nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒06‒25
eleven papers chosen by
Karl Petrick
Western New England University

  1. Post-Keynesian macroeconomics since the mid-1990s - main developments By Eckhard Hein
  2. Stagnation policy in the Eurozone and economic policy alternatives By Eckhard Hein
  3. "Understanding Financialization: Standing on the Shoulders of Minsky" By Charles J. Whalen
  4. Social protection: towards gender equality By Raquel Tebaldi; Flora Myamba
  5. The comparative statics of effective demand By Jochen Hartwig
  6. When Keynes goes to Brussels : a new fiscal rule for the EMU By Francesco Saraceno
  7. Energy, poverty and development: a primer for the Sustainable Development Goals By Hannah Goozee
  8. Unions, Workers, and Wages at the Peak of the American Labor Movement By Brantly Callaway; William J. Collins
  9. Opportunities and limits of rebalancing the Eurozone via wage policies By Eckhard Hein; Eckhard Achim Truger
  10. One Pager IPC-IG 2017 By International Policy Centre for Inclusive Growth
  11. Explaining Sociotechnical Transitions: A Critical Realist Perspective By Steven Sorrell

  1. By: Eckhard Hein
    Abstract: In this paper the main developments in post-Keynesian macroeconomics since the mid-1990s will be reviewed. For this purpose the main differences between heterodox economics in general, including post-Keynesian economics, and orthodox economics will be reiterated and an overview over the strands of post-Keynesian economics, their commonalities and developments since the 1930s will be outlined. This will provide the grounds for touching upon three important areas of development and progress of post-Keynesian macroeconomics since the mid-1990s: first, the integration of distribution issues and distributional conflict into short- and long-run macroeconomics, both in theoretical and in empiri-cal/applied works; second, the integrated analysis of money, finance and macroeconomics and its appli-cation to changing institutional and historical circumstances, like the process of financialisation; and third, the development of full-blown macroeconomic models, providing alternatives to the mainstream ?New Consensus Model? (NCM), and allowing to derive a full macroeconomic policy mix as a more con-vincing alternative to the one implied and proposed by the mainstream NCM, which has desperately failed in the face of the recent crises.
    Keywords: post-Keynesian macroeconomics, heterodox vs. orthodox economics, pluralism in economics, distribution, money, finance, macroeconomics, macroeconomic policies
    JEL: B22 E12
    Date: 2017
  2. By: Eckhard Hein
    Abstract: Empirically, the macroeconomic institutions and the macroeconomic policy approach in the Eurozone have failed badly, both in terms of preventing the global financial and economic cri-sis from becoming a euro crisis and in generating a rapid recovery from the crisis, in particular. In this paper I will argue that the dominating macroeconomic policy regime in the Eurozone can be seen as a version of what Steindl (1979) had called ?stagnation policy?. To underline this argument, I will provide a simple Steindlian distribution and growth model in order to identi-fy the main channels through which stagnation policy affects accumulation and productivity growth. This will also provide a set of elements of a Steindlian anti-stagnation policy. Against this theoretical background I will then examine the macroeconomic institutions and the macro-economic policy approach of the Eurozone which has been based on the New Consensus Macroeconomics (NCM) and I will highlight its main deficiencies. This will then provide the grounds for an outline of an alternative macroeconomic policy approach for the specific institu-tional setup of the Eurozone based on a post-Keynesian/Steindlian/neo-Kaleckian approach.
    Keywords: stagnation, stagnation policy, Eurozone, policy alternatives, Steindl
    JEL: E02 E11 E12 E61 E63 E64 E65 F45
    Date: 2017
  3. By: Charles J. Whalen
    Abstract: Since the death of Hyman Minsky in 1996, much has been written about financialization. This paper explores the issues that Minsky examined in the last decade of his life and considers their relationship to that financialization literature. Part I addresses Minsky's penetrating observations regarding what he called money manager capitalism. Part II outlines the powerful analytical framework that Minsky used to organize his thinking and that we can use to extend his work. Part III shows how Minsky's observations and framework represent a major contribution to the study of financialization. Part IV highlights two keys to Minsky's success: his treatment of economics as a grand adventure and his willingness to step beyond the world of theory. Part V concludes by providing a short recap, acknowledging formidable challenges facing scholars with a Minsky perspective, and calling attention to the glimmer of hope that offers a way forward.
    Keywords: Hyman Minsky; Money Manager Capitalism; Financialization
    JEL: B31 B52 G
    Date: 2017–06
  4. By: Raquel Tebaldi (IPC-IG); Flora Myamba (IPC-IG)
    Abstract: "Social protection has become prominent in the global development agenda over recent decades, with social protection systems now being included as a target under Sustainable Development Goal 1: 'End poverty in all its forms everywhere'. In developing countries, these policies have played an important role in alleviating extreme poverty, among other impacts that are increasingly being investigated. Beyond the improvement of the material conditions of beneficiaries, measures that take into account the power dynamics and inequalities within households and communities are needed for social protection programmes to properly address gender inequality in a transformative way. This special edition of Policy in Focus, which is auspiciously being released for International Women's Day 2017, covers key topics related to gender equality and social protection, featuring a wide range of contributions from women policy practitioners and scholars, presenting case studies and reflections from Brazil and various African countries". (...)
    Keywords: Social protection, gender, equality
    Date: 2017–03
  5. By: Jochen Hartwig
    Abstract: Keynes introduces the term 'effective demand' in chapter 3 of the General Theory as designating the point of intersection of two functions: the 'aggregate demand function' (D) and the 'aggregate supply function' (Z). For the first time in the literature, I here specify exact functional forms for the D and Z functions and run numerical simulations which allow to study the comparative statics of the model in the face of various 'shocks'. The demonstration of how the D/Z model actually works will hopefully prove useful for future students of the economics of Keynes.
    Keywords: Keynes, effective demand, D/Z model
    JEL: B31 E12
    Date: 2017
  6. By: Francesco Saraceno (Observatoire français des conjonctures économiques)
    Abstract: The Economic and Monetary Union (EMU) institutions are consistent with a New Consensus that emerged in the 1980s, limiting the role for macroeconomic (particularly fiscal) policy to short term stabilizations by means of rules. I will argue that the policy inertia induced by the Consensus may have played a role in the disappointing performance of EMU economies even before the crisis. The crisis of the Consensus, and the debate on secular stagnation, proved that Keynesian (and possibly) persistent excesses of savings over investment may hamper growth. This has put fiscal policy back to the center of the scene, and given the General Theory, at eighty, a second youth. I will argue therefore that the EMU fiscal rule should be amended to allow semi-permanent negative government savings. I will finally argue that a modified Golden Rule may serve this objective, and allow EU-wide policy coordination. This seems the only reasonable reform with some chances of being adopted by the EU divided policy makers.
    Keywords: Fiscal rules; Fiscal policy; EMU; Golden rules; Secular stagnation; Keynes; Policy mix
    JEL: B22 E62 E2 E65
    Date: 2016–12
  7. By: Hannah Goozee (IPC-IG)
    Abstract: "The seventh goal of the Sustainable Development Goals (SDGs) is dedicated to ensuring access to affordable, reliable, sustainable and modern energy for all by 2030. While energy was implicit in the Millennium Development Goals (MDGs), the SDGs explicitly recognise the direct linkage between energy access and consumption and poverty and development. This evolution of the development agenda is closely related to an expanded understanding of poverty, as it moves beyond a monetary definition, to be seen as a more holistic measure of overall quality of life. Energy has thus become recognised as an important aspect of alleviating extreme poverty. However, what remains unclear is the impact that poverty reduction will have on worldwide energy consumption. There is a significant amount of literature concerning the connection between energy consumption?in particular electricity?and development, ranging from engineering modelling to development policy. Nevertheless, there is a lack of attention given to the direct causal relationship between poverty reduction and energy consumption. This paper reviews a variety of the current literature concerning energy and electricity consumption and poverty and development, to show that there is a need to directly address how poverty levels will shape future energy consumption. This relationship will have an impact on a number of issues critical to the achievement of the SDGs ranging from health to gender and the environment". (?)
    Keywords: Energy, poverty, development, Sustainable Development Goals
    Date: 2017–05
  8. By: Brantly Callaway; William J. Collins
    Abstract: We study a novel dataset compiled from archival records, which includes information on men’s wages, union status, educational attainment, work history, and other background variables for several cities circa 1950. Such data are extremely rare for the early post-war period when U.S. unions were at their peak. After describing patterns of selection into unions, we measure the union wage premium using unconditional quantile methods. The wage premium was larger at the bottom of the income distribution than at the middle or higher, larger for African Americans than for whites, and larger for those with low levels of education. Counterfactuals are consistent with the view that unions substantially narrowed urban wage inequality at mid-century.
    JEL: J5 N12
    Date: 2017–06
  9. By: Eckhard Hein; Eckhard Achim Truger
    Abstract: In this paper we discuss the relationship between the current account rebalancing in the Eu-rozone, income distribution and wage policies with a focus on the main surplus economy, Germany. We will illustrate how and to which extent German wage policies could be able to contribute to a more balanced development of the Eurozone and to overcome the export-led mercantilist German model. Our analysis and our scenarios will be based on stylized econo-metric results for Germany, as they have recently been obtained in the empirical literature estimating the German demand and growth regime based on post-Kaleckian models. We will focus in particular on the relationship between nominal wages and functional income distribu-tion, on the one hand, and between functional income distribution and domestic demand, on the other hand. We show that more expansionary wage policy can contribute to reducing the excessive German current account surplus, mainly through the domestic income-imports channel. However, wage policy alone will be overburdened with the task of rebalancing. For this, in particular more expansionary fiscal policies are required.
    Keywords: Current account imbalances in the Eurozone, wage policies, distribution, exports, imports
    JEL: E21 E25 E27 E62 E64 F45 F47 H62
    Date: 2017
  10. By: International Policy Centre for Inclusive Growth (IPC-IG)
    Abstract: "The International Policy Centre for Inclusive Growth (IPC-IG) is a leading global forum for South?South dialogue on innovative development policies, aiming at expanding the knowledge and capacities of developing countries to design, implement and evaluate effective policies to attain inclusive growth". (...)
    Keywords: IPC-IG, 2017, institutional, projects, facts and figures
    Date: 2017–05
  11. By: Steven Sorrell (University of Sussex - Science and Technology Policy Research Unit (SPRU))
    Abstract: Social innovation requires a transformation in innovation practices. These transformations should be democratic. At least that is the hypothesis in this paper. Makerspaces are studied as potential sites for democratising innovation activity. Makerspaces are community-based workshops where people access the tools, skills and collaborators to design and make almost anything they wish. Makerspaces are also networked spaces for reflection and debate over design and making in society. But they are many other things too, including a place for personal recreation, entrepreneurship, and education - features of increasing interest to institutions. Makerspaces are pulled and pushed in different directions. An open innovation agenda seeks to insert makerspace creativity into global manufacturing circuits under business as usual. Others see in makerspaces an inchoate infrastructure for a commons-based, sustainable and redistributed manufacturing economy. Activists anticipate new relations in material culture and political economy. Makerspaces are thus socially innovative and not socially innovative at the same time: a site of struggle over issues of profound social significance, and hence an example of innovation democracy in action.
    Keywords: Multilevel perspective; Critical realism; Emergence; Process theory
    Date: 2017–05

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