nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2014‒08‒25
four papers chosen by
Karl Petrick
Western New England University

  1. Sidney Weintraub and American Post Keynesianism: 1938-1970 By E. Roy Weintraub
  2. The Role of Belief in the Debate over Austerity Policies By Sheila C Dow
  3. Unhappy families are all alike: Minskyan cycles, Kaldorian growth, and the Eurozone peripheral crises By Alberto Bagnai
  4. Has Creative Destruction Become More Destructive? By John Komlos

  1. By: E. Roy Weintraub
    Abstract: Sidney Weintraub (1914–1983) was an American economist who spent most of his career at the University of Pennsylvania. A distinguished economic theorist (and the author’s father), he was a co ‐ founder of the Journal of Post Keynesian Economics , and the leading figure in the US in the early years of the Post Keynesian movement. This article shows how the early development of American Post Keynesianism, despite claims to the contrary by historians of Post Keynesianism, had no connection to the UK group centered around Joan Robinson in Cambridge.
    Keywords: Sidney Weintraub, Post Keynesian economics, Paul Davidson, wage-price inflation
    JEL: B2 B3 B5
    Date: 2014
  2. By: Sheila C Dow (University of Stirling)
    Abstract: The purpose of this paper is to argue that awareness of the epistemological issues arising from an open-system ontology is critical to understanding the crisis and the policy response, to challenging that understanding and to encouraging a radical policy shift. The argument is couched in terms of belief as an epistemological concept. In particular the paper addresses the misleading impression, persuasively conveyed by mainstream economists, that their argument for austerity is ‘scientific’ and independent of ideology, power and ethics. The resulting widespread belief in austerity policies as scientifically justified has prevented arguments against austerity gaining more traction. The critique of austerity policies would therefore be strengthened by a critique of this rhetorical (mis)representation of economic theorising.
    Keywords: fiscal austerity; science; belief
    JEL: B4 E1 E62
    Date: 2014–07
  3. By: Alberto Bagnai (Department of Economics, Gabriele d'Annunzio University)
    Abstract: It is frequently claimed that the economic and financial crises in the Eurozone peripheral countries depend on different, country-specific causes. In one case the crisis would depend on a real estate bubble (Ireland, Spain), in another on deceitful government manipulating the national accounts (Greece), in still another on corrupted government postponing essential reforms (Italy). While these claims can always be supported by anecdotal evidence, one may wonder whether a unified framework exists that provides a more consistent explanation of the most massive failure in macroeconomic management since 1929. In this paper we try to interpret the Eurozone peripheral crises in the light of the Minskyan cycle theory, and in particular of its recent applications to developing countries crises. A closer look at the pattern of the macroeconomic fundamentals shows that the different Eurozone crises are actually consistent with this unified framework, thereby providing some important lessons to European policy makers.
    Keywords: Eurozone, Financial crisis, Exchange rate regimes, Post-Keynesian economics.
    JEL: E12 F36 G01
    Date: 2013–07
  4. By: John Komlos
    Abstract: Schumpeter’s concept of creative destruction as the engine of capitalist development is well-known. However, that the destructive part of creative destruction is a social cost and therefore biases our estimate of the impact of the innovation on NNP and on welfare is hardly acknowledged, with the exception of Witt (1996). Admittedly, during the First and Second Industrial Revolutions the magnitude of the destructive component of innovation was probably small compared to the net value added to employment, NNP or to welfare. However, we conjecture that recently the new technologies are often creating products which are close substitutes for the ones they replace whose value depreciates substantially in the process of destruction. Consequently, the contribution of recent innovations to NNP is likely biased upward. This note calls for a research agenda to estimate innovations into their creative and destructive components in order to provide improved estimates of their contribution to NNP, welfare, and employment.
    JEL: E01 O10
    Date: 2014–08

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