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on Post Keynesian Economics |
| By: | Razmi, Arslan (The University of Massachusetts at Amherst) |
| Abstract: | Neo-Kaleckian literature has actively debated whether growth is wage- or profit-led in capitalist economies. However, existing studies tend to ignore the non-tradable sector and heterogeneity within the tradable sector. This paper shows that incorporating these features renders wage-led growth in an open developing economy unfeasible in the traditional (Kaleckian) sense of the term. This result -- which follows even if one sets aside the competitiveness considerations generally seen as impeding such growth -- occurs due to the presence of a homogeneous goods-producing tradable sector that sets the ceiling to steady state growth. A corollary, in light of findings from the "new new trade theory" literature, is that increasing South-South trade may tend to narrow room for wage-led growth regardless of the other desirable effects of higher wages. |
| Keywords: | Wage-led growth, non-tradables, neo-Kaleckian models, development, output heterogeneity. |
| JEL: | F43 O41 E12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2015-01&r=pke |
| By: | Yeva Nersisyan |
| Abstract: | Before the global financial crisis, the assistance of a lender of last resort was traditionally thought to be limited to commercial banks. During the crisis, however, the Federal Reserve created a number of facilities to support brokers and dealers, money market mutual funds, the commercial paper market, the mortgage-backed securities market, the triparty repo market, et cetera. In this paper, we argue that the elimination of specialized banking through the eventual repeal of the Glass-Steagall Act (GSA) has played an important role in the leakage of the public subsidy intended for commercial banks to nonbank financial institutions. In a specialized financial system, which the GSA had helped create, the use of the lender-of-last-resort safety net could be more comfortably limited to commercial banks. However, the elimination of GSA restrictions on bank-permissible activities has contributed to the rise of a financial system where the lines between regulated and protected banks and the so-called shadow banking system have become blurred. The existence of the shadow banking universe, which is directly or indirectly guaranteed by banks, has made it practically impossible to confine the safety to the regulated banking system. In this context, reforming the lender-of-last-resort institution requires fundamental changes within the financial system itself. |
| Keywords: | Banks; Central Banking; Deregulation; Federal Reserve; Financial Crises; Glass-Steagall Act; Lender of Last Resort; Minsky; Regulation; Securitization; Shadow Banking |
| JEL: | B50 E50 E58 G10 G18 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_829&r=pke |
| By: | Stephen B. Kaplan (Department of Economics/Institute for International Economic Policy, George Washington University) |
| Abstract: | How does a shifting economic power balance between the United States and China affect the strategic choices of Latin American governments? During the last several decades, Latin America has often relied on a Western development model that aimed to attract global market capital. After excessive borrowing led to financial busts, however, many countries have sought to insulate themselves from market volatility. Rising terms of trade and a commodity boom, driven in part by China, helped buttress economic growth during much of the 2000s. But, what accounts for the growing variation in national policy approaches, ranging from ongoing market orthodoxy to heavy government intervention? I argue that governments that tap new Chinese income streams – both non-conditional lending and taxable commodity flows – have reduced their reliance on conditionality-linked Western financing, giving them more autonomy to use budget deficits to intervene in their economies. Employing a systematic comparative analysis of three Latin American countries – Argentina, Brazil, and Venezuela – I find that Chinese non-conditional funding endows governments with greater budgetary discretion, making austerity less likely. These findings offer important new insights for the study of globalization, the Latin American left, and China-Latin American relations, by helping explain the structural conditions that enable nations to veer from Western governance models. |
| Keywords: | Economic Policy, Latin America, China, Investment, Lending, Fiscal Policy, Economic Governance |
| JEL: | F00 F30 F40 H00 H30 H60 N10 N20 N16 N26 O10 O54 P50 P51 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2014-19&r=pke |
| By: | Rakesh Gupta N.R. (Centre d'Economie de la Sorbonne - Paris School of Economics and ESSEC Business School - IRENE-CODEV) |
| Abstract: | This paper, on the one hand, goes a step closer to demonstrate the causality of social capital on economic performance. On the other hand, we confirm a continued role of social capital effects on economic performance in this paper by using a much larger sample, spanning three decades and increasing the scope of countries. This paper is unique in the sense that it contributes to revisiting questions of economic performance, social capital and institutions with a clearly better and updated dataset from the last 28 years building upon existing empirical evidence. We employ a longitudinal analysis (pooled unbalanced multiple cross-section datasets) with fixed effects in this study. Our sample includes both the World Values Survey and European Values Study dating back to the 1980s. Our results are twofold: Firstly, to confirm that trust has a significant positive effect on growth. And more importantly, they have a significant effect on growth for at least 5 years (for growth at 5, 7 and 10 years following a period of trust measure). Secondly, associational activities – another measure in the overarching definitions of social capital, along with institutions, inequality, and education are consistently significant determinants of trust. |
| Keywords: | Interpersonal trust, trust, associational activities, social capital, economic development, institutions, inequality. |
| JEL: | Z13 O11 O43 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:15002&r=pke |
| By: | Ralf Martin; Romesh Vaitilingam |
| Abstract: | Policies on climate change that encourage 'clean innovation' while displacing 'dirty innovation' could have a positive impact on short-term economic growth while avoiding the potentially disastrous reduction in GDP that could result from climate change over the longer term. |
| Keywords: | Innovation spill-overs; Climate Change; Growth; Patents; Clean technology; Optimal climate policy |
| JEL: | H23 O30 O38 Q54 Q55 Q58 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60616&r=pke |
| By: | Irina Savelieva (National Research University Higher School of Economics) |
| Abstract: | In modern academia, history is occasionally classified as a social science. My aim is to demonstrate why history has not become a ‘real’ social science, although historians who represent the most advanced trends within the discipline aspired to this. Two-faced status of history is problematized as a conflict between social theory and historical method when historians adopt the theories of the social sciences. I consider two topics to be central here: the uneasy relationship between social theories and methods, and the indispensability of the cognitive potential of the humanities. Although historians have sought theoretical renewal by turning to the theories of various social sciences, they rarely could use techniques that represent ways of cognition normally used by sociologists, psychologists, anthropologists, etc. – psychometric testing, sociometric monitoring, ethnographic description, in-depth interview, long-term observation. This situation has undeniable positive effects. The impossibility of using social science techniques ensures the autonomy of history and enables it to preserve its disciplinary core. At the same time, dealing with meanings and using the cognitive methods of the humanities, history can catch things more ephemeral than trends, patterns, mechanisms and statistical rules. |
| Keywords: | the humanities, social sciences, history, theory, method, symbolic interactionism, cultural interpretation, vague theories |
| JEL: | Z |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:83hum2015&r=pke |