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on Post Keynesian Economics |
| By: | L. Randall Wray |
| Abstract: | This paper explores the intellectual history of the state, or chartalist, approach to money, from the early developers (Georg Friedrich Knapp and A. Mitchell Innes) through Joseph Schumpeter, John Maynard Keynes, and Abba Lerner, and on to modern exponents Hyman Minsky, Charles Goodhart, and Geoffrey Ingham. This literature became the foundation for Modern Money Theory (MMT). In the MMT approach, the state (or any other authority able to impose an obligation) imposes a liability in the form of a generalized, social, legal unit of account--a money--used for measuring the obligation. This approach does not require the preexistence of markets; indeed, it almost certainly predates them. Once the authorities can levy such obligations, they can name what fulfills any obligation by denominating those things that can be delivered; in other words, by pricing them. MMT thus links obligatory payments like taxes to the money of account as well as the currency. This leads to a revised view of money and sovereign finance. The paper concludes with an analysis of the policy options available to a modern government that issues its own currency. |
| Keywords: | Modern Money Theory; Chartalism; State Money; Knapp; Innes; Schumpeter; Keynes; Minsky; Goodhart; Ingham; Sovereign Currency |
| JEL: | B1 B3 B15 B22 B25 B52 E40 E50 E62 H5 H60 N1 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_792&r=pke |
| By: | Stockhammer, Engelbert (Kingston University London) |
| Abstract: | Neoliberalism has not given rise to a sustained profit-led growth process, but to a finance-dominated accumulation regime in which growth relies either on financial bubbles and rising household debt (‘debt-driven growth’) or on net exports (‘export-driven growth’). The financial crisis that began in the market for derivatives on the US subprime mortgage market has translated into the worst recession since the 1930s. In Europe the crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and insulating monetary policy and central banks from national governments. The crisis has thus led to a sharp economic divergence between core and peripheral countries. Contrary to the situation in the (export-driven) Germanic core of Europe, the crisis is escalating in the (debt-driven) southern countries of Europe. The paper interprets the policy regime as the outcome of national elites’ attempt to use European integration as a means to constrain nation states. The result is a policy regime that has fatally weakened nation states as regards their fiscal and monetary capacities without creating a European state. |
| Keywords: | Euro crisis; Neoliberalism; European economic policy; European integration; financial crisis; sovereign debt crisis. |
| JEL: | B50 E60 |
| Date: | 2013–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kngedp:2013_002&r=pke |
| By: | Eugenio Caverzasi |
| Abstract: | The aim of this paper is to develop a structural explanation of the subprime mortgage crisis, grounded on the combination of two apparently incompatible financial theories: the financial instability hypothesis by Hyman P. Minsky and the theory of capital market inflation by Jan Toporowski. Our thesis is that, once the evolution of the financial market is taken into account, the financial Keynesianism of Minsky is still a valid framework to understand the events leading to the crisis. |
| Keywords: | Hyman Minsky; Financial Instability Hypothesis; Jan Toporowski; Capital Market Inflation; Financialization; Financial Crisis; Subprime Mortgage Crisis |
| JEL: | B2 B5 E44 G01 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_796&r=pke |
| By: | Michael Assous; Roberto Lampa |
| Abstract: | Oskar Lange’s 1938 article “The Rate of Interest and the Optimum Propensity to Consume”, is usually associated with the original IS-LM approach of the late 1930s. However, Lange’s article was not only an attempt to illuminate Keynes’s main innovations but the first part of a wide project that included the development of a theory of economic evolution. This paper aims at showing that Lange’s article can help illuminating critical aspects of this project: in particular, Lange’s idea that a synthesis between Kaldor’s and Kalecki’s theories and that of Schumpeter, might have been possible and that it represented (in intentions) a “modern” and consistent reconstruction of the Marxist theory of the business cycle. Section 1 clarifies Lange’s early reflection on dynamics. Section 2 centers on Lange’s 1938 static model and indicates the effects of a change of saving on investment. Section 3 suggests a dynamic reconstruction from which are addressed important arguments raised by Lange in a series of papers written between 1934 and 1942. |
| Keywords: | Lange; Kalecki; Marxian theory of the business cycle; marginal propensity to save; non-linearity |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2014-2&r=pke |
| By: | Fabrizio Patriarca; Claudio Sardoni |
| Abstract: | This paper contributes to the debate on income growth and distribution from a nonmainstream perspective. It looks, in particular, at the role that the degree of capacity utilization plays in the process of growth of an economy that is not perfectly competitive. The distinctive feature of the model presented in the paper is the hypothesis that the rate of capital depreciation is an increasing function of the degree of capacity utilization. This hypothesis implies analytical results that differ somewhat from those yielded by other Kaleckian models. Our model shows that, in a number of cases, the process of growth can be profit-led rather than wage-led. The model also determines the value to which the degree of capacity utilization converges in the long run. |
| Keywords: | Kaleckian Models of Growth; Capital Accumulation; Capital Depreciation; Income Distribution and Growth |
| JEL: | E12 E25 O40 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_795&r=pke |
| By: | Thomas Masterson |
| Abstract: | The quality of match of the statistical match used in the LIMTIP estimates for South Korea in 2009 is described. The match combines the 2009 Korean Time Use Survey (KTUS 2009) with the 2009 Korean Welfare Panel Study (KWPS 2009). The alignment of the two datasets is examined, after which various aspects of the match quality are described. The match is of high quality, given the nature of the source datasets. The method used to simulate employment response to availability of jobs in the situation in which child-care subsidies are available is described. Comparisons of the donor and recipient groups for each of three stages of hot-deck statistical matching are presented. The resulting distribution of jobs, earnings, usual hours of paid employment, household production hours, and use of child-care services are compared to the distribution in the donor pools. The results do not appear to be anomalous, which is the best that can be said of the results of such a procedure. |
| Keywords: | Statistical Matching; Time Use; Household Production; Poverty; LIMTIP; South Korea |
| JEL: | C14 C40 D31 J22 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_793&r=pke |
| By: | Alberto Botta |
| Abstract: | In this paper, we analyze and try to measure productive and technological asymmetries between central and peripheral economies in the eurozone. We assess the effects such asymmetries would likely bring about on center–periphery divergence/convergence patterns, and derive some implications as to the design of future industrial policy at the European level. We stress that future European Union (EU) industrial policy should be regionally focused and specifically target structural changes in the periphery as the main way to favor center–periphery convergence and avoid the reappearance of past external imbalances. To this end, a wide battery of industrial policy tools should be considered, ranging from subsidies and fiscal incentives to innovative firms, public financing of R and D efforts, sectoral policies, and public procurements for home-produced goods. All in all, future EU industrial policy should be much more interventionist than it currently is, and dispose of much larger funds with respect to the present setting in order to effectively pursue both short-run stabilization and long-run development goals. |
| Keywords: | Center–Periphery Structural Symmetries, EU Industrial Policy |
| JEL: | E12 F15 O25 O52 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_794&r=pke |
| By: | John M. Nunley; Adam Pugh; Nicholas Romero; Richard Alan Seals, Jr. |
| Abstract: | We present experimental evidence from a correspondence test of racial discrimination in the labor market for recent college graduates. Online job advertisements were answered with over 9,000 résumé s from fictitious, recently-graduated job seekers. We find strong evidence of differential treatment by race: black applicants receive approximately 14 percent fewer interview requests than their otherwise identical white counterparts. The racial gap in employment opportunities increases as perceived productivity characteristics are added, which is difficult to reconcile with models of statistical discrimination. We investigate different channels through which the observed racial differences might occur and conclude that taste-based discrimination at the race-skill level is the most likely explanation. The racial differences identified operate primarily through customer-level discrimination. |
| Keywords: | Racial Discrimination; Employment; Productivity; Field Experiments; Correspondence Studies |
| JEL: | J23 J24 J71 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2014-06&r=pke |
| By: | Grillitsch, Markus (CIRCLE, Lund University) |
| Abstract: | The overall objective of this paper is to contribute conceptually to the questions why and how regions transform and it joins the debate on economic evolution and institutional change. The paper addresses the challenge of how to conceptualise the interdependencies of institutions of different types and spatial scales. It aims at developing a conceptual framework that i) appreciates the variety of institutional forms and the multi-scalar nature of institutional landscapes, ii) is tangible enough for operationalization in the context of empirical research, and iii) contributes to our understanding about institutional change and economic evolution in regions. The paper offers a review on how institutions have been conceptualised in the context of evolutionary economic geography, a proposal for understanding regional institutional frameworks and institutional change through a novel way of conceptualising institutional layering, a clear distinction between concepts such as agency, networks, social structures and institutional layers, and a discussion about how this can improve our understanding about regional transformation. |
| Keywords: | Evolutionary economic geography; institutional theory; regional change; institutional layering |
| JEL: | B52 R11 |
| Date: | 2014–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_001&r=pke |
| By: | Odile CHANUT; Nadjoua GHARBI; Dominique BONET FERNANDEZ |
| Abstract: | Franchising has become a dominant model of retailing in the Western world and is also developing in emerging countries, with the internationalization of franchisors. The paper is an attempt at explaining the significant differences in the development of franchise between Morocco, Algeria and Tunisia. Explanations can be found in the general institutional environment in these countries (country risk, capital export control) as well as in the governments' willingness to modernize the distribution structures and the specific institutional environment of franchising: franchising law, the development of federations that serve to legitimize franchise partners with resource providers, banks and prospective franchisees. The analytical framework is that of institutional theory (DiMaggio and Powell, 1983) that provides new insight on approaches based on economic efficiency (agency theory and the resource scarcity perspective). From an analysis of the documents in the major public databases in the three countries, supplemented with field research, we propose an analysis grid of the institutional environment specific to franchising. Our analysis grid is used to explain the contrasting development of franchises in the North African countries. This development is also explained through the institutional theories renewing the approaches based on economic efficiency (agency theory and the resource scarcity perspective). |
| Keywords: | Institutional environment, institutional theory, analysis grid, international expansion, Maghreb. |
| Date: | 2014–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-200&r=pke |
| By: | Elise Huillery (Département d'économie) |
| Abstract: | Was colonization costly for France? Did French taxpayers contribute to colonies' development? This paper reveals that French West Africa's colonization took only 0.29 percent of French annual expenditures, including 0.24 percent for military and central administration and 0.05 percent for French West Africa's development. For West Africans, the contribution from French taxpayers was almost negligible: mainland France provided about two percent of French West Africa's revenue. In fact, colonization was a considerable burden for African taxpayers since French civil servants' salaries absorbed a disproportionate share of local expenditures. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/7o52iohb7k6srk09na41pc24o&r=pke |
| By: | Eliasson, Jonas (KTH) |
| Abstract: | Congestion charges were introduced in Stockholm in 2006 as a seven-month trial, followed by a referendum where a majority voted in favour of the charges. This led to the reintroduction of congestion charges in August 2007, and they have been operational since then. The system has attracted worldwide attention worldwide, both because it achieved substantial congestion reductions, and because the system overcame fierce initial hostility, surviving a heated and complicated political and legal process, and eventually gaining support by more than 2/3 of the population and all political parties. This report summarises the story of the Stockholm congestion charges, pointing out experiences and lessons learnt. |
| Keywords: | Congestion charges; Stockholm; Sustainable transport |
| JEL: | H23 H54 R41 R48 |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2014_007&r=pke |
| By: | Thomas J. Miceli (University of Connecticut) |
| Abstract: | This paper examines markets, firms, and the law as alternative institutional arrangements for organizing transactions that involve transaction-specific investments and uncertain performance. The analysis is the logical extension of Coase’s seminal analysis of the market-firm boundary on one hand, and the market-law boundary on the other. It thus combines insights from the literature on industrial organization and law and economics. The result is a unified framework that reveals the relative advantages and disadvantages, within a fairly simple economic setting, of market exchange, court ordering (contracts), and internal governance (agency). |
| Keywords: | Asset specificity, contracts, firms, holdup problem, market exchange |
| JEL: | D23 K12 L14 L22 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2014-06&r=pke |