nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒04‒02
six papers chosen by
Karl Petrick
Western New England University

  1. "Trump's Bait and Switch: Job Creation in the Midst of Welfare State Sabotage" By Pavlina R. Tcherneva
  2. An empirical analysis of Minsky regimes in the US economy By Leila E. Davis - Joao Paulo A. de Souza y Gonzalo Hernandez; Joao Paulo A. de Souza; Gonzalo Hernandez
  3. Metamorphoses of Value.The Concept of a Commodity in Marx’s Capital. By Andrea Ricci
  4. The Need for and Meaning of Socio Ecological Economics By Spash, Clive L.
  5. Environmental Values in Conservation: Ethics, Economics and Pragmatism By Clive L. Spash
  6. The Relationship between Psychology and Economics: Insights from the History of Economic Thought By Drakopoulos, Stavros A.; Katselidis, Ioannis

  1. By: Pavlina R. Tcherneva
    Abstract: President Trump's faux populism may deliver some immediate short-term benefits to the economy, masking the devastating long-term effects from his overall policy strategy. The latter can be termed "welfare state sabotage" and is a wholesale assault on essential public sector institutions and macroeconomic stabilization features that were built during the New Deal era and ushered in the "golden age" of the American economy. Starting in the late '70s, many of these institutions were significantly eroded by Republicans and Democrats alike, paving the way for the rise of Trump but paling in comparison with what is to come.
    Keywords: Manufacturing; Service Sector; Infrastructure; Full Employment; Inequality; Social Wages; Welfare State; Trickle-down Economics
    JEL: H J21 J38 L8 N12 N60 Z18
    Date: 2017–03
  2. By: Leila E. Davis - Joao Paulo A. de Souza y Gonzalo Hernandez; Joao Paulo A. de Souza; Gonzalo Hernandez
    Abstract: In this paper we analyze Minskian dynamics in the US economy via an empirical application of Minsky's nancing regime classi cations to a panel of non nancial corporations. First, we map Minsky's de nitions of hedge, speculative and Ponzi nance onto rm-level data to describe the evolution of Minskian regimes. We highlight striking growth in the share of Ponzi rms in the post-1970 US, concentrated among small corporations. This secular growth in the incidence of Ponzi rms is consistent with the possibility of a long wave of increasingly fragile nance in the US economy. Second, we explore the possibility of short-run Minskian dynamics at a business-cycle frequency. Using linear probability models relating rms' probability of being Ponzi to the aggregate output gap, which captures short-term macroeconomic uctuations exogenous to individual rms, we nd that aggregate downturns are correlated with an almost zero increased probability that rms are Ponzi. This result is corroborated by quantile regressions using a continuous measure of nancial fragility, the interest coverage ratio, which identify almost zero effects of short-term uctuations on nancial fragility across the interest coverage distribution. Together, these results speak to an important question in the theoretical literature on nancial fragility regarding the duration of Minskian cycles, and lend support, in particular, to the contention that Minskian dynamics may take the form of long waves, but do not operate at business cycle frequencies.
    Keywords: Minsky cycles, nancial fragility, rm behavior
    Date: 2017–02–15
  3. By: Andrea Ricci (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    Abstract: IThe development of the concept of a commodity is pursued from the recognition of an initial analytical moment, different from formal logic, within Marx’s dialectical thought. A consistent interpretation of Marxian categories, from substance to magnitude and measure of value, is proposed. Concepts strongly disputed in literature, like abstract labour and money, find their proper positioning, and real measure provides an operational basis to value assessment of concrete economies. The restoration of the conceptual foundations of Marx’s theory opens the way to further research on the whole theoretical edifice of Capital and analysis of today’s capitalism.
    Keywords: Commodity, Labour theory of value, Marxism, Dialectic, Abstract labour, Money.
    JEL: A12 B14 B51 E40
    Date: 2016
  4. By: Spash, Clive L.
    Abstract: Ecological economics has arisen over a period of three decades with a strong emphasis on the essential need to recognise the embeddedness of the economy in the biophysical. However, that element of realism is not matched by an equally well informed social theory. Indeed the tendency has been to adopt mainstream economic concepts, theories and models formulated of the basis of a formal mathematical deductivist approach that pays little or no attention to social reality. Similarly mainstream economic methods are employed as pragmatic devices for communication. As a result ecological economics has failed to develop its own consistent and coherent theory and failed to make the link between the social and the economic. In order to reverse this situation the social and political economy must be put to the fore and that is the aim of social ecological economics. This paper provides a brief overview of the arguments for such a development. The prospect is of unifying a range of critical thought on the social and environmental crises with the aim of informing the necessary social ecological transformation of the economy.
    Keywords: ecological economics, social economy, political ecology, political economy, social ecological transformation, biophysical reality, mainstream economics, neoliberal environmentalism
    Date: 2017–03
  5. By: Clive L. Spash
    Abstract: Conservation today is facing the challenges of neoliberal world political forces dominated by bankers, financiers and multinational corporations who care little for protecting anything that does not pay them a personal reward. The standard counter to such a utilitarian economic philosophy is to point out alternative ethical approaches, which have for sometime been central to conservation arguments. However, in recent times, environmental non-governmental organisations, including conservation biologists, have increasingly pushed a narrow economic rhetoric, and converted themselves into allies of the ‘economic growth at any cost’ school of thought, in an attempt to win the favour of corporations under a new environmental pragmatism and New Conservation. This discussion paper critically analyses these topics as given in a lecture to the international conservation community. Presented here is the full transcript of the plenary presentation given to 2000 conservation biologist at their international meeting in Montpellier in 2015. The talk received an unprecedented standing ovation from the audience. It was given as a counter position to that of Peter Kareiva who presented immediately preceding this lecture, and was followed by a debate between Kareiva and Spash. The central topic was the New Conservation being championed by Kareiva and his boss, Mark Tercek, at The Nature Conservancy. As this lecture notes, this is part of a broader ideological move towards neoliberalism in conservation biology, and more generally the environmental movement, in the guise of a pragmatic use of economics. The arguments presented here are more fully understood when accompanied by the original presentation overheads (available online from However, the transcript on its own makes clear the bias, flaws and contradictions in the logic being presented as New Conservation. The structure of argument covers: the motivations behind the increasing use of economic valuation and policy instruments, the economics of optimal extinction that lies behind this, the implications that appealing to individual preferences for creating money numbers, why this does not provide protection or lead to conservation, how corporations are using the environmental movement for their own ends, and the implicit ideology of the New Conservation as a conservative technocracy. Some references have been added to the transcribed talk.
    Keywords: Conservation biology, economic valuation, environmental values, ethics, corporate power, biodiversity offsetting, species preservation, public preferences, environmentalism of the poor, technocracy, neoliberalism, new environmental pragmatism, Tony Juniper, New Conservation, Peter Kareiva, Mark Tercek, The Nature Conservancy
    Date: 2017
  6. By: Drakopoulos, Stavros A.; Katselidis, Ioannis
    Abstract: Psychological ideas had always played a role on the formation of economic thought as can be seen in the works of many influential pre-classical and classical authors. Up to the beginning of the 20th century, there was almost no methodological objection regarding the incorporation of ideas from psychology into economic theories. After this period, a fundamental shift in mainstream economics took place which is also known as the Paretian turn. This conceptual change, initiated mainly by Vilfredo Pareto and completed with the emergence of the theories of choice in the first decades of the 20th century, attempted to expel all psychological notions from economic theory. However, in the last three decades, the increasing appeal of subjective well-being research and especially of the new behavioral economics, re-brought the topic onto the surface. In order to better comprehend and to contribute to the recent discussion concerning the relationship between the two disciplines, the study of relevant views found in history of economic thought is necessary. The paper starts with a brief sketch of the history of the relationship between economics and psychology, focusing also to the recent literature which points to a reconsideration of this relationship. After an examination of psychological ideas found in influential pre-marginalist writers, the paper discusses the arguments supporting the case for the interaction between the two fields. It also suggests that the work of Richard Jennings can be seen as the peak of the early interaction between economics and psychology. Finally, it considers the relevance of these arguments for the current debate concerning the relationship between economics and psychology.
    Keywords: History of Economic Thought, Economics and Psychology, Economic Methodology; Relation of Economics to other Disciplines
    JEL: A12 B00 B40
    Date: 2017–03

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