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on Post Keynesian Economics |
| By: | Thomas I. Palley (New America Foundation, Washington DC) |
| Abstract: | This paper examines the effects of managerial pay on the Post Keynesian model of growth and distribution. Introducing managerial pay explains why economies may exhibit both wage- and profit-led characteristics in response to changed income distribution. Second, managerial pay undoes Pasinetti's (1961/2) theorem regarding the irrelevance of worker saving behavior for long run growth outcomes. Third, managerial pay links neo-classical Marxist theory with Post Keynesian growth theory. Neo-classical Marxists focus on why firms may choose inefficient production techniques. Similar logic carries over to Post Keynesian growth theory and firms may choose techniques that lower growth because they increase profits. |
| Keywords: | Post Keynesian growth theory, managerial pay, neo-classical Marxism |
| JEL: | E12 E25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:9-2010&r=pke |
| By: | Thomas I. Palley (New America Foundation, Washington DC) |
| Abstract: | This paper develops a neo-Kaleckian endogenous growth model that incorporates aggregate supply - demand balance and balance between labor force and employment growth. The paper explicitly models income distribution which is a critical channel whereby unemployment affects investment and growth. The model generates a growth unemployment rate trade-off. A reduced propensity to save raises growth but it also raises the unemployment rate because of induced technological progress. This resonates with Alvin Hansen's hypothesis. The paper contains several theoretical innovations including a new mechanism whereby unemployment affects income distribution; introduction of a Phillips curve and inflation effects; and introduction of demand growth expectation effects. |
| Keywords: | aggregate demand, supply, unemployment, neo-Kaleckian endogenous growth theory |
| JEL: | E12 O41 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:7-2010&r=pke |
| By: | Thomas I. Palley (New America Foundation, Washington DC) |
| Abstract: | This paper explores the macroeconomics of fiscal austerity and deflation in an economy with public debt. A binding budget deficit cap destabilizes the economy by turning the government budget into an automatic destabilizer. Public debt helps maintain AD in the presence of deflation because deflation increases the real value of public interest payments. That makes public debt significantly different from private debt. If the economy is subject to a binding deficit cap, deflation no longer stabilizes output. This is because increased real interest payments must be matched by spending cuts, giving rise to a negative balanced budget multiplier. |
| Keywords: | fiscal austerity, budget deficit cap, public debt, deflation growth theory |
| JEL: | E12 E60 E62 H62 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:8-2010&r=pke |
| By: | McCloskey, Deirdre Nansen |
| Abstract: | Why did the North-Sea folk suddenly get so rich, get so much cargo? The answers seems not to be that supply was brought into equilibrium with demand---the curves were moving out at breakneck pace. Reallocation is not the key. Language is, with its inherent creativity. The Bourgeois Revaluation of the 17th and 18th centuries brought on the modern world. It was the Greatest Externality, and the substance of a real liberalism. Left and right have long detested it, expressing their detestation nowadays in environmentalism. They can stop the modern world, and in some places have. The old Soviet Union was admired even by many economists---an instance of a “cultural contradiction of capitalism,” in which ideas permitted by the successes of innovation rise up to kill the innovation. We should resist it. |
| Keywords: | innovation; bourgeois revaluation; liberalism; success of innovation |
| JEL: | B1 N00 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22925&r=pke |
| By: | McCloskey, Deirdre Nansen |
| Abstract: | What happened to make for the factor of 16 were new ideas, what Mokyr calls “industrial Enlightenment.” But the Scientific Revolution did not suffice. Non-Europeans like the Chinese outstripped the West in science until quite late. Britain did not lead in science---yet clearly did in technology. Indeed, applied technology depended on science only a little even in 1900. |
| Keywords: | scientific revolution; science; technology; industrial enlightenment; applied technology |
| JEL: | N00 N7 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22308&r=pke |