nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒01‒09
nine papers chosen by
Karl Petrick
Western New England University

  1. "Outside Money: The Advantages of Owning the Magic Porridge Pot" By L. Randall Wray
  2. Presentation of seven country studies on the impact of implementation of EU Directives on Banking and Finance on national regulatory systems By Jan A. Kregel; Mario Tonveronachi
  3. The Wealth of Households: An Analysis of the 2013 Survey of Consumer Finances By David Rosnick; Dean Baker
  4. Capitalism and Inequality Re-Examined By Jon D. Wisman
  5. Social Identity and Class Consciousness By Hanappi, Hardy; Hanappi-Egger, Edeltraud
  6. Varieties of capitalists? The middle class, private sector and economic outcomes in Africa By Handley, Antoinette
  7. The idea of economic development: Views from Africa By Fofack, Hippolyte
  8. Has Microfinance Lost its Moral Compass? By David Hulme; Mathilde Maitrot
  9. MATLAB for Economics and Econometrics A Beginners Guide By John C Frain;

  1. By: L. Randall Wray
    Abstract: Over the past two decades there has been a revival of Georg Friedrich Knapp's "state money" approach, also known as chartalism. The modern version has come to be called Modern Money Theory. Much of the recent research has delved into three main areas: mining previous work, applying the theory to analysis of current sovereign monetary operations, and exploring the policy space open to sovereign currency issuers. This paper focuses on "outside" money--the currency issued by the sovereign--and the advantages that accrue to nations that make full use of the policy space provided by outside money.
    Keywords: Central Bank Independence; Chartalism; Fiat Money; Functional Finance; Innes; Keynes; Knapp; Modern Money Theory; Outside Money; Sovereign Currency; State Money
    JEL: B1 B2 B3 B5 E5 E6
    Date: 2014–12
  2. By: Jan A. Kregel (Tallinn University of Technology); Mario Tonveronachi (Tallinn University of Technology)
    Abstract: This Report provides an introduction to the seven country studies on the implementation of the European Directives on Banking and Finance in the period from the introduction of the Single European Act to the 2007/8 Global financial crisis and the additional national measures that have been taken in response to the crisis. Each of the country studies provides a narrative of the domestic financial regulatory structure at the beginning of the period, defined as the date of the Single European Act, as well the means by which the EU Directives have been introduced into domestic legislation and the impact on the financial structure of the economy. In particular, the studies highlight how the Directives have been modified to meet the then existing domestic conditions and financial structure as well as how they have modified that structure. To provide a roadmap to these legislative changes, each country study is accompanied by a grid noting the dates and relevant national legislation implementing the Directives. To aid in cross-country comparison, a grid presenting the legislation for each country for the major Directives is also included. Since each country has complied with national insertion of the various Directives, and since each faced particular national circumstances, this summary will simply highlight for the individual countries those particular characteristics of more general importance for potential modification of the way regulations are introduced into the member states’ jurisprudence
    Keywords: financial regulation, European Single Market
    JEL: G18 G28
    Date: 2014–10–01
  3. By: David Rosnick; Dean Baker
    Abstract: This paper presents data on the wealth of households by age cohort based on new data from the 2013 Survey of Consumer Finances (SCF). It shows that the upward redistribution of wealth continued between 2010 and 2013. As a result, most households had less wealth in 2013 than they did in 2010 and much less than in 1989, the first year examined. This is in spite of the fact that households were much less likely to have traditional defined-benefit pensions than in prior decades.
    Keywords: Survey of Consumer Finance, retirement, wealth, inequality
    JEL: D D1 D14 D3 D31 J J1 J14
    Date: 2014–11
  4. By: Jon D. Wisman
    Abstract: Ever since capitalism came to be recognized as a new economic system, it has had vociferous critics, of whom none was more wide-ranging than Karl Marx. Marx recognized that behind its ideological patina of freedom, capitalism, like the exploitative systems of slavery and feudalism, was a social system in which a small class extracted from the mass of producers practically all output above that necessary for bare subsistence. An elite's ability to do so was grounded in its monopoly ownership of the means of production. However, Marx, and other critics faulted it for more than its exploitation and extreme inequality. Sharing much with romanticism, they believed that its very institutions of private property and markets corrupt society and its members. Nevertheless, Marx in particular recognized that capitalism, unlike earlier exploitative systems, was radically dynamic, producing unprecedented wealth, while  transforming not only all it inherited from the past, but also its own nature so as to eventually even empower the producers. Yet his anti-private property and anti-market animus led him to believe that empowered producers would abandon these capitalist institutions. He did not imagine that the dynamism, wealth, and potential freedom that capitalism was delivering might have little chance of flourishing in the absence of these institutions. This article claims that Marx and other critics were wrong to fault capitalism's central institutions for the injustices that accompanied them. These institutions are not the problem. Instead it is the inequality that co-evolved with them and enables them to be used for exploitation.
    Keywords: exploitation, Marx, state power, socialism
    JEL: B51 P11 P16
    Date: 2014
  5. By: Hanappi, Hardy; Hanappi-Egger, Edeltraud
    Abstract: The current economic crisis proves how deep the contradictions inherent in contemporary capitalism really are. At the same time it is evident that the financial crisis goes hand in hand with a social crisis, since an increasing number of people lost trust in governments, trade unions and other representative institutions. A main reason why the European Left nevertheless faces severe challenges in attracting supporters seems to be an experienced loss of what has been called ‘working class identity’ in earlier times. This development has been fuelled by the continuing debate on “identity constructions” as proposed e.g. by post-modernist scholars referring to “fluid” and ambiguous concepts of identity and strictly denying any social categorization. So there is a gap between the loss of working class identity on one hand and the focus on merely social identities on the other hand. To bridge this gap the two trajectories have to be linked. Thus, it is proposed to reflect the whole discussion on “working class identity” in the light of exploitation referring to classical political economy, but additionally to integrate social identity constructions by reviving the concept of alienation.
    Keywords: diversity, exploitation, identity, working class, alienation
    JEL: B50 P16 Z13
    Date: 2014–12
  6. By: Handley, Antoinette
    Abstract: Political scientists have generally seen two key features of African political economies.a relatively small or absent middle class, and a middle class that is unusually embedded in the key explanations of the troubled political and economic traje
    Keywords: Africa, middle class, private sector
    Date: 2014
  7. By: Fofack, Hippolyte
    Abstract: Although development generally refers to a broad concept, the quest for development in Sub-Saharan Africa has been biased by ideological considerations which made abstraction of local conditions and people.s aspirations. The prevalent development models h
    Keywords: aspirational goals, balanced growth, self-reliance, structural transformation
    Date: 2014
  8. By: David Hulme; Mathilde Maitrot
    Abstract: Abstract This paper argues that microfinance in South Asia, like mainstream finance in North America and Europe, "has lost its moral compass". Our particular concern is with microloans to vulnerable clients. Microfinance institutions (MFIs) have increasingly focussed on financial performance and have neglected their declared social mission of poverty reduction and empowerment. Loans officers in the field are under enormous pressure to achieve individual financial targets and now routinely mistreat clients – especially poor women. The values of neo-liberal mainstream finance in the rich world have spread to microcredit in the villages of Bangladesh and India. This situation is hidden from western publics who are fed the lie of "the magic of microfinance" by their media, guided by the needs and interests of mainstream finance seeking to provide some "good news" about the financial sector as scandal after scandal unfold. Urgent action is needed, particularly from the leaders of the microfinance industry, to refocus their organizations and workforce on achieving both financial and social performance targets.
    Date: 2014
  9. By: John C Frain (Department of Economics, Trinity College Dublin);
    Abstract: This beginners’ guide to MATLAB for economics and econometrics is an updated and extended version of Frain (2010). The examples and illustrations here are based on Matlab version 8.3 (R2014a). It describes the new MATLAB Desktop, contains an introductory MATLAB session showing elementary MATLAB operations, gives details of data input/output, decision and loop structures, elementary plots, describes the LeSage econometrics toolbox and shows how to do maximum likelihood estimation. Various worked examples of the use of MATLAB in economics and econometrics are also given. I see MATLAB not only as a tool for doing economics/econometrics but as an aid to learning economics/econometrics and understanding the use of linear algebra there. This document can also be seen as an introduction to the MATLAB on-line help, manuals and various specialist MATLAB books.
    Keywords: Matlab; Econometric Software;
    JEL: C87 C88
    Date: 2014–11

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