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on Post Keynesian Economics |
| By: | Joan R. Rovira (Economic Studies Office, Barcelona Chamber of Commerce (ES)) |
| Abstract: | We identify a set of key stylised facts characterising the evolution of the seven largest advanced economies from the 1960s to 2015 and develop a small one-sector model of growth and distribution broadly consistent with these facts. The model is used to explore the relationship between falling trend growth, the re-distribution of aggregate income towards profits and the concentration of corporate power and wealth. Theory is confronted with history to illustrate how changes in social structure can affect economic behaviour and performance. We argue that finance-led corporate restructuring, involving debt-financed corporate transactions, may have played a crucial role in shaping long-term patterns of growth and distribution. |
| Keywords: | Stagnation, Distribution, Growth, Financialisation, Heterodox Economics |
| JEL: | B22 E11 E12 E44 E65 G01 O11 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1704&r=pke |
| By: | John E. Roemer (Dept. of Political Science & Cowles Foundation, Yale University) |
| Abstract: | Marxists have viewed the task of socialism as the elimination of exploitation, defined in the Marxian manner in terms the excess of labor expended over of labor commanded. I argue that the concept of Marxian exploitation commits both type-one (false positives) and type-two (false negatives) errors as a diagnosis of distributive injustice: it misses instances of distributive injustice because they do not involve exploitation, and it calls some economic relations characterized by exploitation unjust when they are not. The most important reformulators of Marx’s concept of socialism, which implicitly or explicitly attempt to correct the Marxian errors, are Oscar Lange, James Meade, John Rawls, Robert Nozick, Ronald Dworkin and G.A. Cohen. I trace this development, and argue for a re-definition of socialist principles based upon it. |
| Keywords: | Exploitation, Socialist equality of opportunity, Market socialism |
| JEL: | P2 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2089&r=pke |
| By: | Marco Lonzi; Samuele Riccarelli; Ernesto Screpanti |
| Abstract: | In his theoretical model of production prices Marx follows the classical economists in treating wages as being paid in advance. Sraffa, instead, tends to treat them as being paid post factum. However, when Marx tackles the problem under less abstract scrutiny, he abandons the classical approach and declares that, as a matter of fact, wages are postponed. We prove that, if the period of postponed wage payment differs from the length of the production process, the correct prices are better approximated by an equation with the full post-payment of wages than by one with full pre-payment. Under perfect competition and postponed wage payments, Sraffa’s approach to price determination is the correct one, and validates Marx’s non-classical vision, whatever the period of wage payment. |
| Keywords: | Value theory, Marx, Sraffa |
| JEL: | B31 B51 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:756&r=pke |
| By: | Zsuzsanna Hosszú (Magyar Nemzeti Bank (Central Bank of Hungary)); Bence Mérõ (Magyar Nemzeti Bank (Central Bank of Hungary)) |
| Abstract: | In this paper, we have developed an agent-based Keynesian macro model that features a detailed representation of a banking system, besides households and firms, and in which fiscal, monetary and macroprudential policy regulators also operate. The banking system generates longer credit cycles on the time series compared to the business cycle, and also fosters growth through lending, but deepens the recession during crises by decreasing credit supply. Macroprudential authority uses countercyclical capital buffer requirements to decrease the procyclicality of the banking system. According to our results, this policy instrument is effective in enhancing financial stability, while in recessions, the decrease in GDP is less with countercyclical capital buffer requirements than without any macroprudential rule. However, there is a trade-off between financial stability and economic growth. |
| Keywords: | agent based model, credit cycle, business cycle, countercyclical capital buffer |
| JEL: | E12 E32 E44 G18 G21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2017/5&r=pke |
| By: | John E. Roemer (Dept. of Political Science & Cowles Foundation, Yale University) |
| Abstract: | Socialism is conceptualized as a society in which individuals cooperate, distinguished from capitalism, characterized as involving ubiquitous economic competition. Here, I embed a formal model of cooperation in an Arrow-Debreu model, using the Kantian optimization protocol, and define a Walras-Kant equilibrium, in which firms maximize profits, consumers choose demands for commodities in the usual utilitymaximizing fashion, and the state rents capital to firms. The labor-supply decision of workers, however, is arrived at using the cooperative protocol. Incomes are redistributed through a flat income tax. Walras-Kant equilibria, with any desired degree of income equality exist, are decentralizable, and are Pareto efficient. |
| Keywords: | Market socialism, General equilibrium, First welfare theorem, Cooperation, Kantian optimization |
| JEL: | D50 D59 D6 P2 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2090&r=pke |