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on Post Keynesian Economics |
| By: | Arupratan Daripa (Department of Economics, Mathematics & Statistics, Birkbeck); Sandeep Kapur (Department of Economics, Mathematics & Statistics, Birkbeck); Stephen Wright (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | In 1997 the new Labour government launched major initiatives in the area of financial regulation, setting up the Financial Services Authority as a comprehensive regulatory body, supported by the legislative framework of the Financial Services and Markets Act 2000. We evaluate the Labour government’s record on financial regulation in terms of its achievements and failures, especially in dealing with the global financial crisis that started in 2007. While we identify some clear flaws in regulatory design and enforcement, our evaluation highlights some inherent difficulties of financial regulation. |
| Keywords: | Financial Regulation, New Labour, Financial Crisis |
| JEL: | G01 G2 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1301&r=pke |
| By: | Kevin Hoover |
| Abstract: | Modern growth theory derives mostly from Robert Solow’s “A Contribution to the Theory of Economic Growth” (1956). Solow’s own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod invoking a fixed-coefficients production function. This paper, first, challenges Solow’s reading of Harrod, arguing that Harrod’s object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed the medium run fluctuations. It was an attempt to isolate conditions under which the economy might tend to run below potential. In making this argument, Harrod does not appeal to a fixed-coefficients production function – or to any production function at all, as that term is understood by Solow. The paper next traces the history of the dominance of Solow’s interpretation among growth economists. These tasks belong to the history of economics. The paper’s final task belongs to economic history. It offers an informal reexamination of economic history through the lens of Harrod’s dynamic model, asking whether there is a prima facie case in favor of Harrod’s model properly understood. |
| Keywords: | economic growth, Roy Harrod, Robert Solow, dynamics, dynamic instability, dnife-edge, warranted rate of growth, natural rate of growth |
| JEL: | B22 O4 E12 E13 N1 B31 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-02&r=pke |
| By: | Roger E.A. Farmer (UCLA Economics); Carine Nourry (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM, EHESS & Institut Universitaire de France); Alain Venditti (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM, EHESS & EDHEC) |
| Abstract: | Existing literature continues to be unable to offer a convincing explanation for the volatility of the stochastic discount factor in real world data. Our work provides such an explanation. We do not rely on frictions, market incompleteness or transactions costs of any kind. Instead, we modify a simple stochastic representative agent model by allowing for birth and death and by allowing for heterogeneity in agents’ discount factors. We show that these two minor and realistic changes to the timeless Arrow-Debreu paradigm are sufficient to invalidate the implication that competitive financial markets efficiently allocate risk. Our work demonstrates that financial markets, by their very nature, cannot be Pareto efficient, except by chance. Although individuals in our model are rational; markets are not. |
| Keywords: | Inefficient markets, heterogeneous agents, overlapping generations, sunspots, extrinsic uncertainty, excess volatility. |
| Date: | 2013–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1311&r=pke |
| By: | Gerritzen, Berit; Kirchgässner, Gebhard |
| Abstract: | Provided that the literature on the deterrent effect of capital punishment is overall inconclusive, the fact that individual authors persistently claim to have found solid evidence in one or the other direction raises two questions. Firstly, what are the causes for these different results? Do different data samples, estimation methods or time periods lead to different results or do the outcomes merely reflect prior convictions of the authors? Secondly, to what extent is it possible to derive such diverging results by slightly changing the specification of the test equations without violating scientific standards? After a survey of the over forty reviews of this literature available so far, we perform a meta-analysis of 102 deterrence studies published between 1975 and 2011. The profession of the author turns out to be the only statistically significant explanatory variable: Economists claim significantly more often to have found a significant deterrence effect than members of law or other social science departments. Furthermore, using a panel data set of U.S. states, we show how easy it is to derive contradictory results by employing alternative specifications. Thus, our results reinforce the claim that the empirical evidence presented to date is by far too fragile in order to base political decisions on it. |
| Keywords: | Death Penalty, Deterrence, Econometric Evidence, Ideology |
| JEL: | K14 K42 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:03&r=pke |