nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2010‒07‒31
four papers chosen by
Karl Petrick
University of the West Indies

  1. The Urgent Need for Job Creation By John Schmitt; Tessa Conroy
  2. Alternatives to Fiscal Austerity in Spain By Mark Weisbrot; Juan Antonio Montecino
  3. Keynesian and schumpeterian efficiency in a BOP-constrained growth model By Gabriel Porcile
  4. Extending the Informational Basis of Welfare Economics: The Case of Preference Dynamics By Ulrich Witt; Christian Schubert

  1. By: John Schmitt; Tessa Conroy
    Abstract: Many lawmakers, policymakers, and economic commentators do not appear to recognize the depth of the current labor-market recession. Between December 2007 – the official first month of the recession – and December 2009, the U.S. economy lost more than eight million jobs. Even if the economy creates jobs from now on at a pace equal to the fastest four years of the early 2000s expansion, we will not return to the December 2007 level of employment until March 2014. And, by the time we return to the number of jobs we had in December 2007, population growth will have increased the potential labor force by about 6.5 million jobs. If job growth matched the fastest four years in the most recent economic expansion, the economy would not catch up to the expanded labor force until April 2021. Absent policy changes such as a major jobs bill, the Congressional Budget Office’s most recent projections suggest that the economy will not return to December 2007 employment levels until June 2013, and will not cover the intervening growth in the potential labor force until August 2015. This report examines the depth of the current labor-market recession and sketches the possible recovery path under several historically based job creation scenarios.
    Keywords: unemployment, recession, stimulus, deficit spending
    JEL: H H6 H62 H63 H68 J J1 J14 J18 J3 J32 J38
    Date: 2010–07
  2. By: Mark Weisbrot; Juan Antonio Montecino
    Abstract: This paper looks at the planned austerity measures in Spain, the rationale for the spending cuts and tax increases, likely outcomes for future debt-to-GDP ratios, and the probable results of alternative policies.
    Keywords: IMF, Spain, EU, European Central Bank, deficit spending, budget deficits, fiscal policy, monetary policy
    JEL: O O5 O52 E E5 E52 E58 E6 E62 E63 E65 E66 F F1 F3 F4 F5 F32 F33 F34 F36 F37
    Date: 2010–07
  3. By: Gabriel Porcile (Department of Economics, Universidade Federal do Paraná)
    Abstract: The paper aims to contribute to the debate on specialization and growth in two forms. Firstly, it develops a North-South model in which the ratio between the income elasticity of exports and imports in the South (that gives the rate of growth compatible with external equilibrium) depends on the Keynesian and Schumpeterian efficiency of the pattern of specialization, as defined by Dosi et al (1990). The model draws on key insights of the technology gap literature to discuss how these efficiencies are related to the dynamics of technological learning. Secondly, the model is tested including the variables Keynesian and Schumpeterian efficiency in a Keynesian growth regression. Several estimation procedures are used to test the model, among which Finite Mixture Estimation, which allows for estimating the parameters for homogenous groups of countries.
    Keywords: Schumpeterian efficiency, keynesian efficiency, balance-of-payments-constrained growth, Thirlwall's Law
    JEL: O11 O33
    Date: 2010
  4. By: Ulrich Witt; Christian Schubert
    Abstract: Normative reasoning in welfare economics and social contract theory usually presumes invariable, context-independent individual preferences. Following recent work particularly in behavioral economics this assumption is difficult to defend. This paper therefore explores what can be said about preferences and their changes from a motivation-theoretic perspective, i.e. by explaining what motivates economic agents in making their choices and what mechanisms of change are at work here. We show that on this basis it is possible to complement social welfare assessments by a differential weighing of different human motivations which is derived from empirically informed foundations rather than from ad hoc arguments.
    Keywords: Preference Change, Welfare, Needs, Subsistence Level, Redistribution Length 31 pages
    JEL: D63 O12
    Date: 2010–07

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