nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒04‒23
nine papers chosen by
Karl Petrick
Western New England University

  1. Institutions as Emergent Phenomena: Redefining Downward Causation By Nicolas Brisset
  2. Speculation rather than enterprise? Keynes' beauty contest revisited in theory and experiment By Kene Boun My; Camille Cornand; Rodolphe Dos Santos Ferreira
  3. Theory and Practice of Crisis in Political Economy: the Case of the Great Recession in Spain By Juan Pablo Mateo
  4. Stagnation traps By Benigno, Gianluca; Fornaro, Luca
  5. The tragedy of modern economic growth: A call to business to radically change its purpose and practices By Johnson, Thomas
  6. The Spirits of Neoliberal Reforms and Everyday Politics of the State in Africa By Béatrice Hibou; Boris Samuel; Laurent Fourchard
  7. In-Work Poverty in the United States By Kenworthy, Lane; Marx, Ive
  8. Psychology into economics: fast and frugal heuristics By Schilirò, Daniele
  9. Engaged Learning in MBA Programs: Hands-on Microfinance By Warner Woodworth

  1. By: Nicolas Brisset (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The concept of emergence is frequently used in the social sciences in order to characterize social institutions. Nevertheless, philosophy of mind argues that the idea of emergence is problematic because it encompasses the dubious notion of downward causation, i.e. the fact that an entity at a given ontological level might have a causal influence on lower level entities. This work shows that although it is problematic in some fields, emergence is an ontological feature of the social world. In order to justify this point of view and to show how institutions relate to individuals’ actions, we define an institution as an exogenous device, which enables us to show that the relationship between institution and individual actions is not only a causal one but also an intersubjective and a constitutive one.
    Keywords: Emergent Phenomena, Institution, Downward Causation, Convention.
    Date: 2016–04–11
  2. By: Kene Boun My (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Camille Cornand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Rodolphe Dos Santos Ferreira (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In Keynes' beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty. Abstract In Keynes' beauty contest, agents make evaluations reflecting both an expected fun
    Keywords: dispersed information,public information,beauty contest,coordination,experiment
    Date: 2017
  3. By: Juan Pablo Mateo (Department of Economics, New School for Social Research and University of Valladolid)
    Abstract: This paper addresses the Marx´s theory of crisis in order to analyze the Great Recession in Spain, a peripheral economy within the Eurozone. It is shown the underlying problem in the capacity to generate surplus value behind the housing bubble, which in turn explain some particularities related to the capital composition and productivity, as well as wages and finance. The document also carries out a critic of both orthodox and heterodox approaches that focus i) on a profit squeeze caused by labor market rigidities, ii) underconsumption because of stagnant wages, as well as iii), finances: interest rates and indebtedness.
    Keywords: Theory of crisis, profit rate, Spain, housing bubble, interest rates, wages
    JEL: B14 E11 E20 E43 J30
    Date: 2017–04
  4. By: Benigno, Gianluca; Fornaro, Luca
    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. JEL Classification: E32, E43, E52, O42
    Keywords: Endogenous Growth, Growth Traps, Liquidity Traps, Multiple Equilibria, Secular Stagnation
    Date: 2017–03
  5. By: Johnson, Thomas
    Abstract: It is now clear that endlessly growing consumption of resources in the global human economy imperils Earth’s life-sustaining biosystem and threatens human existence as we know it. Long-term sustainability of human and non-human life can be achieved only by creating an entirely new economy that eschews the current economy’s pursuit of continuous growth and concentrates, instead, on re-focusing human activities from the global to the local level in organizations that exist to fulfill genuine and concrete human and non-human needs, not to maximize financial wealth of corporations, their shareholders and their top managers. However, impeding this move to a new economy is the widespread belief that “accounting is the language of business.” This article proposes that the concrete ecological principles underlying Earth’s life-restorative natural ecosystems provide a much more appropriate language to guide a sustainable human economy than the abstract language of accounting and finance.
    Keywords: Modern Economics, Change, Business Purpose, Sustainability
    JEL: N0 N01
    Date: 2017–03
  6. By: Béatrice Hibou (Centre de recherches internationales); Boris Samuel; Laurent Fourchard (Centre de recherches internationales)
    Abstract: This book, composed of articles first published in the journal Politique africaine, proposes an original interpretation of neoliberalism in Africa. Instead of seeing neoliberal reforms as intrinsically destructive of the post-colonial state, the authors, who include some of Africa’s best-known social scientists, focus on the resilience and adaptability of African state structures, economic systems, and social survival mechanisms and examine the diversity of responses to neoliberalism in what the editors call the “everyday politics of the state.” In essays that range from diverse theoretical or historical discussions to close studies of the dynamics of specific reforms in particular places, they argue against univocal interpretations of the effects of neoliberalism. They show that the African state, far from disappearing, is adapting and reconfiguring itself in fascinating new social realities “co-constructed” by state action as well as by the improvisations of communities and other private actors. (Publisher's abstract)
    Keywords: Africa; Neoliberalism; Reform
    Date: 2016–12
  7. By: Kenworthy, Lane (University of California, San Diego); Marx, Ive (University of Antwerp)
    Abstract: In-work poverty became a prominent policy issue in the United States long before the term itself acquired any meaning and relevance in other industrialized countries. With America's embrace of an employment-centered antipoverty strategy, the working poor have become even more of an issue. This paper reviews some key trends, drivers and policy issues. How much in-work poverty is there in the United States? How does the US compare to other rich democracies? Has America's in-work poverty rate changed over time? Who are the in-work poor? What are the main drivers of levels and changes in in-work poverty? Finally, what are the prospects for America's working poor going forward?
    Keywords: poverty, employment, wages, United States
    JEL: I3
    Date: 2017–03
  8. By: Schilirò, Daniele
    Abstract: The present essay focuses on the fast and frugal heuristics program set forth by Gerd Gigerenzer and his fellows. In particular it examines the contribution of Gigerenzer and Goldstein (1996) ‘Reasoning the Fast and Frugal Way: Models of Bounded Rationality’. This essay, following the theoretical propositions and the empirical evidence of Gigerenzer and Goldstein, points out that simple cognitive mechanisms such as fast and frugal heuristics can be capable of successful performance in real world, without the need of satisfying the classical norms of rational inference.
    Keywords: behavioral economics; heuristics; biases; fast and frugal heuristics
    JEL: D0 D10 D80
    Date: 2015–11
  9. By: Warner Woodworth (NGOs Worldwide)
    Abstract: Today's students in business schools are increasingly passionate about using their skills to change the world. This paper provides an opportunity to gain a vision for how professors may "juice" their classes by integrating management theory with real world problems. There are a growing number of colleges that seek practical and meaningful ways to get students involved in community service. Increasingly university students want the praxis of learning, in other words they seek the conceptual plus the practical. Often, these ideas are referred to as service learning or action research. They usually consist of a couple months of activities during the semester as pro bono consultants to local government agencies, nonprofit organizations, and so forth. The essence of this paper is the establishing of a new start-up venture with students that continues with the involvement of other students in the future, well beyond a given semester. The idea was to create an ongoing micro-enterprise program that would generates superb learning for current students, and build further in the future from one class to another.
    Keywords: Teaching, Practice, Microfinance, MBA, Social Entrepreneurship

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