nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒03‒27
twenty-one papers chosen by
Karl Petrick
Western New England University

  1. History of the Concept of Value By J. E. King; Michael McLure
  2. International Effects of China’s Rise and Transition: Neoclassical and Keynesian Perspectives By Rod Tyers
  3. Supply and Demand Is Not a Neoclassical Concern By Lima, Gerson P.
  4. Contrasting Paradigms of Energy Security: Which Way for the Future? An Ecological Economics Perspective By Filippos Proedrou
  5. The Political, Moral, Intellectual and Revolutionary Authority of Africa in Malcolm X's Life and Thought By Tunde Adeleke
  6. How culture matters: The impact of individual values on development By Judit Kapas
  7. The gold standard for randomised evaluations: from discussion of method to political economics By Florent Bédécarrats; Isabelle Guérin; François Roubaud
  8. Institutional Grafting as a Three-Dimensional Phenomenon By Tamilina, Larysa; Tamilina, Natalya
  9. Equality of Opportunity: Theory and Evidence By Francisco H. G. Ferreira; Vito Peragine
  10. Creativity and Collaboration in the Online Classroom By Joy Kutaka-Kennedy
  11. Social Development Theory: Reinforcing Vygotsky's Theory in Teaching and Learning By Nor Shafiqa Mohamed Shaffiee; Muhd. Anwar Muhamad Subri
  12. The questionable economics of development assistance in Africa: hot-fresh evidence, 1996-2010 By Asongu, Simplice
  13. Africa´s Largest Economy, World´s Poorest People: Paradox of the Nigerian State in a Democracy By Mike Omilusi
  14. Financial education and financial inclusion: How lexicography makes sense By Gerardo Sierra; Serafín Martínez-Jaramillo; Biliana Alexandrova-Kabadjova; Elena Lozanova
  15. An Australian Contribution to International Trade Theory: The Dependent Economy Model By Phillip Edmund Metaxas; Ernst Juerg Weber
  18. Rethinking Reform and Re-growing Democracy: A Call for Renewed Research and Real Accountability By Bruce Marlowe; Alan Canestrari; Annie Winfield; Marilyn Page
  19. A Way Out of the Euro Crisis: Fiscal Transfers Are Indispensable for Sustainability in a Union with Heterogeneous Members By Harashima, Taiji
  20. Cheap but flighty: how global imbalances create financial fragility By Ahnert, Toni; Perotti, Enrico C
  21. Corporate Social Responsibility: Rewriting the Relationship between Business and Society By Aya Safwat

  1. By: J. E. King (La Trobe University, Victoria); Michael McLure (University of Western Australia)
    Abstract: In this historical review we distinguish between two broad categories of value theories, objective and subjective, which focus respectively on the conditions of production and on the preferences of consumers. The objective approach to value theory is discussed with respect to classical political economy and the labour theory of value and the Sraffian revival of classical value theory in the twentieth century. The subjective approach to value theory is discussed with reference to neoclassical economics, with emphasis on marginal utility and equilibrium; marginal productivity and the distribution of product; and enhancements to utility analysis developed in the late nineteenth and early twentieth centuries. We conclude with a very brief and speculative reflection on the challenge of the digital age for value theory. The paper has been prepared as an entry for the forthcoming second edition of the International Encylopedia of the Social and Behavioural Sciences (Elsevier).
    Date: 2014
  2. By: Rod Tyers (Business School, University of Western Australia)
    Abstract: Opinion over the global implications of China’s rise is divided between critics, who see it as having developed at the expense of both investment and employment in the US, Europe and Japan and proponents who emphasise improvements in the terms of trade and reductions to the cost of financing that stem from China’s supply of light manufactures, its demand for Western capital and luxury goods and its high saving. The criticism implies Keynesian assumptions while proponents take a neoclassical perspective. In this paper, both are embodied in a global macro model that emphasises bilateral linkages via both trade and investment, with monetary spill-overs represented by globally integrated bond markets. Net gains are suggested for the US and Europe from China’s successful export-oriented growth, though there are partially offsetting Keynesian effects. China’s recent slower, more consumption focussed, growth appears also to be beneficial in those regions and in Japan notwithstanding terms of trade losses.
    Date: 2014
  3. By: Lima, Gerson P.
    Abstract: The central point of this paper is the demonstration that there is a real world supply and demand theory, supported by an estimate of the US aggregate supply curve. The fundamental idea is that demand and supply interaction is the smallest economic act, an act without which there would be no economics. Paper’s first point is that what neoclassical textbooks call supply and demand is just a disguising device created to justify a given goal and stresses three mistakes that plague all profit maximisation models thus condemning the neoclassical approach to unfeasibility: the notions of competition and equilibrium and the econometrics of disequilibrium data. The second point is the proposal of rescuing and improving the approach to the supply and demand theory prevailing before the upsurge of the neoclassical doctrine. Fundamental assumptions are three; first, supply and demand generates price and production of all relevant products and services, being thus the immediate cause of all economic outcomes: (un)employment, income, tax receipts, etc., and their social consequences on education, wealth distribution, and so forth. Second, supply and demand interplay depends on several exogenous factors, mainly human ontological behaviour, economic policy and natural resources; exogenous phenomena, especially the economic policy, command supply and demand and supply and demand commands the economy. Third, production takes time; quantities produced and sold are never equal; disequilibrium is the usual status of the supply and demand interaction and therefore the entire economy. Econometrics of the experiment described deals with disequilibrium without using the time series method and gives support to the proposed economic structure and theory.
    Keywords: Economic theory, equilibrium,supply and demand.
    JEL: A11 B41 C13
    Date: 2015–03–03
  4. By: Filippos Proedrou (American College of Thessaloniki (ACT) / International Hellenic University)
    Abstract: This paper argues that mainstream discourse on energy security is premised upon the assumption of infinite growth and for this reason focuses upon the political, security and economic aspects of energy security. Consequently, it fails to provide satisfactory answers to the global environmental, energy, economic, geopolitical, and developmental challenges. The emerging alternative paradigm, to the contrary, makes a strong case for disentangling prosperity from growth and studies how a substantial retreat of energy consumption is not only feasible, but will also efficiently address the sustainability challenge and enhance overall energy security. It also suggests how it can alleviate geopolitical and developmental tensions. Ultimately, the paper poses the fundamental question of how valid our assumptions are to lead us into a better, and sustainable, future.
    Keywords: Energy security paradigm, ecological economics, development, growth, sustainability
    JEL: F50 Q01 Q50
    Date: 2014–12
  5. By: Tunde Adeleke (Iowa State University)
    Abstract: From the dawn of the Black experience in America, Africa had played and continues to play, a central role in constructions of countervailing forms/forces of resistance and empowerment. From the early nineteenth century “pioneers of protest†down to the civil and post-civil rights activists, Black Americans have invoked Africa as a critical repertoire of resistance. None more so than Malcolm X (1925-1965). Although he began his activist career in the Nation of Islam, an organization that focused less on Africa as a source of inspiration and strength, Malcolm would, shortly after his break with the NOI, position Africa at the core, and the foundation, for his philosophy of resistance and empowerment for Blacks. In his writings and speeches; and in the movement that he developed for advancing the black struggles, Malcolm X prioritized the African nexus. He advocated broadening the purview of the Black American struggles to include Africa. In his view, Africa offered much of what Black Americans lacked and desperately need in their historic struggles—the moral, cultural, political, and intellectual force and authority that would facilitate black liberation and empowerment in both America and globally.
    Keywords: liberation, resistance, empowerment, hegemony, self-esteem
    Date: 2014–10
  6. By: Judit Kapas (University of Debrecen)
    Abstract: Recently, the view that culture matters for economic development has gained much ground within institutional economics; scholars have provided us with empirical evidence on the positive effect of culture on economic performance. This evidence shows, in some cases, the overwhelming effect of culture vis-à-vis that of formal institutions (Williamson 2009). In these investigations, culture is generally measured by the subjective evaluation of those answering the question “Do you think that most people can be trusted?†in the World Values Survey. However, whether an answer to this question really refers to culture has recently been doubted by a growing number of scholars, a problem which goes back to a somewhat ambiguous definition of culture. Another problematic issue here is that these empirical investigations do not rely on an economic theory concerning the effects of culture on economic performance, at least when it comes to the mechanisms through which culture may effect development.One way to overcome these shortcomings – more importantly the “black box†view of culture – is to move from general statements about culture to a narrower, and consequently more reliable dimension of culture. My argument is that Schwartz’s (2006) theory of cultural value orientations developed in cross-cultural psychology can be fruitfully used for two reasons. First, this theory relies on a priori theorizing about three basic issues that all societies confront, rather than post hoc examination of data. Secondly, it captures only one, but an unambiguous, aspect of culture: individual values.So, in this paper I argue that an analysis of individual values on economic development contributes to a clarification of the effects of culture by “unbundling†culture itself. Using individual values allows me to rely on theories of institutional economics – namely Williamson’s (2000) theory about the levels of institutions and of Boettke et al’s (2008) theory on institutional stickiness – to make hypotheses about their effects on development, and then empirically investigate them. The cross-country empirical investigation using the Schwartz Values Survey data on individual values provides evidence for the main hypothesis: individual values have no effect on development after controlling for formal institutions, and this result is different from the effect of the culture index derived from the World Values Survey and that of Hofstede’s “individualismâ€, and is very robust.
    Keywords: culture, economic development, institutions, individual values
    JEL: E02 O10
    Date: 2014–12
  7. By: Florent Bédécarrats; Isabelle Guérin; François Roubaud
    Abstract: This last decade has seen the emergence of a new field of research in development economics: randomised control trials. This paper explores the contrast between the (many) limitations and (very narrow) real scope of these methods and their success in sheer number and media coverage. Our analysis suggests that the paradox is due to a particular economic and political mix driven by the innovative strategies used by the new school’s researchers and by specific interests and preferences in the academic world and the donor community.
    Keywords: Impact evaluation; randomised control trial; experimental method; political economy; development
    JEL: A11 B41 C93 D72 O10
    Date: 2015–03–16
  8. By: Tamilina, Larysa; Tamilina, Natalya
    Abstract: This study introduces a comprehensive model of institutional grafting by examining the formation of legal institutions as shaped by three forces: (1) cultural, (2) structural, and (3) political. The model is used to argue that a country's growth rates are a function of the distance that new legal institutions develop to these three forces. We demonstrate that the potential size of such distance varies depending on the phase of institutional change in which legal institutions emerge: drift/evolution or critical junctures. When a country drifts along the established institutional path, the distance is likely to be minimal, enabling rapid economic development. When a country changes its institutional path, the distance proves large and hinders economic growth. These propositions are tested empirically based on a sample of 53 countries for the period from 1996 to 2008. The post-communist transition is used as an example of critical junctures.
    Keywords: Institutional economics, formal institutions, institutional change, post-communist transition
    JEL: O43 O57
    Date: 2014–03–01
  9. By: Francisco H. G. Ferreira (World Bank and IZA); Vito Peragine (Università degli Studi di Bari)
    Abstract: Building on earlier work by political philosophers, economists have recently sought to define a concept of equity that accommodates the fairness of reward to individual responsibility and effort, while allowing for the existence of some inequalities which are unfair and should be compensated. This paper – commissioned as a chapter for the Oxford Handbook of Well Being and Public Policy – provides a critical review of the economic literature on equality and inequality of opportunity. A simple ‘canonical model’ of equal opportunity is proposed, and used to explore the two fundamental concepts in this (relatively) new theory of social justice: the principles of compensation and reward. Ex-ante and ex-post versions of the compensation principle are presented, and the tensions between them are discussed. Different approaches to the measurement of inequality of opportunity - and empirical applications - are reviewed, and implications for the measurement of poverty and of the rate of economic development are discussed
    Keywords: equality of opportunity, inequality of opportunity, compensation, reward
    JEL: D63 I32
  10. By: Joy Kutaka-Kennedy (National University)
    Abstract: Online and collaborative learning have been identified as driving trends in higher education today (Johnson, Adams, Becker, Estrada, & Freeman, 2014). Over 6.7 million students have taken at least one online class, more than 32% of all higher education students (Allen & Seaman, 2011). However, many students report dissatisfaction with content, process, and lack of engagement, especially when online learning is a static, instructor-led discussion (Adams, Defleur, & Heald, 2007). Fredericks (2004) posited that student engagement facilitates success and retention. He identified behavioral engagement with academic and social activities, emotional engagement with positive and negative reactions to people and activities, and cognitive engagement with reflective and integrative thinking. Creative and collaborative assignments by nature can engage students on behavioral, emotional and cognitive levels; their increased engagement leads to improved learning outcomes. Done appropriately, online education can be an engaging, creative venue for teaching and learning with the proper tools and supports. Contrary to popular misconception and fears, online learning can be creative, dynamic student experience. This session will present one assignment that actively engages student creativity resulting in a practical classroom tool for special education teachers. Students are required to create a Parent Newsletter to provide information about the teacher, his/her classroom procedures, and resources for families. They then share and critique each other’s work in small, online groups with clear documentation of everyone’s participation and responses. Using peers’ feedback, students can refine their newsletters and submit it for final grading; an additional benefit is they have ideas and templates to write future newsletters for their own classroom. Students report that they use these newsletters in their own classrooms.Going beyond their role as content experts, online instructors can promote creativity and collaboration through a judicious mix of lectures, video clips, assigned readings, and discussions. Assessment of creative and collaborative assignments can also pose challenges, as aesthetic quality is often very individualized. How does one compare works from Mozart to Rodin to Chagall? Although creative and artistic endeavors cannot be evaluated with the same kind of metrics that multiple choice tests can employ, rubrics with general descriptors of gradations of quality can be useful. Furthermore, providing examples of weak, acceptable, and exemplary products can also provide guidance on grading criteria. The rewards of creative and collaborative assignments far outweigh the challenges of assessment and evaluation.
    Keywords: Creativity; Collaboration; Online education;
    JEL: I23 I29 I21
    Date: 2014–07
  11. By: Nor Shafiqa Mohamed Shaffiee (Universiti Kuala Lumpur Malaysian Spanish Institute (UniKL MSI)); Muhd. Anwar Muhamad Subri (Kolej Poly-Tech MARA Alor Setar (KPTMAS))
    Abstract: Social Development Theory, a theory formulated by Lev Vygotsky, is a theory which emphasizes on the effect of culture and social factors in contributing to cognitive development. According to Vygotsky, his theory differs from Piaget's as he places more emphasis on culture affecting / shaping cognitive development and he sets more weight on the role of language in cognitive development. Vygotsky believes that community plays a central role in the process of learning. Thus, an event management project has been designed to suit the students' needs in absorbing language while interacting with the community. The effectiveness and the impact of the event management project is still a big question to be answered. However, the project has been implemented as one of the assessment for the students of Universiti Kuala Lumpur. Whether or not the project is beneficial and meaningful in the sense of English language, it may be answered through comparison research between the respondents of Universiti Kuala Lumpur Malaysian Spanish Institute and Kolej Poly-Tech MARA Alor Setar. In relation to the issue, the research aims to investigate the impact of Vygotsky's Social Development Theory, particularly in event management project, in teaching and learning English. The research involves Universiti Kuala Lumpur Malaysian Spanish Institute and Kolej Poly-Tech MARA Alor Setar students as the experimental and controlled groups of respondents.
    Keywords: Social Development Theory, Teaching and Learning
    Date: 2014–10
  12. By: Asongu, Simplice
    Abstract: This paper assesses the aid-development nexus in 52 African countries using updated data (1996-2010) and a new indicator of human development (adjusted for inequality). The effects of Total Net Official Development Assistance (NODA), NODA from the Development Assistance Committee (DAC) and NODA from Multilateral donors on economic prosperity (at national and per capita levels) are also examined. The findings broadly indicate that development assistance is detrimental to GDP growth, GDP per capita growth and inequality adjusted human development. The magnitude of negativity (which is consistent across specifications and development dynamics) is highest for NODA from Multilateral donors, followed by NODA from DAC countries. Given concerns on the achievement of the MDGs, the relevance of these results point to the deficiency of foreign aid as a sustainable cure to poverty in Africa. Though the stated intents or purposes of aid are socio-economic, the actual impact from the findings negates this. It is a momentous epoque to solve the second tragedy of foreign aid; it is high time economists and policy makers start rethinking the models and theories on which foreign aid is based. In the meantime, it is up to people who care about the poor to hold aid agencies accountable for piecemeal results. Policy implications and caveats are discussed.
    Keywords: Foreign Aid; Political Economy; Development; Africa
    JEL: B20 F35 F50 O10 O55
    Date: 2014–08–12
  13. By: Mike Omilusi (Ekiti State University)
    Abstract: Nigeria’s 1999 transition to civilian government culminated a long, turbulent period of military rule and failed democratic experiments. At the time of the political handover, many Nigerians expressed hopes for a “democracy dividend†that would expand political liberties, improve the performance of government, encourage accountability among leaders, and revive the ailing economy. However, the anticipated benefits of democracy have been slow to emerge, and the new dispensation has failed to fulfill the expectations of many Nigerians. This essay examines the poverty situation in Nigeria in relation to what democracy, as a people-centered system of government, should offer the citizenry especially in a country regarded as rich in human and material resources. It traces the interface between democracy and the poor while analyzing the trends, patterns and causes of poverty in the country. The failure of the present democratic government to alleviate the alarming level of poverty is also brought into focus. It suggests ways of reversing the unpleasant trend.
    Keywords: Poverty, Democracy, Economy, State, Government
    Date: 2014–12
  14. By: Gerardo Sierra (Universidad Nacional Autónoma de México); Serafín Martínez-Jaramillo (Banco de México); Biliana Alexandrova-Kabadjova (Banco de México); Elena Lozanova (Banco de México)
    Abstract: Financial inclusion has taken a very important role on the agenda of many international organizations and financial authorities across the globe. There are many reasons why financial inclusion is important, among these is the fact that a vast majority of the people in poverty are excluded from banking services. There is also the additional aspect of the technological development which has also changed our everyday lives; this in turn, due to the lack of an adequate financial education, prevents the use of the most advanced technology related to financial services and products.We performed an analysis of five dictionaries belonging to five financial organizations and regulators in Mexico, this allowed us to identify some deficiencies which prevent the users from resolving the linguistic phenomena given to them in relation to financial services. This situation creates a gap on the understanding of financial texts and on the knowledge acquisition of the un-experienced user of financial services. For this reason, we propose the creation of an interactive dictionary for financial education which we believe is the ideal tool to improve financial education, tackling the informational and cultural barriers. In this paper we study the role that the dictionaries have in the financial inclusion process and we explain in detail the methodological aspects that we have followed, which borrows heavily from lexicography, for the design of our interactive dictionary of finance. The result is a tool for the non-specialists and people who is entering the study of finance in which simplicity, practicality and reliability converge.
    Keywords: financial inclusión, financial eduaction, lexicography
    JEL: A20 A00 M53
    Date: 2014–05
  15. By: Phillip Edmund Metaxas (University of Western Australia); Ernst Juerg Weber (University of Western Australia)
    Abstract: This paper details the origin and development of the dependent economy model. The model is also known as the ‘Australian model’ and the ‘Salter-Swan-Corden-Dornbusch model’, but neither title adequately conveys the scope and sequence of contributions that were instrumental to its development. In particular, attention is given to indispensable contributions made by renowned Australian public servant Sir Roland Wilson and British economist James Meade, which preceded those of Trevor Swan, Wilfred Salter, W. Max Corden and Rudiger Dornbusch. It is shown that Wilson and Meade laid much of the theoretical groundwork ahead of the contributions of Swan, Salter, Corden and Dornbusch. Each contribution is analysed in detail and the model’s development is placed in the broader context of the evolution of balance of payments theory. The paper sheds light on several underappreciated (or perhaps unknown) facets of the model and, principally, highlights a broader Australian contribution to international trade theory inherent in it, namely, the identification of the real exchange rate as the critical relative price in balance of payments adjustment.
    Date: 2014
  16. By: Mustafa ER (Turkish Air Force Academy); Ünal ARI (Turkish Air Force Academy)
    Abstract: Education is one of the most effective tools to shape the world and solve its problems. Furthermore the earth and its well-being is heavily dependent upon the education and the number of educated inhabitants who are well aware of the fact that the resources are limited and the environmental protection is essential for the future of the human race. Taking this fact into consideration, the focal point of this paper will be environmental education and sustainable development. Admitting the fact that curricula of educational institutions and educational approaches cannot be the only cure to the environmental problems, they can be used as invaluable tools to develop environmental awareness and help sustainable development. By the help of instructors and educational administrators, educational programs could be developed in such a way that they not only include traditional school subjects like mathematics, science, and reading but also involve courses and/or projects aiming at developing environmental competence of the learners. Designing the programs interdisciplinary approaches rather than traditional ones would be of great contribution to provide the society with citizens respecting the natural resources as social assets. In this respect teachers play an important role and teacher education programs are expected to raise environmental awareness of the prospective teachers. Under the light of those facts, this paper will analyze both some of the teacher education programs of Turkish universities and some of the educational practices in Turkish secondary schools’ programs with a critical approach to set the elements pertaining to environmental education. Furthermore some of the environmental education practices in various countries will also be discussed to illustrate good examples. Recommendations on curricular issues to improve environmental education and sustainable development will also be provided.
    Keywords: Environmental education, sustainable development, curriculum, teacher education
    JEL: I00
    Date: 2014–05
  17. By: Bruno Rocha; Solomos Solomou
    Abstract: This paper examines the time-profile of the impact of systemic banking crises on GDP and industrial production using a panel of 24 countries over the inter-war period and compares this to the post-war experience of these countries. We show that banking crises have effects that induce medium-term adjustments on economies. Focusing on an eight-year horizon, it is clear that the negative effects of systemic banking crises last over the entirety of this time-horizon. The effect has been identified for GDP and industrial production. The adverse effect on the industrial sector stands out as being substantially larger in magnitude relative to the macroeconomic effect. Comparing the results across long-run historical periods for the same selection of countries and variables identifies some differences that stand out: the short term macroeconomic impact effects are much larger in the post-war period, suggesting that the propagation channels of shocks operate at a faster pace in the more recent period. Moreover, the time-profile of effects differs, suggesting that modern policies may be modulating the temporal shape of the response to banking crises shocks. However, the broad magnitude of the adverse effect of banking crises remains comparable across these time periods.
    Keywords: Local projections, Banking crises, Financial crises, Economic History, Inter-war.
    JEL: E6 N0 N2 G01
    Date: 2015–03–19
  18. By: Bruce Marlowe (Roger Williams University); Alan Canestrari (Roger Williams University); Annie Winfield (Roger Williams University); Marilyn Page (Penn State University)
    Abstract: Over the past 3 decades, a neo-conservative educational reform agenda has come to dominate public education. Since the publication of the polemic, A Nation at Risk by the National Commission on Excellence in Education (1983), educational reform in the US has been guided by private and corporate interests and seized by opportunistic and culturally conservative politicians and policymakers. As Sahlberg (2011) has pointed out, this “at-risk†agenda is now a global phenomenon, characterized by a discourse of crisis and fear. This model of reform is grounded, primarily, in standardized testing as the sole measure of the academic worth of children, teachers, and schools. Fueled by the media, the current reform agenda reinforces the notions of bad kids, bad teachers and bad schools by seizing every opportunity to publish declining scores, the ranks of low performing schools and under-qualified teachers. Such results provide numbers, but given what we know about teaching and learning, these numbers actually short-circuit deeper understanding of student learning and high-quality teaching. Consistent with this test-score emphasis, teachers are being reinvented as technicians, instead of decision-makers, and even more ominous, students are being reinvented as test-takers instead of thinkers. The purposes of this panel discussion are to examine and critique the current wave of reform, and to propose alternative models of accountability (and renewed research) as they relate to educational equity, diversity, and democracy. Our viewpoint places the highest value on good teachers and good teaching, instead of on test scores. An alternative discourse and model of accountability must hinge upon restoring a social reconstructivist point of view. That viewpoint sees schools as mechanisms to improve society, and not as an apparatus to transmit an uncritical acceptance of the past, the thrust of today's neo-essentialist point of view. To that end, the panelists will each engage the participants on a different aspect of this fundamental question: How can concerned educators break into the current discourse about accountability in order to offer a more optimistic, accurate, inclusive, and democratic model for our schools and children?
    Keywords: Reform, accountability, democracy
    Date: 2014–12
  19. By: Harashima, Taiji
    Abstract: This paper theoretically examines a way out of the euro crisis based on a model of inflation acceleration and differentials. The conclusion is that, unless more advantaged states (e.g., Germany) systematically transfer a necessary amount of money to less advantaged states (e.g., Greece) in every period, the euro area cannot necessarily reach equilibrium where all heterogeneous states achieve optimality. In this case, fiscal transfers are not a tool of risk-sharing or a buffer against asymmetric shocks; rather, they are indispensable for escaping from indefinite disparity acceleration within a union consisting of heterogeneous member states. Such fiscal transfers should not be viewed as alms for the less advantaged states but as a right these states should justly assert. The model indicates that the lack of a fiscal transfer mechanism inevitably generates inflation differentials and huge current account imbalances among member states. As a result, although relatively more advantaged member states obtain “extra” benefits from the euro, less advantaged member states eventually lose most of their capital ownership and their economies are devastated.
    Keywords: The euro; Monetary union; Inflation; Inflation differential; Current account imbalance; Fiscal transfer; Time preference
    JEL: E31 E58 E63 F33 N14 O52
    Date: 2015–04–02
  20. By: Ahnert, Toni; Perotti, Enrico C
    Abstract: Can a wealth shift to emerging countries explain instability in developed countries? Investors exposed to political risk seek safety in countries with better property right protection. This induces private intermediaries to offer safety via inexpensive demandable debt, and increases lending into marginal projects. Because safety conscious foreigners escape any risk by running also in some good states, cheap foreign funding leads to larger and more frequent runs. Beyond some scale, foreign runs also induce domestic runs in order to avoid dilution. When excess liquidation causes social losses, a domestic planner may limit the scale of foreign inflows or credit volume.
    Keywords: absolute safety; capital flows; safe haven; unstable funding
    JEL: F3 G2
    Date: 2015–03
  21. By: Aya Safwat (Future University in Egypt)
    Abstract: The relationship between business and society has witnessed a dramatic change in the past few years. Many factors forced businesses to reconsider their role in society; accordingly there has been a surge of notions that tries to explain this new complex relation between business and society. This paper aims at accentuating this evolving relation by focusing on the concept of corporate social responsibility (CSR). It differentiates between CSR and other related concepts such as business ethics and corporate philanthropy. It analyzes the different arguments in the CSR debate, pinpoints mechanisms adopted by businesses in carrying out their social responsibilities, and concludes with the link between corporate social responsibility and sustainable development.
    Keywords: Business Ethics, Corporate Philanthropy, Corporate Citizenship, Corporate Social Responsibility, Sustainable Development, Corporate Social Development
    Date: 2014–10

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