nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2014‒08‒28
five papers chosen by
Karl Petrick
Western New England University

  1. Minsky Perpective on the Macroprudential Policy By Oğuz Esen; Ayla Oğuş Binatlı
  2. The Nature of Corruption - An Interdisciplinary Perspective By Eugen Dimant
  3. Who is the Narrator of the Fable of the Individuality in Political Economy: Mandeville or Smith? By Eren, Ahmet Arif; Bozkurt, Ahmet Deniz
  4. Insights from behavioral economics on how labor markets work By Altman, Morris
  5. Re-Reading the New Institutional Economics in Market-State Dilemma By Akansel, İlkben

  1. By: Oğuz Esen (Izmir University of Economics, Department of Economics); Ayla Oğuş Binatlı (Izmir University of Economics, Department of Economics)
    Abstract: The recent global financial crisis has underlined the need to go beyond the microprudential perspective to financial instability and move in a macroprudential direction. There is a growing consensus among policymakers and academics that macroprudential policy should be adopted. Through these changes, policymakers appear to be moving in a direction broadly consistent with Minsky’s view.The theoretical framework of macroprudential policy can be found in Minsky’s financial instability theory. Emerging economies, including Turkey, have adopted macroprudential tools to prevent and mitigate system wide risks. This paper offers a Minsky perspective on macroprudential policy and evaluates macroprudential tools through an examination of the Turkish experience as a case study.
    Keywords: Macroprudential policy, Minsky, Reserve Requirement
    JEL: E58 E60 G01
    Date: 2013
  2. By: Eugen Dimant (University of Paderborn)
    Abstract: Corruption has fierce impacts on economic and societal development and is subject to a vast range of institutional, jurisdictional, societal and economic conditions. Research indicates that corruption’s predominantly negative effects have arisen to a massive trans-border threat while creating high obstacles to sustainable and prospective development, ultimately impairing everybody’s life. This paper provides a comprehensive state-of-the-art review of existing literature on corruption and its antecedents and effects. Consequently, we bridge the gap between existing theories of different fields of research including economics, psychology, and criminology in order to draw a conclusive picture of corruption on the micro-, meso- and macro-level.
    Keywords: Bribery, Corruption, Development, Interdisciplinarity, Public Economics, Survey
    JEL: D73 H1 O17 K42
    Date: 2014–03
  3. By: Eren, Ahmet Arif (Artvin Çoruh University, Department of Economics, Artvin, Turkey); Bozkurt, Ahmet Deniz (Gazi University, Department of Economics, Ankara, Turkey)
    Abstract: In this study, the historical roots of individuality will be examined. According to the view of economic individuality, pursuit of self-interest is the fundamental motivation for all of human beings. When we look into the eighteenth century, the main argument was whether the rise of the commercial society erosions the moral values or not. This argument was especially discussed by the philosophers of the Scottish Enlightenment. This subject was most throughly discussed by Adam Smith who finds a solution which is very important and also debatable to date. This solution actually created a problem which is called the Adam Smith problem. Smith, thanks to his approaches to this subject, became the creator of the individual of political economy. And this creates a situation in which his two important books namely Wealth of Nations and Theory of Moral Sentiments are not considered totally. In this context Theory of Moral Sentiments has been ignored and Smith’s individual is narrowed to an individual prototype which economics needs. In this study the adventure of the creation of the prototype, which has mentioned above, and the contributions of Adam Smith and Bernard Mandeville will be evaluated both with their agreements and contradictions.
    Keywords: Individuality, Scottish Enlightenment, Adam Smith Problem, Mandeville
    JEL: B11 B12 B30 B31
    Date: 2013
  4. By: Altman, Morris
    Abstract: I discuss some key issues raised by behavioral economics for better understanding the working of the labor market. Amongst the key points in this paper are: (i) a revised modeling of the labor supply curve, with a specific focus on the target income approach (ii) elaborating on the importance of effort variability for understanding labor supply, including a narrative on efficiency wage and x-efficiency theory (includes the importance of fairness) (iii) building upon x-efficiency and efficiency wage theory to better understand the demand side of the labor market (iv) discussing some of the cognitive/informational/institutional factors affecting decision-making, including modeling the role of errors or biases in labor market decisions for both the supply and demand side of the labor market (v) insights of experimental economics for labor market behavior (vi) the importance behavioral economics for better understanding the stylizing facts of labor markets. This paper also compares conventional to behavioral theoretical approaches labor markets, their different underlying assumptions, and analytical predictions, with implications for public policy and institutional design. Also compared are the errors and biases and the bounded rationality approaches labor market analysis. They produce different analytical predictions as well as having different implications for public policy and institutional design.
    Keywords: Behavioral economics, Bounded rationality, Efficiency wages, Effort discretion, Errors and biases, Fairness, Information asymmetries, Target income approach, Involuntary employment,
    Date: 2014
  5. By: Akansel, İlkben (Hopa Economics and Administrative Faculty, Artvin Coruh University, Artvin, Turkey)
    Abstract: After Old Institutional economics lost its dominance after the 2nd World War, it entered a new revival period; the beginning of this period was marked with Oliver Williamson’s (1975) use of “New Institutional Economics” (NIE) as a new term in his studies. New Institutional Economics analyzes institutions that influence and determine human life deeply such as government, law, markets and family, by combining different disciplines such as legal science, economics, political sciences, sociology etc. But despite these inter-disciplinary attempts, New Institutional Economics has never been a mainstream that follows Old Institutional Economics in terms of epistemology or politics. On the other hand, the only common feature between New Institutional Economics and Old Institutional Economics is the complete opposition to the established economics which is also named neo-classical economics. Besides all of these, discussions on the market mechanism and role of state have been the topics of dispute in almost all of different economics schools of thought. This is the same in New Institutional Economics. In this study, based on the basic features that distinguish New Institutional Economics from Old Institutional Economics, we will firstly attempt to discuss ideological structure of New Institutional Economics; while doing this, we will analyze which ideological logic of basic assumptions, suggested by New Institutional Economics from the procedural individualism and limited rationalism assumptions to the process of market mechanism, distinguish it from Old Institutional Economics and we will analyze the assumptions that are claimed to be close to the assumptions of established economics. In this way, we will analyze New Institutional Economics on the basis of the question of “will it be able to present a different point of view to market mechanism-state relation?” by presenting market mechanism-state relation in New Institutional Economics, which exists similarly in all school of thought. So, we will attempt to analyze if New Institutional Economics, which reflects a different thought system, can present a new perspective to the market-state dilemma. As a result, by presenting the features of general economic structure of New Institutional Economics, which is sometimes claimed to come close to neo-classical economics, existence of solutions that can shed light on current basic economic problems will be analyzed.
    Keywords: Old Institutional Economics, New Institutional Economics, Veblen, market, government, Neo-liberalism, capitalism, state
    JEL: B15 B25 B52
    Date: 2013

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