nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2012‒08‒23
eight papers chosen by
Karl Petrick
University of the West Indies

  1. Critical realism, grounded theory, and theory construction in heterodox economics By Lee, Frederic
  2. "Veblen's Institutionalist Elaboration of Rent Theory" By Michael Hudson
  3. Goodwin’s Growth Cycle Model with the Bhaduri-Marglin Accumulation Function By Mariollis, Theodore
  4. When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter By Aronsson, Thomas; Johansson-Stenman, Olof
  5. Should the focus of publicly provided small business assistance be on start-ups or growth businesses? By Greene, Francis
  6. Capitalism as a system of contingent expectations: Toward a sociological microfoundation of political economy By Beckert, Jens
  7. The Neoliberal and the Powerlessness of Ideas By William Coleman
  8. Academic rankings with RePEc By Christian Zimmermann

  1. By: Lee, Frederic
    Abstract: This paper proposes an approach to theory creation and evaluation for heterodox economics that is based in the integration of critical realism and the method of grounded theory. Critical realism provides the concepts of structures and causal mechanisms that form the outline of theory construction, while the grounded theory method provides the research strategy to transform them into a theory. After this is set out in the first two sections of the paper, research methods issues, such as data triangulation, case studies, analytical statistics (econometrics), and mathematics and modeling, are discussed. The final section of the paper deals with the historical character of critical realist-grounded theories and the implication for heterodox economic theories.
    Keywords: Heterodox; Critical Realism; Grounded Theory
    JEL: D0 B5 B41
    Date: 2012–07
  2. By: Michael Hudson
    Abstract: As the heirs to classical political economy and the German historical school, the American institutionalists retained rent theory and its corollary idea of unearned income. More than any other institutionalist, Thorstein Veblen emphasized the dynamics of banks financing real estate speculation and Wall Street maneuvering to organize monopolies and trusts. Yet despite the popularity of his writings with the reading public, his contribution has remained isolated from the academic mainstream, and he did not leave behind a "school." Veblen criticized academic economists for having fallen subject to "trained incapacity" as a result of being turned into factotums to defend rentier interests. Business schools were painting an unrealistic happy-face picture of the economy, teaching financial techniques but leaving out of account the need to reform the economy's practices and institutions. In emphasizing how financial "predation" was hijacking the economy's technological potential, Veblen’s vision was as materialist and culturally broad as that of the Marxists, and as dismissive of the status quo. Technological innovation was reducing costs but breeding monopolies as the finance, insurance, and real estate (FIRE) sectors joined forces to create a financial symbiosis cemented by political-insider dealings—and a trivialization of economic theory as it seeks to avoid dealing with society’s failure to achieve its technological potential. The fruits of rising productivity were used to finance robber barons who had no better use of their wealth than to reduce great artworks to the status of ownership trophies and achieve leisure-class status by funding business schools and colleges to promote a self-congratulatory but deceptive portrayal of their wealth-grabbing behavior.
    Keywords: History of Economic Thought; Institutionalism; FIRE Sector; Financialization
    JEL: B15
    Date: 2012–08
  3. By: Mariollis, Theodore
    Abstract: This paper incorporates the Bhaduri-Marglin accumulation function in Goodwin’s growth cycle model. It seems that, a priori, nothing unambiguous can be said about the dynamic behaviour of that extended system, since it depends crucially on two separate factors: (i) the form of the accumulation function; and (ii) the degree of capital heterogeneity.
    Keywords: Bhaduri-Marglin accumulation function; capital heterogeneity; Goodwin’s growth cycle model; Sraffian theory
    JEL: B51 E32 C67 C62
    Date: 2012–08–18
  4. By: Aronsson, Thomas (Department of Economics, Umeå University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, University of Gothenburg)
    Abstract: This paper derives Pareto efficient policy rules for the provision of national as well as global public goods in a two-country world, where each individual cares about relative consumption within as well as between countries. Furthermore, we compare these policy rules with those that follow from a non-cooperative Nash equilibrium. The results show that both global and national public goods are systematically under-provided in Nash equilibrium under such relative consumption concerns.
    Keywords: Public goods; relative consumption; inter-jurisdictional comparison; status; positional goods
    JEL: D03 D62 H40
    Date: 2012–08–16
  5. By: Greene, Francis (Warwick Business School)
    Abstract: How is New Zealand best able to maximise the potential of its enterprise population? The simple answer is that it has to ensure that the „rules of the game‟ (incentives and signals) are as good as they can be. Nonetheless, there still may be instances of market failure, suggesting grounds for publicly provided business assistance. This paper examines whether any such business assistance would be better provided to start-up or small fast growth firms. The paper presents both arguments for and against support for these two types of small firms. It finds, overall, that the arguments for supporting fast growth firms are more compelling. It then considers a range of potential policy options (e.g. the introduction of a voucher scheme, managerial training). After reviewing the evidence base, the paper recommends that there still remains a need for the stronger evaluation of public assistance programmes.
    Keywords: Economic development; enterprise policy; business assistance; entrepreneurship
    JEL: L26 O10 O25 O38
    Date: 2012–05–01
  6. By: Beckert, Jens
    Abstract: Political economy and economic sociology have developed in relative isolation from each other. While political economy focuses largely on macrophenomena, economic sociology focuses on the level of social interaction in the economy. The paper argues that economic sociology can provide a microfoundation of political economy beyond rational actor theory and behavioral economics. Based on a discussion of what I call the four Cs of capitalism (credit, commodification, creativity, and competition), I argue that macroeconomic outcomes depend on the contingent expectations actors have in decision situations. Expectations are based on the indeterminate and therefore contingent interpretation of the situations actors face. This shifts attention to the management of expectations as a crucial element of economic activity and to the institutional, political, and cultural foundations of expectations. The dynamics of capitalist development are precarious because they hinge on the creation of expectations conducive to economic growth. -- Politische Ökonomie und Wirtschaftssoziologie haben sich relativ isoliert voneinander entwickelt. Während die Politische Ökonomie vornehmlich Makrophänomene untersucht, konzentriert sich die Wirtschaftssoziologie zumeist auf die Ebene der sozialen Interaktion in der Wirtschaft. Der Beitrag zeigt, dass die Wirtschaftssoziologie Grundlagen für eine Mikrofundierung der Politischen Ökonomie jenseits der Theorie rationalen Handelns und behavioristischer Theorien bietet. Ausgehend von der Diskussion vier zentraler Elemente kapitalistischer Ökonomie, die ich als the four Cs of capitalism bezeichne (credit, commodification, creativity, and competition), zeige ich, dass makroökonomische Resultate auf den kontingenten Erwartungen der Akteure in der Handlungssituation beruhen. Erwartungen gründen auf den unbestimmten und daher kontingenten Interpretationen der Handlungssituation, mit der die Akteure konfrontiert sind. Dies lenkt die Aufmerksamkeit auf das Erwartungsmanagement als zentrales Element wirtschaftlichen Handelns und zu den institutionellen, politischen und kulturellen Grundlagen von Erwartungen. Die Dynamik kapitalistischer Entwicklung ist immer prekär, weil sie von der Schaffung von Erwartungen abhängt, die Wachstum befördern.
    Date: 2012
  7. By: William Coleman
    Abstract: Keynes famously claimed 'soon or late, it is ideas, not vested interested which are dangerous for good or evil'. His neoliberal critics have frequently concurred with this contention, and have happily used the example of Keynes to illustrate it. But is 'the power of ideas' consistent with neoliberal doctrine? The paper argues that the most conclusive case for categorical 'market success' propositions will eliminate ideas as explanatory of economic failure , and imply such failures must be traced to exploitation of by special interests . However, the paper argues that neoliberalism is committed to 'government failure' not 'market success', and government failure does give room for ideas to have power, for good or ill.
    Date: 2012–07
  8. By: Christian Zimmermann
    Abstract: This document describes the data collection and use of data for the computation of rankings within RePEc (Research Papers in Economics). This encompasses the determination of impact factors for journals and working paper series, as well as the ranking of authors, institutions, and geographic regions. The various ranking methods are also compared, using a snapshot of the data.
    Keywords: Research and development
    Date: 2012

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