nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2012‒02‒08
three papers chosen by
Karl Petrick
University of the West Indies

  1. Fiscal Multipliers over the Business Cycle By Pascal Michaillat
  2. The Political Economy of Social Inclusion By Sylvain Dessy; Stéphane Pallage; Désiré Vencatachellum
  3. Socially Responsible Investment in the USA : evolution of the shareholder advocacy to improve social performance of the firms. Updating a database for a longitudinal study By Laura Martinez

  1. By: Pascal Michaillat
    Abstract: This paper illustrates why fiscal policy becomes more effective as unemployment rises in recessions. The theory is based on the equilibrium unemployment model of Michaillat (forthcoming), in which jobs are rationed in recessions. Fiscal policy takes the form of government spending on public-sector jobs. Recessions are periods of acute job shortage without much competition for workers among recruiting firms; hiring in the public sector does not crowd out hiring in the private sector much; therefore fiscal policy reduces unemployment effectively. Formally the fiscal multiplier—the reduction in unemployment rate achieved by spending one dollar on public-sector jobs—is countercyclical. An implication is that available estimates of the fiscal multiplier, which measure the average effect of fiscal policy over the business cycle, do not apply in recessions because the multiplier is much higher in recessions than on average.
    Keywords: Fiscal multiplier, unemployment, business cycle, job rationing, matching frictions
    JEL: E24 E32 E62 J64
    Date: 2012–01
  2. By: Sylvain Dessy; Stéphane Pallage; Désiré Vencatachellum
    Abstract: We build a political economy model of state policy choice highlighting the challenges to breaking barriers to the adoption of inclusive policies in Africa. We highlight necessary and sufficient conditions for a political leader to gain from implementing exclusive policies: (i) Implementing inclusive policies must be risky; (ii) the political leader must have adequate access to an overseas’ financial safe haven as a technology for protecting the spoils from implementing exclusive policies, or investing the looted funds in the domestic economy must sufficiently contribute to mitigate the risk of a revolution. Our results suggest that breaking barriers to inclusive policies in Africa is not an easy task. Bans on international money-laundering schemes may not be sufficient if domestic money laundering is easy and sufficiently discrete.
    Keywords: Inclusive policies, social exclusion, rebellion, financial safe havens, development
    JEL: D70 D74 H50
    Date: 2012
  3. By: Laura Martinez (USTV UFR SEG - Université Sud-Toulon-Var - UFR Sciences économiques et de gestion - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: The aim of this report is to analyze the Socially Responsible Investment in the USA from the shareholder's point of view. Based on the rule 14a-8, dissatisfied investors or activists may submit proposal to be implemented in order to improve social, societal and environmental performances of a firm; they may change the firm strategy through their proposals. The internship mission consisted of updating a database from 1997 to 2007. This database results from the merging of two databases; one with data from 1997 to 2004, and one containing new data from 2005 to 2007. Observations are made from this constructed database containing nature of 3,428 filed resolutions, targeted companies, resolution's outcomes and filers. Empirical analysis reveals that while religious and individual investors are becoming less present, resolutions submitted by mutual funds, public pension funds and advocacy groups come at the front of the stage. In the same way, propositions concerning abortion and contraception and tobacco and military involvement are getting less important whereas energy and environment, animal rights and political involvement questions are increasing. Assuming that Socially Responsible Investment is a growing phenomenon, this report contributes to knowledge about the nature of the resolutions and their vote, and the involvement of filers.
    Keywords: shareholder advocacy, social policy, shareholder activism, social policy resolutions, socially responsible investment, SRI, USA, corporate social responsibility
    Date: 2011–09–26

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