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on Post Keynesian Economics |
| By: | Peter Kriesler (School of Economics, UNSW Business School, UNSW); G. C. Harcourt (School of Economics, UNSW Business School, UNSW); Joseph Halevi (University of sydney) |
| Abstract: | In major advanced economies, including Australia, independent central banks have become established institutions. Yet there are reasons why the sustained presence of such an institution in a democratic society should be challenged. This paper considers the arguments usually advanced for central bank independence, and the underlying arguments for a failure of democracy including the standard argument based on the importance of central bank credibility. This argument depends crucially on the role of inflationary expectations on the actual inflation rate. We question whether the standard story is really relevant – and, if not, then independence depends on the argument that politicians may not always act in the best long-term interests of their constituencies but bankers are more likely to. We show that this is a questionable assumption. The post Wold War 2 development of Europe and the emergence of the European Central Bank is examined to illustrate our underlying proposition that Central bank independence is not the result of economic argument, but of political ones leading to suboptimal economic results. |
| Keywords: | Central bank independence, democracy, European Central Bank, inflation, inflationary expectations |
| JEL: | E58 E50 G20 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2018-01&r=pke |
| By: | Hein, Eckhard |
| Abstract: | The re-distribution of income from labour to capital, from workers to top-managers, and from low income households to the rich has been an important feature of financedominated capitalism since the early 1980s. After the Great Financial Crisis and the Great Recession in 2007-9, the recovery has been sluggish so far, and this has given rise to a renewed discussion about stagnation tendencies in capitalist economies. In orthodox approaches income distribution only has a restricted role to play, if at all, but the interaction between distribution and growth is at the centre of Marxian and post-Keynesian/Kaleckian approaches when it comes to explaining medium- to long-run trends of economic growth - and stagnation. In this contribution we will thus provide Marxian and Kaleckian assessments of the distribution and growth regimes under finance-dominated capitalism, both before and after the recent crisis. Finally, we also sketch an interpretation of stagnation tendencies in a demand-led endogenous growth model with Kaleckian, Kaldorian and Marxian features. |
| Keywords: | distribution,growth,financialisation,stagnation,macroeconomic demand and growth regimes,productivity growth,Kaleckian models,Marxian models |
| JEL: | E11 E21 E22 E25 E60 F43 O40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:962018&r=pke |
| By: | Rodrik, Dani |
| Abstract: | As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization, they have become more difficult to fit into received economic theory. Nevertheless, most economists continue to regard trade agreements such as the Trans Pacific Partnership (TPP) favorably. The default view seems to be that these arrangements get us closer to free trade by reducing transaction costs associated with regulatory differences or explicit protectionism. An alternative perspective is that trade agreements are the result of rent-seeking, self-interested behavior on the part of politically well-connected firms - international banks, pharmaceutical companies, multinational firms. They may result in freer, mutually beneficial trade, through exchange of market access. But they are as likely to produce purely redistributive outcomes under the guise of "freer trade." |
| Keywords: | Free Trade Agreements |
| JEL: | F13 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12703&r=pke |
| By: | Jon D. Wisman |
| Abstract: | In a manner remarkably similar to the decade of the 1920s, inequality soared for over three decades prior to the crisis of 2008, provoking in both instances financial crises and severe macroeconomic dysfunction. The 1930s depression witnessed a strong egalitarian political reaction to the laissez-faire ideology that had justified the inequality-generating institutional changes of the 1920s, resulting in a New Deal that launched four decades of institutional change that considerably improved general welfare and lessened inequality. The Grand Recession and its wake, by contrast, has not put that same ideology seriously into question, malaise becoming expressed predominantly in a form of rightwing populism, behind which inequality continues to explode. Why such radically divergent reactions to severe hardship? This article explores three foremost reasons for why ideology legitimating inequality survived practically unscathed during the later crisis: First, the crisis beginning in 2008 proved to be less severe, in part due to wiser public policy responses. Second, the welfare net that developed in the wake of the earlier crisis softened the degree of hardship accompanying the later crisis. And third, the elite's command over ideology had become more sophisticated and thus capable of surviving the later crisis essentially intact. |
| Keywords: | Inequality, ideology, Great Depression, Laissez-faire, Barack Obama |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2018-02&r=pke |
| By: | Jon D. Wisman |
| Abstract: | Exploitation exists where some gain advantage at others' expense. Its root force is found in human biology, the fact that as a socially-reproducing species, humans compete for mates and the exploitation of others can generate a competitive advantage. Social institutions direct and channel this competitiveness. Thus, during 97-98 percent of our species existence, competitiveness was not expressed by accumulating material wealth and political power, but by being good warriors and foragers, being cooperative, and being generous. However, with the rise of civilization and the state, elites gained ownership and control over the means of production, thereby subjugating all others and appropriating their surplus. Although violence stood behind this exploitation, ideology served as the principal political tool for its maintenance. It is the force of ideology that clarifies why, even with free speech, free press, free assembly, and the franchise, exploitation continues to exist. |
| Keywords: | Inequality, ideology, Sexual selection, Economic Surplus |
| JEL: | B52 N00 N40 P00 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2018-03&r=pke |
| By: | Sanjit Dhami |
| Abstract: | The neoclassical model in economics envisages humans as amoral and self-regarding (Econs). This model, also known as the homo-economicus model, is not consistent with the empirical evidence. In light of the evidence, the continued use of the homo-economicus model is baffling. It also stymies progress in the field by putting the burden of adjustment on auxiliary assumptions that need to compensate for an unrealistic picture of human motivation and behavior. This essay briefly outlines the evidence for a more inclusive picture of humans in which ethics and morality play a central role. It argues for replacing the homo-economicus model with a homo-behavioralis model that has already enabled great progress to be made in the field of behavioral economics. |
| Keywords: | ethics, morality, intrinsic motivation, consequentialistic choices, lying-aversion, guilt-aversion, markets and morality, moral balancing, self-image, self-serving justifications, partial lying, third party punishment, delegation, social identity, moral suasion |
| JEL: | D90 D64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6836&r=pke |
| By: | Jon D. Wisman |
| Abstract: | Ever since capitalism came to be recognized as a new economic system, its principal institutions of private property and markets have had vociferous critics, of whom none was more wide-ranging than Karl Marx. Marx claimed that not only were private property and markets critical to creating an ideological patina of freedom, behind which, as in slavery and feudalism, a small class extracted from the mass of producers practically all output above that necessary for bare subsistence, but they also served to enable this exploitation. Further, Marx and other critics faulted private property and markets for being corrupting. Yet Marx recognized that capitalism, unlike earlier exploitative systems, was radically dynamic, producing unprecedented wealth, while transforming not only all it inherited from the past, but also its own nature so as to eventually empower even the producers, who he believed would abandon these capitalist institutions. He did not imagine that the dynamism, wealth, and potential freedom that capitalism was delivering might have little chance of flourishing in the absence of its institutions of private property and markets. This article claims that Marx and other critics were wrong to blame capitalism's principal institutions of private property and markets for the injustices that accompanied them. Instead it is the specific form of inequality that co-evolved with them that enables an elite to extract surplus from the producers. It is the inequality that must be targeted. A dynamic and just social order needs private property and markets. |
| Keywords: | Exploitation, Markets, private property, Marx |
| JEL: | B51 P11 P16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2017-13&r=pke |
| By: | Curtis Jr, James E |
| Abstract: | ABSTRACT An understanding of the freedoms (or the lack of freedoms) and their economic consequences on early black Americans provides an informative understanding to the freedoms (or the lack of freedoms), and their economic consequences on other, modern ethnic groups. James Curtis Jr (2017) investigates the link between the social asymmetry and economic asymmetry among early blacks and whites in the United States of America. For the empirical study, James Curtis Jr (2017) uses cross-sectional variables from the Integrated Public Use Microdata Sample (IPUMS), developed informative conditional ratios, and employed least squares statistical analyses. FINDINGS This study finds that economic differences among ethnic groups, as measured by differences between early blacks and whites, are intertwined with asymmetrical freedoms, leading to statistically insignificant returns to education, as measured by literacy. One might conclude that the individual’s basic protection of life, liberty, and the pursuit of happiness must proceed any expectations of measured returns to schooling, particularly among individuals in disenfranchised groups. Furthermore, one might propose education policy such that modern higher education investment programs prioritize education entrepreneurs and/or state/social planners with academic research familiarity of differences in wealth. This research is a revision of November 2002, November 2010 and January 2012 working papers. Copyright 2017. James Edward Curtis, Jr. is the President & Research Economist of The James Edward Curtis Jr Education Foundation, Correspond with James Edward Curtis, Jr. at PO Box 3126, Washington, District of Columbia 20010, or phone (202) 739-1962, email jamesjr@jecjef.net Learn more at jecjef.net. |
| Keywords: | Education, History, Wealth |
| JEL: | C81 E21 I24 N00 |
| Date: | 2017–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84818&r=pke |
| By: | Herr, Hansjörg |
| Abstract: | Today we can learn from the Communist Manifesto that unregulated markets lead to disastrous economic, social, and political developments, which can endanger the reproduction of the capital system itself. The liberal argument, based on Adam Smith's invisible hand - that markets coordinate the selfish actions of millions of people and lead to the welfare of nations -, is a dangerous dream. The consequence is that politicians should not listen to economists, including foreign advisors who preach the liberal dreams of radical versions of capitalist systems. Especially for developing countries, it is vital that they strive for a regulated version of capitalist development. Marx and Engels had a deep understanding of the functioning of capitalism. They underestimated the possibilities to regulate the capitalist system and also allowed the working class to take part in prosperity. However, there is always the danger that capitalist systems evolve with low levels of regulation with the features of capitalism analysed in the Manifesto. |
| Keywords: | Marxism,Communist Manifesto,capitalism,development strategy |
| JEL: | B14 B30 O11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:982018&r=pke |
| By: | Nejma Bouchama (OECD Development Centre); Gaëlle Ferrant (OECD Development Centre); Léa Fuiret (OECD Development Centre); Alejandra Meneses (OECD Development Centre); Annelise Thim (OECD Development Centre) |
| Abstract: | Discriminatory social institutions – formal and informal laws, social norms and practices – restrict women’s rights and empowerment opportunities across 17 West African countries. New laws and measures to protect and promote women’s economic, political and human rights have been accompanied by impressive reductions in gender gaps. However, discriminatory social institutions still constitute significant impediments to women’s access to land assets and restrict women’s physical integrity and decision-making power in both private and public spheres. This holds back women’s education and economic empowerment, thereby decreasing countries’ potential growth. The data and analysis based on the OECD Development Centre’s Social Institutions and Gender Index (SIGI) aims to provide policy makers with the necessary tools and evidence to design more effective gender-responsive policies. Putting social institutions at the core of policy responses may open new and sustainable vistas to promote gender equality in national and regional development agendas. |
| Keywords: | gender inequality, social institutions, West Africa, women |
| JEL: | J16 N37 |
| Date: | 2018–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:swacaa:13-en&r=pke |