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on Post Keynesian Economics |
| By: | L. Randall Wray |
| Abstract: | In this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work--at the time that he was first developing his financial instability approach. In an earlier piece (Wray 1992), I closely examined Minsky's published writings to support the argument that, from his earliest articles in 1957 to his 1986 book (as well as a handout he wrote in 1987 on "securitization"), he consistently held an endogenous money view. I'll refer briefly to that published work. However, I will devote most of the discussion here to unpublished early manuscripts in the Minsky archive (Minsky 1959, 1960, 1970). These manuscripts demonstrate that in his early career Minsky had already developed a deep understanding of the nature of banking. In some respects, these unpublished pieces are better than his published work from that period (or even later periods) because he had stripped away some institutional details to focus more directly on the fundamentals. It will be clear from what follows that Minsky's approach deviated substantially from the postwar "Keynesian" and "monetarist" viewpoints that started from a "deposit multiplier." The 1970 paper, in particular, delineates how Minsky's approach differs from the "Keynesian" view as presented in mainstream textbooks. Further, Minsky's understanding of banking in those years appears to be much deeper than that displayed three or four decades later by much of the post-Keynesian endogenous-money literature. |
| Keywords: | Banks; Deposit Multiplier; Endogenous Money; Financial Innovation; Financial Instability Hypothesis; Horizontalists; Minsky; Originate to Distribute; Prudent Banking; Say’s Law; Securitization |
| JEL: | B3 B50 B52 E2 E4 E5 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_827&r=pke |
| By: | Roger Backhouse |
| Abstract: | This paper presents the story of the attempts made by Hans Apel, after a Professor at Bridgeport University, to defend academic freedom through strengthening the right of instructors to choose their own textbooks. The story began when his university was attacked and threatened with losing donations as a result of its use of Paul Samuelson's introductory textbook and that culminated in an article in the AAUP Bulletin. |
| Keywords: | Economics, textbooks, academic freedom, Apel, Samuelson |
| JEL: | B2 B3 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:14-12&r=pke |
| By: | C.A.E Goodhart (London School of Economics) |
| Abstract: | The earlier 2007/8 financial crisis generated the main lessons for monetary policy, notably that price stability does not necessarily guarantee financial stability. Nevertheless, the on-going Eurozone crisis has pointed to further lessons, notably that a single currency covering diverse states does need a Banking Union; and to problems of zero risk-weighting for sovereign debts. Without such a Banking Union, economic divergences between the Eurozone states have continued and look likely to persist. |
| Keywords: | Price stability; financial stability; banking union; zero lower-bound |
| JEL: | E52 E44 F36 G01 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:bog:spaper:17&r=pke |
| By: | Camille Cornand; Rodolphe Dos Santos Ferreira |
| Abstract: | In Keynes’ beauty contest, agents have to choose actions in accordance with an expected fundamental value and with the conventional value expected to be set by the market. In doing so, agents respond to a fundamental and to a coordination motive respectively, the prevalence of either motive being set exogenously. Our contribution is to consider whether agents favor the fundamental or the coordination motive as the result of a strategic choice that generates a strong strategic complementarity of agents’ actions. We show that the coordination motive tends to prevail over the fundamental one, which yields a disconnection of activity away from the fundamental. A valuation game and a competition game are provided as illustrations of this general Framework. |
| Keywords: | beauty contest, financial markets, indeterminacy, oligopolistic competition, strategic complementarities. |
| JEL: | D84 E12 E44 L13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2015-01&r=pke |
| By: | Sunanda Sen; Zico DasGupta |
| Abstract: | Financialization creates space for the financial sector in economies, and in doing so helps to raise the share of financial assets in the portfolios held by market participants. Largely driven by deregulation, the process works to make financial assets relatively attractive as compared to other assets, by offering both better returns and potential capital gains. Both the trend toward a more financialized economy and the expected returns on financial investments have provided incentives to corporate managers to invest larger sums in financial assets, resulting in growth of the share of financial assets relative to other assets held in portfolios. Assets held in the financial sector, however, failed to generate asset growth for the corporates. The need to obtain resources by borrowing in order to meet current liabilities reflects a pattern of Ponzi finance on their part. This paper traces the above pattern in corporate holdings of assets and its implications, with emphasis on the Indian economy. |
| Keywords: | Corporate Investments; Financialization; Ponzi Finance; Speculation |
| JEL: | E44 G32 L21 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_828&r=pke |
| By: | Soldatos, Gerasimos T. |
| Abstract: | The idea is that the three Abrahamic religions, Judaism-Christianity-Islam, all predispose microeconomics-wise for a social-welfare liberal state safeguarding against the violation of efficiency (not to waste resources and goods), equity (fair wealth distribution), and envy-freeness prefer own modus vivendi relative to neighbor’s) through voluntary action. Macroeconomics-wise, all of them are comfortably compatible with managing the overall economy in line with the four rules of the non-Monetarist Chicago School of Thought given that none of them approves profitable lending: No open-market-operations, cyclically-balanced-budget, k-percent money-growth, and zero-bank-money or full-reserve rules. A Rousseauesque social contract complementing the Lockean one is claimed to be the only état des choses compatible with all three Abrahamic religions. |
| Keywords: | Abrahamic religions, Efficiency-equity-envy-freeness, Democracy, non-Monetarist Chicago School of Thought |
| JEL: | A12 A13 Z12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59445&r=pke |
| By: | Bernardo Alves Furtado; Patrícia Alessandra Morita Sakowski |
| Abstract: | This text was written as part of the project Modelling of Complex Systems for Public Policy. It reviews the classical authors who jointly contributed to establish the elements of what could constitute a “science of complexity”. Based on the original writings of these authors, the text discusses the central concepts of complex systems: i) the interaction between (homogeneous or heterogeneous) agents and the environment; ii) emergence and self-organization; iii) the importance of nonlinearity and scales; iv) the determinism of rules; v) the emphasis on dynamics and feedback; and vi) the notions of adaptation, learning and evolution. Finally, contemporary criticisms are presented. They suggest that the arguments of complex systems do not support the epistemological establishment of a supposedly new science, but they do not reject the advances proposed by complexity studies. |
| Keywords: | complexity; emergence; dynamical systems; non-linearity; cellular automata; modelling; information theory; neural networks; evolution. Este texto está inserido no projeto Modelagem de Sistemas Complexos para Políticas Públicas e faz uma resenha dos autores clássicos que, em conjunto, contribuíram com os elementos do que seria uma “ciência da complexidade”. Com base no pensamento original destes autores, os conceitos centrais de sistemas complexos são discutidos, a saber: i) a interação entre agentes (homogêneos ou heterogêneos) e o ambiente; ii) as propriedades emergentes e a auto-organização; iii) a importância da não linearidade e das escalas; iv) as regras e seu determinismo; v) a ênfase na dinâmica e retroalimentação; e vi) as noções de adaptação, aprendizado e evolução. Por fim, críticas contemporâneas são apresentadas. Elas sugerem que os argumentos de sistemas complexos não sustentam epistemologicamente a constituição de suposta nova ciência, mas não rejeitam os avanços propostos nos estudos de complexidade. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2019a&r=pke |
| By: | Grazyna Wolska (University of Szczecin, Poland) |
| Abstract: | Regardless of the fact that economics distinguishes itself from other social sciences by a high level of formal deductive modelling, it is a social science due to the essence of the economic process where a human is subject and object at the same time. In the recent years this issue has been more frequently emphasized by economists in ongoing discussions. In the discussions a good deal of time is devoted to economic models and, mainly, their relations with the socioeconomic reality and coherence of empirical evidence. The article presents a thesis that some mainstream economic theories have not always constituted the background to their practical applications, which led - and still can - to the dogmatic and inflexible use of model solutions for economic phenomena which are difficult to forecast in a non-variant rigid model. The aim is to critically analyse beliefs about usefulness of universal economic models in the economic reality advocated by mainstream economists and to prove that not all economic models have constituted the background to their practical applications. |
| Keywords: | economic model; economics; economic theories; economy |
| JEL: | E10 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2014:no53&r=pke |
| By: | Roberts, Michael |
| Abstract: | In September 2015, Heads of State and Government will gather in New York to agree the post-2015 development agenda. The role that trade will play in this agenda is neither clear, nor agreed. Yet an open, non-discriminatory, rules-based multilateral trading system underpins sustainable development - a concept that lies at the core of much of the post-2015 debate to date. Indeed, sustainable development is recognized as an objective in the Marrakesh Agreement Establishing the World Trade Organization (WTO). With the aim of stimulating discussion, this paper asks the question of how trade, and WTO rules, can contribute to the post-2015 development agenda? In reply, the author offers some thoughts on 10 contributions that trade, and WTO rules, can make to the post 2015 development agenda. The list is indicative, not exhaustive. The 10 contributions highlight the complex way in which trade and trade policy interact with the evolving debate on the post-2015 development agenda - a debate which encompasses issues ranging from poverty eradication, inclusive growth, climate change mitigation, decent work, food security, access to health services and sustainable development financing, to name but a few of the topics under consideration. The paper organizes the 10 indicative contributions around three headings: trade rules as part of the enabling environment for the achievement of the post-2015 development agenda; the role that trade, and trade policy, can play in meeting specific goals (including possible Sustainable Development Goals); and the contribution that Aid for Trade can make. |
| Keywords: | WTO,Millennium Development Goals,Sustainable Development Goals,Accession,Inclusive Growth,Food Security,Environment,Intellectual Property,Services,Financing for Development,Aid for Trade,Trade in Value Added,Trade Statistics |
| JEL: | F1 F13 O19 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd201407&r=pke |