nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2013‒05‒22
fourteen papers chosen by
Karl Petrick
Western New England University

  1. Tackling the instability of growth: A Kaleckian model with autonomous demand expenditures By Olivier Allain
  2. Abstract Labour Theory of Value and Theory of Price By Samuel Jaramillo González
  3. What remains of Sraffa's economics By Pier Luigi Porta
  4. The Inaugural Harold Mitchell Development Policy Lecture: Timor-Leste and the New Deal for Engagement in Fragile States By Emilia Pires
  5. So Goes the Nation? A preliminary report on how immigration is reshaping the identities of workers in California By Voss, Kim; Silva, Fabiana
  7. Stochastic Macro-equilibrium and Microfoundations for Keynesian Economics By YOSHIKAWA Hiroshi
  8. Some Aspects of External Dimensions of Indian Economy in the Age of Globalisation By Byasdeb Dasgupta
  9. Sraffa's and Wittgenstein's Crossed Influences: Forms of Life and Snapshots By Richard Arena
  10. A model of gendered production in colonial Africa and implications for development in the post-colonial period By Fofack, Hippolyte
  11. Creative industries from an evolutionary perspective: A critical literature review By Jürgen Essletzbichler
  12. The Economic Importance of Financial Literacy: Theory and Evidence By Annamaria Lusardi; Olivia S. Mitchell
  13. What Have We Learned from Attempts to Introduce Green-Growth Policies? By OECD
  14. A"greenprint"for international cooperation on climate change By Mattoo, Aaditya; Subramanian, Arvind

  1. By: Olivier Allain (Université Paris Descartes - Sorbonne Paris Cité - Faculté de Droit, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This article presents a Kaleckian model enriched by introducing autonomous public expenditure which grows at an exogenous rate. It shows that the usual properties are not affected in the short run: growth is wage-led. But long run properties are strongly affected: public expenditure plays a role as an automatic stabilizer so that the accumulation rate converges on the growth rate of public expenditure. The effect of a change in income distribution on the growth rate is then only transient. However, the impacts on the level of variables (output, capital stock, labor, etc.) remain permanent. The research here also shows that this theoretical framework can provide a solution (depending on the parameters) to the 'second' Harrod knife-edge problem. In this case, Kaleckian outcomes are consistent with the convergence of the current utilization rate on the 'normal' rate, a result which has not been found in the existing literature.
    Keywords: Kaleckian models; utilization rate; Harrod instability; income distribution; automatic stabilizers
    Date: 2013–03
  2. By: Samuel Jaramillo González
    Abstract: The renewal of Marx's interpretation of capitalist society implies the recovery and development of his Theory of Value. The stream of thought known as Abstract Labour Theory of Value, or New Interpretation, proposes to do this, and points out that value is a category that is formed in the interaction between production and circulation (and not just in production, as the Ricardian conception). The theory of value exceeds a theory of price, but requires this piece of analysis that for now is underdeveloped. This paper aims to contribute to the task of constructing a price theory compatible with the abstract labor theory of value, and approaches this task in a simple commodity economy scheme.
    Date: 2013–03–11
  3. By: Pier Luigi Porta
    Abstract: Recently the Cambridge Journal of Economics have launched a project on New Perspectives on the Work of Piero Sraffa in a Conference and a Special Issue of the Journal. "Almost two decades after the opening of the Sraffa Archives - the Introduction reads - and 50 years on from the publication of PCMC seemed an appropriate moment to reflect on ongoing debates on Sraffa's overall contribution to economics and, in particular, on the relevance of the opening of the Sraffa Archives in this regard. Does Sraffa's lasting contribution to economic analysis essentially remain limited to PCMC or is it taken beyond this by his unpublished writings? In the latter case, is it possible to identify a distinctive research project that Sraffa had in mind?". This paper discusses these problems and proposes an answer to both questions. It is argued that the opening of the Archives changes substantially the judgment that can be given of the intellectual legacy of Piero Sraffa. The contributions to the ongoing debate on Piero Sraffa's economics are discussed. It is argued that the publication of Sraffa's literary remains is the necessary step to make the debate more productive.
    Keywords: Sraffian economics, Structural economic dynamics
    JEL: A10 B12
    Date: 2013–05
  4. By: Emilia Pires
    Abstract: This is an edited transcript of the lecture given by The Honorable Emilia Pires, Timor-Leste Finance Minister and g7+ Chair, for the inaugural Harold Mitchell Development Policy Lecture at the Australian National University on 22 November 2012. In her lecture and subsequent Q&A, Ms Pires explains, drawing from its own experience in achieving social stability and rapid growth, Timor-Leste’s pioneering role in the establishment of the g7+, a group of now 18 fragile states that was formed in 2010 as a country-owned and country-led global mechanism to monitor, report on and draw attention to the unique challenges faced by fragile states. The New Deal for Engagement in Fragile States is the first time in history that conflict-afflicted states have taken the lead in designing an aid architecture for and by themselves.
    JEL: O10 O20
    Date: 2013–01
  5. By: Voss, Kim; Silva, Fabiana
    Keywords: Sociology, Immigration, worker identity
    Date: 2013–05–13
  6. By: Elizabeth Ananat; Shihe Fu; Stephen L. Ross
    Abstract: We demonstrate a striking but previously unnoticed relationship between city size and the black-white wage gap, with the gap increasing by 2.5% for every million-person increase in urban population. We then look within cities and document that wages of blacks rise less with agglomeration in the workplace location, measured as employment density per square kilometer, than do white wages. This pattern holds even though our method allows for non-parametric controls for the effects of age, education, and other demographics on wages, for unobserved worker skill as proxied by residential location, and for the return to agglomeration to vary across those demographics, industry, occupation and metropolitan areas. We find that an individual’s wage return to employment density rises with the share of workers in their work location who are of their own race. We observe similar patterns for human capital externalities as measured by share workers with a college education. We also find parallel results for firm productivity by employment density and share college-educated using firm racial composition in a sample of manufacturing firms. These findings are consistent with the possibility that blacks, and black- majority firms, receive lower returns to agglomeration because such returns operate within race, and blacks have fewer same-race peers and fewer highly-educated same-race peers at work from whom to enjoy spillovers than do whites. Data on self-reported social networks in the General Social Survey provide further evidence consistent with this mechanism, showing that blacks feel less close to whites than do whites, even when they work exclusively with whites. We conclude that social distance between blacks and whites preventing shared benefits from agglomeration isa significant contributor to overall black-white wage disparities.
    Keywords: Black White Wage Gap, Agglomeration Economies, Human Capital Externalities,Information Networks, Total Factor Productivity
    JEL: J15 J24 J31 R23 R32
    Date: 2013–04
  7. By: YOSHIKAWA Hiroshi
    Abstract: In place of the standard search equilibrium, this paper presents an alternative concept of stochastic macro-equilibrium based on the principle of statistical physics. This concept of equilibrium is motivated by unspecifiable differences in economic agents and the presence of all kinds of micro shocks in the macroeconomy. Our model mimics the empirically observed distribution of labor productivity. The distribution of productivity resulting from the matching of workers and firms depends crucially on aggregate demand. When aggregate demand rises, more workers are employed by firms with higher productivity while, at the same time, the unemployment rate declines. The model provides a micro-foundation for Keynes' principle of effective demand.
    Date: 2013–05
  8. By: Byasdeb Dasgupta (Département d'économie - Jawaharlal Nehru University)
    Abstract: External dimensions of Indian economy in the age of globalisation are viewed in this paper in terms of unabated opening up of the economy with respect to both trade and foreign capital flows. This paper empirically shows that with more opening up of the economy there is more and more transfer of financial resources abroad from the Indian economy. So opening up through neoliberal globalisation is a ploy of global capitalism to extract super duper surplus from India. Analytically also the paper makes an attempt to negate the recent policy reforms (as is imminent in allowing FDI in multi-brand retail, aviations and insurance and in relentless efforts of the Government in slashing down fiscal deficit) as anti-growth and more attuned to the interests of global finance and capital.
    Keywords: globalisation; India; Indian economy; global capitalism; economic opening up
    Date: 2013–04–01
  9. By: Richard Arena
    Abstract: The purpose of this contribution is to investigate Sraffa’s and Wittgenstein’s mutual methodological and philosophical influences to try to point out how they reveal the possibility of an interpretation of Sraffa’s contribution to economics which differs from the most usual ones. The second part of this paper will consider how it is possible to read Production of Commodities by means of Commodities (PCMC) as an attempt to build a classical version of the theory of General Economic Equilibrium. Its third part will focus on the interpretation of Sraffa’s 1960 scheme in terms of “long-period positions”. In a fourth part, we will investigate the notions of “form of life” and “language game” in Wittgenstein post-Tractatus contributions, beginning to connect them to some developments included in Sraffa’s Unpublished Manuscripts. Finally, in the last part of this paper, we will show how these notions offer some similarities with an interpretation of Sraffa’s contribution in terms of morphological and comparative analysis of the economic foundations of surplus-based societies.
    Date: 2013–02
  10. By: Fofack, Hippolyte
    Abstract: This paper proposes a model to analyze the implications of colonial policies for gender inequality in Sub-Saharan Africa. The model emphasizes segmentation of production under complete specialization. It shows that the colonial production model, underpinned by occupational job segregation in the agricultural sector and gender bias in the non-agricultural sector, exacerbated gender inequality by limiting employment opportunities for women outside the realm of home production and subsistence agriculture. Over the past few decades, the resilience of parameters underlying these models of colonial production has heightened the risks of macroeconomic volatility in the region, especially where the structural transformation from low to high-value-added activities has remained elusive.
    Keywords: Economic Theory&Research,Labor Policies,Rural Development Knowledge&Information Systems,Gender and Development,Population Policies
    Date: 2013–05–01
  11. By: Jürgen Essletzbichler
    Abstract: This paper builds on and complements work by evolutionary economic geographers on the role of industry relatedness for regional economic development and extends this work into a number of methodological and empirical directions. First, while recent work defines relatedness through co-occurrence, this paper measures relatedness as intensity of input-output links between industry pairs. Second, this measure is employed to examine industry evolution in 360 U.S. metropolitan areas over the period 1977-1997. The paper confirms the findings of existing work: Industries are more likely to be members of and enter and less likely to exit a metropolitan industry portfolio if they are technologically related to those industries. Third, based on average industry relatedness in a metropolitan area, an employment weighted measure of metropolitan technological cohesion is developed. Changes in technological cohesion can then be decomposed into selection, entry and exit effects revealing that the change in technological cohesion is not only due to the entry and exit of related industries but employment growth in strongly related incumbent industries.
    Keywords: Evolutionary economic geography, industry relatedness, industrial branching, technological cohesion, selection, entry, exit
    Date: 2013–05
  12. By: Annamaria Lusardi (The George Washington University School of Business & NBER); Olivia S. Mitchell (Wharton School & NBER)
    Abstract: In this paper, we undertake an assessment of the rapidly growing body of research on financial literacy. We start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision-making in the United States and elsewhere. While the literature is still growing, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.
    Date: 2013–04
  13. By: OECD
    Abstract: Long-term projections suggest that without policy changes, the continuation of business-as-usual economic growth and development will have serious impacts on natural resources and the ecosystem services on which human well-being depends. This highlights the necessity for both developed and developing countries to move to a new growth path that is consistent with the protection of the environment and a sustainable use of scarce natural resources, while still achieving sizeable gains in living standards and reducing poverty...
    Date: 2013–03–27
  14. By: Mattoo, Aaditya; Subramanian, Arvind
    Abstract: International negotiations on climate change have been dogged by mutual recriminations between rich and poor countries, constricted by the zero-sum arithmetic of a shrinking global carbon budget, and overtaken by shifts in economic power between industrialized and developing countries. To overcome these"narrative,""adding-up,"and"new world"problems, respectively, this paper proposes a new Greenprint for cooperation. First, the large dynamic emerging economies -- China, India, Brazil, and Indonesia -- must assume the mantle of leadership, offering contributions of their own and prodding the reluctant industrial countries into action. This role reversal would be consistent with the greater stakes for the dynamic emerging economies. Second, the emphasis must be on technology generation. This would allow greater consumption and production possibilities for all countries while respecting the global emissions budget that is dictated by the climate change goal of keeping average temperature rise below 2 degrees centigrade. Third, instead of the old cash-for-cuts approach -- which relies on the industrial countries offering cash (which they do not have) to the dynamic emerging economies for cuts (that they are unwilling to make) -- all major emitters must make contributions. With a view to galvanizing a technology revolution, industrial countries would take early action to raise carbon prices. The dynamic emerging economies would in turn eliminate fossil fuel subsidies, commit to matching carbon price increases in the future, allow limited border taxes against their own exports, and strengthen protection of intellectual property for green technologies. This would directly and indirectly facilitate such a technological revolution.
    Keywords: Climate Change Mitigation and Green House Gases,Climate Change Economics,Environmental Economics&Policies,Energy Production and Transportation,Carbon Policy and Trading
    Date: 2013–05–01

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