nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2016‒11‒06
four papers chosen by
Karl Petrick
Western New England University

  1. How secular is the current economic stagnation? By Maria Roubtsova
  2. Has Trade Been Driving Global Economic Growth? By Leon Podkaminer
  3. New Economic Geography: history and debate By José M. Gaspar
  4. ¿Tenemos algo que aprender de Keynes ahora? By Antonio Torrero Mañas

  1. By: Maria Roubtsova (Centre d'Economie de l'Université de Paris Nord (CEPN))
    Abstract: From the burst of the dotcom bubble in 2000, until the global financial crisis that started in August 2007, the global economy was growing. During that phase, macroeconomics went through an era of general optimism around the idea of having reached a great moderation, with high steady growth and low stable inflation. Central bankers thought they managed to dampen the economic cycles. This era came to an end following the meltdown which started with the global financial crisis of 2007. And as among economic agents, macroeconomists’ general state of mind went from optimism to pessimism. Almost ten years since the beginning of the crisis, growth is not back to its pre-crisis trends. Therefore, macroeconomists are debating the notion of a secular stagnation. Is the economy on a long-term stagnation trend, if so, for what reasons, and how to address this situation? This paper offers a critical review of the debates among macroeconomists around this notion of secular stagnation, a concept which was invented by Alvin Hansen following the global economic crisis of the 1930s, and was brought back into the public debate largely by Lawrence Summers since the end of 2013. This literature review starts with a brief synthesis of the original debate about secular stagnation, launched by Hansen in 1938, and ended in the mid-1950s, since these debates inspired contemporary theorists. The second part highlights the main elements of neoclassical explanations for secular stagnation. The third part focuses on the Minskian idea of the end of a debt super-cycle. The last part offers a contemporary reading of the unleashing of the contradictions of capitalism, and the tendency of mature capitalism to generate oligopolies, as a cause for long stagnation.
    Keywords: macroeconomics, secular stagnation, balance sheet recession, financialization, private debt, growth and distribution
    JEL: E39 E44 E66 G01
    Date: 2016–10
  2. By: Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract The last 50 years have produced a series of revolutionary technological changes. These decades have also witnessed a truly revolutionary systemic change at the global level. The change started with step-wise internal liberalisations and deregulations in the major industrialised countries. The internal systemic changes have been synchronised with the consecutive waves of liberalisation of international economic relations. Trade liberalisations (cuts in tariff levels, progressive removal of many non-tariff barriers to trade) were followed by consecutive waves of liberalisation of capital flows to a large degree completing the process of globalisation. Advancing globalisation seems to have been paralleled by the global economic growth becoming progressively slower and unstable. Using the standard tools of time series econometrics (VEC, Granger non-causality testing, ARDL) the paper suggests that trade has not been driving global economic growth (or even that expanding trade may have slowed down global output growth). Large and persistent trade imbalances which have become typical since the mid-1970s are just one possible reason for trade no longer playing the positive role assigned to it in the trade theories. The second reason relates to the ‘race-to-the-bottom’ tendencies with respect to the wage rate which have developed under globalisation. These tendencies may have been responsible for the persistent shortage of aggregate demand at the global level and – consequently – weakening global output growth.
    Keywords: world income, world trade, globalisation, wage-led growth, VEC, Granger causality
    JEL: F43 F15 F16 O47 O49
    Date: 2016–10
  3. By: José M. Gaspar (Rua Dr. Roberto Frias, 4200-464 Porto PORTUGAL)
    Abstract: This paper aims to synthesize the main conceptual and ontological discussion around the field of New Economic Geography. It starts out by laying down the fundamental reasons and motivations that led to the surge of New Economic Geography and provides the background in adjacent fields of economic theory which made this possible. I then provide an overall assessment of the state of the art in NEG and track the intellectual evolution of the field since the nineties up to the present, focusing on the intrinsic criticism that it has been subject to throughout its history. This criticism has its roots in the different ontological conceptions of geography (space) and history (time), as well on the methodological differences, between economists and geographers. Another concern of this paper is to analyze the evolution of the debate and communication between geographical economists and economic geographers.
    Keywords: economic geography; geography and history; ontological debate;
    JEL: N7 N9 R12
    Date: 2016–10
  4. By: Antonio Torrero Mañas
    Abstract: En este breve ensayo el Pfsor. Torrero plantea la vigencia del pensamiento de Keynes en la actualidad, especialmente en tres puntos: el exceso de ahorro o el déficit de inversión; la existencia de instituciones financieras privadas con sus propias normas y los problemas que se derivan de ello; y, la importancia de la incertidumbre. Este úlimo punto constituye el foco central del ensayo del que se saca la importante conclusión de que es necesario adecuar las instituciones a la aceptación de que la incertidumbre radical existe, y no podemos comportarnos como si fuera posible transformarla en riesgo susceptible de medición. Por cometer este error nos encontramos inmersos todavía en la crisis que comenzó en 2008.
    Keywords: Crisis Financiera, Keynes, Riesgo, Incertidumbre
    Date: 2016–10

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