nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒02‒22
six papers chosen by
Karl Petrick
Western New England University

  1. Credit-Driven Investment, Heterogeneous Labor Markets and Macroeconomic Dynamics By Matthieu Charpe; Peter Flaschel; Hans-Martin Krolzig; Christian Proaño; Willi Semmler; Daniele Tavani
  2. Behavioral economics and social exclusion : can interventions overcome prejudice ? By Hoff, Karla
  3. Green the Union : an investment strategy towards a sustainable European Union By Xavier Timbeau; Lars Anderson; Christophe Blot; Jérôme Creel; Andrew Watt
  4. Race & Gender Differences in the Experience of Earnings Inequality in the US from 1995 to 2010 By Markus P. A. Schneider
  5. History, Path Dependence and Development: Evidence from Colonial Railroads, Settlers and Cities in Kenya By Remi Jedwab; Edward Kerby; Alexander Moradi
  6. Rising inequality in the EU : the elephant in the room By Xavier Timbeau; Lars Anderson; Christophe Blot; Jérôme Creel; Andrew Watt

  1. By: Matthieu Charpe (International Labor Organization); Peter Flaschel (Bielefeld University); Hans-Martin Krolzig (Kent University); Christian Proaño (Department of Economics, New School for Social Research); Willi Semmler (Department of Economics, New School for Social Research); Daniele Tavani (Colorado State University)
    Abstract: In this paper we set up a baseline, but nevertheless advanced and complete model rep-resenting detailed goods market dynamics, heterogeneous labor markets, dual and cross-dual wage-price adjustment processes, as well as counter-cyclical government policies. The cyclical movements of output generates, through Okun's law, employment variations in the heterogeneous labor market. The core of the resulting Keynesian macrodynamics is however given by credit-financed investment behavior and loan-rate setting by credit suppliers. The framework is constructed in such way that simplied, lower dimensional versions of the model can be obtained by setting parameters describing specific feedback effects from one sector to another equal to zero. Starting from such low dimensional sub-dynamics, we show the local stability of the full 7D model through a "cascade of stable matrices" approach if the feedback chains are sufficiently tranquil in their trans-mission mechanisms. However, local stability is the point of departure for the numerical investigation of local explosiveness and the forces that can bound such a behavior.
    Keywords: Macroeconomic (In-)Stability, Segmented Labor Markets,Business Cycles, Fiscal and Monetary Policy Rules
    JEL: E12 E24 E31 E52
    Date: 2013–03
  2. By: Hoff, Karla
    Abstract: Behavioral economics recognizes that mental models -- intuitive sets of ideas about how things work -- can bias an individual's perceptions of himself and the world. By representing an ascriptive category of people as unworthy, a mental model can foster unjust social exclusion of, for example, a race, gender, caste, or class. Since the representation is a social construction, shouldn't society be able to control it? But how? This paper considers three interventions that have had some success in developing countries: (1) Group deliberation in Senegal challenged the traditional mental model of female genital cutting and contributed to the abandonment of the practice; (2) political reservations for women and low castes in India improved the way men perceived women, the way parents perceived their daughters, and the way women perceived themselves, but have not generally had positive effects on the low castes; and (3) reductions in the salience of identity closed performance gaps between dominant and stigmatized groups in experiments in India and China. Spoiled collective identities need to be changed or made less prominent in order to overcome social exclusion.
    Keywords: Educational Sciences,Primary Education,Anthropology,Knowledge for Development,Tertiary Education
    Date: 2015–02–01
  3. By: Xavier Timbeau (OFCE); Lars Anderson (Economic Council of the Labour Movement (ECLM)); Christophe Blot (OFCE); Jérôme Creel (OFCE); Andrew Watt (Macroeconomic Policy Institute (IMK))
    Date: 2015–02
  4. By: Markus P. A. Schneider (Economics Department, University of Denver)
    Abstract: This paper studies the evolution of the earnings distribution from 1995 to 2010 of four major de- mographic groups are considered separately, which shows that there are important differences in the experience of inequality that imply that race and gender are not separable when it comes to understand- ing the distribution of earnings in the US. The main findings are that only white men have experienced changes in within-group inequality that parallel the changes in inequality seen in the overall distribution. By contrast, the black population (male and female) has seen no notable increase in within-group in- equality. The evolution of earnings inequality is also compared to the increase in inequality documented by Thomas Piketty and Emmanuel Saez, and it is shown that earnings inequality has followed a qualita- tively similar, though less extreme trend to total pre-tax income inequality. In the process, the apparent disconnect between the Gini coefficient - which has not changes much - and inequality assessed via the share of income going to the top percent of income earners is clarified.
    Keywords: Dagum Distribution, Earnings Inequality, Gini Coefficient, Income Distribution
    JEL: D31 D63 C46
    Date: 2013–04
  5. By: Remi Jedwab; Edward Kerby; Alexander Moradi
    Abstract: Little is known about the extent and forces of urban path dependence in developing countries.  Railroad construction in colonial Kenya provides a natural experiment to study the emergence and persistence of this spatial equilibrium.  Using new data at a fine spatial level over one century shows that colonial railroads causally determined the location of European settlers, which in turn decided the location of the main cities of the country at independence.  Railroads declined and settlers left after independence, yet cities persisted.  Their early emergence served as a mechanism to coordinate investments in the post-independence period, yielding evidence for how path dependence influences development.
    Keywords: Path Dependence, Urbanisation, Transportation, Colonialism
    JEL: R11 R12 R40 O18 N97
    Date: 2014–01–12
  6. By: Xavier Timbeau (OFCE); Lars Anderson (Economic Council of the Labour Movement (ECLM)); Christophe Blot (OFCE); Jérôme Creel (OFCE); Andrew Watt (Macroeconomic Policy Institute (IMK))
    Abstract: Rising inequality is the elephant in the European room: everybody knows it is there and that it is an obvious problem, but no one wants to either discuss the problem or address it. Macroeconomic issues have taken the front seat, andinequality might be dropped in the conversation when it has relevance from a macroeconomic perspective: maybe we should reduce inequality to fight secular stagnation (Fitoussi and Saraceno, 2011), especially because inequality can be self-reinforcing through secular stagnation; maybe we should reduce inequality toenhance growth in a world of credit-constraint households, because growth is the final goal of our policies (Birdsall et al. 1996). The fact that, maybe, we should aim for socio-economic equality for itself and not for some other macroeconomic objective seems to have disappeared in th epresence of other urgencies. Paradoxically, Thomas Piketty’s Capital in the 21st Century has spurred a global debate, but not a European one. The Capital is on everybody’s lips from New-York to Hong-Kong through Rio, but not in Brussels—although it is in everybody’s mind, hence the Elephant in the Room. But, perhaps it is so because Piketty has placed attention on high and very high income, which is less of a subject in stagnatingeconomies.
    Date: 2015–02

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