nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒08‒06
seven papers chosen by
Karl Petrick
Western New England University

  1. "Why the Compulsive Shift to Single Payer? Because Healthcare Is Not Insurable" By L. Randall Wray
  2. Curriculum reform in UK economics: a critique By Andrew Mearman; Sebastian Berger; Danielle Guizzo
  3. Expenditure Cascades, Low Interest Rates or Property Booms? Determinants of Household Debt in OECD Countries By Stockhammer, Engelbert; Wildauer, Rafael
  4. Are higher wages good for business? An assessment under alternative innovation and investment scenarios By Caiani, Alessandro; Russo, Alberto; Gallegati, Mauro
  5. "The Neoclassicals' Conundrum: If Adam Smith Is the Father of Economics, It Is a Bastard Child" By Oscar Valdes Viera
  6. "Capital in Banking" (in Japanese) The purpose of this paper is to clarify the concept of capital in banking as the foundation for understanding our financial system. Though Japanese Marxian economists have accumulated theoretical studies on credit system, we do not yet have a clear-cut idea of what capital is in banking. Nevertheless, we must identify it if we are to properly analyse recent financial expansion and unconventional monetary policies. K. Marx’s Capital gives us a hint to solve this issue. In section 1, we read the text of Capital Vol.3 to grasp the points of argument. While Marx mainly discusses “fictitious capital†, we cannot miss his notice on a net worth of banks. In section 2, we develop the latter concept on capital of Marx as reserves for non-performing loans. Banks try to maintain and reinforce their credibility on the basis of the capital, thereby enlarging the scale of their asset under the competition. The growth of the asset leads to more profit even if the interest rate is constant. Financial booms boost the growth of the asset of banks without maintaining their credibility, consequently making the banking asset fairly vulnerable. By Kei Ehara
  7. Gender: An Historical Perspective By Giuliano, Paola

  1. By: L. Randall Wray
    Abstract: The growing political momentum for a universal single-payer healthcare program in the United States is due in part to Republican attempts to repeal and replace the Affordable Care Act (Obamacare). However, according to Senior Scholar L. Randall Wray, it is Obamacare's successes and its failures that have boosted support for a single-payer system. Even after Obamacare, the US healthcare system still has significant gaps in coverage--all while facing the highest healthcare bill in the world. In this policy note, Wray argues that the underlying challenge for a system based on private, for-profit insurance is that basic healthcare is not an insurable expense. It is time to abandon the current, overly complex and expensive payments system and reconsider single payer for all. Social Security and Medicare provide a model for reform.
    Date: 2017–07
  2. By: Andrew Mearman (University of the West of England, Bristol); Sebastian Berger (University of the West of England, Bristol); Danielle Guizzo (University of the West of England, Bristol)
    Abstract: This paper offers a multi-dimensional critique of recent reforms to UK Economics curricular frameworks. The paper assesses the reforms in terms of their extent and the positions taken within them on their approach to economics, treatment of politics, and, crucially, educational philosophy. Despite claims of innovation and new epistemological caution in the wake of the global financial crisis, the reforms are found to be minor and superficial. The CORE programme and the revised Subject Benchmark Statement document for Economics still ignore educational philosophy; yet they are implicitly educationally instrumental and remain limitedly pluralist. Our conclusions are buttressed by contrasts made between UK reforms and the curriculum architecture found in the Brazilian system.
    Keywords: curriculum reform, economics, pluralism, educational philosophy
    JEL: A14 A20 B50
    Date: 2016–01–11
  3. By: Stockhammer, Engelbert (Kingston University London); Wildauer, Rafael (Kingston University London)
    Abstract: The past decades have witnessed a strong increase in household debt and high growth of private consumption expenditures in many countries. This paper empirically investigates four explanations: First, the expenditure cascades hypothesis argues that an increase in inequality induced lower income groups to copy the spending behaviour of richer peer groups and thereby drove them into debt (‘keeping up with the Joneses’). Second, the housing boom hypothesis argues that increasing property prices encourage household spending and household borrowing due to wealth effects, eased credit constraints and the prospect of future capital gains. Third, the low interest hypothesis argues that low interest rates encouraged households to take on more debt. Fourth, the financial deregulation hypothesis argues that deregulation of the financial sector boosted credit supply. The paper tests these hypotheses by estimating the determinants of household borrowing using a panel of 11 OECD countries (1980-2011). Results indicate that real estate prices and low interest rates were the most important drivers of household debt. In contrast the data does not support the expenditure cascades hypothesis as a general explanation of debt accumulation across OECD countries. Our results are consistent with the financial deregulation hypothesis, but its explanatory power for the 1995-2007 period is low.
    Keywords: household debt; income distribution; property prices
    JEL: D31 E12 E51
    Date: 2017–08–01
  4. By: Caiani, Alessandro; Russo, Alberto; Gallegati, Mauro
    Abstract: This paper aims at investigating the interplay between inequality, innovation dynamics, and investment behaviors in shaping the long-run patterns of development of a closed economy. By extending the analysis proposed in Caiani et al. (2017) we explore the effects of alternative wage regimes under different investment and technological change scenarios. Experiments results seem to de-emphasize the role of technological progress as a possible source of greater inequality. Overall, simulation results are consistent with the predominance of a wage-led growth regime in most of the scenarios analyzed: a faster growth of low and middle level workers’ wages, relative to managers’, generally exert beneficial effects on the economy and allows to counteract the labor-saving effects of technological progress. Furthermore, contrary to what is sometimes argued in the academic and political debate, a distribution more favorable to workers does not compromise firms’ profitability, but rather strengthen it creating a more favorable macroeconomic environment which encourages further innovations, stimulates investment, and sustains economic growth.
    Keywords: Innovation; Investment; Inequality; Agent-Based Macroeconomics; Stock Flow Consistent Models
    JEL: E22 E64 O41
    Date: 2017–01–31
  5. By: Oscar Valdes Viera
    Abstract: Neoclassical economists of the current era frequently pay lip service to Adam Smith's theories to certify the validity of natural-laws-based, laissez-faire policies. However, neoclassical theories are fundamentally disconnected from Adam Smith's notion of value, his understanding of the economic individual and their interactions in society, his methodology, and the field of study he afforded to political economy. Instead, early neoclassical economists parted ways with the theories of Adam Smith in an effort to construct economic laws that would validate the existing capitalist order as universal, natural, and harmonious.
    Keywords: Economic Thought; Classical School; Neoclassical Economics; Adam Smith; Economists
    JEL: A11 A13 B12 B13 B16 B20 B31
    Date: 2017–07
  6. By: Kei Ehara (Faculty of Economics, University of Tokyo)
    Date: 2017–08
  7. By: Giuliano, Paola
    Abstract: Social attitudes toward women vary significantly across societies. This chapter reviews recent empirical research on various historical determinants of contemporary differences in gender roles and gender gaps across societies, and how these differences are transmitted from parents to children and therefore persist until today. We review work on the historical origin of differences in female labor-force participation, fertility, education, marriage arrangements, competitive attitudes, domestic violence, and other forms of difference in gender norms. Most of the research illustrates that differences in cultural norms regarding gender roles emerge in response to specific historical situations, but tend to persist even after the historical conditions have changed. We also discuss the conditions under which gender norms either tend to be stable or change more quickly.
    Keywords: Cultural persistence; Cultural Transmission; Gender
    JEL: J16 N0 Z1
    Date: 2017–07

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