nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2015‒09‒05
seven papers chosen by
Karl Petrick
Western New England University

  1. Reflecting on new developmentalism and classical developmentalism By BRESSER-PEREIRA, Luiz Carlos,
  2. Methodological, internal and ontological inconsistencies in the conventional micro-foundation of post-Keynesian theory By Christian Schoder
  3. Two Opposing Economic-Literary Critiques of Socialism: George Orwell Versus Eugen Richter and Henry Hazlitt By Makovi, Michael
  4. The BRICS Youth, the Financial Crisis and Job Promotion By Pedro Lara de Arruda; Ashleigh Kate Slingsby
  5. The Political Legacy of American Slavery By Acharya, Avidit; Blackwell, Matthew; Sen, Maya
  6. Modelling the "Animal Spirits" of Bank's Lending Behaviour By Carl Chiarella; Corrado Di Guilmi; Tianhao Zhi
  7. The Brazilian rural development model in the context of green economy By Mattei, Lauro

  1. By: BRESSER-PEREIRA, Luiz Carlos,
    Abstract: This paper, first, distinguishes new developmentalism, a new theoretical system that is being created, from really existing developmentalism – a form of organizing capitalism. Second, it distinguishes new developmentalism from its antecedents, Development Economics or classical developmentalism and Keynesian Macroeconomics. Third, it discusses the false opposition that some economists have adopted between new developmentalism and social-developmentalism, which the author understands as a form of really existing developmentalism; as theory, it is just a version of classical developmentalism with a bias toward immediate consumption. Finally, it makes a summary of new developmentalism – of its main political economy, economic theory and economic policy claims
    Date: 2015–07–23
  2. By: Christian Schoder (Department of Economics, New School for Social Research)
    Abstract: By the aid of a simple but widely accepted model, the conventional micro-foundation of behavioral hypothesis postulated in post-Keynesian theory in the Kaleckian tradition is critically reviewed. Inconsistencies are identied along three dimensions: A methodological inconsistency arises from presenting macroeconomic arguments formally and microeconomic arguments verbally. An internal inconsistency prevails when the micro-considerations for dierent behavioral rules are mutually inconsistent. An ontological inconsistency arises since the postulated behavioral rules are invariant to endogenous changes in the micro-environment whereas the micro-considerations imply them to adjust endogenously. We arrive at two conclusions: First, re-visiting the issue of micro-foundation within the post-Keynesian framework may be a rewarding line of research. Second, the post-Keynesian research paradigm should be open to various forms of consistent micro-foundations as long as the economic mechanism characterized by the model are post-Keynesian.
    Keywords: Post-Keynesian economics, micro-foundations, economic methodology, ontology
    JEL: B41 B50 E12
    Date: 2015–08
  3. By: Makovi, Michael
    Abstract: Orwell's famous fictions, Animal Farm and Nineteen Eighty-Four criticized totalitarian forms of socialism from a Public Choice perspective, assuming that socialism would work as an economic system as long as the proper political institutions were in place to curb the potential for the abuse of power. This is contrasted with two novels by others who took the opposite approach: Richter's Pictures of the Socialistic Future and Hazlitt's Time Will Run Back. These two assumed that the political implementation of socialism would be perfect but that socialism would necessarily turn totalitarian because of the problem of economic calculation. These novels assumed away the Public Choice problem of institutions and the abuse of power and focused on the political implications of socialism as a purely economic system. Contrasting these two sets of novels shows how the Austrian and Public Choice schools criticize socialism in two entirely different ways.
    Keywords: Orwell; Richter; Hazlitt; democratic socialism; market socialism; totalitarianism
    JEL: A12 B24 B25 B31 B51 B53 D70 P11 P20 P30 Z11
    Date: 2015–02–27
  4. By: Pedro Lara de Arruda (IPC-IG); Ashleigh Kate Slingsby (IPC-IG)
    Abstract: Since the 2008 financial crisis there has been an increasing focus on the creation of decent and productive employment for youth. This movement has recently been formally entrenched in the construction of the post-2015 Sustainable Development Goals agenda, under core dimension number 3: Inclusive social development. (...)
    Keywords: BRICS, Youth, Financial Crisis, Job Promotion
    Date: 2014–10
  5. By: Acharya, Avidit (Stanford University); Blackwell, Matthew (Harvard University); Sen, Maya (Harvard University)
    Abstract: We show that contemporary differences in political attitudes across counties in the American South trace their origins to slavery's prevalence more than 150 years ago. Whites who currently live in Southern counties that had high shares of slaves in 1860 are more likely to identify as a Republican, oppose affirmative action policies, and express racial resentment and colder feelings toward blacks. These results cannot be explained by existing theories, including the theory of racial threat. To explain these results, we offer evidence for a new theory involving the historical persistence of racial attitudes. We argue that, following the Civil War, Southern whites faced political and economic incentives to reinforce racist norms and institutions. This produced racially conservative political attitudes, which in turn have been passed down locally across generations. Our results challenge the interpretation of a vast literature on racial attitudes in the American South.
    JEL: N32 N91 O17
    Date: 2014–12
  6. By: Carl Chiarella (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Corrado Di Guilmi (Economics Discipline Group, UTS Business School, University of Technology, Sydney); Tianhao Zhi (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: The idea of “animal spirits” has been widely treated in the literature with particular reference to investment in the productive sector. This paper takes a different view and analyses from a theoretical perspective the role of banks’ collective behaviour in the creation of credit that, ultimately, determines the credit cycle. In particular, we propose a dynamic model to analyse how the transmission of waves of optimism and pessimism in the supply side of the credit market interacts with the business cycle. We adopt the Weidlich-Haag-Lux approach to model the opinion contagion of bankers. We test different assumptions on banks’ behaviour and find that opinion contagion and herding amongst banks play an important role in propagating the credit cycle and destabilizing the real economy. The boom phases trigger banks’ optimism that collectively lead the banks to lend excessively, thus reinforcing the credit bubble. Eventually the bubbles collapse due to an over-accumulation of debt, leading to a restrictive phase in the credit cycle.
    Keywords: animal spirits; contagion; pro-cyclical credit cycle; financial fragility
    JEL: E12 E17 E32 G21
    Date: 2015–08–01
  7. By: Mattei, Lauro
    Keywords: rural development, agricultural development, sustainable development, environmental protection, Brazil, développement rural, développement agricole, développement durable, protection de l'environnement, Brésil, desarrollo rural, desarrollo agrícola, desarrollo sostenible, protección ambiental, Brasil
    Date: 2015

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