nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2017‒09‒10
five papers chosen by
Karl Petrick
Western New England University

  1. Pluralism in Economics: Epistemological Rationales and Pedagogical Implementation By Jakob Kapeller
  2. Reconciling facts with fiction: Minimum wages in a post-Keynesian perspective By Heise, Arne
  3. Estimating normal capacity utilization rates and their tolerable ranges of values: A comment on Setterfield By Florian Botte
  4. Reactivity in Economic Science By Bruno S. Frey
  5. Armand Hatchuel and the Refoundation of Management Research By Blanche Segrestin; Franck Aggeri; Pascal Le Masson; Albert David

  1. By: Jakob Kapeller (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: This paper first presents a series of epistemological rationales for pluralism as a guiding concept in economic research. In doing so, it highlights the inherent uncertainty of (scientific) knowledge as well as the complex and dynamic nature of socio-economic relationships to indicate how the discussion of theoretical and applied problems in economics might benefit from a pluralist approach. Eventually, I apply the notion of pluralism in economics to questions of economic teaching and curricular design in economics.
    Date: 2017–08
  2. By: Heise, Arne
    Abstract: There has long been a discussion about the employment impact of minimum wages and this discussion has recently been renewed with the introduction of an economy-wide, binding minimum wage in Germany in 2015. In traditional reasoning, based on the allocational approach of modern labour market economics, it has been suggested that the impact is clearly negative on the assumption of a competitive labour market and clearly positive on the assumption of a monopsonistic labour market. Unfortunately, both predictions conflict with the empirical findings, which do not show a clear-cut impact of significant size in any direction.
    Keywords: Post-Keynesianism,minimum wage,aggregate demand,aggregate supply
    JEL: B50 E12 E23 J31
    Date: 2017
  3. By: Florian Botte (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - Université de Lille, Sciences et Technologies - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Taking the potential instability of the Kaleckian model of growth as his starting point, Setterfield (2017) investigated, inter alia, the possibility of taming the Harrodian instability. His investigation used a range of tolerable values, rather than a unique value, for the normal rate of capacity utilization. After illustrating his point theoretically, Setterfield then proposes empirical methods to estimate the normal capacity utilization rate and the corresponding tolerance range. This paper suggests improved methods to estimate the normal rate of capacity utilization and its tolerance range. The proposed alternative solutions offer better consistency with Post-Keynesian behavioral theories, and the presented exploratory narrative based on these suggestions can partly explain the current stagnation.
    Keywords: Normal rate of capacity utilization, Harrodian instability, Kaleckian growth theory
    Date: 2017–07–05
  4. By: Bruno S. Frey
    Abstract: There is a fundamental difference between the natural and the social sciences due to reactivity. This difference remains even in the age of Artificially Intelligent Learning Machines and Big Data. Many academic economists take it as a matter of course that economics should become a natural science. Such a characterization misses an essential aspect of a social science, namely reactivity, i.e. human beings systematically respond to economic data, and in particular to interventions by economic policy, in a foreseeable way. To illustrate this finding, I use three examples from quite different fields: Happiness policy, World Heritage policy, and Science policy.
    Keywords: Economics; Social; Natural Science; Reactivity; Data; Happiness; Economic Policy
    JEL: A10 B40 C70 C80 D80 Z10
    Date: 2017–08
  5. By: Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Franck Aggeri (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Albert David (Université Paris-Dauphine, PSL - Paris Sciences et Lettres)
    Abstract: Armand Hatchuel’s work marks a turning point in management research and paves the way for a refoundation of management science. Hatchuel’s research deals with organizational metabolism rather than organizational change, as he is concerned with the drivers of change and with the organization of innovative collective action. Several theoretical milestones can be put forward. First, Hatchuel offers a theory of the cognitive processes of generativity: while decision theory targets optimization by supporting the selection of a solution, “C-K theory” is a design theory. It accounts for the generation of new alternatives by expanding what is known to include some unknowns in innovations. This theory has provided the theoretical cornerstone characterizing the rationality and organization of innovative or design-oriented collective action. Second, in Hatchuel’s view, learning and organizational dynamics are tightly bound. Learning processes are hosted and supported by social relationships, which, in turn, are shaped by the distribution of knowledge. Hatchuel proposes a theory of collective action whereby knowledge and relationships are involved in a dynamic interplay: this theory shows that both markets and hierarchies are special and highly unstable forms of organization, because they imply that either knowledge or relationships are frozen. Management scholars contribute to the study of generative forms of collective action: Hatchuel argues that management science, far from being applied economics or applied sociology, is a basic science devoted to the design and study of new models of collective action. He therefore opens up promising avenues for programmes on post-decision paradigms and creative institutions.
    Keywords: Collective action,Management sciences,Innovation,Design theory
    Date: 2017

This nep-pke issue is ©2017 by Karl Petrick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.