nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2014‒11‒22
ten papers chosen by
Karl Petrick
Western New England University

  1. A case for redistribution? Income inequality and wealth concentration in the recent crisis By Thomas Goda; Özlem Onaran; Engelbert Stockhammer
  2. A Critical Marxist Simple Approach to Capital Theory By Cavalieri, Duccio
  3. Of railroads and finance: The making of market society in the Pacific Northwest By Green, Mitchell R.
  4. Children of the Recession: The impact of the economic crisis on child well-being in rich countries By Gonzalo Fanjul; UNICEF Innocenti Research Centre
  5. The Cult of statistical significance - A Review By Sripad Motiram
  6. Is inequality an unavoidable by-product of skill-biased technical change? No, not necessarily! By Hühne, Philipp
  7. Rethinking the Twin Deficits By Constantine, Collin
  8. Beyond Deterrence and Decline. Towards a General Understanding of Peace Economics By Caruso, Raul
  9. Thinking about Justice By Risse, Mathias
  10. Schumpeter and the History of Economic Thought By Estrada, Fernando

  1. By: Thomas Goda; Özlem Onaran; Engelbert Stockhammer
    Abstract: Several Nobel laureates economists have called for redistributive policies. This paper shows that there is a strong case for redistributive policies because the global increase of income inequality and wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and rising debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the rise of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. To tame the inherent instability of the current mode of capitalism it is necessary to reduce inequality.
    Keywords: Financial crisis, Eurozone crisis, distribution, income inequality, wealth concentration, redistribution
    JEL: D31 G01 E25
    Date: 2014–08–31
  2. By: Cavalieri, Duccio
    Abstract: This essay provides a simple, non-technical reformulation of Marx’s theoretical treatment of value and capital. It implies the abandonment of the ‘pure’ labour theory of value and of the ‘new value’ equality between the net product of the economy and the living labour employed in production of gross output, and a development of the different theoretical perspective outlined by the mature Marx. A correct method for converting quantities of labour-time in terms of money, which accounts for both explicit and implicit costs, is proposed.
    Keywords: value forms; labour; capital; money; capital theory; critical Marxism; MEV; MELT.
    JEL: B12 B14 B51 D46 E11
    Date: 2014
  3. By: Green, Mitchell R.
    Abstract: This paper examines how the development of railroads in the region established enduring ties with financiers on the East coast and Europe, and how these ties facilitated the exercise of power for certain individuals central in their respective social networks. These men of railroads and finance acted in an institutional capacity to transform the region we now understand as the Pacific Northwest so that it was conducive to the generation of financial flows in the machine age. In doing so, they set in motion a process of cumulative development that would render the old provisioning process unviable. That is, the non-market provisioning process embedded in the complex of tribal social relations was destroyed and the peoples who flourished within it were displaced. However, the two systems shared a common thread: each bore some direct relationship with the Columbia River Basin. Hence, I use the river as my entry point in a framework of analysis that seeks to trace out the many relations that account for such radical change.
    Keywords: Social provisioning process, embeddedness, social network analysis, Henry Villard, Pacific Northwest, institutional economics, heterodox economics
    JEL: B4 B5 L9 N9 N91
    Date: 2014–05–13
  4. By: Gonzalo Fanjul; UNICEF Innocenti Research Centre
    Abstract: As the data in this new edition of the Innocenti Report Card series show, in the past five years, rising numbers of children and their families have experienced difficulty in satisfying their most basic material and educational needs. Most importantly, the Great Recession is about to trap a generation of educated and capable youth in a limbo of unmet expectations and lasting vulnerability. League Tables, the flagship tool of the Innocenti Report Card series, rank the change, since the onset of the crisis, in the poverty levels of children and the impact of the recession on youth. The Report also explores the effects of the recession on youth seeking to enter or remain in the labour force in the middle of a recession.
    Keywords: child poverty; children; economic crisis; economic depression; underemployment; unemployment; youth;
    Date: 2014
  5. By: Sripad Motiram (Indira Gandhi Institute of Development Research)
    Abstract: I present a review and extended discussion of The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice and Lives by Deirdre McCloskey and Stephen Ziliak, a work that raises important issues related to the practice of statistics and that has been widely commented upon. For this review, I draw upon several other works on statistics and my personal experiences as a teacher of undergraduate econometrics.
    Keywords: Significance, Standard Error, Application of Statistics, Methodology
    JEL: C1 C12
    Date: 2014–09
  6. By: Hühne, Philipp
    Abstract: This paper compares the evolution of wage inequality along three different skill groups (low-, middle- and high-skilled) across five industrialized countries (Finland, Germany, Italy, Korea and the US). Despite similar exposure to technological change, the countries exhibit significant differences in inequality trajectories, suggesting that inequality is not necessarily an unavoidable by-product of technological change.
    Keywords: wage inequality; technical change; labor supply
    JEL: J23 J31 O30
    Date: 2014–09–03
  7. By: Constantine, Collin
    Abstract: This article reexamines the thesis that fiscal deficits cause trade deficits and challenges this explanation of the twin deficits with the following propositions. Differences in competitiveness among nations do not lead to balanced trade. Using a Eurozone case study, the article discusses the nexus between competitiveness and the trade balance. Secondly, the author proposes that causality runs from trade deficits to fiscal deficits when the free trade-balanced trade theory is overthrown, and finally, the article overturns the argument that austerity works.
    Keywords: twin deficits, competitiveness, free trade, Eurozone, austerity
    JEL: E62 F15 F32 F34 F41
    Date: 2014
  8. By: Caruso, Raul
    Abstract: The aim of this short article is to provide elements for a general discussion on peace economics and its potential contribution to economics and economic policy. I first present a discussion on deterrence equilibria and consequent allocation of resources. Eventually I expound five economic channels through which military expenditures turn to be detrimental for economic development. Finally some elements to build a framework for a peaceful economic policy are presented.
    Keywords: peace; war; development; military expenditures; butter, guns and ice-cream
    JEL: D74 F51 F55 H56
    Date: 2014–10
  9. By: Risse, Mathias (Harvard University)
    Abstract: This paper develops and defends the approach to distributive justice the author presents in his 2012 book On Global Justice. Characteristic of that approach is that the notion of distributive justice is understood as capturing the most stringent moral demands while at the same time being broadly applicable. This is unusual: normally, distributive justice is either understood very stringently, or as broadly applicable, but not both. Immanuel Kant does the former, Ernst Tugendhat does the latter. This paper argues that the author's approach should be preferred to both of those other approaches. One result of this inquiry is also to display the conceptual unity in the author's approach to global justice in terms of different grounds of justice.
    Date: 2014–02
  10. By: Estrada, Fernando
    Abstract: Schumpeter's The History of Economic Analysis, is a tour de force of scholarship. The display of erudition is truly unbelievable. How may one man and then digested have acquired much knowledge? Not only does the History offer two thousand years of economics, from Aristotle to Paul Samuelson, But also, it expertly almost ranges over all the other social sciences, history and belles letters as well. For more that 1,100 pages on the prose flows in a way That one has come to expect from Schumpeter the fluent style, the vivid analogy, the striking metaphor, the arresting aside. Our goal is to present the main thoughts of Schumpeter on the complex relationships between Economic History and Epistemology of Science. This design has three aspects that interest us: (a) its amplitude to conceive the economy as part of the overall development of scientific knowledge; (B) its relevance and the Applied examples used by the author; (C) its methodological facing tremendous problems facing the economy with the other sciences.
    Keywords: Schumpeter, Economics History, Epistemology, Econometric, Industrial.
    JEL: B13 B15 B31 B41 O31
    Date: 2014

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