nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒06‒05
eight papers chosen by
Karl Petrick
Western New England University

  2. Conceptualizing the formation and role of expectations before 1950: George Katona's thought By Pierrick Dechaux
  3. Preconditions of world economic crisis and needs for qualitative changes in economic theory and practise By Vladimir Jovanoviæ, Marija Jovanoviæ
  4. Econometrics as a Pluralistic Scientific Tool for Economic Planning: On Lawrence R. Klein's Econometrics By Erich Pinzón Fuchs
  5. Teaching the Economic Way of Thinking Through Op-eds By Joshua C. Hall; Marta Podemska-Mikluch
  6. Managing the climate commons at the nexus of ecology, behaviour and economics By Alessandro Tavoni; Simon Levin
  7. Evolutionary Economic Geography By Ron Boschma; Koen Frenken
  8. The Great Recession, Austerity and Inequality: Evidence from Ireland By Savage, Micheal; Callan, Tim; Nolan, Brian; Colgan, Brian

  1. By: Ivan Bozoviæ, Jelena Bozoviæ (University of Priština, Faculty of Economics, University of Priština, Faculty of Economics)
    Abstract: Economic recession which nowadays has affected economies in the majority of countries, starting with the most developed ones, whilst other countries record negative economic performance in the form of a more significant slowing down of economic growth, raised the question of its overcoming, both among the economic policy creators and among macroeconomic theoreticians. Economic policy measures, which should contribute to the finalization of negative economic movements and reverse them, are primarily oriented towards encouragement of aggregate demand, and in macroeconomics they are known as Keynesian economics. It is quite certain that the causes, and even more the consequences, of incidence and overcoming of economic crisis in the world will always remain to be the main topic of discussion among the entire community, and particularly among academic community. It happens very frequently that economists identify mortgage loans crises as the main nucleus of creating the economic crises, failing thereby almost every time to point out to the dark side i.e. the immoral side of the banks and other financial institutions responsible for granting bad loans. The intention of this paper is to point to the main causes of incidence and spreading of world economic crises. The paper also points towards a very important role and significance of the Keynesian economic theory in overcoming the consequences of such crises and struggle against economic depression.
    Keywords: economic crisis, neo-liberalism, interventionism, Keynesian theory, economic recovery
    JEL: E2 E12 E13 E44
    Date: 2014–10
  2. By: Pierrick Dechaux (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This article analyzes Katona's theory of expectations and compares it to that of Keynes and Hicks. It discusses the implicit and explicit debates on the introduction of psychology in economic theory. The aim of this paper is twofold: define Katona's thought and examine the impact of this work on the debate on expectations in macroeconomics. This paper shows that Katona is the only author, to our knowledge, who develops both an empirical and theoretical research program on expectations that borrows from the epistemology of Keynes. While rediscovering Katona's work, this paper contributes to highlight the forgotten methodology that initiated the construction of confidence (or sentiment) indexes. It also discusses the implicit and explicit debates on the introduction of psychology in economic theory.
    Abstract: Cet article étudie la théorie des anticipations de Katona et la compare à celle de Keynes et de Hicks. Il poursuit deux objectifs : définir la pensée de Katona et examiner son impact dans le débat sur les anticipations en macroéconomie. Ce papier met en évidence que Katona est le seul auteur, à notre connaissance, à développer un programme à la fois empirique et théorique sur les anticipations qui empreinte à l'épistémologie de Keynes. En s'intéressant aux travaux peu étudiés de Katona, cet article remet en avant la méthodologie à l'origine de la construction des indicateurs de confiance. Il discute aussi les débats implicites et explicites sur l'introduction de la psychologie en théorie économique.
    Date: 2015–02
  3. By: Vladimir Jovanoviæ, Marija Jovanoviæ (Pravni fakultet za privredu i pravosuðe, Univerzitet privredna akademija, Novi Sad; College of Economics and Administration, Belgrade)
    Abstract: TMain thesis of this work is that international financial crisis which occurred in 2007 and 2008 year, is only last in line of negative economic events, that rises from theory because of which economy has stopped to examine the phenomena from the rel world and become ideologue based on mathematics. Even those crises where initiated by cutting real wages in many countries in the economic periphery, in Latin America in the late 1970s, those roots can be followed in economic theory in 1950,s when empirical reality has become unpopular in academic circles. On a half development of that theoretical tsunami – from it beginning,s in 1970,s till contemporary financial crises – we supervene on destruction of production capacities of ex Soviet Union. Now it returns back like boomerang – the fading of wealth and social problems are reaching Europe and United States of America. This work represents thesis that these events has to be seen as continuous operation enforce of neoclassical and neo - liberal economics policy's that destroyed real wages and wealth. Processes that took more than three decades. Precondition for reconstruction of system of widespread welfare is apprehension that downfall of widespread welfare is not caused by market failure, but rather by theory failure.
    Keywords: economic crisis, crisis roots, market failure, financial crash, widespread welfare
    JEL: B52 F50
    Date: 2014–10
  4. By: Erich Pinzón Fuchs (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: Lawrence R. Klein (1920-2013) played a major role in the construction and in the further dissemination of econometrics from the 1940s. Considered as one the main developers and practitioners of macroeconometrics, Klein's influence is reflected in his application of econometric modelling “to the analysis of economic fluctuations and economic policies” for which he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1980. The purpose of this paper is to give an account of Klein's image of econometrics focusing on his early period as an econometrician (1944-1950), and more specifically on his period as a Cowlesman (1944-1947). Independently of how short this period might appear, it contains a set of fundamental publications and events, which were decisive for Klein's conception of econometrics, and which formed Klein's unique way of doing econometrics. At least four features are worth mentioning, which characterise this uniqueness. First, Klein was the only Cowlesman who carried on the macroeconometric programme beyond the 1940s, even if the Cowles had already abandoned it. Second, his pluralistic approach in terms of economic theory allowed him not only to use the Walrasian framework appraised by the Cowles Commission and especially by T.C. Koopmans, but also the Marxian and Keynesian frameworks, enriching the process of model specification and motivating economists of different stripes to make use of the nascent econometrics. Third, Klein differentiated himself from the rigid methodology praised at Cowles; while the latter promoted the use of highly sophisticated methods of estimation, Klein was convinced that institutional reality and economic intuition would contribute more to econometrics than the sophistication of these statistical techniques. Last but not least, Klein never gave up what he thought was the political objective of econometrics: economic planning and social reform.
    Date: 2014–10
  5. By: Joshua C. Hall (West Virginia University, College of Business and Economics); Marta Podemska-Mikluch (Gustavus Adolphus College, Department of Economics and Management)
    Abstract: There are many goals an instructor may wish to accomplish in a course on economic principles. For us one goal should be the education of a generation of sensible and active members of civil society. This is an ambitious goal: it requires that students internalize the economic way of thinking and learn to exercise active citizenry. After experimenting with a variety of methods, we have concluded that requiring students to write an op-ed is the most conducive to the development of the economic way of thinking. Here we share what we have learned in the process, hoping that the pedagogical capability of writing an op-ed will encourage others to adopt the assignment into their classrooms.
    Keywords: Engagement, Op-ed, Principles of Economics, Writing
    JEL: A11 A13 A22 D01 D7 D72
    Date: 2015–05
  6. By: Alessandro Tavoni; Simon Levin
    Abstract: Sustainably managing coupled ecological–economic systems requires not only an understanding of the environmental factors that affect them, but also knowledge of the interactions and feedback cycles that operate between resource dynamics and activities attributable to human intervention. The socioeconomic dynamics, in turn, call for an investigation of the behavioural drivers behind human action. We argue that a multidisciplinary approach is needed in order to tackle the increasingly pressing and intertwined environmental challenges faced by modern societies. Academic contributions to climate change policy have been constrained by methodological and terminological differences, so we discuss how programmes aimed at cross-disciplinary education and involvement in governance may help to unlock scholars' potential to propose new solutions.
    JEL: N0
    Date: 2014–11–26
  7. By: Ron Boschma; Koen Frenken
    Abstract: The chapter gives a brief overview of the most recent literature on Evolutionary Economic Geography (EEG). We describe how EEG has provided new and additional insights on a number of topics that belong to the core of the economic geography discipline: why do industries concentrate in space, how do clusters operate and evolve, how are innovation networks structured in space and how do they evolve over time, what types of agglomeration externalities induce urban and regional growth, how do regions diversify, and how do institutions and institutional change matter for the development of new growth paths in regions.
    Keywords: Evolutionary Economic Geography, related variety, regional branching, proximity, path dependence, co-evolution, institutional change
    Date: 2015–05
  8. By: Savage, Micheal; Callan, Tim; Nolan, Brian; Colgan, Brian
    Abstract: The advent of the Great Recession and the widespread adoption of fiscal austerity policies have heightened concern about inequality and its effects. We examine how the distribution of income in Ireland has evolved over the years 2008 to 2013, using data from the CSO?s Survey on Income and Living Conditions. Snapshots of the income distribution show that the greatest falls in income were for the bottom decile (poorest 10 per cent). Longitudinal analysis shows that these sharp falls were not due to decreasing income for those remaining in the bottom decile, but to falling income among those with somewhat higher incomes. Most of those falling into the bottom decile came from the bottom one third of the income distribution.
    Date: 2015–04

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