nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2011‒04‒23
six papers chosen by
Karl Petrick
University of the West Indies

  1. "Will the Recovery Continue? Four Fragile Markets, Four Years Later" By Greg Hannsgen; Dimitri B. Papadimitriou
  2. A multi-sector version of the Post-Keynesian growth model By Araujo, Ricardo Azevedo; Teixeira, Joanílio Rodolpho
  3. Military Keynesianism: An Assessment By J Paul Dunne
  4. Thorstein Veblen: A Marxist Starting Point By Kirsten Ford and William McColloch
  5. Bringing Theory Into Practice: Operational Criteria for Measuring Implementation of the International Right to Development By Susan Randolph; Maria Green
  6. Heterodox Central Banking By Luis Felipe Céspedes; Roberto Chang; Javier García-Cicco

  1. By: Greg Hannsgen; Dimitri B. Papadimitriou
    Abstract: In this brief, Research Scholar Greg Hannsgen and President Dimitri B. Papadimitriou focus on the risks and possibilities ahead for the US economy. Using a Keynesian approach and drawing from the commentary of other observers, they analyze publicly available data in order to assess the strength and durability of the expansion that probably began in 2009. They focus on four broad groups of markets that have shown signs of stress for the last several years: financial markets, markets for household goods and services, commodity markets, and labor markets. This kind of analysis does not yield numerical forecasts but it can provide important clues about the short-term outlook for the country’s economic well-being, and cast light on some longer-run threats. In particular, dangers and stresses in the financial and banking systems are presently very serious, and labor market data show every sign of a widespread and severe weakness in aggregate demand. Unless there is new resolve for effective government action on the jobs front, drastic cuts in much-needed federal, state, and local programs will become the order of the day in the United States, as in much of Europe.
    Date: 2011–04
  2. By: Araujo, Ricardo Azevedo; Teixeira, Joanílio Rodolpho
    Abstract: With this inquiry we seek to develop a disaggregated version of the post-Keynesian approach to economic growth, by showing that indeed it can be treated as a particular case of the Pasinettian model of structural change and economic expansion. By relying upon vertical integration it becomes possible to carry out the analysis initiated by Kaldor (1956) and Robinson (1956, 1962), and followed by Dutt (1984), Rowthorn (1982) and later Bhaduri and Marglin (1990) in a multi-sectoral model in which demand and productivity increase at different paces in each sector. By adopting this approach it is possible to show that the structural economic dynamics is conditioned not only to patterns of evolving demand and diffusion of technological progress but also to the distributive features of the economy, which can give rise to different regimes of economic growth. Besides, we find it possible to determine the natural rate of profit that makes the mark-up rate to be constant over time.
    Keywords: Post-Keynesian growth model; structural change; multi-sector models
    JEL: O11 D33 E11
    Date: 2011–04–14
  3. By: J Paul Dunne (University of the West of England and University of Cape Town)
    Abstract: The recent recession has seen something of resurgence in the debate over military Keynesianism. Recent commentators who should no better have claimed that it would make sense to stimulate the US economy through increases in military spending, as though this has not been a commonly contested view over the last 40 years. A large literature has debated the economic effects of military spending and while it has reached no consensus, there is also little support for any belief that military spending is a good way of stimulating the economy. This paper makes a contribution to the debate by assessing the theoretical perspectives and the empirical approaches used. It then undertakes an analysis of the US using a number of approaches and the results suggest that the simple Military Keynesian arguments still lack empirical support.
    Keywords: Military Spending; economic growth; VAR; CVAR
    JEL: H56 E12 E60
    Date: 2011–04
  4. By: Kirsten Ford and William McColloch
    Abstract: As existing literature attests, in spite of methodological differences Marx and Veblen draw strikingly similar conclusions regarding production, conflict, and alienation in modern existence. We here attempt to establish that similarity in conclusion stems from similarity in approach. After reviewing the existing literature on a Marx-Veblen methodological reconciliation, we recapitulate Marx’s method, making the mediated starting point the locus of discussion.From this vantage point, we then examine Veblen’s own approach to analysis in “The Theory of Business Enterprise” and the conclusions that emerge as they resemble those of Marx. In taking a kindred approach Veblen is able to arrive at an understanding of capitalism in accordance with, and complementary to, Marx’s rendering of the inverted nature of economic life in modernity.
    Keywords: Marxism, Institutionalism, History of Economic Thought: Individuals, Economic Methodology: General JEL Codes: B140, B150, B300, B400
    Date: 2011
  5. By: Susan Randolph (University of Connecticut); Maria Green (Brandeis University)
    Abstract: This paper builds on the work of the Working Group and High Level Task Force on the Right to Development to devise a set of Right to Development criteria, sub-criteria and operational sub-criteria (indicators) that could be used by international organizations, governments, and civil society to define and measure implementation of the Right to Development in the current development and human rights environment. The criteria and indicators are offered in a framework that could eventually serve as the basis for the elaboration by the Working Group of formal guidelines for implementing the Declaration on the Right to Development and/or of a legally binding Right to Development instrument.
    Date: 2011–04
  6. By: Luis Felipe Céspedes; Roberto Chang; Javier García-Cicco
    Abstract: This paper discusses theoretical and practical aspects of the various unconventional central bank policies during the 2008-2009 crisis. In terms of theory, we first discuss the role of credibility in the attainment of inflationary goals once the nominal interest rate is at a lower bound, paying particular attention to the role of the central bank’s balance sheet. Additionally, we present a model which has at its core a financial imperfection that highlights the role of bank’s capital as well as the relevance of alternative credit policies that can be used to deal with financial distress. On the other hand, we review evidence regarding the recent experience. We discuss the timing and type of observed unconventional policies. We then explore alternative measures to assess the stance of monetary policy in a situation when the policy rate has reached its lower bound. Finally, we present some descriptive evidence on the effect of the applied policies on the shape of the yield curve and the lending-deposit spread.
    Date: 2010–07

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