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on Post Keynesian Economics |
| By: | Severin Reissl |
| Abstract: | In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by Wolfgang Stützel which has recently been developed further.Using this framework, it is shown that there is no strictly necessary relationship whatsoever between effective demand and changes in the level of gross debt. Keen's proposed relation is shown not to hold under all circumstances, and it is demonstrated that where it does hold this is due to variations in the `velocity of debt'-variable he introduces. This variable, however, lacks theoretical underpinning. The article also comments on Keen's proposal that trade in financial assets should be included in effective demand, arguing that this undermines the concept of effective demand itself. It is also shown that many weaknesses in Keen's argument stem from a lack of terminological clarity which originates in his interpretation of the works of Hyman Minsky. |
| Keywords: | Effective Demand, endogenous money, debt |
| JEL: | E12 E20 E44 E51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:149-2015&r=pke |
| By: | Julie A Nelson |
| Abstract: | While extremely important and revolutionary, much feminist work on the economics of care has risked reinforcing an association of care with only women and with only women’s traditional activities. This essay revives the image of “husbandry,†understood as careful cultivation, tending, and management, as a complement to the image of mothering. A rich masculine prototype of care may be helpful in re-awakening male responsibility for care, and revitalizing the recognition of the necessity of concern and carefulness in all of economic life. The “good husbandman,†in stark contrast to “economic man,†lives a fuller life, acting responsively and responsibly. This essay lays out the need for such a rich image; suggests applications to the environment, carework, and business management; and addresses some possible drawbacks. |
| JEL: | A13 B54 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:mab:wpaper:2015_01&r=pke |
| By: | Ling Ting and Naiefa Rashied |
| Abstract: | The study attempts to evaluate the effectiveness of social media on cognitive development among undergraduate economics students at a South African university. The study collects data on student postings to discussion topics posted on Facebook and Twitter. The use of 3 well-known rubrics for evaluating cognitive development: Garrison, Anderson, and Archer (2001), revised Bloom’s taxonomy (Anderson et al. 2001), and Greenlaw and Deloach (2003), are used. Results indicate that student posts fall mainly into lower levels of thinking suggesting that social media may not be effective in cultivating critical thinking. Moreover, these results shed light on the voluntary versus mandatory nature of participation, the time length for student responses, and “big think†style questions in a developing country context (i.e. poor internet). |
| Keywords: | Social media, teaching and learning, critical thinking |
| JEL: | A20 A22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:513&r=pke |
| By: | Crost, Benjamin (University of Illinois at Urbana-Champaign); Duquennois, Claire (University of Colorado Denver); Felter, Joseph (Stanford University); Rees, Daniel I. (University of Colorado Denver) |
| Abstract: | Climate change is predicted to affect global rainfall patterns, but there is mixed evidence with regard to the effect of rainfall on civil conflict. Even among researchers who argue that rainfall reduces civil conflict, there is disagreement as to the underlying mechanism. Using data from the Philippines for the period 2001-2009, we exploit seasonal variation in the relationship between rainfall and agricultural production to explore the connection between rainfall and civil conflict. In the Philippines, above-average rainfall during the wet season is harmful to agricultural production, while above-average rainfall during the dry season is beneficial. We show that the relationship between rainfall and civil conflict also exhibits seasonality, but in the opposite direction and with a one-year lag. Consistent with the hypothesis that rebel groups gain strength after a bad harvest, there is evidence that lagged rainfall affects the number of violent incidents initiated by insurgents but not the number of incidents initiated by government forces. Our results suggest that policies aimed at mitigating the effect of climate change on agricultural production could weaken the link between climate change and civil conflict. |
| Keywords: | climate change, civil conflict, rainfall |
| JEL: | H56 O13 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8965&r=pke |
| By: | David G. Blanchflower; Andrew T. Levin |
| Abstract: | In the wake of a severe recession and a sluggish recovery, labor market slack cannot be gauged solely in terms of the conventional measure of the unemployment rate (that is, the number of individuals who are not working at all and actively searching for a job). Rather, assessments of the employment gap should reflect the incidence of underemployment (that is, people working part time who want a full-time job) and the extent of hidden unemployment (that is, people who are not actively searching but who would rejoin the workforce if the job market were stronger). In this paper, we examine the evolution of U.S. labor market slack and show that underemployment and hidden unemployment currently account for the bulk of the U.S. employment gap. Next, using state-level data, we find strong statistical evidence that each of these forms of labor market slack exerts significant downward pressure on nominal wages. Finally, we consider the monetary policy implications of the employment gap in light of prescriptions from Taylor-style benchmark rules. |
| JEL: | E24 E32 E52 E58 J21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21094&r=pke |
| By: | Roland Bénabou; Davide Ticchi; Andrea Vindigni |
| Abstract: | We analyze the joint dynamics of religious beliefs, scientific progress and coalitional politics along both religious and economic lines. History offers many examples of the recurring tensions between science and organized religion, but as part of the paper's motivating evidence we also uncover a new fact: in both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita. The political-economy model we develop has three main features: (i) the recurrent arrival of scientific discoveries that generate productivity gains but sometimes erode religious beliefs; (ii) a government, endogenously in power, that can allow such innovations to spread or instead censor them; (iii) a religious organization or sector that may invest in adapting the doctrine to new knowledge. Three long-term outcomes emerge. First, a "Secularization" or "Western-European" regime with declining religiosity, unimpeded science, a passive Church and high levels of taxes and transfers. Second, a "Theocratic" regime with knowledge stagnation, extreme religiosity with no modernization effort, and high public spending on religious public goods. In-between is a third, "American" regime that generally (not always) combines scientific progress and stable religiosity within a range where religious institutions engage in doctrinal adaptation. It features low overall taxes, together with fiscal advantages or societal laws benefiting religious citizens. Rising income inequality can, however, lead some of the rich to form a successful Religious-Right alliance with the religious poor and start blocking belief-eroding discoveries and ideas. |
| JEL: | E02 H11 H41 N0 O3 O43 P16 Z1 Z12 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21105&r=pke |
| By: | Damian Whittard (University of the West of England, Bristol) |
| Abstract: | This paper captures the perceptions of both a new academic and his students on the use of the one-minute paper (OMP). Much of the originality of this paper derives from the multi-layered qualitative approach which provides a deeper insight into the direct and indirect mechanism through which the OMP is perceived to work. This paper argues, more than the prevailing literature suggests, that in order to increase the benefits of using the OMP then considerable investment in time is required. The findings show that the academic’s cost in terms of time is greatest when asking ‘lecturer effectiveness’ type questions, but the benefits derived are potentially longer term than standard ‘lecture content’ based question. Students value the use of the OMP, principally because it demonstrates respect for them; this helps to create an atmosphere of trust which can encourage engagement and an active approach to student learning. The research informs a discussion on how practical implementation techniques can be used to maximise the benefits and limit the costs. |
| Keywords: | one-minute paper, economics lecture, students’ perceptions, lecturer effectiveness |
| JEL: | A12 A20 A22 |
| Date: | 2015–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:uwe:wpaper:20151502&r=pke |
| By: | Bezemer, Dirk; Grydaki, Maria; Zhang, L (Groningen University) |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:14016-gem&r=pke |
| By: | Marco Vivarelli |
| Abstract: | This paper is intended to provide an updated discussion on a series of issues that the relevant literature suggests to be crucial in dealing with the challenges a middle income country may encounter in its attempts to further catch-up a higher income status. In particular, the conventional economic wisdom - ranging from the Lewis-Kuznets model to the endogenous growth approach - will be contrasted with the Schumpeterian and evolutionary views pointing to the role of capabilities and knowledge, considered as key inputs to foster economic growth. Then, attention will be turned to structural change and innovation, trying to map - using the taxonomies put forward by the innovation literature - the concrete ways through which a middle income country can engage a technological catching-up, having in mind that developing countries are deeply involved into globalized markets where domestic innovation has to be complemented by the role played by international technological transfer. Among the ways how a middle income country can foster domestic innovation and structural change in terms of sectoral diversification and product differentiation, a recent stream of literature underscores the potentials of local innovative entrepreneurship, that will also be discussed bridging entrepreneurial studies with the development literature. Finally, the possible consequences of catching-up in terms of jobs and skills will be discussed. |
| Keywords: | catching-up, structural change, globalization, capabilities, innovation, entrepreneurship |
| Date: | 2015–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2015/09&r=pke |
| By: | Diego A. Salzman (London South Bank University, London, United Kingdom, and University of Amsterdam); Remco C.J. Zwinkels (Erasmus University Rotterdam) |
| Abstract: | The behavioural approach to decision making under uncertainty combines insights from psychology and sociology into economic decision making. It steps away from the normative homo economicus and introduces a positive approach to human decision making under uncertainty. We provide an overview of the main themes in the behavioural real estate literature from the perspective of different market participants. It can be concluded that there seems to be general agreement that behavioural studies can help explain the inefficiency of real estate markets, but a large component of behavioural decision making in the property markets seems to be undiscovered. |
| Keywords: | real estate markets, market participants, behavioural decision making |
| JEL: | G02 R31 R33 |
| Date: | 2013–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130088&r=pke |
| By: | Koen Vermeylen (University of Amsterdam) |
| Abstract: | This paper uses the Kaldor-Hicks compensation principle to compute the present value (PV) of a non-marginal future event. Three theoretical results stand out: First, decreasing returns to capital create a wedge between the PV of future generations' willingness to pay (WTP) and the PV of their willingness to accept compensation (WTA); second, the discount rates implicit in the computation of the PVs are endogenous, and rising (declining) over time for the future generations' WTP (WTA); and third, decreasing returns to capital may make it impossible to compensate future generations according to their WTA, effectively defeating the tyranny of discounting. A back-of-the-envelope calibration suggests that this last result is realistic in the case of climate change. A cost-benefit analysis based on the Kaldor-Hicks compensation principle may therefore be impossible if futu re generations are entitled to a world without climate change; and an environmental trust fund - no matter how large it is - may be insufficient to adequately compensate future generations. |
| Keywords: | climate change, cost-benefit analysis, discounting, WTP, WTA |
| JEL: | D61 E13 H43 Q51 Q54 |
| Date: | 2013–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130203&r=pke |
| By: | Dragone, Davide (University of Bologna); Ziebarth, Nicolas R. (Cornell University) |
| Abstract: | This paper develops a conceptual framework that can explain why economic development goes along with increases in body weight and obesity rates. We first introduce the concept of novelty consumption, which refers to an increase in food availability due to trade or innovation. Then we study how novel food products alter the optimal consumption bundle and welfare, and possibly lead to changes in body weight. We test our model employing the German reunification as a fast motion natural experiment of economic development. Our data elicit detailed information on East Germans' food consumption, body mass, and diet-related health. After the fall of the Wall, East Germans permanently changed their diet by consuming novel western food products. A significant population share permanently gained weight. This is consistent with our theoretical framework where past affects current consumption, and where novel goods determine consumption changes over time with ambiguous effects on diet-related health. |
| Keywords: | economic development, food consumption, habit formation, learning, novel goods, obesity, nutrition-related health, German reunification |
| JEL: | D11 D12 I12 I15 L66 O10 O33 Q18 R22 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8967&r=pke |