|
on Post Keynesian Economics |
| By: | Verick, Sher (ILO International Labour Organization); Islam, Iyanatul (Griffith University) |
| Abstract: | Starting in mid-2007, the global financial crisis quickly metamorphosed from the bursting of the housing bubble in the US to the worst recession the world has witnessed for over six decades. Through an in-depth review of the crisis in terms of the causes, consequences and policy responses, this paper identifies four key messages. Firstly, contrary to widely-held perceptions during the boom years before the crisis, the paper underscores that the global economy was by no means as stable as suggested, while at the same time the majority of the world’s poor had benefited insufficiently from stronger economic growth. Secondly, there were complex and interlinked factors behind the emergence of the crisis in 2007, namely loose monetary policy, global imbalances, misperception of risk and lax financial regulation. Thirdly, beyond the aggregate picture of economic collapse and rising unemployment, this paper stresses that the impact of the crisis is rather diverse, reflecting differences in initial conditions, transmission channels and vulnerabilities of economies, along with the role of government policy in mitigating the downturn. Fourthly, while the recovery phase has commenced, a number of risks remain that could derail improvements in economies and hinder efforts to ensure that the recovery is accompanied by job creation. These risks pertain in particular to the challenges of dealing with public debt and continuing global imbalances. |
| Keywords: | global financial crisis, unemployment, macroeconomic policy, labour market policy |
| JEL: | E24 E60 J08 J60 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4934&r=pke |
| By: | Sreedharan, Ranjan |
| Abstract: | The noted management guru Michael E Porter identifies seven unique competitive advantages for the U.S. economy to explain the country’s pre-eminence; they range from (among others) its environment for entrepreneurship, its institutions of higher learning, its technology and innovation machine, to its commitment to competition and free markets. In this article, I argue that there is another critical competitive advantage exclusive to the U.S. that arises from its electoral system characterised by consistently low levels of voter turnout in national elections and with disproportionately large numbers of its poorest and least educated citizens not voting. I begin by looking at reasons why the poor in America vote in far lesser proportions than their numbers, and particularly, at the various formal and informal impediments that prevent voting by the poor. I then consider the impact this would have had on America’s economy and its competitiveness. The core idea of this paper is that when an electoral process effectively filters out significant sections of the poor, the country would find it far easier to put in place (and sustain) sound free-market economic policies focussed on long term objectives with generous incentives for creation of wealth and with a tight leash on welfare and other entitlement programmes. I contend that America’s undeniably greater acceptance of the rigours of the free-market system is not (as is commonly believed) a product of a unique history or culture but, in truth, is closely tied to a discriminatory and exclusionary electoral system that has strong historical roots. |
| Keywords: | Competitive advantage, Voter turnout, Disenfranchisement |
| JEL: | O51 M21 |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22023&r=pke |
| By: | Alan S. Blinder (Princeton University) |
| Abstract: | The stunning events of 2007-2009 both shook the world and piqued interest in economics. In the 30-plus years that I have been teaching macro principles, I have never seen the level of interest in students as high as what I observed last year rapt attention and no sleepers! Interest in economics has grown, and our students will want, expect, and deserve explanations of these events for years to come. This is truly a teaching moment, and that moment is going to be a long one. That’s the good news. The bad news is that the current curriculum fails to give students even imperfect answers. This means that the macro principles course will have to be changed. Although we can’t provide beginning students with complete answers, we can do a lot better than we have been doing. |
| Keywords: | macroeconomics, financial crisis, economic curriculums in schools |
| JEL: | A22 A23 E20 D40 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1222&r=pke |