nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒01‒03
nine papers chosen by
Karl Petrick
Western New England University

  1. Finance and crisis: Marxian, institutionalist and circuitist approaches By Argitis, Georgios; Evans, Trevor; Michell, Jo; Toporowski, Jan
  2. Not Beautiful, not Just, not Virtuous; 'And It Doesn't Deliver the Goods'. Capitalism and “Fear of Goods” in Keynes's Thought. By Carabelli, Anna; Cedrini, Mario
  3. Further developments of Sraffa's system on fixed capital, rent, and joint products By Giuseppe Vitaletti
  4. Moral categories in the financial crisis By Fourcade, Marion; Steiner, Philippe; Streeck, Wolfgang; Woll, Cornelia
  5. Econometrics as a Pluralistic Scientific Tool for Economic Planning: On Lawrence R. Klein's Econometrics. By Erich Pinzón Fuchs
  6. Michaël Polanyi on Reality, Knowledge, and Economics By Agnès Festré; Pierre Garrouste
  7. The Affordable Care Act: A Family-Friendly Policy By Helene Jorgensen; Dean Baker
  8. Sir W. Arthur Lewis By Berhanu Abegaz
  9. Environmental Sustainability and Economic Development: Cost Benefit Analysis for Sustainable Development By Anastasios Xepapadeas

  1. By: Argitis, Georgios; Evans, Trevor; Michell, Jo; Toporowski, Jan
    Abstract: Most mainstream neoclassical economists completely failed to anticipate the crisis which broke in 2007 and 2008. There is however a long tradition of economic analysis which emphasises how growth in a capitalist economy leads to an accumulation of tensions and results in periodic crises. This paper first reviews the work of Karl Marx who was one of the first writers to incorporate an analysis of periodic crisis in his analysis of capitalist accumulation. The paper then considers the approach of various subsequent Marxian writers, most of whom locate periodic cyclical crises within the framework of longer-term phases of capitalist development, the most recent of which is generally seen as having begun in the 1980s. The paper also looks at the analyses of Thorstein Veblen and Wesley Claire Mitchell, two US institutionalist economists who stressed the role of finance and its contribution to generating periodic crises, and the Italian Circuitist writers who stress the problematic challenge of ensuring that bank advances to productive enterprises can successfully be repaid.
    Keywords: capitalism,finance,crisis
    JEL: B14 B15 B24 B25 E11 E32
    Date: 2014
  2. By: Carabelli, Anna; Cedrini, Mario (University of Turin)
    Abstract: Offering a view of the other side of the liquidity-issue, the paper elaborates on the concept of “ fear of goods” in Keynes’s thought. It therefore illustrates numerous evidences of “fear of goods” in his economics , and aims to show that the notion might be considered as playing a quite important role as organising concept, helping to establish connections between ideas that are apparently only weakly related. The article fosters an interpretation of the development of Keynes’s theoretical arguments and proposed policy instruments for both domestic and global economy, as reactions to the “fear of goods” of capitalism, which Keynes saw as an inborn propensity of monetary economies of production.
    Date: 2014–11
  3. By: Giuseppe Vitaletti (University of Macerata, Italy)
    Abstract: All the findings of this paper derive from the application of fiscal measures to Sraffa’s system. The first result depends on the development of my thesis in 1974, where I studied methods of taxation to modify work shifts. Here it is obvious to make endogenous the duration of plants, when Sraffa’s system is adopted. This gives origin to a situation in which in the last period of operation only intermediate input and labour are relevant for prices. Therefore it is possible the reduction to labour also for fixed capital, and prices may be interpreted in terms of minimization of the present value of incorporated labour. The second result regards taxation of rent in the case of exhaustible minerals. It is found a model for the determination of prices, which differs from Sraffa’s one. In particular, it is no more true that taxation rests on rent, since price and quantities are modified, with constant returns. The third result regards joint products. While in Sraffa’s system the taxation is totally translated into the price of the hit product, this does not hold in the new model, where demand becomes very important for prices. Though, it is not a marginalist outcome, since returns are constant. All these things imply a deep modification of Sraffa’ system. It is shown that alternative three parts are possible. The first part is very similar to the actual one, save the interpretation of prices. The second part regards fixed capital and the change of techniques, which now resemble in their working. The third part regards the role of demand, which is very different though from marginalism. Here there is the place for rent and joint production.
    Keywords: New prices, Taxes on rent, Demand and Joint Products
    JEL: D51
    Date: 2014–11
  4. By: Fourcade, Marion; Steiner, Philippe; Streeck, Wolfgang; Woll, Cornelia
    Abstract: Karl Marx observed long ago that all economic struggles invite moral struggles, or masquerade as such. The reverse may be true as well: deep moral-political conflicts may be waged through the manipulation of economic resources. Using the recent financial and Eurozone crises as empirical backgrounds, the four papers gathered here propose four different perspectives on the play of moral judgments in the economy, and call for broader and more systematic scholarly engagement with this issue. Focusing on executive compensation, bank bailouts, and the sovereign debt crisis, the symposium builds on a roundtable discussion held at the opening of the Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo) in Paris on November 29, 2012.
    Date: 2013
  5. By: Erich Pinzón Fuchs (Centre d'Economie de la Sorbonne)
    Abstract: Lawrence R. Klein (1920-2013) played a major role in the construction and in the further dissemination of econometrics from the 1940s. Considered as one the main developers and practitioners of macroeconometrics, Klein's influence is reflected in his application of econometric modelling “to the analysis of economic fluctuations and economic policies” for which he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1980. The purpose of this paper is to give an account of Klein's image of econometrics focusing on his early period as an econometrician (1944-1950), and more specifically on his period as a Cowlesman (1944-1947). Independently of how short this period might appear, it contains a set of fundamental publications and events, which were decisive for Klein's conception of econometrics, and which formed Klein's unique way of doing econometrics. At least four features are worth mentioning, which characterise this uniqueness. First, Klein was the only Cowlesman who carried on the macroeconometric programme beyond the 1940s, even if the Cowles had already abandoned it. Second, his pluralistic approach in terms of economic theory allowed him not only to use the Walrasian framework appraised by the Cowles Commission and especially by T.C. Koopmans, but also the Marxian and Keynesian frameworks, enriching the process of model specification and motivating economists of different stripes to make use of the nascent econometrics. Third, Klein differentiated himself from the rigid methodology praised at Cowles; while the latter promoted the use of highly sophisticated methods of estimation, Klein was convinced that institutional reality and economic intuition would contribute more to econometrics than the sophistication of these statistical techniques. Last but not least, Klein never gave up what he thought was the political objective of econometrics: economic planning and social reform.
    Keywords: Economic epistemology, history of econometrics, history of macroeconometric modelling, pluralism in Econometrics, Lawrence R. Klein, Cowles Commission.
    JEL: B23 B31 B41
    Date: 2014–10
  6. By: Agnès Festré (GREDEG CNRS; University of Nice Sophia Antipolis); Pierre Garrouste (GREDEG CNRS; University of Nice Sophia Antipolis)
    Keywords: Michael Polanyi, economics, science, reality, tacit knowledge
    Date: 2014–12
  7. By: Helene Jorgensen; Dean Baker
    Abstract: Most of the discussion of the Affordable Care Act (ACA) has focused on the extent to which it has extended health insurance coverage to the formerly uninsured. This is certainly an important aspect of the law. However by allowing people to buy insurance through the exchanges and extending Medicaid coverage to millions of people, the ACA also largely ends workers’ dependence on their employer for insurance. This gives tens of millions of people the option to change their job, to work part-time, or take time off to be with young children or family members in need of care, or to retire early.
    Keywords: affordable care act, family, working families, aca, part-time employment
    JEL: I I1 H J J8 J83 J88 J3 J33 J38
    Date: 2014–09
  8. By: Berhanu Abegaz (Department of Economics, The College of William and Mary)
    Abstract: Raised by school-teacher parents in the Caribbean island of St. Lucia and educated in St. Mary’s College there—a school that also produced poet Derek Walcott, the other Nobel Laureate of St. Lucia—Lewis began his studies and career at the London School of Economics (LSE). He subsequently held distinguished professorships at the universities of Manchester and Princeton. He also served as a senior economic advisor in West Africa in addition to administrative stints as Vice Chancellor of the University of the West Indies and as founding president of the Caribbean Development Bank. Knighted by Queen Elizabeth in 1963, Arthur Lewis retired in 1983 and died in 1991 at the age of 76 in his summer home in Grenada. It was in Manchester that he did some of his most significant works in development economics, especially the seminal article `Economic Development with Unlimited Supplies of Labor' (1954) and the treatise, The Theory of Economic Growth (1955). Lewis is also known for his work, while at Princeton, on the history of the second industrial revolution and the new international economic order. While The Theory of Economic Growth (1955) and Growth and Fluctuations 1870–1913 (1978) are both regarded as classics, it is the 1954 article that constitutes his most influential single contribution having spawned a large literature on development as structural transformation. Lewis’s foundational and pioneering research arguably launched the field of modern development economics. This and a deep knowledge of economic history earned him the ultimate recognition as a Nobel Laureate in Economics in 1979. A gifted scholar and a perceptive public intellectual with the sensibilities of a British Fabian socialist (a view he shared with the likes of Gandhi), he was blessed with the good luck of appearing in an era on the cusp of major world events, including decolonization, the global civil rights movement, centrally planned economies, and the urgency for accelerating economic development felt in the newly independent countries of Africa, Asia, Latin America and the Caribbean. Lewis is also remembered as an independent-minded trailblazer: the first black man to serve on the faculties of LSE, Manchester, and Princeton; to head the University of the West Indies; and to be awarded the Nobel Prize in a field other than peace and literature. Given his origins in a poor outpost of the British Empire and the blatant institutional racism he had to confront at the intellectual centers of the metropole, his life’s journey provides a great inspiration to all who cherish the life of the mind, responsible citizenship, and dream of living in a world free of racial injustice and abject poverty.
    Date: 2014–09–10
  9. By: Anastasios Xepapadeas
    Abstract: Sustainable development, environmental sustainability, green economies and green growth are issues which are of great importance for both the research and the policy agenda. The present paper clearly defines the concepts of sustainability and environmental sustainability and provides a conceptual framework for developing sustainability-founded cost benefit rules. It shows that a certain policy cannot necessarily simultaneously satisfy sustainable development and environmental sustainability objectives, the development of green economies, and the attainment of development or green growth.This is important for decision makers because it suggests using more than one criterion depending on the combination of the objectives to be pursued.The cost benefit rules presented in this paper could provide a basis for a clear distinction among objectives and for project selection mechanisms that promote single or multiple objectives.
    Keywords: Sustainable development, wellbeing, comprehensive investment, accounting prices, cost benefit analysis, environmental sustainability, green economies, green growth
    Date: 2014–12–06

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