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on Post Keynesian Economics |
| By: | NGUENA, CHRISTIAN LAMBERT |
| Abstract: | The relative positive economic growth experienced by most African countries in the recent decade has come with insufficient demand stimulation. The concern of poverty at the forefront of economic policy, the need for inclusive growth and sustainable development, inter alia, brings forward the inevitable question of the monetary policy responsibility. Accordingly, the monetarist theory that focuses on price stability inherently neglects the demand stimulation aspect of economic prosperity. Since the mid 1980s, the monetarist school driven by its central aim of fighting inflation and maintaining credibility in markets and economic agents has been priority for monetary authorities (especially in Africa). To this effect, while good results in terms of inflation targeting has been achieved in many African countries; economic growth has sometimes been low. Hence, in light of the above, using a statistical and theoretical debate method, the Credible Monetary Policy (CMP) paradox is traceable to Africa. Accordingly, with the promising economic environment in Africa, we recommend the promotion of a monetary policy oriented toward improving economic growth under the constraint of price stability. In light of the above view, there are some note worthy signs such the recent decision by the two CFA zone central banks to either maintain interest rates at a low level or reduce it despite tightening measures of monetary policy taken by the European Central Bank (ECB) earlier in the year. In the same vein, the central bank of South Africa has maintained its policy of low interest rates with an objective of economic expansion. Since, the 2008 financial crisis, the consolidation of the Federal Reserve’s declared final objective of lowering interest rates and making emergency loans is an eloquent example to reassure African central banks in the choice of the pro-growth monetary policy option. |
| Keywords: | Pro growth monetary policy; CMP paradox; Financing enterprises; African central bank. |
| JEL: | B40 E52 |
| Date: | 2010–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52100&r=pke |
| By: | Philip Pilkington |
| Abstract: | In a policy note published last year by the Levy Institute, Philip Pilkington and Warren Mosler argued that the eurozone sovereign debt crisis could be solved by national governments without the assistance of the European Central Bank (ECB) and without their leaving the currency union, through the issuance of a proposed financial innovation called "tax-backed bonds." These bonds would be similar to standard government bonds except that, should the country issuing the bonds not make its payments, the tax-backed bonds would be acceptable to make tax payments within the country in question, and would continue to earn interest. In the current policy note, Pilkington examines the continued relevance of the bond proposal in light of changes that have taken place with respect to ECB policy since the original proposal was made, as well as the case made by Ireland's finance minister that tax-backed bonds would violate current Irish law (and, by implication, the law in other eurozone countries). He also outlines some changes made to the initial proposal in response to constructive criticisms received since its publication, and briefly notes another area in which the proposal might be utilized—outside the eurozone. His conclusion? That tax-backed bonds remain a valid policy tool, one that can be implemented at the national rather than at the federal level, and a stepping stone to solving the eurozone’s economic problems. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:13-10&r=pke |
| By: | Jorg Bibow |
| Abstract: | The euro crisis remains unresolved even as financial markets may seem calm for now. The current euro regime is inherently flawed, and recent reforms have failed to turn this dysfunctional regime into a viable one. Our investigation is informed by the "cartalist" critique of traditional "optimum currency area" theory (Goodhart 1998). Various proposals to rescue the euro are assessed and found lacking. A "Euro Treasury" scheme operating on a strict rule and specifically designed not to be a transfer union is proposed here as a condition sine qua non for healing the euro’s potentially fatal birth defects. The Euro Treasury proposed here is the missing element that will mend the current fiscal regime, which is unworkable without it. The proposed scheme would end the currently unfolding euro calamity by switching policy from a public thrift campaign that can only impoverish Europe to a public investment campaign designed to secure Europe’s future. No mutualization of existing national public debts is involved. Instead, the Euro Treasury is established as a means to pool eurozone public investment spending and have it funded by proper eurozone treasury securities. |
| Keywords: | Euro Crisis; Currency Union; Fiscal Union; Transfer Union; Cartalism; Lender of Last Resort; European Integration |
| JEL: | E02 E42 E58 E61 E62 F36 G01 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_780&r=pke |
| By: | Kevin D. 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, knife-edge, warranted rate of growth, natural rate of growth |
| JEL: | B22 O4 E12 E13 N1 B31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2012-1&r=pke |
| By: | John List |
| Abstract: | Not applicable. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00389&r=pke |
| By: | Bruce Caldwell |
| Abstract: | In the paper I offer some vignettes on my relationship, both professional and personal, with Mark Blaug, and by way of example reflect on his impact on the history of economics. |
| Keywords: | Mark Blaug, history of economic thought, economic methodology, Karl Popper, falsificationism, Imre Lakatos |
| JEL: | B2 B31 B4 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2012-6&r=pke |
| By: | Orley Ashenfelter |
| Abstract: | In this essay I review Sylvia Nasar’s long awaited new history of economics, Grand Pursuit. I describe how the book is an economic history of the period from 1850-1950, with distinguished economists’ stories inserted in appropriate places. Nasar’s goal is to show how economists work, but also to show that they are people too--with more than enough warts and foibles to show they are human! I contrast the general view of the role of economics in Grand Pursuit with Robert Heilbroner’s remarkably different conception in The Worldly Philosophers. I also discuss more generally the question of why economists might be interested in their history at all. |
| Keywords: | economic history, book review, Nassar, Keynes |
| JEL: | B10 B20 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:dsp01j9602063p&r=pke |
| By: | Maurice Obstfeld; Kenneth Rogoff; Ben Bernanke; Kenneth Rogoff |
| Abstract: | The central claim in this paper is that by explicitly introducing costs of international trade (narrowly, transport costs but more broadly, tariffs, nontariff barriers and other trade costs), one can go far toward explaining a great number of the main empirical puzzles that international macroeconomists have struggled with over twenty-five years. Our approach elucidates J. McCallum's home bias in trade puzzle, the Feldstein-Horioka saving-investment puzzle, the French-Poterba equity home bias puzzle, and the Backus-Kehoe- Kydland consumption correlations puzzle. That one simple alteration to an otherwise canonical international macroeconomic model can help substantially to explain such a broad arrange of empirical puzzles, including some that previously seemed intractable, suggests a rich area for future research. We also address a variety of international pricing puzzles, including the purchasing power parity puzzle emphasized by Rogoff, and what we term the exchange-rate disconnect puzzle.' The latter category of riddles includes both the Meese-Rogoff exchange rate forecasting puzzle and the Baxter-Stockman neutrality of exchange rate regime puzzle. Here although many elements need to be added to our extremely simple model, we can still show that trade costs play an essential role. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:32326&r=pke |
| By: | Scott, James; Spencer, Liz |
| Abstract: | This paper explores the process that links low achievement, school exclusion and involvement in crime among African-Caribbean boys and young men. Based on qualitative interviews with pupils and teachers at a pioneering secondary school in London and also with African-Caribbean young men who had dropped out of or been excluded from other schools in the area, we identify key aspects of trouble at school and ways in which this can lead to trouble on the street. When students experience academic or behavioural problems they may drop out of or be formally excluded from school. Although schools are responsible for arranging alternative provision, in practice, once out of mainstream education, students are unlikely to gain academic qualifications and the problem of low achievement is exacerbated. They are then at a disadvantage in the job market, and their perceived lack of legitimate opportunities for making money may lead them to engage in crime. A complex interplay of factors appears to influence this low achievement school exclusion crime sequence, including the young persons family background, their neighbourhood, and the culture in which they are embedded. According to the students who took part in school interventions the main benefits of participation were seen as: being part of a community of support; improved motivation; higher academic achievement; the ability to express emotions constructively; and a greater sense of responsibility and self- worth. Our research suggests that by adopting an inclusive rather than exclusive policy, schools can buy time, retaining vulnerable young men within the educational system, keeping their options open until they have a chance to mature, rather than leaving them to the uncertainty of the street. |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2013-25&r=pke |
| By: | Alan Manning |
| Abstract: | The phenomenon of 'job polarisation' is increasing inequality as the labour market splits into high- and low-wage work. According to Alan Manning, who coined the term a decade ago, we cannot ignore job polarisation - but with sensible policies, we can manage it. Aiming for greater equality in the distribution of human capital is as important as ever. The most compelling explanation for job polarisation lies in the nature of technical progress: machines and software programs have been replacing employees in many routine jobs in the middle of the income distribution. But as Manning explains, while technology will undoubtedly continue to displace humans in some tasks, there is no reason to think that the jobs affected will always be the middle-skill ones. |
| Keywords: | Labor Demand and Technology, Inequality |
| JEL: | J21 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:398&r=pke |