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on Post Keynesian Economics |
| By: | Eric Kemp-Benedict |
| Abstract: | This paper presents a step toward a post-Keynesian dynamic model for long-run policy analysis. It is a multi-sector Harrodian-Kaleckian growth model with locally unstable dynamics contained by a Hicksian floor and ceiling. It adopts a model of biased technological change that links productivity growth with the functional income distribution. The model features endogenous wages, prices, labor and capital productivities, capital utilization, employment, and labor participation. At present it lacks government, financial, and foreign sectors, but despite this it exhibits interesting behavior. The model generates asymmetric business cycles, with a long expansion and a short contraction, as well as long waves and changes in the structure of employment. |
| Keywords: | post-Keynesian, Harrodian-Kaleckian, multiplier-accelerator, technological change |
| JEL: | E11 E17 E22 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1702&r=pke |
| By: | Antonio Claudio Cerqueira (Cedeplar-UFMG); Gilberto Libânio (Cedeplar-UFMG) |
| Abstract: | Using as reference the Extended Post-Keynesian Model (EPKM) – canonical model from this approach to treatment of the relationship between inflation, output dynamic and economic policy – is developed the Structuralist Output Gap Curve (CHPE), an dynamic output equation based on Principle of Effective Demand and Big Government hypothesis, forming dynamics in which transitory deviations from the stochastic trend are related with accelerators coming from consumption, public sector, financial sector and external sector. The CHPE is estimated in panels of countries after defining output gap by a formulation where trends are linearly divided into parts, being obtained, as expected, a parameter of past output gap with a value lesser than unity and where the accelerators are relevant in most groups of countries and periods, in special the extra spending of consumers. The estimates successfully support the proposed approach on output dynamics determinants, confirming the theoretical rule that there is partial inertia on the stochastic rate of economic growth. |
| Keywords: | Post-Keynesian Macroeconomics, Business Fluctuations, Models and Applications |
| JEL: | E12 E32 E47 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td542&r=pke |
| By: | Gianluca Benigno; Luca Fornaro |
| Abstract: | We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent, slumps characterized by unemployment and weak growth. We refer to these episodes as stagnation traps, because they consist in the joint occurrence of a liquidity and a growth trap. In a stagnation trap, the central bank is unable to restore full employment because weak growth depresses aggregate demand and pushes the interest rate against the zero lower bound, while growth is weak because low aggregate demand results in low profits, limiting firms’ investment in innovation. Policies aiming at restoring growth can successfully lead the economy out of a stagnation trap, thus rationalizing the notion of job creating growth. |
| Keywords: | Secular Stagnation, Liquidity Traps, Growth Traps, Endogenous Growth, Multiple Equilibria |
| JEL: | E32 E43 E52 O42 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-22&r=pke |
| By: | Antonio Claudio Cerqueira (Cedeplar-UFMG); Gilberto Libânio (Cedeplar-UFMG) |
| Abstract: | Using as reference the Extended Post-Keynesian Model (EPKM) – canonical model from this approach to treatment of the relationship between inflation, output dynamic and economic policy – is developed the Structuralist Phillips Curve (CPE), an inflationary equation based on markup rule that establishes inflation as a dynamic path possessing partial inertia and that varies with the output gap, the distributive conflict and the external relations. The CPE is estimated in panels of countries after defining output gap by a formulation where trends are linearly divided into parts, being obtained, as expected, a parameter of past inflation with a value lesser than unity and where the parameters of output gap, distributive conflict and external relations are relevant in most groups of countries and periods. The estimates successfully support the proposed approach on inflation determinants, confirming the relevance of partial inertia theoretical rule of inflationary process and being established the distributive conflict and the external relations as central pivots of this dynamic. |
| Keywords: | Post-Keynesian Macroeconomics, Business Fluctuations, Models and Applications |
| JEL: | E12 E32 E47 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td544&r=pke |
| By: | Daniele Tavani (Department of Economics, Colorado State University); Luca Zamparelli (Department of Social Sciences and Economics, Sapienza University of Rome) |
| Abstract: | In this paper, we introduce a twofold role for the public sector in the Goodwin (1967) model of the growth cycle. The government collects income taxes in order to: (a) invest in infrastructure capital, which directly affects the production possibilities of the economy; (b) finance publicly funded research and development (R&D), which augments the growth rate of labor productivity. We study two versions of the model: with and without induced technical change, that is with or without a feedback from the labor share to labor productivity growth. In both cases we show that: (i) provided that the output-elasticity of infrastructure is greater than the elasticity of labor productivity growth to public R&D, there exists a tax rate that maximizes the long-run labor share, and it is smaller than the growth-maximizing tax rate; (ii) the longrun share of labor is always increasing in the share of public spending in infrastructure; (iii) different taxation schemes have an impact on the stability of growth cycles. |
| Keywords: | Public R&D, Goodwin growth cycle, fiscal policy |
| JEL: | D33 E11 O38 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1711&r=pke |
| By: | Rohit Azad (Department of Economics, New School for Social Research); Prasenjit Bose |
| Abstract: | This paper seeks to theoretically analyse the change in growth patterns in post-reform India. While 1991 marks a break in the Indian economy in terms of its opening up, it was not the 1990s which saw spectacular rates of growth such as those seen in the 2000s. Our attempt here is to situate two signi cant booms that the post-reform period has witnessed so far, 2003-04 to 2007-08 and 2009-10 to 2010-11, in a macrotheoretic model. |
| Keywords: | Indian Corporate Sector, Bad Loans, Public Sector Banks |
| JEL: | E12 E22 E32 E44 E52 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1712&r=pke |
| By: | Cedrini, Mario; Magda, Fontana (University of Turin) |
| Abstract: | There is considerable discussion on so-called ‘mainstream pluralism’, that is, on the co-presence of a variety of research programmes in today’s mainstream economics that: 1. significantly deviate from the neoclassical core; 2. are pursued by different, often separate communities of researchers; 3. have their origins outside economics. The literature tends to regard mainstream pluralism as a transitory state towards a new, post-neoclassical, mainstream. This paper advances a new interpretation: it suggests that the changing and fragmented state of mainstream economics is likely to persist over time under the impact of specialization (as a self-reinforcing mechanism) and the creation of new specialties and approaches, also through collaboration with researchers from other disciplines. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201706&r=pke |
| By: | Janet Gornick; Branko Milanovic; Nathaniel Johnson |
| Abstract: | The US has exceptionally high inequality of disposable household income (i.e., income after accounting for taxes and transfers). Among working-age households (those with no persons over age 60), that high level of inequality is caused by a high level of market income inequality (i.e., income before taxes and transfers), paired with a moderate level of redistribution. In this paper, we look more deeply at market income inequality, focusing on its main component – labor income – across a group of 24 OECD countries. We disaggregate the working-age population into household types, defined by the number and gender of the household’s earners and the partnership and parenting status of its members. We concentrate on comparing US results with those of the other OECD countries. Our main finding is that high levels of labor income inequality in the US cut across diverse subgroups. We conclude that within-group inequality of labor incomes in the US is, in almost all groups, high by OECD standards. So it is neither an unusual household composition, nor unusually high mean labor incomes of some groups (nor indirectly, unusually low levels of redistribution), that explain high US disposable income inequality, but instead the fact that high and low labor incomes are universally spread across all household/demographic categories. |
| Keywords: | Wage distribution, earnings distributions, income inequality |
| JEL: | D31 D33 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:692&r=pke |
| By: | Harrison, Mark (The University of Warwick) |
| Abstract: | This paper reviews two decades of research on the political economy of secrecy, based on the records of former Soviet state and party archives. Secrecy was an element of Soviet state capacity, particularly its capacity for decisiveness, free of the pressures and demands for accountability that might have arisen from a better informed citizenry. But secrecy was double-edged. Its uses also incurred substantial costs that weakened the capacity of the Soviet state to direct and decide. The paper details the costs of secrecy associated with “conspirative” government business processes, adverse selection of management personnel, everyday abuses of authority, and an uninformed leadership. |
| Keywords: | abuse of authority, adverse selection, censorship, military outlays, secrecy, state capacity, transaction costs, trust JEL Classification: N44, P37 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:312&r=pke |
| By: | Pajarinen, Mika; Rouvinen, Petri |
| Abstract: | In this brief, we study the cultural dimension of new entrepreneurial activity in Finland. One in ten nascent entrepreneurs in Finland consider themselves to possess (also) a non-Finnish background. The ventures of these multicultural entrepreneurs are more networked and more likely to locate within the Helsinki metropolitan region than other, non-multicultural, ventures. In terms of firm survival and growth, these two groups of ventures are largely similar. |
| Date: | 2017–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:55&r=pke |
| By: | Meara, Katie; Pastore, Francesco; Webster, Allan |
| Abstract: | This study examines the gender wage gap between male and female workers in the US using a cross-section from the Current Population Survey (CPS) It shows that the extent of gender segregation by both industry and occupation is significantly greater than previously supposed. For the wage gap this creates problems of sample selection bias, of non-comparability between male and female employment. To address these problems the study uses a matching approach, which we also extend to a more recent methodological version with a yet stronger statistical foundation – Inverse Probability Weighted Regression Adjustment (IPWRA) – not previously used in related studies. Despite this, doubts remain about even these well founded and appropriate techniques in the presence of such strong gender segregation . To secure even greater precision we repeat the matching analysis for a small number of industries and occupations, each carefully selected for employing similar numbers of men and women. This is an approach that has not previously been explored in the relevant literature. The findings for the full sample are replicated at the level of industry and occupation, where comparability is more reliable. The study supports the view of the existing literature that the gender wage gap varies by factors such as age and parenthood. But it also finds that, even when these and other important “control” variables such as part-time working, industry and occupation are taken into account, a statistically significant gender wage gap remains. |
| Keywords: | Gender Pay Gap,Segregation,Sample Selection Bias,Propensity Score Matching IPWRA,USA |
| JEL: | C31 J16 J31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:40&r=pke |