nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒05‒28
nine papers chosen by
Karl Petrick
Western New England University

  1. "On the Centrality of Redemption: Linking the State and Credit Theories of Money through a Financial Approach to Money" By Eric Tymoigne
  2. Structural Change, Fundamentals and Growth: A Framework and Case Studies By Margaret McMillan; Dani Rodrik; Claudia Sepulveda
  3. Sraffa et Leontief By Yoann Verger
  4. From planning to policy: Half a century of the CDP By Daniel Gay
  5. Trump's success and its impact for the next elections in Europe By Enste, Dominik
  6. The political economy of stability in Western countries : Wicksell lectures, Stockholm, 2nd and 4th of May By von Weizsäcker, Carl Christian
  7. Assessing the role of grammar schools in promoting social mobility By Simon Burgess; Claire Crawford; Lindsey Macmillan
  8. Are less developed countries more exposed to multinational tax avoidance? Method and evidence from micro-data By Niels Johannesen; Thomas Tørsløv; Ludvig Wier
  9. Fiscal policy, inequality, and the poor in the developing world By Nora Lustig

  1. By: Eric Tymoigne
    Abstract: The paper presents a financial approach to monetary analysis that links the credit and state theories of money. A premise of the functional approach to money is that "money is what money does." In this approach, monetary and mercantile mechanics are conflated, which leads to the conclusion that unconvertible monetary instruments are worthless. The financial approach to money strictly separates the two mechanics and argues that major monetary disruptions occurred when the two were conflated. Monetary instruments have always been promissory notes. As such, their financial characteristics are central to their value and liquidity. One of the main financial requirements of any monetary instrument is that it be redeemable at any time. As long as this is the case, the fair value of an unconvertible monetary instrument is its face value. While the functional approach does not recognize the centrality of redemption, the paper shows that redemption plays a critical role in the state and credit views of money. Payments due to issuer and/or convertibility on demand are central to the possibility of par circulation. The paper shows that this has major implications for monetary analysis, both in terms of understanding monetary history and in terms of performing monetary analysis.
    Keywords: Credit Theory of Money; State Theory of Money; Net Present Value; Monetary Systems
    JEL: E31 E42 G12
    Date: 2017–05
  2. By: Margaret McMillan; Dani Rodrik; Claudia Sepulveda
    Abstract: Developing countries made considerable gains during the first decade of the 21st century. Their economies grew at unprecedented rates, resulting in large reductions in extreme poverty and a significant expansion of the middle class. But more recently that progress has slowed with an economic environment of lackluster global trade, not enough jobs coupled with skills mismatches, continued globalization and technological change, greater income inequality, unprecedented population aging in richer countries, and youth bulges in the poorer ones. This essay examines how seven key countries fared from 1990-2010 in their development quest. The sample includes seven developing countries—Botswana, Ghana, Nigeria, Zambia, India, Vietnam and Brazil —all of which experienced rapid growth in recent years, but for different reasons. The patterns of growth are analyzed in each of these countries using a unifying framework which draws a distinction between the “structural transformation” and “fundamentals” challenge in growth. Out of these seven countries, the traditional path to rapid growth of export oriented industrialization only played a significant role in Vietnam.
    JEL: O11
    Date: 2017–05
  3. By: Yoann Verger (INRA - Institut National de la Recherche Agronomique)
    Abstract: Sraffa et Leontief sont souvent présentés comme deux auteurs proches en termes de théorie économique; cet article fait le point sur cette supposée proximité, en se penchant sur l'estime réciproque que se portaient Sraffa et Leontief, et en décrivant rapidement les présupposés théoriques à la base de leurs modèles.
    Keywords: Sraffa,Leontief,Input-output model,Neoclassical,Distribution,Price
    Date: 2017–04–20
  4. By: Daniel Gay
    Abstract: The United Nations Committee for Development Policy (CDP) comprises 24 independent specialists from a variety of disciplines. It advises the UN Economic and Social Council on emerging economic, social and environmental issues relevant to sustainable development and international co-operation. The paper argues that since its launch in 1965 the CDP has at times struggled to make an impact, but that it has been most effective when it has been at its most creative and when it has broken with convention. It helped put into practice the target that developed countries should devote 0.7% of their gross national income to official development assistance. The Committee created the least developed countries category and continues to monitor and update membership of the group. Its members were prominent in the genesis of the human development approach and continue to conduct new work in the areas of governance, productive capacity and sustainable development.
    Keywords: aid, human development, least developed countries, official development assistance, sustainable development, United Nations
    JEL: F02 N01 O1 O2 O15 O19
    Date: 2017–04
  5. By: Enste, Dominik
    Abstract: Donald Trump is now the 45th president of the USA. Behavioral economics can explain why he was successful even though his positions are somewhat controversial. Furthermore, his success raises critical implications for Europe's next elections. Some of the main reasons for the success of populist politicians are explained.
    Date: 2017
  6. By: von Weizsäcker, Carl Christian (Center for Mathematical Economics, Bielefeld University)
    Date: 2017–05–10
  7. By: Simon Burgess (Department of Economics, University of Bristol); Claire Crawford (Department of Economics, University of Warwick and Institute of Fiscal Studies); Lindsey Macmillan (Department of Social Science, University College London)
    Abstract: One of the main motivations given for the proposed new expansion of grammar schools in England is to improve social mobility. We assess the role of existing grammar schools in promoting social mobility by examining a) access to grammar schools, differentiating among the 85 per cent non-poor pupils, and b) the higher education outcomes of those who attend a grammar school relative to those who just miss out and relative to those who attend similar schools in non-selective areas. We find stark differences in grammar school attendance within selective areas by SES, even when comparing pupils with the same Key Stage 2 attainment. We also find that grammar school pupils are more likely to participate in higher education, and attend a high-status university than those who just miss out in selective areas. However, conditional on attendance and prior attainment, they do not perform as well at university. Worryingly, those who miss out on grammar places in selective areas who are high-attaining at primary school are significantly less likely to participate in university, attend a high-status university or achieve a good degree classification compared to equivalent pupils in non-selective areas. This highlights the harm that selective systems cause to those who do not make it into grammar schools. Taken together, these inequalities in access and outcomes suggest that grammar schools do not promote social mobility and actually work against it.
    Keywords: Grammar schools; Social mobility
    JEL: I20 I24
    Date: 2017–05–17
  8. By: Niels Johannesen; Thomas Tørsløv; Ludvig Wier
    Abstract: We use a global dataset with information on 210,000 corporations in 102 countries to investigate whether cross-border profit shifting by multinational firms is more prevalent in less developed countries. We propose a novel technique to study aggressive profit shifting and improve the credibility of existing techniques.Our results consistently show that the sensitivity of reported profits to profit-shifting incentives is negatively related to the level of economic and institutional development. This may explain why many developing countries opt for low corporate tax rates in spite of urgent revenue needs and severe constraints on the use of other tax bases.
    Keywords: International business enterprises, Tax evasion, Taxation
    Date: 2016
  9. By: Nora Lustig
    Abstract: Using comparable fiscal incidence analysis, this paper examines the impact of fiscal policy on inequality and poverty in 25 countries for around 2010. Success in fiscal redistribution is driven primarily by redistributive effort (share of social spending to GDP in each country) and the extent to which transfers/subsidies are targeted at the poor and direct taxes targeted at the rich. While fiscal policy always reduces inequality, this is not the case with poverty. Fiscal policy increases poverty in 4 countries using a US$1.25/day PPP poverty line, in 8 countries using a US$2.50/day line, and in 15 countries using a US$4/day line (over and above market income poverty). Net direct taxes are always equalizing and net indirect taxes are equalizing in 17 of the 25 countries. While spending on pre-school and primary school is pro-poor (i.e. the per capita transfer declines with income) in almost all countries, pro-poor secondary school spending is less prevalent, and tertiary education spending tends to be progressive only in relative terms (i.e. equalizing but not pro-poor). Health spending is always equalizing.
    Date: 2016

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