nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2011‒02‒12
seven papers chosen by
Karl Petrick
University of the West Indies

  1. Money as an institution of capitalism.On the relationship between money and uncertainty from a Keynesian perspective By Giancarlo Bertocco
  2. On the monetary nature of the interest rate in Keynes’s thought By Giancarlo Bertocco
  3. The Change in Sraffa's Philosophical Thinking By Davis, John B.
  4. Kenneth Boulding as a Moral Scientist By Davis, John B.
  5. Did Immigrants in the U.S. Labor Market Make Conditions Worse for Native Workers During the Great Recession? By Robert Pollin; Jeannette Wicks-Lim
  6. On Uneven Ground: How Corporate Governance Prioritizes Short-term Speculative Investments, Impedes Productive Investments, and Jeopardizes Productivity Growth By Christian E. Weller; Luke Reidenbach
  7. Where do preferences come from? By Dietrich Franz; List Christian

  1. By: Giancarlo Bertocco (Department of Economics, University of Insubria, Italy)
    Abstract: Dillard (1987) notes that to consider money as an institution of capitalism means to emphasise that the presence of money is an essential element in explaining fluctuations in income and employment. He states that Keynes?s General Theory offers a sound explanation of money as an institution of capitalism. Keynes?s explanation is based on a necessary condition, independent of money: the presence of uncertainty. The objective of the paper is to elaborate a different explanation of the role of money as an institution of capitalism according to which the presence of money constitutes the necessary condition to justify the importance of uncertainty.
    Date: 2011–02
  2. By: Giancarlo Bertocco (Department of Economics, University of Insubria, Italy)
    Abstract: Keynes in the General Theory, explains the monetary nature of the interest rate by means of the liquidity preference theory. The objective of this paper is twofold. Fist, to point out the limits of an explanation of the monetary nature of the interest rate and thus of the non-neutrality of money based on the liquidity preference theory. Second, to present a different explanation of the monetary nature of the interest rate based on the arguments with which Keynes, following the General Theory, responded to the criticism levelled at the liquidity preference theory by supporters of the loanable funds theory such as Ohlin and Robertson. It is shown that this explanation is consistent with the definition of the non-neutrality of money that Keynes presented in his 1933 works in which he underlines the need to elaborate a monetary theory of production (Keynes 1933a, 408) in order to explain the phenomena of the crisis and the fluctuations in income and employment
    Date: 2011–02
  3. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: The availability of Piero Sraffa’s unpublished manuscripts and correspondence at Trinity College Library, Cambridge, has made it possible to begin to set out a more complete account of Sraffa’s philosophical thinking than previously could be done with only his published materials and the few comments and suggestions made by others about his ideas, especially in connection with their possible impact on Ludwig Wittgenstein’s later thinking. This makes a direct rather than indirect examination of Sraffa’s philosophical thinking possible, and also shifts the focus from his relationship to Wittgenstein to his own thinking per se. I suggest that the previous focus, necessary as it may have been prior to the availability of the unpublished materials, involved some distortion of Sraffa’s thinking by virtue of its framing in terms of Wittgenstein’s concerns as reflected in the concerns of scholars primarily interested in the change in the his thinking. This paper seeks to locate these early convictions in this historical context, and then go on to treat the development of Sraffa’s philosophical thinking as a process beginning from this point, arguing that his thinking underwent one significant shift around 1931, but still retained its early key assumptions. Thus the approach I will take to Sraffa’s philosophical thinking is to explain it as a process of development largely within a single framework defined by his view of how modern science determines the scope and limits upon economic theorizing.
    Keywords: Sraffa, supervenience physicalism, objectivism, physical real cost, Neurath, Carnap, Wittgenstein
    JEL: B41 B51
    Date: 2011–01
  4. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: Kenneth Boulding’s AEA presidential address argued that economics is a moral science. His view derived from his general systems theory thinking, his three systems view of human society, and his early contributions to evolutionary economics. Boulding’s argument that economics could not be value-free should be distinguished from other well-known views of economics as a moral science, such as Gunnar Myrdal’s. This paper discusses the development and nature of Boulding’s thinking about economics as a moral science in the larger context of his thinking.
    Keywords: Boulding, moral science, general systems theory, three systems view, evolutionary economics
    JEL: A13 B31 B52
    Date: 2011–01
  5. By: Robert Pollin; Jeannette Wicks-Lim
    Abstract: <p>Did the presence of immigrant workers in the United States labor market—including both documented and undocumented workers—significantly affect conditions for low-wage native workers during the Great Recession of 2008-09?   Building from the methodology developed by Card (2005), our basic finding is straightforward: the presence of immigrants in the U.S. labor market <i>did not</i> contribute in any significant way to the severe labor market problems faced by native workers during the recession. We do emphasize that our conclusion remains provisional until a broader set of data are brought to bear in investigating the question.</p>
    JEL: J61 J31
    Date: 2011
  6. By: Christian E. Weller; Luke Reidenbach
    Abstract: <p>The economic recovery after the Great Recession highlighted a continuous divergence between soaring profits and lagging investment. These trends are related at the corporate level, where corporate managers have stronger incentives to pursue short-term profit-seeking activities than to invest in longer-term productive activities, such as hiring and training people and investment in physical infrastructure. This prioritization results because the corporate governance system is biased towards the short run. The policy goals that we discuss aim to find a better economic balance between short-run and long-run goals by defining long-term performance measures and finding a better balance in the incentives of short-run and long-run oriented corporate stakeholders.</p>
    Keywords: Business investment; corporate governance; short-term speculation; long-term productivity growth
    Date: 2011
  7. By: Dietrich Franz; List Christian (METEOR)
    Abstract: Rational choice theory analyzes how an agent can rationally act, given his or her preferences, but says little about where those preferences come from. Instead, preferences are usually assumed to be .xed and exogenously given. We introduce a framework for conceptualizing preference formation and preference change. In our model, an agent.s preferences are based on certain .motivationally of the alternatives over which the preferences are held. Preferences may change as new properties of the alternatives become salient or previously salient ones cease to be so. We suggest that our approach captures endogenous preferences in various contexts, and helps to illuminate the distinction between formal and substantive concepts of rationality, as well as the role of perception in rational choice.
    Keywords: microeconomics ;
    Date: 2011

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