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on Post Keynesian Economics |
| By: | Harvey Gram (Ph. D. Program in Economics, Graduate Center, CUNY); Geoffrey Harcourt (University of New South Wales, Australia) |
| Abstract: | The great question which has always haunted the type of analysis offered by the MIT economists in answer to Robinson's provocative critique (1953) has always been her own question: how to get into equilibrium? If the notion of "vision at a distance", inherent in dynamic equilibrium analysis (Dorfman, Samuelson, and Solow, 1958) means co-ordination of long-term expectations, recent work shows theory, that "getting into equilibrium" is an impossibility. This vindicates Robinson's position in the capital controversy, at least with respect to the MIT economists. |
| Keywords: | Joan Robinson, dynamic equilibrium |
| JEL: | A10 B30 |
| Date: | 2015–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:cgc:wpaper:009&r=all |
| By: | Esteban Pérez Caldentey; Matías Vernengo |
| Abstract: | The Spanish crisis is generally portrayed as resulting from excessive spending by households, associated with a housing bubble and/or excessive welfare spending beyond the economic possibilities of the country. We put forward a different hypothesis. We argue that the Spanish crisis resulted, in the main, from a widening deficit position in the nonfinancial corporate sector--the most important explanatory factor behind the country's rising external imbalance--and a declining trend in profitability under a regime of financial liberalization and loose and unregulated lending practices. This paper argues that the central cause of the crisis is related to the nonfinancial corporate sector's increasingly fragile financial position, which originated from the financial convergence that followed adoption of the euro. |
| Keywords: | Euro; Macroeconomic Crisis; Spain |
| JEL: | F33 O52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_847&r=all |
| By: | Rambarran, Richard |
| Abstract: | Since the 1970’s, both politically and theoretically, neoliberalism as an ideology has been on a persistent rise to the point where, in the twenty first century, it has garnered hegemonic dominance. Despite several recurring crises in countries since the ascendance of neoliberalism, we yet remain reluctant to point out the political economy philosophy as the root cause of the crises. Instead, many of the academics within Economics prefer to offer bouts of highly technical reasons for the downturn- this is especially true and almost solely applicable to those who practice within the ‘neoclassical’ conjecture of Economics. In a typical Marxian sense, one would have to look no further than the economic system to determine both economic and social outcomes of a country. What dictates that economic system however is the political philosophy of the leaders who guide the economic system- the policy makers. This paper attempts to show the neoliberal political philosophy, as the common thread for major crises within the last two decades. It also proposes a societal trinity for which change is driven through complexed interactions among the political, economic and social spheres. |
| Keywords: | Neoliberalism, Crises, Liberalization, Recession, Financialization, Hegemony |
| JEL: | O11 O19 P12 P16 |
| Date: | 2015–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67410&r=all |
| By: | David Rosnick |
| Abstract: | This issue brief examines widely cited studies on the potential gains from the Trans-Atlantic Trade and Investment Partnership (TTIP) and finds that they would deliver no more than 40 cents per person per day in the U.S., and 0.2 euros per person per day in the EU. These projections are also optimistic, as they result in part from significantly underestimating the costs from patent protections for pharmaceuticals, copyright enforcement and other protections under the TTIP that could increase the price of a product by thousands, or tens of thousands, of percent. |
| Keywords: | TTIP, trade, TPP, terms of trade, growth, patents |
| JEL: | F F1 F4 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2015-20&r=all |
| By: | Ocampo Jos. Antonio |
| Abstract: | This paper proposes a reformed architecture of the international monetary system based on three pillars. The first is a representative apex organization, which can be understood as a transformation of the G-20 into a representative international instituti |
| Keywords: | Financial institutions, International, International economic relations |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-046&r=all |
| By: | Ocampo Jos. Antonio |
| Abstract: | This paper reviews the history and controversies associated with capital account management. It first looks at the transition from the acceptance at the Bretton Woods conference of capital account regulations as a normal policy instrument to the liberaliz |
| Keywords: | Accounting, Capital, Financial institutions, International |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-048&r=all |
| By: | Javier Rodríguez Weber (Programa de Historia Económica y Social, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | Until recently, most studies on income inequality were very limited in their aim and scope: the period under study was restricted to the recent decades and income inequality was seen as a pure outcome of market forces. Nevertheless, things are changing. This paper is part of the growing literature which aims to study the political economy of income inequality in the long run. Using a new set of estimates on income inequality in Chile, the main task of this paper is to build a historical argumentation which focuses on the vicissitudes of the political economy of the income share of the top 1% between 1913 and 1973, an age of economic and political turbulence. |
| Keywords: | Inequality, Top 1%, Chile, Political Economy, Institutions |
| JEL: | D31 O15 N36 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:ude:doctra:41&r=all |
| By: | Goodspeed, Tyler |
| Abstract: | From 1735 to 1751, the Board of Trustees of the Province of Georgia imposed the only ban on slavery among the North American colonies. Exploiting the historical boundary between the 88 counties of Trustee Georgia and the 71 counties that were appended to the colony after 1751, I analyze the effects of this initial institutional difference on subsequent differences in slave dependence, land inequality, income, and poverty. I find that counties that had been covered by the initial Trustee ban subsequently had lower slave population density, fewer farms holding more than 10 slaves, and higher income and lower poverty rates today. I further find that while counties affected by the ban did not have significant differences in pre-Civil War land inequality, productivity, industrial development, or educational investment, their economic output was significantly more diversified and less reliant upon the production of cash crops. Finally, I demonstrate that controlling for pre-war output diversification significantly reduces the estimated relationship between Trusteeship and current income. Results therefore suggest that the effects of initial differences in labor institutions can persist even where those differences are not determined by geography, and that a primary channel of persistence is the path-dependence of early economic specialization. |
| Keywords: | institutions, slavery, inequality, development, history |
| JEL: | N0 O1 Q0 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67202&r=all |
| By: | Gawlik, Remigiusz |
| Abstract: | Socio-economic development can be understood in a number of ways. Jaffee (1998, p. 3) defines this term by saying that it “refers to the ability to produce an adequate and growing supply of goods and services productively and efficiently, to accumulate capital, and to distribute the fruits of production in a relatively equitable manner”. This definition seems to be the most accurate because it combines both leading and sometimes competing approaches to socio-economic development: economic (production, accumulation, efficiency) and sociological (social transition and change and relatively equal distribution of welfare). |
| Keywords: | socioeconomic development, social entrepreneurship |
| JEL: | A13 L26 O10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67328&r=all |
| By: | Robert Simons (Harvard Business School, Accounting and Management Unit) |
| Abstract: | This paper examines contemporary economic theories that focus on the design and management of business organizations. In the first part of the paper, a taxonomy is presented that describes the different types of economists interested in this subject-market economists, regulatory economists, and enlightened economists-and illustrates the extent to which each tribe has been captured by the concept of self-interest. After arguing that this fixation has caused-and is likely to continue to cause-significant harm to our economy, the paper then presents an alternative approach based on a theory of business and discusses the implications for research and teaching. |
| Keywords: | self-interest, economists, moral philosophers, agency theory, regulation, capture, organization design, economic theory, organization theory, management theory, business education, competition, customers, commitment, controls, boundaries. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:16-045&r=all |
| By: | Li, Cheng |
| Abstract: | In this paper, we argue that economics exhibits the properties of both moral science and value-free technique, thereby establishing a dualist view on the two identities of economics. This duality is implied by the fundamental logic of the economic way of thinking − investigating human behavior upon the means-end rationality principle. In this view, on the one hand, economics behaves as a moral science for two reasons: all economic theories and policy discussions are necessarily based on some moral premises about means-end considerations; economics as an analytical approach can be and has been applied to explanations of a wide range of ethical issues. On the other hand, economics remains neutral regarding judgmental positions. This is because economists cannot deal with the comparisons and choices among different value criteria, unless some ethical presuppositions of higher order are given to them. Therefore, economics is indeed featured by both morality and value neutrality. |
| Keywords: | Methodology; Rationality; Moral science; Value-free approach |
| JEL: | A11 B41 D60 |
| Date: | 2015–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67264&r=all |
| By: | Ramón E. López; Eugenio Figueroa B. |
| Abstract: | This paper hypothesizes that fiscal policy is one important factor determining whether or not environmentally and socially sustainable economic growth is possible. We postulate that tax policies affect the incentives to make the economy more or less dependent on natural resources and the environment as factors of production. So-called pro-growth tax policies consisting on a low tax burden, low direct taxes but high indirect ones, affect the composition of factor endowment, often inducing over investment in physical capital and under investment in human capital including education and health. These policies in part explain a structure of production heavily dependent on natural resource-based and environmentally-dirty industries. Also, these tax policies induce high levels of inequality that ultimately may render economic growth socially and politically unsustainable. This analysis has important implications for Chile and other developing countries especially in Latin America which are highly dependent on natural resources and have unequal income distribution. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp411&r=all |
| By: | Cielo Magno (School of Economics, University of the Philippines Diliman) |
| Abstract: | Mineral extraction alone is not sufficient to trigger sustainable development in developing countries. The mainstream paradigm on mining for development suggests that mineral-rich developing countries need to formulate a fiscal policy that can balance the need to maximize fiscal revenue while ensuring that the country has an attractive investment climate. The presence of mining companies in poor remote communities is sufficient to initiate development. In this discussion, it is suggested that the fiscal policy should take into account the state of governance where mining is being conducted, the extent of linkages mining creates in the local economy and whether the Regalian doctrine applies to ownership of minerals. The raise-to-the-bottom approach in designing fiscal policies does not necessarily benefit mineral-rich developing countries. In the case of the Philippines, a more comprehensive development framework is necessary to ensure that mining contribute to the sustainable development of the Philippines. The framework should include: (1) good governance of the public and extractive sectors which entails institutionalization of transparency and accountability mechanisms, implementation of the United Nations guiding principles on business and human rights and strengthening of government's regulatory capacity; (2) effective allocative capacity and capacity to effectively manage the returns from the sector by the government so that the proceeds from mining contribute to sustainable development and ensure intergenerational equity; (3) establishment of linkages between the extractive sector and the rest of the economy to maximize the benefit of the extractive activity; and (4) fiscal policy that reflects fair share in the extraction of resources, the state of mining governance and the environment where extraction is conducted. Fair share in mining includes payment for the minerals owned by the government on top of the regular taxes the government imposes to all industries. |
| Keywords: | mining, natural resource extraction, extractive industry, sustainable development, taxation |
| JEL: | E62 L72 O13 H23 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201512&r=all |
| By: | Asongu, Simplice |
| Abstract: | This survey essay reviews over 200 papers in arguing that in order to achieve sustainable and inclusive development, foreign aid should not orient developing countries towards industrialisation in the perspective of Kuznets but in the view of Piketty. Abandoning the former’s view that inequality will fall with progress in industrialisation and placing more emphasis on inequality in foreign aid policy will lead to more sustainable development outcomes. Inter alia: mitigate short-term poverty; address concerns of burgeoning population growth; train recipient governments on inclusive development; fight corruption and mismanagement and; avoid the shortfalls of celebrated Kuznets’ conjectures. We discuss how the essay addresses post-2015 development challenges and provide foreign aid policy instruments with which discussed objectives can be achieved. In summary, the essay provides useful policy measures to avoid past pitfalls. ‘Output may be growing, and yet the mass of the people may be becoming poorer’ (Lewis, 1955). ‘Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink’ (Amavilah, 2014). Piketty (2014) has led all developing countries to the stream again and a challenging policy syndrome of our time is how foreign aid can help them to drink. |
| Keywords: | Foreign aid; Piketty; Kuznets; Development |
| JEL: | B20 F35 F50 O10 |
| Date: | 2015–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67307&r=all |
| By: | Asongu, Simplice; De Moor, Lieven |
| Abstract: | The policy debate has been shifting from the finance-growth nexus to the finance-inequality relationship. In the transition from Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs), there has been an urgent policy challenge of putting some structure on recent advances in finance for more inclusiveness. The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those in the low-income strata and by what mechanisms? We survey about 170 recently published papers to provide recent advances in finance for inclusive development. The analytical approach consists of first, situating issues of exclusive growth in the context of the literature and then reviewing recent financial inclusion growth strategies. Developed and developing countries are separately engaged in some currents to account for heterogeneity in financial development benefits. Retained financial innovations are structured along three themes, notably: the rural/urban divide, women empowerment and human capital in terms of skills & training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowdfunding , Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative. |
| Keywords: | Finance; Inclusive Growth; Economic Development |
| JEL: | G20 I10 I20 I30 O10 |
| Date: | 2015–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67299&r=all |
| By: | Winters, John V. (Oklahoma State University) |
| Abstract: | The current study examines earnings differences for practicing lawyers by undergraduate major with a focus on economics majors. Some majors do much better than others. Economics majors tend to do very well in both median and mean earnings, and both without and with controlling for individual characteristics. Electrical engineering, accounting, finance, and some other majors also do relatively well. This information is useful for undergraduates planning to attend law school and considering what undergraduate major field to study. Economics appears to be a very good option. |
| Keywords: | college major, earnings, economics major, lawyers, attorneys |
| JEL: | I20 J24 J31 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9416&r=all |
| By: | Paul Johnson (Department of Economics and Public Policy, University of Alaska Anchorage); Qiujie Zheng (Department of Economics and Public Policy, University of Alaska Anchorage) |
| Abstract: | This paper describes a classroom experiment that demonstrates coordination and competition between traders in a network. Students test theoretical predictions concerning the emergence of equilibrium and the division of surplus between buyers and sellers. The experiment is appropriate for use in teaching intermediate microeconomics, industrial organization, transportation economics and game theory. |
| Keywords: | Experimental Economics, Classroom Experiment, Trading in Networks |
| JEL: | A22 B21 C92 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ala:wpaper:2015-03&r=all |