); Andreas Pyka (University of Hohenheim, Department of Economics); Florian Wackermann (University of Augsburg, Department of Economics) |
| Abstract: | Innovation is the major driver of economic growth and development. To analyze innovation processes the restriction of a framework suited to the analysis of innovation towards the industrial sphere of an economy is not sufficient because of the important co-evolutionary dimensions of innovation. Instead, a comprehensive economic theoretical approach is needed which encompasses all spheres of economic life. This paper is filling this gap by introducing Comprehensive Neo-Schumpeterian Economics and the Neo-Schumpeterian approach towards public sector economics. |
| Keywords: | innovation, uncertainty, public sector, co-evolution |
| JEL: | B52 H11 L2 O20 P0 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0306&r=pke |
| By: | Oechssler, Jörg |
| Date: | 2009–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0486&r=pke |