nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2018‒05‒21
ten papers chosen by
Karl Petrick
Western New England University

  1. "Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution" By Michalis Nikiforos
  2. Race and the City By Ingrid Gould Ellen; Stephen L. Ross
  3. The Finance Uncertainty Multiplier By Iván Alfaro; Nicholas Bloom; Xiaoji Lin
  4. An AB-SFC Model of Induced Technical Change along Classical and Keynesian Lines By Fanti, Lucrezia
  5. "The Dynamics of Japanese Government Bonds' Nominal Yields" By Tanweer Akram; Huiqing Li
  6. The Inefficiency of Inequality. Summary By -
  7. The Comparative Organizational Inequality Network: Toward an Economic Sociology of Inequality By Donald Tomaskovic-Devey; Olivier Godechot
  8. Inequality: A Piketty et al. Moment in the Social Sciences By Olivier Godechot
  9. Evolutions and contradictions in mainstream macroeconomics : the case of Olivier Blanchard By Francesco Saraceno; E Brancaccio
  10. African Regional Economic Integration: The Emergence, Evolution, and Impact of Institutional Innovation By Juma, Calestous; Mangeni, Francis

  1. By: Michalis Nikiforos
    Abstract: The paper discusses the Sraffian supermultiplier (SSM) approach to growth and distribution. It makes five points. First, in the short run the role of autonomous expenditure can be appreciated within a standard post-Keynesian framework (Kaleckian, Kaldorian, Robinsonian, etc.). Second, and related to the first, the SSM model is a model of the long run and has to be evaluated as such. Third, in the long run, one way that capacity adjusts to demand is through an endogenous adjustment of the rate of utilization. Fourth, the SSM model is a peculiar way to reach what Garegnani called the "Second Keynesian Position." Although it respects the letter of the "Keynesian hypothesis," it makes investment quasi-endogenous and subjects it to the growth of autonomous expenditure. Fifth, in the long run it is unlikely that "autonomous expenditure" is really autonomous. From a stock-flow consistent point of view, this implies unrealistic adjustments after periods of changes in stock-flow ratios. Moreover, if we were to take this kind of adjustment at face value, there would be no space for Minskyan financial cycles. This also creates serious problems for the empirical validation of the model.
    Keywords: Sraffian Supermultiplier; Long Run; Utilization; Autonomous Demand
    JEL: B22 B5 E12 E32 O4
    Date: 2018–05
  2. By: Ingrid Gould Ellen (New York University); Stephen L. Ross (University of Connecticut)
    Abstract: This paper provides the introduction to the special issue on Race and the City in the Journal of Housing Economics in 2018. The paper surveys relevant topics on racial and ethnic discrimination and residential segregation, and provides a more detailed discussion of the specific papers in the special issue. The paper primarily focuses on the literatures on discrimination in housing, on-line markets and policing. In terms of racial segregation, the paper discusses work related to the pattern of residential segregation and the causes and consequences of segregation.
    Keywords: race, ethnicity, discrimination, segregation, urban
    JEL: J15 R20 R30 R50
    Date: 2018–04
  3. By: Iván Alfaro; Nicholas Bloom; Xiaoji Lin
    Abstract: We show how real and financial frictions amplify the impact of uncertainty shocks. We build a model with real frictions, and find adding financial frictions roughly doubles the impact of uncertainty shocks. Higher uncertainty alongside financial frictions induces the standard real-options effects on investment and hiring, but also leads firms to hoard cash, further reducing investment and hiring. We then test the model using a panel of US firms and a novel instrumentation strategy for uncertainty exploiting differential firm exposure to exchange rate and price volatility. These results highlight why in periods with greater financial frictions uncertainty can be particularly damaging.
    JEL: E0 G0
    Date: 2018–05
  4. By: Fanti, Lucrezia
    Abstract: This paper introduces the classical idea about the so-called directed and induced technical change (ITC) within a Keynesian demand-side and evolutionary endogenous growth model in order to analyze the interplay among technical change, long-run economic growth and functional income distribution. An ITC process is analyzed within an Agent-Based Stock-Flow Consistent (AB-SFC) model, wherein credit-constrained heterogeneous firms choose both the intensity and the direction of the innovation towards a labor- or capital-saving choice of technique. In the long-run, the model reproduces the so-called Kaldor stylized facts (i.e. with a purely labor-saving technical change), however during the transitional phase the model shows a labor-saving/capital-using innovation pattern, as the aggregate output-capital ratio decreases until it stabilizes in the long-run, as well as declining labor share for long time periods and we can ascribe these evidences mainly to the directed technical change process. In order to stress the effective role of the innovation bias on the model dynamics, we compare the baseline scenario with a counterfactual scenario wherein a neutral technical progress is at work.
    Keywords: Agent-Based Macroeconomics; Stock-Flow Consistent Models; Induced Technical Change; Directed Innovation; Choice of Techniques; Labor Share; Growth and Distribution.
    JEL: E24 E25 O33 O41
    Date: 2018–03–10
  5. By: Tanweer Akram; Huiqing Li
    Abstract: This paper employs a Keynesian perspective to explain why Japanese government bonds' (JGBs) nominal yields have been low for more than two decades. It deploys several vector error correction (VEC) models to estimate long-term government bond yields. It shows that the low short-term interest rate, induced by the Bank of Japan's (BoJ) accommodative monetary policy, is mainly responsible for keeping long-term JGBs' nominal yields exceptionally low for a protracted period. The results also demonstrate that higher government debt and deficit ratios do not exert upward pressure on JGBs' nominal yields. These findings are relevant to ongoing policy debates in Japan and other advanced countries about government bond yields, fiscal sustainability, fiscal policy, functional finance, monetary policy, and financial stability.
    Keywords: Japanese Government Bonds; Long-Term Interest Rate; Nominal Bond Yields; Monetary Policy; Bank of Japan; John Maynard Keynes
    JEL: E43 E50 E58 E60 G10 G12
    Date: 2018–05
  6. By: -
    Abstract: Consistently with the emphasis that the Economic Commission for Latin America and the Caribbean (ECLAC) has placed on equality since 2010, and in keeping with the purpose of leaving no one behind enshrined in the 2030 Agenda for Sustainable Development, this document examines the mechanisms by which inequality erodes dynamic efficiency in the Latin American and Caribbean economies. It analyses and measures the productivity and income effects of unequal access to health and education, as well as the consequences of inequality of opportunities arising from gender-,race- or ethnicity-based discrimination. It also examines how these inequalities play out at the level of territory, infrastructure and urban dynamics, where their costs not only weigh on productivity, but also worsen energy inefficiencies and environmental degradation, thereby compromising the development possibilities of present and future generations. Inequality imposes constraints on innovation and creativity that are all the heavier because they are embedded within the culture of agents, which creates a culture of privilege in which many public goods and rights are not universal, but denied to much of the population. This weakens trust in social interactions and in democratic institutions. Here, ECLAC proposes strategic guidelines for increasing the dynamic efficiency of the Latin American and Caribbean economies on the basis of equality. Capacity-building and the construction of welfare States are at the heart of a new development paradigm that puts the technological revolution at the service of low-carbon, technology-intensive growth. In this regard, and in view of the rapid transformations and mounting uncertainties in the global economy, the region urgently needs stronger public and private investment revolving around an environmental big push in order to diversify its production structure and even out its structural disparities.
    Date: 2018–05–03
  7. By: Donald Tomaskovic-Devey (UMAassAmherst); Olivier Godechot (Observatoire sociologique du changement)
    Abstract: The international Comparative Organizational Inequality Network (COIN) asks: • What factors drive overall income inequality within and between workplaces? • How do workplaces exacerbate or mitigate the impact of individual distinctions, such as education level, gender, or immigrant status? • How do inequality-generating mechanisms vary as a function of institutional context?
    Keywords: Inequality; Incomes; Firms; Wages; Segregation at work; Workplaces
    Date: 2017–11
  8. By: Olivier Godechot (Observatoire sociologique du changement)
    Abstract: What does the world success of Piketty’s Capital in the 21st Century (2014) reveal? This book is not just one of the most astonishing bestsellers in the social sciences in recent years, but it may also signal an important shift in the way we consider inequality in economics and sociology, in the social sciences and the public arena, in political debate and day-to-day conversations. [First paragraph]
    Keywords: Inequality; Capitalism; Upper classes; Measurement of inequality
    Date: 2017–11
  9. By: Francesco Saraceno (Observatoire français des conjonctures économiques); E Brancaccio
    Abstract: This article traces the complex intellectual path of Olivier Blanchard, a personification of the controversial evolution of macroeconomic research over the last three decades. After contributing to consolidation of the core of mainstream macroeconomics, Blanchard recently suggested ‘rethinking’ some of its key aspects to take stock of the lessons of the 2008 Great Recession, which he witnessed as the International Monetary Fund’s Chief Economist. This welcome discussion, which according to Blanchard should open mainstream macroeconomics to heterodox thinking, has so far produced a certainly interesting albeit theoretically contradictory synthesis and limited policy consequences. The most paradigmatic aspect of this rethinking of macroeconomics is represented by the abandonment in teaching of aggregate supply and demand in favor of a revival of the IS–LM model complemented by the Phillips curve. While this change of perspective does allow for the instability of ‘natural’ equilibrium to be emphasized, a deeper reading may prove incompatible with the neoclassical foundations of the mainstream approach.
    Keywords: Alternative economic paradigms; Great recession; Mainstream macroeconomics; Neoclassical theory; Olivier Blanchard
    JEL: B31 B41 B50 E10
    Date: 2017–06
  10. By: Juma, Calestous (Harvard University); Mangeni, Francis (Harvard University)
    Abstract: The power of Pan-Africanism as a guiding vision for the continent’s development is widely studied, mostly as an aspirational phenomenon. At worst, Pan-Africanism has often been seen as a poor imitation of American federalism or European integration. Both of these perceptions do not reflect the profound nature of the role that the ideology of Pan-Africanism played in shaping the continent’s economic transformation.
    Date: 2018–01

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