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on Post Keynesian Economics |
| By: | Esteban Perez-Caldentey; Matias Vernengo |
| Abstract: | Conventional wisdom suggests that the European debt crisis, which has thus far led to severe adjustment programs crafted by the European Union and the International Monetary Fund in both Greece and Ireland, was caused by fiscal profligacy on the part of peripheral, or noncore, countries in combination with a welfare state model, and that the role of the common currency-the euro-was at best minimal. This paper aims to show that, contrary to conventional wisdom, the crisis in Europe is the result of an imbalance between core and noncore countries that is inherent in the euro economic model. Underpinned by a process of monetary unification and financial deregulation, core eurozone countries pursued export-led growth policies-or, more specifically, "beggar thy neighbor" policies-at the expense of mounting disequilibria and debt accumulation in the periphery. This imbalance became unsustainable, and this unsustainability was a causal factor in the global financial crisis of 2007-08. The paper also maintains that the eurozone could avoid cumulative imbalances by adopting John Maynard Keynes's notion of the generalized banking principle (a fundamental principle of his clearing union proposal) as a central element of its monetary integration arrangement. |
| Keywords: | European Union; Current Account Adjustment; Financial Aspects of Economic Integration |
| JEL: | F32 F36 O52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_702&r=pke |
| By: | Edward N. Wolff; Ajit Zacharias; Thomas Masterson; Selcuk Eren; Andrew Sharpe; Elspeth Hazell |
| Abstract: | We use the Levy Institute Measure of Economic Well-being (LIMEW), the most comprehensive income measure available to date, to compare economic well-being in Canada and the United States in the first decade of the 21st century. This study represents the first international comparison based on LIMEW, which differs from the standard measure of gross money income (MI) in that it includes noncash government transfers, public consumption, income from wealth, and household production, and nets out all personal taxes. We find that, relative to the United States, median equivalent LIMEW was 11 percent lower in Canada in 2000. By 2005, this gap had narrowed to 7 percent, while the difference in median equivalent MI was only 3 percent. Inequality was notably lower in Canada, with a Gini coefficient of 0.285 for equivalent LIMEW in 2005, compared to a US coefficient of 0.376-a gap that primarily reflects the greater importance of income from wealth in the States. However, the difference in Gini coefficients declined between 2000 and 2005. We also find that the elderly were better off relative to the nonelderly in the United States, but that high school graduates did better relative to college graduates in Canada. |
| Keywords: | Well-Being; Living Standards; Inequality; Income; International Comparisons |
| JEL: | D31 D63 P17 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_703&r=pke |
| By: | Massimo Di Matteo |
| Abstract: | In the paper I present and discuss an unpublished essay of Richard Goodwin found in the Goodwin’s Archive at the University of Siena on the theme of social philosophy. I will illustrate the main points of his text, briefly compare these late views with those entertained at the beginning of his scientific life (namely his Harvard dissertation on Marxism also kept in the Archive) and add a few remarks in connection with the implications for economics suggested by his analysis. |
| Keywords: | history of economics, social philosophy. |
| JEL: | B20 B30 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:usi:depfid:0711&r=pke |
| By: | Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise) |
| Abstract: | Kaldor présente l'analyse qu'il fait de la répartition comme une théorie keynésienne. Son travail s'inspire, nous dit-il, des contributions de Keynes, dans le Traité de la Monnaie, et de Kalecki. Cependant, alors que Keynes et Kalecki développent des analyses de courte période, Kaldor décrit les caractéristiques d'un équilibre de longue période si bien que le mécanisme d'ajustement sur lequel il s'appuie, la flexibilité des taux de marge, est inapproprié. Pasinetti, en suggérant que l'article de Kaldor repose sur une erreur logique et que la correction de cette erreur permet de montrer que le taux de profit — en équilibre de longue période — ne dépend que du taux de croissance naturel de l'économie et de la propension à épargner des capitalistes, relança le débat. Cependant, sa thèse paraît discutable. D'une part, l'équilibre qu'il décrit n'est pas unique et il se peut que, dans certaines circonstances, l'économie tende vers un autre équilibre dont les caractéristiques sont déterminées par la propension à épargner des salariés. D'autre part, l'idée que la fonction d'épargne proposée par Kaldor est logiquement incohérente est sans fondement. Enfin, l'hypothèse cruciale sur laquelle repose le raisonnement de Pasinetti, l'existence d'une classe d'individus qui tirent des profits la totalité de leurs revenus ne paraît guère caractériser de façon pertinente les systèmes économiques qui prédominent dans les économies développées. |
| Keywords: | Kaldor, Keynes, Kalecki, Pasinetti, repartition des revenus |
| Date: | 2012–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00143948&r=pke |
| By: | Mark Langan; James Scott |
| Abstract: | Abstract Aid for Trade (AfT) has gained prominence as an innovative form of donor support in the era of the ‘post’-Washington Consensus. Institutions such as the World Trade Organization (WTO), the US Agency for International Development (USAID), the European Commission, and the UK Department for International Development (DfID) have heralded AfT concessions as a means of creating a level economic playing field between industrialised nations and countries in the global South. Specifically, AfT mechanisms have been praised as a means of aligning trade liberalisation deals (whether in the Doha Round or within bilaterals) to poverty reduction objectives. Donor AfT assistance to low-income states’ trade capacity – including support to government ministries, private sector development, and local infrastructure – are understood to construct a more balanced global trade system conducive to the needs of ‘the poor’. This article, however, through critical analysis of AfT discourse within the ‘moral economies’ of multilateral WTO and bilateral EU-ACP (African, Caribbean and Pacific) negotiations, points to the strategic purposes of donor language in rationalising asymmetric North- South trade systems. Moreover, it questions the ‘development’ credentials of AfT assistance, given its disbursement to strategically significant middle-income states in relation to Western overseas interventions, private sector activities that have dubious consequences for supposed beneficiaries, and the tying of AfT disbursements to the implementation of inappropriate policies. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:16011&r=pke |
| By: | Abdoul Aziz Wane; Luc Eyraud; Changchang Zhang; Benedict J. Clements |
| Abstract: | This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or “feed-in-tariffs,†which require use of “green†energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment. |
| Keywords: | Asia , China , Climatic changes , Cross country analysis , Economic models , Energy policy , Energy prices , Europe , Greenhouse gas emissions , North America , Public investment , United States , |
| Date: | 2011–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/296&r=pke |
| By: | Zsolt Darvas |
| Abstract: | Highlights 1) Iceland, Ireland and Latvia experienced similar developments before the crisis, such as sharp increases in banks’ balance sheets and the expansion of the construction sector. However the impact of the crisis was different: Latvia was hit harder than any other country in the world. Ireland also suffered heavily, while Iceland came out from the crisis with the smallest fall in employment, despite the greatest shock to the financial system. 2) There were marked differences in policy mix: currency collapse in Iceland but not in Latvia, letting banks fail in Iceland but not in Ireland, and the introduction of strict capital controls only in Iceland. The speed of fiscal consolidation was fastest in Latvia and slowest in Ireland. 3) Economic recovery has started in all three countries and there are several encouraging signals. The programme targets in terms of fiscal adjustment, structural reforms and financial reform are on track in all three countries. 4) Iceland seems to have the right policy mix. 5) Internal devaluation in Ireland and Latvia through wage cuts did not work, because private-sector wages hardly changed. The productivity increase was significant in Ireland and moderate in Latvia, yet was the result of a greater fall in employment than the fall in output, with harmful social consequences. 6) The experience with the collapse of the gigantic Icelandic banking system suggests that letting banks fail when they had a faulty business model is the right choice. 7) There is a strong case for a European banking federation. |
| Keywords: | banking crisis, banking sector restructuring, economic recovery, currency devaluation, internal devaluation, capital controls, fiscal adjustment |
| JEL: | F31 F32 J30 O40 |
| Date: | 2011–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:mkg:wpaper:1106&r=pke |