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on Post Keynesian Economics |
| By: | Thomas I. Palley |
| Abstract: | This paper examines the relationship between inequality and growth in the neo-Kaleckian and Cambridge growth models. The paper explores the channels whereby functional and personal income distribution impact growth. The growth - inequality relationship can be negative or positive, depending on the economy's characteristics. Contrary to widespread claims, inequality per se does not impact growth through macroeconomic channels. Instead, both growth and inequality are impacted by changes in the underlying forms and pattern of income payments. However, inequality is critical at the microeconomic level as it explains differences in household propensities to consume which are at the foundation of neo-Kaleckian and Cambridge growth theory. |
| Keywords: | Income Inequality, growth, neo-Kaleckian theory, Cambridge growth theory |
| JEL: | E0 E12 E25 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:167-2016&r=pke |
| By: | Sidney G. Winter |
| Abstract: | This essay first reviews what Nelson and Winter were trying to accomplish when they put forward An Evolutionary Theory of Economic Change (Belknap Press, Harvard, 1982). It then does a fast-forward to controversies and contributions in the recent past, and speculates on where the intellectual enterprise might be headed from here. The issues involved in the original motivations are definitely alive and well. Aside from the review of the basic issues behind the NW project, an important theme here is that an evolutionary approach to economics entails a degree of engagement with the realities of business organization and the quest for profit that has no parallel in mainstream economics. Thus it makes sense in retrospect that the evolutionary program has proved more influential in other research fields, including strategic management, technology studies and organization theory, than it is in economics proper. Recent controversies underscore the continuing existence of a challenging research agenda featuring the interactions among the dynamic processes at different levels - individuals, firms and market environments. |
| Date: | 2016–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/22&r=pke |
| By: | Martin Guzman (Columbia University); Peter Howitt (Brown University) |
| Abstract: | This paper analyzes what assumptions on formation of expectations are consistent with Minsky’s Financial Instability Hypothesis (FIH) and its corollaries. The FIH establishes that financial relations evolve over time turning a stable system into an unstable one. Financial crises would be more likely to occur, and more severe if they occur, the longer the previous crisis recedes into the past. We show that the hypothesis is consistent with assumptions on formation of expectations that imply learning from realization of states and inconsistent with the assumption of full information rational expectations. |
| Keywords: | Wealth distribution, income distribution, Cambridge theory. |
| JEL: | D84 E32 F34 G01 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:33&r=pke |
| By: | Michael, Bryane; Zhao, Simon |
| Abstract: | How far do China’s property prices need to drop in order to send the country into a recession? What does this question tell us about the way Bubble Economies work? In this paper, we develop a theory of Bubble Economics – non-linear and often “systemic” (in the mathematical sense of the word) forces which cause significant misallocations of resources. Our theory draws on the standard elements of most stories of Bubble Economics, looking at the way banking, construction, savings/investment, local government and equities sectors interact. We find that Bubble Economies’ GDP growth can depend on property prices changes differently at different times -- depending on risks building up in the economy. We argue that a tacit, implicit Bubble Risk Factor might provide a way of understanding a key variable academics and practitioners omit when they try to explain how economies (mis)allocate resources during bubbles. A 15%-20% property price drop could cause recession, if China’s economy resembles other large economies having already experienced property-related asset crises. However, a 40% decline would not be out of the question. |
| Keywords: | China recession,bubble economics,fragility,housing bubble |
| JEL: | D58 N15 L85 G01 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:141314&r=pke |
| By: | Anirban Chakraborti; Dhruv Raina; Kiran Sharma |
| Abstract: | In the light of contemporary discussions of inter and transdisciplinarity, this paper approaches econophysics and sociophysics to seek a response to the question -- whether these interdisciplinary fields could contribute to physics and economics. Drawing upon the literature on history and philosophy of science, the paper argues that the two way traffic between physics and economics has a long history and this is likely to continue in the future. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1605.08354&r=pke |
| By: | RAINER KATTEL; LEONARDO BURLAMAQUI |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2014:073&r=pke |
| By: | Giovanni Dosi; Maria Enrica Virgillito |
| Abstract: | This work, which shall contribute to the Fest "A Just Society: Honouring Joseph Stiglitz", discusses a major unifying theme in Joe Stiglitz monumental work, namely, the analysis of economies characterised by persistent learning and coordination hurdles. In his analysis Joe is in many respects a "closet evolutionist" who in fact highlighted and explored many evolutionary properties of contemporary economies in a Schumpeterian spirit. And he went further introducing genuinely Keynesian properties e.g. coordination failures and the possibility of path-dependent multiplicity of growth trajectories which are far and beyond Schumpeterian concerns. In this short essay, we shall illustrate this point with reference to some of Stiglitz works, out of many, linking them with significantly overlapping contributions from the evolutionary camp. We group them by two major themes, namely, the consequences of learning and dynamic increasing returns, and "Keynesian" coordination failures with the ensuing possibility of multiple growth paths, fluctuations, small and big crises. |
| Keywords: | Stiglitz, Learning, Coordination Hurdles, Growth Trajectories, Knowledge, Information |
| Date: | 2016–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/20&r=pke |
| By: | JOANILIO RODOLPHO TEIXEIRA; RICARDO AZEVEDO ARAUJO |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2014:070&r=pke |
| By: | FRANKLIN SERRANO; FABIO FREITAS |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:107&r=pke |
| By: | ANDRE RONCAGLIA DE CARVALHO |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:008&r=pke |
| By: | Antonio Damasio (Brain and Creativity Institute, University of Southern California, Los Angeles); Hanna Damasio (Brain and Creativity Institute, University of Southern California, Los Angeles) |
| Abstract: | In its standard format, the concept of homeostasis refers to the ability, present in all living organisms, of continuously maintaining certain functional variables within a range of values compatible with survival. The mechanisms of homeostasis were originally conceived as strictly automatic and as pertaining only to the state of an organism’s internal environment. In keeping with this concept, homeostasis was, and still is, often explained by analogy to a thermostat: upon reaching a previously set temperature, the device commands itself to either suspend the ongoing operation (cooling or heating), or to initiate it, as appropriate. This traditional explanation fails to capture the richness of the concept and the range of circumstances in which it can be applied to living systems. Our goal here is to consider a more comprehensive view of homeostasis. This includes its application to systems in which the presence of conscious and deliberative minds, individually and in social groups, permits the creation of supplementary regulatory mechanisms aimed at achieving balanced and thus survivable life states but more prone to failure than the fully automated mechanisms. We suggest that an economy is an example of one such regulatory mechanism, and that facts regarding human homeostasis may be of value in the study of economic problems. Importantly, the reality of human homeostasis expands the views on preferences and rational choice that are part of traditionally conceived Homo economicus and casts doubts on economic models that depend only on an “invisible hand†mechanism. |
| Keywords: | Homeostasis; Economics; Consciousness |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:38&r=pke |