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on Post Keynesian Economics |
| By: | Mariana Mazzucato; L. Randall Wray |
| Abstract: | This paper discusses the role that finance plays in promoting the capital development of the economy, with particular emphasis on the current situation of the United States and the United Kingdom. We define both 'finance' and 'capital development' very broadly. We begin with the observation that the financial system evolved over the postwar period, from one in which closely regulated and chartered commercial banks were dominant to one in which financial markets dominate the system. Over this period, the financial system grew rapidly relative to the nonfinancial sector, rising from about 10 percent of value added and a 10 percent share of corporate profits to 20 percent of value added and 40 percent of corporate profits in the United States. To a large degree, this was because finance, instead of financing the capital development of the economy, was financing itself. At the same time, the capital development of the economy suffered perceptibly. If we apply a broad definition -to include technological advances, rising labor productivity, public and private infrastructure, innovations, and the advance of human knowledge- the rate of growth of capacity has slowed. The past quarter century witnessed the greatest explosion of financial innovation the world had ever seen. Financial fragility grew until the economy collapsed into the global financial crisis. At the same time, we saw that much (or even most) of the financial innovation was directed outside the sphere of production -to complex financial instruments related to securitized mortgages, to commodities futures, and to a range of other financial derivatives. Unlike J. A. Schumpeter, Hyman Minsky did not see the banker merely as the ephor of capitalism, but as its key source of instability. Furthermore, due to "financialisation of the real economy", the picture is not simply one of runaway finance and an investment-starved real economy, but one where the real economy itself has retreated from funding investment opportunities and is instead either hoarding cash or using corporate profits for speculative investments such as share buybacks. As we will argue, financialization is rooted in predation; in Matt Taibbi's famous phrase, Wall Street behaves like a giant, blood-sucking "vampire squid". In this paper we will investigate financial reforms as well as other government policy that is necessary to promote the capital development of the economy, paying particular attention to increasing funding of the innovation process. For that reason, we will look not only to Minsky's ideas on the financial system, but also to Schumpeter's views on financing innovation. |
| Keywords: | Banker as Ephor of Capitalism; Capital Development; Finance; Global Financial Crisis; Innovation; Minsky; Schumpeter |
| Date: | 2015–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2015/14&r=pke |
| By: | João Antonio de Paula (Cedeplar-UFMG); Hugo Eduardo da Gama Cerqueira (Cedeplar-UFMG); Leonardo Gomes de Deus (UFOP); Carlos Eduardo Suprinyak (Cedeplar-UFMG); Eduardo da Motta e Albuquerque (Cedeplar-UFMG) |
| Abstract: | Marx's Notebooks prepared in 1868 and 1869 (excerpts from The Economist and The Money Market Review) are an investigation on the crisis of 1866. Beyond a broad study of that crisis, they are an investigation of an emerging transformation of capitalism. They focus on leading industrial sectors (railways), financial innovations (such as limited liability firms and new types of shares and titles), and follow political measures undertaken in response to that crisis - dynamic new features of a system in its drive for survival. Those Notebooks might be material for a deep revision of his unfinished manuscripts for Volume III. |
| Keywords: | Karl Marx; MEGA; financial innovation; phases of capitalism |
| JEL: | B14 B31 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td515&r=pke |
| By: | Jael, Paul |
| Abstract: | This paper focuses on the debate held in the twenties and thirties of the last century between libertarian economists and socialist economists, following the denial by the first ones of the feasibility of a socialist economy. This controversy is well known to specialists and has been widely commented. It seemed to me useful to initiate non-specialists in an original way: by having the controversy speaking by itself. We review the main contributions and summarise their arguments with, initially, the bare minimum of personal comments. Walrasian general equilibrium serves as a reference for the defenders of market socialism in the controversy. But the concept of competition behind this theory is very incomplete; it is purely passive. It follows that the market socialism which emanates from it is not really a MARKET socialism. It is lacking the competition which innovates. Markets for capital goods are also lacking in theses models. Our paper then turns to a new generation of socialist models involving this real competition. We review two models proposed by Bardhan and Roemer and then exhibit a personal model. This type of model is facing a modern criticism whose central concept is the "soft budget constraint". |
| Keywords: | planning; market socialism; socialist calculation; soft budget constraint; Barone; von Mises; Hayek; Lange; Roemer |
| JEL: | P20 P21 P27 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64255&r=pke |
| By: | Bengi Akbulut; Fikret Adaman; Yahya M. Madra |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bou:wpaper:2015/01&r=pke |
| By: | Rannah Hetherington (The University of Melbourne) |
| Abstract: | The practicum is accepted as being mutually beneficial. Relationships between all members in the supervisory set are a significant component of the pre-service teacher practicum experience. The strength of these relationships supports social justice for pre-service teachers.This qualitative study explores the epistemological beliefs of a group of university based supervisors to determine their perceptions of professional reciprocal relationships. As a newly emerging qualitative methodology, in educational research, cognitive mapping was used to explore and challenge individual and collective perceptions of relationships developed in the practicum. Data derived through the mapping activity represents a subjective ‘collective’ view of what constitutes a professional reciprocal relationship and how these relationships can better support pre-service teacher development, university-school partnerships and inform systemic policy. |
| Keywords: | Cognitive Mapping, professional relationships, teacher education, practicum |
| JEL: | I29 I23 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:1003063&r=pke |
| By: | Richard S. Prawat (Michigan State University) |
| Abstract: | This paper tells the story of the development of a science unit from a unique epistemological perspective—termed “realist constructivism.” The teacher in the realist constructivist approach is not expected to relinquish his or her expert status. Instead, that person adopts a stance, described in recent writings by one of the researchers as a “sage on the side” role that is mid-way between the traditional “sage on the stage” role and that of the inquiry-oriented “guide on the side” (Prawat, 2003). As this metaphor suggests, teachers in this approach play a more direct role than they do in the typical constructivist-oriented approach in science, social studies, and other disciplines. Reflecting this role, the approach can best be described as an “ideas first/inquiry second” variant on active teaching and learning. Data from implementation studies are presented that support this novel approach to science curricula development. |
| Keywords: | Education, Science, Technology |
| JEL: | I29 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:1002971&r=pke |
| By: | Kellee Tsai (Division of Social Science, Hong Kong University of Science and Technology; Division of Political Science, Johns Hopkins University; Institute for Emerging Market Studies, Hong Kong University of Science and Technology) |
| Abstract: | The Xi-Li administration faces the dual challenge of managing state capitalism and shadow banking as China enters a phase of more moderate economic growth. During China's first three decades of reform, private sector development occurred in parallel with prioritization of state-owned enterprises in strategic industries, and growth surged. This pattern of state capitalism rested on an unarticulated bifurcated financing arrangement whereby the formal banking system primarily served public enterprises, while private businesses relied primarily on informal finance. However, China's response to global financial crisis disrupted the preceding equilibrium of financial dualism under state capitalism. Unprecedented expansion of bank lending after 2008 created opportunities for a host of state economic actors- including SOEs, state banks, and local governments—to expand their participation in offbalance sheet activities. |
| Keywords: | China, state capitalism, informal finance, shadow banking, financial development |
| JEL: | G23 G21 O17 P16 P26 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201525&r=pke |
| By: | Arjun Jayadev (University of Massachusetts, Boston); Rahul Lahoti (University of Goettingen); Sanjay G. Reddy (Department of Economics, New School for Social Research) |
| Abstract: | Using newly comprehensive data and tools from the Global Consumption and Income Project or CGIP, covering most of the world and five decades, we present a portrait of the changing global distribution of consumption and income and discuss its implications for our understanding of inequality, poverty, inclusivity of growth and development, world economic welfare, and the emergence of a global ‘middle class’. We show how regional distributions of income and consumption have evolved very differently over time. We also undertake sensitivity analysis to quantify the impact of various choices made in database construction and analysis. We find that levels of consumption and income have increased across the distribution, that the global distribution has become more relatively equal due to falling inter-country relative inequality, and that by some measures global poverty has declined greatly but by others it has hardly declined at all, even over the fifty years. The global middle class has grown markedly in certain countries but only slightly worldwide. Most of the marked changes have occurred after 1990. China’s rapid economic growth is by far the most important factor underlying almost all of them, notwithstanding sharply increasing inequalities within the country. Most improvements outside of China are associated with rapid developing country growth after 2000, and are of unknown durability. Country-experiences vary widely; there is for instance some evidence of ‘inequality convergence’ with previously more equal countries becoming less equal over time and the obverse. We provide support for previous findings (e.g. the replacement of the global ‘twin peaks’ by a unimodal distribution) but also arrive at some conclusions that overthrow old ‘stylized facts’ (e.g. that the Sub-Saharan African countries, and not Latin American ones, have the highest levels of inequality in the world, when measured using standardized surveys). The GCIP provides a resource for ongoing analysis, and forecasting, of developments in the world distribution. |
| JEL: | D30 D31 D60 D63 I30 O10 O15 P50 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1510&r=pke |
| By: | SYLVESTER ADEJO OGBA (KOGI STATE UNIVERSITY,); ELIJAH OJOCHONU OKPANACHI (KOGI STATE UNIVERSITY) |
| Abstract: | The concept of sustainable development can be interpreted in different ways, but at its core is an approach to development that looks to balance different and often competing needs against an awareness of environmental, social and economic limitations in the society. Most often than not, development is driven by one particular need without fully considering the wider or future impacts. The effects of the damages this type of approach can cause should be the concern of all. When the World Commission on Environment and Development (1987) presented their report titled “our common future”, they sought to address the problems of conflicts between environment and development goals by formulating a concise approach to the understanding of the concept. The Postulation is that, both development and the environment, hitherto addressed as separate issues, could be managed in a mutually beneficial way. One implication of not doing so is environmental degradation resulting in climate change. However, the focus of sustainable development is more encompassing than just the environment; it is also about ensuring the strong, healthy and just society. This invariably involves meeting the diverse needs of all people in existing and future communities since we cannot afford to exploit our environment in such a way that would endanger our common future. The contemporary Nigerian society has not shown much effort in this regard. The period between 1989 when the Nigerian policy on sustainable development was formulated and today, has marked a period of intensive political, administrative and to a lesser extent, judicial actions against man’s activities that are delirious to the environment. The ambition of the federal government of Nigeria towards sustainable development after the Koko incidence of 1999 has been great, but her achievement remarkably small. The reason is simply and squarely due to lack of implementation of policies. This paper is basically an assessment of the challenges of sustainable development in Nigeria; the author warns that humans are transforming the planet in ways that could undermine any developmental gains. Hence, he suggests among other things that global principles of sustainable development drawn from the existing United Nations agreements be combined with some recommended proposals to achieve new sustainable developmental goals for Nigeria and other developing nations. The paper employs the philosophical tools of critical analysis and rational justification. It is also prescriptive in the sense that it recommends ways to achieve sustainable development. |
| Keywords: | Sustainable Development, Environment, Philosophy, Nigeria. |
| JEL: | A13 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:1004054&r=pke |