nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2018‒06‒25
29 papers chosen by
Karl Petrick
Western New England University

  1. Explaining the Euro crisis: Current account imbalances, credit booms and economic policy in different economic paradigms By Engelbert Stockhammer; Collin Constantine; Severin Reissl
  2. Normal utilization as the adjusting variable in Neo-Kaleckian growth models : a critique By Daniele Girardi; Riccardo Pariboni
  3. Expenditure cascades, low interest rates or property booms? Determinants of household debt in OECD Countries By Engelbert Stockhammer; Rafael Wildauer
  4. A stock-flow-fund ecological macroeconomic model By Yannis Dafermos; Maria Nikolaidi; Giorgos Galanis
  5. Minsky models: A structured survey By Maria Nikolaidi; Engelbert Stockhammer
  6. A multi-sector Kaleckian-Harrodian model for long-run analysis By Eric Kemp-Benedict
  7. The effects of income distribution and fiscal policy on growth, investment and budget balance: the case of Europe By Thomas Obst; Özlem Onaran; Maria Nikolaidi
  8. Trades unions, real wages and full employment By Mark Hayes
  9. Theoretical and Methodological Context of (Post)-Modern Econometrics and Competing Philosophical Discourses for Policy Prescription By Jackson, Emerson Abraham
  10. The Composition of Capital and Technological Unemployment: Marx's (and Ricardo's) Intellectual Debt to John Barton and George Ramsay. By Miguel D. Ramirez
  11. Are current accounts driven by competitiveness or asset prices? A synthetic model and an empirical test By Alexander Guschanski; Engelbert Stockhammer
  12. Directed technological change in a post-Keynesian ecological macromodel By Asjad Naqvi; Engelbert Stockhammer
  13. A post-Keynesian theory for the yield on equity markets By Javier Lopez Bernardo
  14. Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies By Ewa Karwowski; Engelbert Stockhammer
  15. Thorstein Veblen on the nature of the firm and income distribution By Guglielmo Forges Davanzati
  16. Financialisation: Dimensions and determinants. A cross-country study By Ewa Karwowski; Mimoza Shabani; Engelbert Stockhammer
  17. Monetary Reform, Central Banks and Digital Currencies By Sheila Dow
  18. Secular stagnation and concentration of corporate power By Joan R. Rovira
  19. Climate change, financial stability and monetary policy By Yannis Dafermos; Maria Nikolaidi; Giorgos Galanis
  20. The Research Excellence Framework 2014, journal ratings and the marginalization of heterodox economics By Engelbert Stockhammer; Quirin Dammerer; Sukriti Kapur
  21. A Global Voice for Survival: An Ecosystemic Approach for the Environment and the Quality of Life By Pilon, André Francisco
  22. Addendum to "Marx's Analysis of Ground-Rent : Theory, Examples and Applications" By Deepankar Basu
  23. Of time, uncertainty, and policy-making : Lionel Robbins’ lost philosophy of political economy By Thiago Dumont Oliveira; Carlos Eduardo Suprinyak
  24. Push no one behind By Diane Elson
  25. Combating Hysteresis With Output Targeting By Michl, Thomas; Oliver, Kayla
  26. A Model of the Marxist Rent Theory By Debarshi Das
  27. Mirror image versus Parabolic Reflections of Donor Kebabs: Secret of Economic Success By Mamoon, Dawood
  28. Math, Girls and Socialism By Lippmann, Quentin; Senik, Claudia
  29. Books Reports: Prepared by: Yahya Malik and Kaleem Alam. تقارير كتب: من إعداد: يحيى ملك وكليم عالم By Editorial Board أسرة التحرير

  1. By: Engelbert Stockhammer (Kingston University); Collin Constantine; Severin Reissl
    Abstract: The paper proposes a post-Keynesian analysis of the Eurozone crisis and contrasts interpretations inspired by New Keynesian, New Classical, and Marxist theories. The origin of the crisis is the emergence of a debt-driven and an export-driven growth model, which resulted in a rapid increase in private debt ratios and current account imbalances. The reason the crisis escalated in southern Europe, but not in other parts of the world, lies in the unique dysfunctional economic policy regime of the Euro area. European fiscal rules and the Troika impose fiscal austerity on countries in crisis and the separation of fiscal and monetary spaces has made countries vulnerable to sovereign debt crises and forced them to comply. We analyse the role different paradigms attribute to current account imbalances, fiscal policy and monetary policy. Remarkably, opposing views on the relative importance of cost and demand developments in explaining current account imbalances can be found in both heterodox and orthodox economics. Regarding the assessment of fiscal and monetary policy there is a clearer polarisation, with heterodox analysis regarding austerity as unhelpful and large parts of orthodox economics endorsing it. We conclude that there is a weak mapping between post-Keynesian, New Classical, New Keynesian and Marxist theories and different economic policy strategies for the Euro area, which we label Keynesian New Deal, European Orthodoxy, Moderate Reform and Progressive Exit respectively.
    Keywords: Euro crisis, European economic policy, sovereign debt crisis, current account balance, fiscal policy, quantitative easing
    JEL: B00 E00 E50 E63 F53 G01
    Date: 2016–11
  2. By: Daniele Girardi (Department of Economics, University of Massachusetts, Amherst); Riccardo Pariboni (Department of Economics, Roma Tre University)
    Abstract: As well-known, the canonical Neo-Kaleckian growth model fails to reconcile actual and normal rates of utilization in equilibrium. Some recent contributions revive an old proposal for solving this problem – making the normal rate of utilization an endogenous variable that converges to the actual utilization rate – justifying it with new, micro-founded premises. We argue that these new justifications for the convergence of normal to actual utilization do not stand closer scrutiny. First, the proposed microeconomic model relies on various restrictive assumptions, some of which are mutually inconsistent. Second, the derivation of the macroeconomic adjustment mechanism from the microeconomic analysis involves a logical leap, that can be justified only by a very arbitrary assumption with little economic justification. Finally, we discuss the way in which this mechanism has been incorporated into the Neo-Kaleckian growth model by proposers of this approach. We show that, even if one puts aside, for the sake of argument, the first two points, the existence of autonomous components of demand is sufficient to invalidate the resulting macroeconomic model.
    Keywords: Capacity Utilization, Normal Rate of Utilization, Neo-Kaleckian model, Economic Growth
    JEL: B50 E11 E12 E22
    Date: 2018
  3. By: Engelbert Stockhammer; Rafael Wildauer (Kingston University)
    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
  4. By: Yannis Dafermos (UWE Bristol); Maria Nikolaidi; Giorgos Galanis
    Abstract: This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model has the following key features. First, monetary and physical stocks and flows are explicitly formalised taking into account the accounting principles and the laws of thermodynamics. Second, Georgescu-Roegen’s distinction between stock-flow and fund-service resources is adopted. Third, output is demand-determined but supply constraints might arise either due to environmental damages or due to the exhaustion of natural resources. Fourth, climate change influences directly the components of aggregate demand. Fifth, finance affects macroeconomic activity and the materialisation of investment plans that determine ecological efficiency. The model is calibrated using global data. Simulations are conducted to investigate the trajectories of key environmental, macroeconomic and financial variables under (i) different assumptions about the sensitivity of economic activity to the leverage ratio of firms and (ii) different types of green finance policies.
    Keywords: ecological macroeconomics, stock-flow consistent modelling, laws of thermodynamics, climate change, finance
    JEL: E12 E44 Q54 Q57
    Date: 2016–07
  5. By: Maria Nikolaidi (University of Greenwich); Engelbert Stockhammer
    Abstract: Minsky’s ideas have recently gained prominence in the mainstream as well as in the heterodox literature. However, there exists no agreement upon the formal presentation of Minsky’s insights. The aim of this paper is to survey the literature and identify differences and similarities in the ways through which Minskyan ideas have been formalised. We distinguish between the models that focus on the dynamics of debt or interest, with no or a secondary role for asset prices, and the models in which asset prices play a key role in the dynamic behaviour of the economy. Within the first category of models we make a classification between (i) the Kalecki-Minsky models, (ii) the Kaldor-Minsky models, (iii) the Goodwin-Minsky models, (iv) the credit rationing Minsky models, (v) the endogenous target debt ratio models and (vi) the Minsky-Veblen models. Within the second category of models, we distinguish between (i) the equity price Minsky models and (ii) the real estate price Minsky models. Key limitations of the models and directions for future research are outlined.
    Keywords: business cycles, financial instability, post-Keynesian economics, debt cycles
    JEL: B50 E32 G01
    Date: 2017–07
  6. By: Eric Kemp-Benedict
    Abstract: This paper presents a step toward a post-Keynesian dynamic model for long-run policy analysis. It is a multi-sector Harrodian-Kaleckian growth model with locally unstable dynamics contained by a Hicksian floor and ceiling. It adopts a model of biased technological change that links productivity growth with the functional income distribution. The model features endogenous wages, prices, labor and capital productivities, capital utilization, employment, and labor participation. At present it lacks government, financial, and foreign sectors, but despite this it exhibits interesting behavior. The model generates asymmetric business cycles, with a long expansion and a short contraction, as well as long waves and changes in the structure of employment.
    Keywords: post-Keynesian, Harrodian-Kaleckian, multiplier-accelerator, technological change
    JEL: E11 E17 E22
    Date: 2017–03
  7. By: Thomas Obst; Özlem Onaran (University of Greenwich); Maria Nikolaidi
    Abstract: This paper develops a multi-country post-Kaleckian demand-led growth model that incorporates the role of the government. One novelty of this paper is to integrate cross-country effects of both changes in income distribution and fiscal policy. The model is used to estimate econometrically the effects of income distribution and fiscal policy on the components of aggregate demand in EU15 countries. The results show that a policy mix that combines the simultaneous implementation of a pro-labour wage policy, an expansionary fiscal policy and a progressive tax policy in all EU countries leads to a significant rise in the EU15 GDP. The impact of wage policies is positive but small; the overall stimulus becomes much stronger with fiscal expansion. This policy mix leads to an improvement in the budget balance in all the EU15 countries, suggesting that expansionary fiscal policy is sustainable when it is combined with wage and progressive tax policy.
    Keywords: None
    JEL: E12 E25 E62
    Date: 2017–04
  8. By: Mark Hayes (University of Cambridge)
    Abstract: A core proposition of Keynes’s General Theory is that money wages do not determine real wages or employment at the aggregate level in a closed economy. What then is the macroeconomic role of trades unions in the determination of real wages and employment? What are the mechanisms through which bargaining power takes effect? The paper argues that trades unions play important roles in countering employer monopsony as well as in determining the non-wage terms and conditions of employment and the incidence of risk between capital and labour. In the former role, it is the money wage that is relevant, while the latter role is a factor in the determination of aggregate real income and profit, yet the aggregate real wage itself and the wage share are residuals. Trades unions have the potential to support the promotion of full employment with price stability as part of a policy of demand management through the adoption of co-ordinated wage bargaining institutions.
    Keywords: Collective bargaining, wage co-ordination, income distribution
    JEL: E23 E25 J30 J51 J52
    Date: 2016–08
  9. By: Jackson, Emerson Abraham
    Abstract: This research article was championed as a way of providing discourses pertaining to the concept of "Critical Realism (CR)" approach, which is amongst many othe forms of competing postmodern philosophical concepts for the engagement of dialogical discourses in the area of established econonetric methodologies for effective policy prescription in the economic science discipline. On the the whole, there is no doubt surrounding the value of empirical endeavours in econometrics to address real world economic problems, but equally so, the heavy weighted use and reliance on mathematical contents as a way of justifying its scientific base seemed to be loosing traction of the intended focus of economics when it comes to confronting real world problems in the domain of social interaction. In this vein, the construction of mixed methods discourse(s), which favour that of CR philosophy is hereby suggested in this article as a way forward in confronting with issues raised by critics of mainstream economics and other professionals in the postmodern era.
    Keywords: Theoretical, Methodological Intervention, Postmodern, Critical Realism, Econometrics
    JEL: A12 B50 C18
    Date: 2018–05–18
  10. By: Miguel D. Ramirez (Department of Economics, Trinity College)
    Abstract: This brief note contends that Marx's (and Ricardo's) views on fixed (constant) and circulating (variable) capital,the impact of machinery on the working class,and their conception of how the accumulation of capital gives rise to a relative diminution in the demand for labor were strongly influenced by the works of English economists John Barton and George Ramsay. With a few notable exceptions, Marx's (and Ricardo,s)intellectual debt to these classical economists has been practically neglected in the extant literature. Second, the note into Marx's theory of technological unemployment (surplus labor) and its main components. Again, the textual evidence strongly suggests that Marx was influenced by the writings of Barton, Ricardo, and Ramsay. The latter seems to have also influenced Marx's conception of one of the three major components of the surplus population, viz. the latent component.
    JEL: B10 B12 B14
    Date: 2018–06
  11. By: Alexander Guschanski; Engelbert Stockhammer
    Abstract: This paper analyses the emergence of current account imbalances as a result of the co-existence of trade flows and financial flows. The literature has tended to view these factors in isolation: many post-Kaleckian models, as well as Net-saving approaches assume that financial flows will adjust to trade flows. Models focusing on financial crises feature a strong role for financial flows but ignore drivers of trade flows. Similarly, empirical analyses either ignore drivers of financial flows or insufficiently capture determinants of trade flows. The paper, first, proposes a simple macroeconomic framework of the current account which gives equal emphasis to trade flows, determined by price competitiveness, and financial flows, determined by asset prices. Second, we test a reduced form of the model for 28 OECD countries for the period 1971-2014. Our results indicate that cost competitiveness as well as asset prices play a role in the determination of current accounts, but asset prices have dominated in the last two decades.
    Keywords: current account, financial flows, competitiveness, asset prices
    JEL: E12 F32 F41
    Date: 2017–11
  12. By: Asjad Naqvi; Engelbert Stockhammer
    Abstract: This paper presents a post-Keynesian ecological macro model that combines three strands of literature: the directed technological change mechanism developed in mainstream endogenous growth theory models, the ecological economic literature which highlights the role of green innovation and material flows, and the post-Keynesian school which provides a framework to deal with the demand side of the economy, financial flows, and inter- and intra-sectoral behavioral interactions. The model is stock-flow consistent and introduces research and development (R&D) as a component of GDP funded by private firm investment and public expenditure. The economy uses three complimentary inputs – Labor, Capital, and (non-renewable) Resources. Input productivities depend on R&D expenditures, which are determined by relative changes in their respective prices. Two policy experiments are tested; a Resource tax increase, and an increase in the share of public R&D on Resources. Model results show that policy instruments that are continually increased over a long-time horizon have better chances of achieving a "green" transition than one-off climate policy shocks to the system, that primarily have a short-run effect.
    Keywords: directed technological change, research and development, green transition, ecological economics, post-Keynesian economics, stock-flow consistency
    JEL: E12 O33 Q57
    Date: 2017–10
  13. By: Javier Lopez Bernardo (Kingston University)
    Abstract: This paper offers a novel post-Keynesian theory, in a stock-flow consistent framework, to understand equity returns and their links with economic growth and consumption decisions from a long-run perspective. The main features of such a theory can be summarised as follows. First, there is a negative relationship between Tobin’s q and economic growth. Second, the effect of economic growth on dividend yields and earnings growth is positive, but its effect on the growth in the number of shares is negative (i.e. a ‘dilution effect’), which makes the relationship between equity returns and economic growth undetermined a priori. Third, consumption decisions emerge as crucial drivers for shareholder profitability in the long-run, being such a result very close to Kalecki’s theory of profits, but now applied to financial markets. And fourth, in the post-Keynesian theory the equity yield is determined by aggregate demand, and no theory of risk is needed. Finally, the post-Keynesian theory will be compared against the mainstream financial theory, which features the famous risk-return nexus where asset returns are given by the volatility of the asset with respect to consumption. It will be claimed that the use of risk for determining equity returns at the macroeconomic level is problematic, and that depending on the risk definition assumed, the risk-return relationship can be either positive or negative – being thus such a nexus of little theoretical significance and posing serious problems for mainstream finance.
    Keywords: equity yield, dividend yield, Tobin’s q, post-Keynesian macroeconomic theory, Kaleckian growth models, stock-flow consistent models, mainstream finance
    JEL: E12 E22 E44 G10 O42
    Date: 2016–07
  14. By: Ewa Karwowski; Engelbert Stockhammer
    Abstract: Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.
    Keywords: financialisation, emerging markets, financial instability, asset price volatility, heterodox economics
    JEL: B50 E30 F34 G01 G12 G15
    Date: 2016–08
  15. By: Guglielmo Forges Davanzati (University of Salento (IT))
    Abstract: The aim of this paper is to provide a theoretical model inspired by Veblen’s theory of the firm, and to derive some implications of firms’ behaviour for the process of income distribution. It will be shown that the firm is a locus of conflict, involving technicians – interested in expanding production – and “businessmen” – interested in gaining money profits via the management of the “pecuniary side” of the firm. The outcome of the bargaining within the firm defines the ‘workmanship-type’ or ‘non-workmanship-type’ nature of the firm, and affects the level of real wages and employment, insofar as the greater the power of technicians, the higher the real wages are. Moreover, since the expansion of production is associated with the minimum degree of underutilization of capital, technical improvements have a positive effect on the level of employment. Finally, it is argued that a wage increase can have a positive effect on the degree of capital utilization and the level of employment, via the increase in total demand and in the degree of capital utilization.
    Keywords: Veblen, theory of firm, wages, income distribution
    JEL: B15 B31 D21 D30
    Date: 2016–11
  16. By: Ewa Karwowski (SOAS, University of London); Mimoza Shabani; Engelbert Stockhammer
    Abstract: The financialisation literature has grown over the past two decades. While there is a generally accepted definition, effectively financialisation has been used to describe very different phenomena. This paper proposes a multi-faceted notion of financialisation by distinguishing between financialisation of non-financial companies, households and the financial sector and using activity as well as vulnerability measures of financialisation. We identify seven financialisation hypotheses in the literature and empirically investigate them in a cross-country analysis for 17 OECD countries for the 1997-2007 period. We find that different financialisation measures are only weakly correlated, which suggests the existence of distinct financialisation processes. There is strong evidence across all sectors that financialisation is closely linked to asset price inflation and correlated with a debt-driven demand regime. Financial deregulation encourages financialisation, especially in the financial and household sector. By contrast, there is limited evidence that market-based financial systems tend to be more financialised, meaning financialisation can occur with large banks. Foreign financial inflows do not seem to be a main driver. We do not find indication that a secular investment slowdown precedes financialisation. Overall, our findings suggest that financialisation should be understood as variegated process, playing out differently across economic sectors in different countries.
    Keywords: financialisation, cross country analysis, financial deregulation, property prices
    JEL: B50 B51 G10 G20 G30 P51
    Date: 2016–12
  17. By: Sheila Dow (Department of Economics, University of Victoria)
    Abstract: The modern debate about monetary reform has taken on a new twist with the development of distributed ledger payments technology employing private digital currencies. In order to consider the appropriate state response, we go back to first principles of money and finance and the case for financial regulation: to ensure provision of a safe money asset and a stable supply of credit within an inherently unstable financial system. We consider calls to privatise money or to restrict money issue to the state against the background of the increasing marketisation of the financial sector and money itself. Following an analysis of private digital currencies, we then consider proposals for state issue of digital currency. It is concluded that the focus of attention should instead be on updating of regulation, not only to encompass digital currencies, but also to address other innovations in the financial sector which generate credit and liquidity, in order to meet the needs of the real economy. JEL Classification: E3, E5, G1
    Keywords: Digital Currencies, Central Banks, Financial Instability, Financial Regulation
    Date: 2018–06–22
  18. By: Joan R. Rovira (Economic Studies Office, Barcelona Chamber of Commerce (ES))
    Abstract: We identify a set of key stylised facts characterising the evolution of the seven largest advanced economies from the 1960s to 2015 and develop a small one-sector model of growth and distribution broadly consistent with these facts. The model is used to explore the relationship between falling trend growth, the re-distribution of aggregate income towards profits and the concentration of corporate power and wealth. Theory is confronted with history to illustrate how changes in social structure can affect economic behaviour and performance. We argue that finance-led corporate restructuring, involving debt-financed corporate transactions, may have played a crucial role in shaping long-term patterns of growth and distribution.
    Keywords: Stagnation, Distribution, Growth, Financialisation, Heterodox Economics
    JEL: B22 E11 E12 E44 E65 G01 O11
    Date: 2017–05
  19. By: Yannis Dafermos; Maria Nikolaidi (University of Greenwich); Giorgos Galanis
    Abstract: Using a stock-flow-fund ecological macroeconomic model, we analyse (i) the effects of climate change on financial stability and (ii) the financial and global warming implications of a green QE programme. Emphasis is placed on the impact of climate change damages on the price of financial assets and the financial position of firms and banks. The model is estimated and calibrated using global data and simulations are conducted for the period 2015-2115. Four key results arise. First, by destroying the capital of firms and reducing their profitability, climate change is likely to gradually deteriorate the liquidity of firms, leading to a higher rate of default that could harm both the financial and the non-financial corporate sector. Second, climate change damages can lead to a portfolio reallocation that can cause a gradual decline in the price of corporate bonds. Third, financial instability might adversely affect credit expansion and the investment in green capital, with adverse feedback effects on climate change. Fourth, the implementation of a green QE programme can reduce climate-induced financial instability and restrict global warming. The effectiveness of this programme depends positively on the responsiveness of green investment to changes in bond yields.
    Keywords: ecological macroeconomics, stock-flow consistent modelling, climate change, financial stability, green quantitative easing
    JEL: E12 E44 E52 Q54
    Date: 2017–09
  20. By: Engelbert Stockhammer (Kingston University); Quirin Dammerer; Sukriti Kapur
    Abstract: The Research Excellence Framework (REF) is the main research assessment for universities in the UK. It informs university league tables and the allocation of government research funding. This paper analyses the evaluations of the REF 2014 for Economics, Business, Politics and History. We analyse, first, from which journals, articles have been submitted; second, to what extent journal ratings and impact factors predict the REF´s evaluations; third, how many articles from heterodox economics journals have been submitted. We find that a small group of journals dominate the outputs submitted. Journal ratings and impact factors explain 86 to 89% of the variation in the output evaluations for Economics. These values are lower but still substantial for other disciplines. Few papers from heterodox economics journals were submitted to Economics. Overall, the REF in its present form marginalises heterodox economics, pushes it out of the discipline and endangers pluralism in economics research.
    Keywords: research assessment, Research Excellence Framework, journal impact factors, journal ratings, pluralism, heterodox economics
    JEL: A14 A20 B50
    Date: 2017–11
  21. By: Pilon, André Francisco
    Abstract: In view of the overwhelming pressures on the global environment and the need to disrupt the systems that drive them, an ecosystemic theoretical and practical framework is posited for the evaluation and planning of public policies, research and teaching programmes, encompassing four dimensions of being-in-the-world (intimate, interactive, social and biophysical), as they combine, as donors and recipients, to induce the events (deficits/assets), cope with consequences (desired/undesired) and contribute for change (potential outputs). The focus should not be on the “bubbles” of the surface (consequences, fragmented issues), but on the configurations deep inside the boiling pot where the problems emerge. New paradigms of development, growth, power, wealth, work and freedom, embedded at institutional level, include heterogeneous attributes, behaviours and interactions and the dynamics of the systems (institutions, populations, political, economic, cultural and ecological background). Instead of dealing with the bubbles (segmented, reduced issues) and trying to solve isolated and localized problems without addressing the general phenomenon, the proposal emphasizes the definition of the problems deep inside the “boiling pot”, where the problems emerge, encompassing the current “world-system” with its boundaries, structures, techno-economic paradigms, support groups, rules of legitimation, and coherence. In the socio-cultural learning niches, heuristic-hermeneutic experiences generate awareness, interpretation and understanding beyond established stereotypes, from a thematic (“what”), an epistemic(“how”) and a strategic (policies) point of view. The proposal relates to how taken for granted worldviews, values and perceptions affect environmental problems and quality of life.
    Keywords: education, culture, politics, economics, ethics, environment, ecosystems
    JEL: I00 I25 I28 I29 O21 O31 Q2 Q28 Q5 Q51 Q56 Q57 Q58
    Date: 2016–11–05
  22. By: Deepankar Basu (Department of Economics, University of Massachusetts - Amherst)
    Abstract: In a recent paper, I had proposed an analytical framework to understand Marx’s theory of ground-rent. An important question had been left unaddressed in the paper : how are the price and output levels (of the agricultural commodity) determined in a way that can both take account of fluctuations in market demand and also embed profit-maximizing behavior of the capitalist-farmers? In this note, I offer a simple way to think about the determination of equilibrium levels of price and output for the agricultural commodity that makes explicit two important dimensions: (a) the role of aggregate demand for the agricultural commodity, and (b) profit maximizing behavior of the capitalist farmers.
    Keywords: ground-rent, surplus value, Marx
    JEL: B51
    Date: 2018
  23. By: Thiago Dumont Oliveira (University of Siena); Carlos Eduardo Suprinyak (Cedeplar-UFMG)
    Abstract: In the second edition of his methodological Essay, Lionel Robbins attributes a significant role to uncertainty, dynamics and the time element. Understanding the motives that led to these revisions may offer important clues to assess what happened to political economy ever since, and how far economics has diverged from Robbins’ agenda. Our main claim is that these topics appeared on the second edition of the Essay because Robbins saw them as fundamental if economics (as a science) were to achieve its goal of being a useful tool for political economy, following the English Classical economists’ distinction between science and art. His conception of science was thus tailored to his interests in political economy, rejecting attempts to mimic the methods of the natural sciences by preserving the human element that makes economics a social science.
    Keywords: Lionel Robbins, Political Economy, Uncertainty, Time, Methodology of Economics
    JEL: B20 B31 B40
    Date: 2018–05
  24. By: Diane Elson
    Abstract: One of the pillars of the 2030 Agenda for Sustainable Development is the pledge to ‘leave no one behind’. This paper argues that we must recognise that many people throughout the world are not just being left behind. They are being pushed even further behind, and their levels of well-being are falling, often in ways from which it is impossible to fully recover. Indeed, many are confronted with forces that lead to their avoidable premature deaths. Thus, development policies should have as their first priority to ensure that no one is pushed behind. The paper argues that this could be secured through a different way of framing economic policy, that focuses on the obligations of states to respect, protect and fulfil economic, social and cultural rights. The paper also highlights the ways in which deprived people are using the human rights system to claim their rights.
    Keywords: 2030 Agenda, poverty, inequality, deprivation, dispossession, human rights obligations, human rights claims
    JEL: D63 I15 I31
    Date: 2018–06
  25. By: Michl, Thomas (Department of Economics, Colgate University); Oliver, Kayla (Department of Economics, Colgate University)
    Abstract: Hysteresis, path dependence, and multiple equilibria are characteristic features of post-Keynesian economics. This paper constructs an otherwise conventional three-equation model that includes a hysteresis-generating mechanism and an invariant output target. We use it to explore the implications for monetary policy of an output targeting policy framework that seeks to reverse the damage caused by hysteresis. We restrict ourselves to negative aggregate demand shocks and positive inflation shocks that in most instances require a disinflationary response from the central bank. One important finding is that as long as inflation expectations are to some degree anchored, the central bank can achieve its output target after an aggregate demand shock by overshooting its inflation target temporarily and running a ``high-pressure labor market." If expectations are unanchored, an aggregate demand shock will not have long-run hysteresis effects because the central bank is obliged to reflate aggressively, replacing on a cumulative basis all the demand that was lost through the shock. However, with unanchored expectations a pure inflation shock will create hysteresis effects since the central bank will need to disinflate and it does not have the option of running a high-pressure labor market. Anchoring gives the central bank this option, making inflation shocks manageable.
    Keywords: monetary policy, hysteresis, path dependence, divine coincidence, inflation-expectations anchoring
    JEL: E11 E12 O42
    Date: 2017–11–01
  26. By: Debarshi Das (Humanities and Social Sciences Department, Indian Institute of Technology Guwahati)
    Abstract: This paper presents an interpretation of Marx’s rent theory. The three forms of rent, differential rent of type one and two, and absolute rent, have been elaborated and represented through algebra. Marx situated his theory in an agrarian economy characterized by the capitalist mode of production. Such conditions are not present in the agrarian economy of India, yet one can still borrow Marx’s analytical tools, the paper argues, to understand the contemporary agrarian India. Some observations on Indian agrarian economy have been offered in the end.
    Keywords: Keywords: Marx, absolute rent, organic composition of capital, landed property
    Date: 2018
  27. By: Mamoon, Dawood
    Abstract: The paper explains why re advent of neo Keynesian economics may lead to a framework of universal economic development that means prosperity achieved vertically (national) and horizontally (local) only if it can utilize tools of social science available in anthropology and political economy.
    Keywords: Economic Measures, Social Constructs, Political Constructs
    JEL: B2 B25 Z1 Z13
    Date: 2018–05–17
  28. By: Lippmann, Quentin (Paris School of Economics); Senik, Claudia (Paris School of Economics)
    Abstract: This paper argues that the socialist episode in East Germany, which constituted a radical experiment in gender equality in the labor market and other instances, has left persistent tracks on gender norms. We focus on one of the most resilient and pervasive gender gaps in modern societies: mathematics. Using the German division as a natural experiment, we show that the underperformance of girls in math is sharply reduced in the regions of the former GDR, in contrast with those of the former FRG. We show that this East-West difference is due to girls' attitudes, confidence and competitiveness in math, and not to other confounding factors, such as the difference in economic conditions or teaching styles across the former political border. We also provide illustrative evidence that the gender gap in math is smaller in European countries that used to be part of the Soviet bloc, as opposed to the rest of Europe. The lesson is twofold: (1) a large part of the pervasive gender gap in math is due to social stereotypes; (2) institutions can durably modify these stereotypes.
    Keywords: gender gap in math, institutions, German division, gender stereotypes
    JEL: I2 J16 J24 P36 Z13
    Date: 2018–05
  29. By: Editorial Board أسرة التحرير (Islamic Economics Institute King Abdulaziz University, Jeddah, Saudi Arabia معهد الاقتصاد الإسلامي جامعة الملك عبدالعزيز – جدة – المملكة العربية السعودية)
    Abstract: Books Name: 1. Reformation and Development in the Muslim World: Islamicity Indices as Benchmark. 2. Measuring Multidimensional Poverty and Deprivation: Incidence and Determinants in Developed Countries. 3. How Capitalism Destroyed Itself: Technology Displaced by Financial Innovation. 4. Rethinking Economics: An Introduction to Pluralist Economics. [Prepared by Yahya Malik] 5. House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It From Happening Again. [Prepared by Kaleem Alam] أسماء كتب: 1. الإصلاح والتنمية في العالم الإسلامي: مؤشرات الإسلام كمقياس. 2. قياس الفقر والحرمان المتعدد الأبعاد: الوقوع والمحددات في البلدان المتقدمة. 3. كيف دمرت الرأسمالية نفسها: التكنولوجيا المشردة من قبل الابتكار المالي. 4. إعادة التفكير في الاقتصاد: مقدمة في الاقتصاد التعددي. 5. بيت الدين: كيف تسببت (وأنت) في حدوث الركود الكبير ، وكيف يمكننا منعه من الحدوث مرة أخرى.
    Date: 2018–01

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