nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2013‒01‒19
seven papers chosen by
Karl Petrick
Western New England University

  1. "Finance-dominated Capitalism and Redistribution of Income: A Kaleckian Perspective" By Eckhard Hein
  2. "Expansion of Federal Reserve Authority in the Recent Financial Crisis Raises Questions about Governance" By Bernard Shull
  3. Robust Estimates of Changes in Poverty and Inequality in Post-Independence Namibia By Sebastian Levine; Benjamin Roberts
  4. Eurozone: The Untold Economics By John Hatgioannides; Marika Karanassou; Hector Sala
  5. South-South Cooperation for Inclusive Green Growth By Kishan Khoday; Leisa Perch
  6. Poverty Where People Live: What do National Poverty Lines Tell us about Global Poverty? By Ugo Gentilini; Andy Sumner
  7. Financial Flows Can Create Exchange Rate Issues By Raquel Almeida Ramos

  1. By: Eckhard Hein
    Abstract: This paper examines a major channel through which financialization or finance-dominated capitalism affects macroeconomic performance: the distribution channel. Empirical data for the following dimensions of redistribution in the period of finance-dominated capitalism since the early 1980s is provided for 15 advanced capitalist economies: functional distribution, personal/household distribution, and the share and composition of top incomes. Based on the Kaleckian approach to the determination of income shares, the effects of financialization on functional income distribution are studied in more detail. Some stylized facts of financialization are integrated into the Kaleckian approach, and by means of reviewing empirical and econometric literature it is found that financialization and neoliberalism have contributed to the falling labor income share since the early 1980s through three main Kaleckian channels: (1) a shift in the sectoral composition of the economy; (2) an increase in management salaries and rising profit claims of the rentiers, and thus in overheads; and (3) weakened trade union bargaining power.
    Keywords: Finance-dominated Capitalism; Distribution of Income; Kaleckian Price and Distribution Theory
    JEL: D31 D33 D43
    Date: 2013–01
  2. By: Bernard Shull
    Abstract: Several years before the onset of the recent financial crisis, ex -- Federal Reserve Board Member Lawrence Meyer wrote that the Fed "is often called the most powerful institution in America," its key decisions made by 19 people whose names are known by few, meeting regularly behind closed doors. Bernard Shull examines the origin and nature of Fed authority and independence, and reviews the impact of Dodd-Frank on our central bank. His conclusion? The new constraints placed on the Fed are modest at best, and its continued expansion inexorably raises questions of governance.
    Date: 2013–01
  3. By: Sebastian Levine (UNDP); Benjamin Roberts (Human Sciences Research Council)
    Abstract: The authors estimate changes in the distribution of household consumption expenditure in Namibia since Independence in 1990 and the effects on poverty. To produce comparability between two household surveys, they use survey matching techniques and apply the framework of stochastic dominance to test the robustness of the results. The results reveal a significant decrease in the poverty headcount over the period and small but insignificant decreases in the country?s extremely high levels of inequality. Decomposition analysis shows that poverty reduction in Namibia is largely driven by growth in mean incomes rather than redistribution. Even so, there have been important changes in inequality, especially between different social groups, as educational attainment has replaced ethnicity as the main determinant of inequality between groups. (?)
    Keywords: Robust Estimates of Changes in Poverty and Inequality in Post-Independence Namibia
    Date: 2012–12
  4. By: John Hatgioannides (City University); Marika Karanassou (Queen Mary, University of London and IZA); Hector Sala (Universitat Autònoma de Barcelona and IZA)
    Abstract: This paper dwells on the Eurozone woes and addresses the origins of the transition from a fictitious boom to a painful bust by unravelling (i) the supply-side structural imbalances that formed the core-periphery economic divide, and (ii) the necessity of the periphery’s sovereign debt to finance imports from the export-led core. Within our macroeconomic setup, we challenge the cliché that countries of the core have funded the sovereign debts of the periphery and demonstrate that the commonly held view that the periphery countries have lived beyond their means (due to wages growing beyond what is justified by productivity gains) is in stark contrast to the trajectories followed by the wage shares. We argue against the tyrannical neoliberal policies of austerianism and we propose the rebooting of central and private banking. We present a fresh vision for the future of the Eurozone that will halt the tearing of the social fabric of its member states.
    Keywords: Eurozone crisis, Structural imbalances, Sovereign debt, Austerity, Neoliberal policies, Banking/credit system
    JEL: E50 E62 E65 G01
    Date: 2013–01
  5. By: Kishan Khoday (UNDP); Leisa Perch (International Policy Centre for Inclusive Growth)
    Abstract: Two critical megatrends are of central importance in implementing the green economy agenda launched at the recent Rio+20 Summit on Sustainable Development: the rise of emerging economies across the South, and the global challenges of resource security and ecological change. At the converging point of these trends are surging levels of outward investments by emerging economies, bringing social and ecological risks to resource-rich, vulnerable communities around the world, but also bringing opportunities for achieving global goals for inclusive, green growth. (?)
    Keywords: South-South Cooperation for Inclusive Green Growth
    Date: 2012–11
  6. By: Ugo Gentilini (World Food Programme); Andy Sumner (Institute of Development Studies, Sussex)
    Abstract: Debate about national and international poverty measurement continued to evolve (see for example, Abu-Ismail et al., 2012). The basic question of how many poor people there are in the world generally assumes that poverty is measured according to international poverty lines (IPLs). Yet, an equally relevant question could be how many poor people there are in the world, based on how poverty is defined where those people live. In short, rather than a comparison based on monetary values, the latter question is germane to estimates based on a concept??poverty??as defined by countries? specific circumstances and institutions. (?)
    Keywords: Poverty Where People Live: What do National Poverty Lines Tell us about Global Poverty?
    Date: 2012–12
  7. By: Raquel Almeida Ramos (IPC-IG)
    Abstract: Developing countries have been receiving increasing amounts of finance-related flows, which are also becoming more volatile ?two features that increase the importance of such flows in determining exchange rates. This process is part of broader changes in the relationship between the ?financial? and the ?real? sectors, characterised by the increasing importance of financial assets and motives. These changes have been referred to as financialisation. (?)
    Keywords: Financial Flows Can Create Exchange Rate Issues
    Date: 2012–11

This nep-pke issue is ©2013 by Karl Petrick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.