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on Post Keynesian Economics |
| By: | Roy H Grieve (Department of Econimics, University of Strathclyde) |
| Abstract: | It has been alleged that J M Keynes, quoting in the General Theory a passage from J S Mill’s Principles, misunderstood the passage in question and was therefore wrong to cite Mill as an upholder of the ‘classical’ proposition that ‘supply creates its own demand’. We believe that, although Keynes was admittedly in error with respect to, so-to-say, the ‘letter’ of Mill’s exposition, he did not mislead readers as to the ‘substance’ of Mill’s conception. The purpose of this paper is to demonstrate that J S Mill did indeed stand for a ‘classical’ position, vulnerable to Keynes’s critique as developed in the General Theory. [This is a revised version of an earlier working paper: ‘Keynes, Mill and Say’s Law’, Strathclyde Papers in Economics, 2000/11] |
| Keywords: | Keynes and the 'classics'; John Stuart Mill; Say's Law |
| JEL: | B12 B22 B31 E32 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1323&r=pke |
| By: | Dube, Arindrajit (University of Massachusetts Amherst) |
| Abstract: | A recent paper by Meer and West argues that minimum wages reduce aggregate employment growth, and that this relationship is masked by looking at employment levels. I also find a negative association between minimum wages and aggregate employment growth using both the Business Dynamics Statistics and the Quarterly Census of Employment and Wages datasets, and it is sizable for some time periods. However, I show that this negative association is present in exactly the wrong sectors. It is particularly strong in manufacturing which hires very few minimum wage workers. At the same time, there is no such association in retail, or in accommodation and food services – which together hire nearly 2/3 of all minimum wage workers. These results indicate that the negative association between minimum wages and aggregate employment growth does not represent a causal relationship. Rather the association stems from an inability to account for differences between high and low minimum wage states and the timing of minimum wage increases. Consistent with that interpretation, when I use bordering counties to construct more credible control groups, I find no such negative correlation between minimum wages and overall employment growth. |
| Keywords: | minimum wage, employment growth |
| JEL: | J23 J38 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7674&r=pke |
| By: | Frederick Guy (Department of Management, Birkbeck, University of London); Peter Skott (Department of Economics, University of Massachusetts, Amherst) |
| Abstract: | Technology can affect the distribution of income directly via its influence on both the bargaining power of different parties and the marginal product of different factors of production. This paper focuses mainly on the first route. The role of power is transparent in the case of medieval choke points but modern network technologies have similar features. There is also substantial evidence -- from truckers and retail clerks to CEOs -- that power affects the determination of wages. But power relations inevitably have institutional dimensions; regulatory frameworks influence industry structures and the market power of large companies as well as the parameters that determine the earnings of different groups of workers. The institutional framework is arrived at through complex social and political processes; technology, however, may exert some influence on the course of those processes. |
| Keywords: | Power biased technological change, network technologies, increasing returns, winnertakes- all, efficiency wage, Fordism, information technology, Great Compression |
| JEL: | O33 J31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2013-09&r=pke |
| By: | Richard G. Lipsey (Simon Fraser University) |
| Abstract: | To make the argument that the behaviour of modern industrial economies since the 1990s is inconsistent with theories in which there is a unique ergodic macro equilibrium, the paper starts by reviewing both the early Keynesian theory in which there was no unique level of income to which the economy was inevitably drawn and the debate about the amount of demand pressure at which it was best of maintain the economy: high aggregate demand and some inflationary pressure or lower aggregate demand and a stable price level. It then covers the rise of the simple Phillips curve and its expectations-augmented version, which introduced into current macro theory a natural rate of unemployment (and its associated equilibrium level of national income). This rate was also a NAIRU, the only rate consistent with stable inflation. It is then argued that the current behaviour of many modern economies in which there is a credible policy to maintain a low and steady inflation rate is inconsistent with the existence of either a unique natural rate or a NAIRU but is consistent with evolutionary theory in which there is perpetual change driven by endogenous technological advance. Instead of a NAIRU evolutionary economies have a noninflationary band of unemployment (a NAIBU) indicating a range of unemployment and income over with the inflation rate is stable. The paper concludes with the observation that the great pre- Phillips curve debates of the 1950s that assumed that there was a range within which the economy could be run with varying pressures of demand, and varying amounts of unemployment and inflationary pressure, were not as silly as they were made to seem when both Keynesian and New Classical economists accepted the assumption of a perfectly |
| Keywords: | Natural rate of unemployment, NAIRU, NAIBU, inflation targeting, Phillips curve, evolutionary theory, equilibrium theory |
| JEL: | B22 E12 E31 E58 E61 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp13-12&r=pke |
| By: | John E. Roemer (Dept. of Political Science, Yale University) |
| Abstract: | Although evidence accrues in biology, anthropology and experimental economics that homo sapiens is a cooperative species, the reigning assumption in economic theory is that individuals optimize in an autarkic manner (as in Nash and Walrasian equilibrium). I here postulate a cooperative kind of optimizing behavior, called Kantian. It is shown that in simple economic models, when there are negative externalities (such as congestion effects from use of a commonly owned resource) or positive externalities (such as a social ethos reflected in individuals’ preferences), Kantian equilibria dominate Nash-Walras equilibria in terms of efficiency. While economists schooled in Nash equilibrium may view the Kantian behavior as utopian, there is some -- perhaps much -- evidence that it exists. If cultures evolve through group selection, the hypothesis that Kantian behavior is more prevalent than we may think is supported by the efficiency results here demonstrated. |
| Keywords: | Kantian equilibrium, Social ethos, Implementation |
| JEL: | D60 D62 D64 C70 H30 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1854r&r=pke |
| By: | John E. Roemer (Dept. of Political Science, Yale University); Alain Trannoy (GREQAM-IDEP) |
| Abstract: | This forthcoming chapter in the Handbook of Income Distribution (eds., A. Atkinson and F. Bourguignon) summarizes the literature on equality of opportunity. We begin by reviewing the philosophical debate concerning equality since Rawls (sections 1 and 2), present economic algorithms for computing policies which equalize opportunities, or, more generally, ways of ordering social policies with respect to their efficacy in opportunity equalization (sections 3, 4 and 5), apply the approach to the conceptualization of economic development (section 6), discuss dynamic issues (section 7), give a preamble to a discussion of empirical work (section 8), provide evidence of population views from surveys and experiments concerning conceptions of equality (section 9), and a discuss measurement issues, summarizing the empirical literature on inequality of opportunity to date (section 10). We conclude with mention of some critiques of the equal-opportunity approach, and some predictions (section 11). |
| Keywords: | Equality of opportunity, Responsibility, Circumstances, Effort, Veil of ignorance |
| JEL: | D3 D6 D63 H1 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1921&r=pke |
| By: | Fernando Lopez-Alves |
| Abstract: | The literature has long argued that the nation is a community, either “imagined”, ”invented”, or of “sentiment”. The existence of such a “national community” has strongly relied upon the assumption that members share –or feel/believe that they share-- something/s in common. It stands to reason that members of the national community, therefore, should have some degree of consciousness as to what unites them as a nation. Theoretically, they ought to somewhat concur in identifying the features that characterize their nations and differentiates them from others. Very seldom, however, has literature asked members of the nation what the nation means to them. In this paper I do and thereby I question well-known arguments in current literature on the nation., I seek to establish to what degree, if at all, the nation exists as a construct in the popular imaginary. I attempt to identify the concepts and images that members of the nation associate with their national identity. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:525&r=pke |