nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2018‒10‒29
seven papers chosen by
Karl Petrick
Western New England University

  1. "Two Harvard Economists on Monetary Economics: Lauchlin Currie and Hyman Minsky on Financial Systems and Crises" By Ivan D. Velasquez
  2. Daniel Ellsberg on J.M. Keynes and F.H. Knight:Risk, Ambiguity and Uncertainty By Yasuhiro Sakai
  3. On the Ricardian invariable measure of value in general convex economies By Kazuhiro Kurose; Naoki Yoshihara
  4. Animal Spirits - Die Verhaltensökonomischen Grundlagen der Keynesschen Theorie By Ronald Schettkat
  5. Textbooks in the historiography of recent economics By Yann Giraud
  6. Is Cash Dead? Using Economic Concepts To Motivate Learning and Economic Thinking By Philip Gunby; Stephen Hickson
  7. From income poverty to multidimensional poverty?an international comparison By Francesco Burchi; Nicole Rippin; Claudio E. Montenegro

  1. By: Ivan D. Velasquez
    Abstract: In November 1987, Hyman Minsky visited Bogota, Colombia, after being invited by a group of professors who at that time were interested in post-Keynesian economics. There, Minsky delivered some lectures, and Lauchlin Currie attended two of those lectures at the National University of Colombia. Although Currie is not as well-known as Minsky in the American academy, both are outstanding figures in the development of non-orthodox approaches to monetary economics. Both alumni of the economics Ph.D. program at Harvard had a debate in Bogota. Unfortunately, there are no formal records of this, so here a question arises: What could have been their respective positions? The aim of this paper is to discuss Currie's and Minsky's perspectives on monetary economics and to speculate on what might have been said during their debate.
    Keywords: Lauchlin Currie; Hyman Minsky; Monetary Economics; Monetary Policies; Fiscal Policies
    JEL: B22 B31 B50 E12 E50
    Date: 2018–10
  2. By: Yasuhiro Sakai (Faculty of Economics, Shiga University)
    Abstract: This paper aims to focus on the life and work of Daniel Ellsberg, with an intensive discussion on its relation to J.M. Keynes and F.H. Knight, the two great pioneers of the economics of uncertainty. Ellsberg seems to be a man in paradox. When he was young, he was an outstanding researcher at Harvard University and the RAND Corporation; at the December Meting of the Econometric Society in 1960, he presented his remarkable paper in which he successfully demonstrated what we may now call Ellsberg's paradox against the traditional expected theory a la Daniel Bernoulli and von Neumann. Although it was published with the title "Risk, ambiguity and decision" in the November issue of the Quarterly Journal of Economics, it was not paid due attention for a long time. It was partly because he was so preoccupied in the 1960s and onward by letting the general public know the Pentagon papers that he could virtually have no time left to engage in purely academic activities. In the 21st century, however, the times have changed in favor of Ellsberg: we can see the dramatic return of interest in decision making under ambiguity. Chapter ‡U will deal with uncertainties that are not risks. A focal point of discussion will be the similarity and difference between Keynes and Knight. Kenneth Arrow's skepticism about Knight on uncertainty will also be paid due attention. Chapter ‡V, the main part of this paper, will turn to the concept of ambiguity that was first introduced by Ellsberg. The two-color problem and the three color problem will systematically be examined by help of numerical representations. Chapter ‡W will tell us many alternative ways to solve the so-called Ellsberg paradox. Presumably, the Keynesian approach by means of interval-valued probabilities will be shown to be very simple and highly effective. In our opinion, the most amazing Ellsberg paradox lies in the fact that an accomplished economist specialized in the aversion of risk and uncertainty dared to make a personal choice to risk everything such as degrading his social status and putting him in prison for a long period. Surely, the intellectual legacy of Ellsberg seems to be an intriguing research in paradox.
    Keywords: Ellsberg, Keynes, Knight, risk, ambiguity, uncertainty
    JEL: B21 B22 D81 E12
    Date: 2018–06
  3. By: Kazuhiro Kurose (Tohoku University); Naoki Yoshihara (School of Economics and Management, Kochi University of Technology)
    Abstract: This study examines the possibility of an invariable measure of value when price changes induced by income redistribution between profit and wages take place in general convex economies. While Ricardo searched for an invariable measure of value with respect to changes in both the factor income distribution and the technique, Sraffa constructed a standard commodity serving as a measure of the change in a factor income distribution alone by leaving aside the possibility of changes in the size and composition of output and means of production. This study allows for the possibility that a change in factor income distribution involves a change in technique, and proposes an extension of Sraffa’s standard commodity. Then, we show that it serves as an invariable measure of value with respect to the income redistribution, even though it involves a change in technique. Finally, we examine whether the linear distributional relation is preserved.
    Keywords: Ricardo’s invariable measure of value, Sraffa’s standard commodity, Linear relation of factor income distribution, General convex economies
    JEL: B51 D33 D51
    Date: 2018–10
  4. By: Ronald Schettkat
    Abstract: Keynes' General Theory (GT) ist in zweierlei Hinsicht umfassender als das (neo-) klassische Modell - (1) sie schließt das Vollbeschäftigungsgleichgewicht als Sonderfall ein und (2) sie basiert auf realistischem mikroökonomischem Verhalten, dessen sozial isolierter, den Eigennutz maximierender homo oeconomicus der neoklassischen Ökonomie allenfalls ein ganz spezieller Fall ist. Keynes' Mikro basiert auf verhaltensökonomischen Grundlagen, die durch die Neurowissenschaften und die Experimente der Behavioral Economics eindrucksvoll bestätigt werden.
    Date: 2018–10
  5. By: Yann Giraud (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Textbooks are both neglected and at times overused as objects in the history of economics. They are neglected because most historians, borrowing from Kuhn, tend to regard them as passive receptacles of past knowledge, yet they are also overused as shortcuts to study the state of economic doctrine at a certain point in time. Looking at the existing historical literature that studies or uses textbooks, this chapter shows how a better understanding of the specific pedagogical and institutional environments in which textbooks operate can help build thicker and more accurate histories of the role they have played, not just in disseminating, but also in creating and transforming economic knowledge.
    Date: 2018
  6. By: Philip Gunby (University of Canterbury); Stephen Hickson (University of Canterbury)
    Abstract: Simple but neglected concepts such as the velocity of circulation are ideal to open up discussions in macroeconomics classes, in this case about why the demand for money may rise or fall and about the likelihood of a cashless society. First, we review the history of the velocity of circulation. Next, we provide details of a research exercise in an undergraduate macroeconomics course. This exercise includes students searching for data on financial and monetary systems and national accounts. Data sources and links are provided for different countries. We also explain how such an exercise can be used to further Excel skills of students. Finally, we discuss our experiences from this exercise, including student feedback about the exercise from a survey we conducted.
    Keywords: Teaching Macroeconomics, Velocity of Circulation, Cashless Society, Undergraduate Research.
    JEL: A22
    Date: 2018–09–01
  7. By: Francesco Burchi (IPC-IG); Nicole Rippin (IPC-IG); Claudio E. Montenegro (IPC-IG)
    Abstract: "Proponents of the income-based approach to poverty rarely contest the fact that poverty is actually a multidimensional phenomenon. What they claim is that economic resources provide a sufficiently precise proxy for whatever dimensions poverty might have. The indirect assumption is that all dimensions of poverty are highly correlated and thus can be substituted by just one dimension: income. Upcoming multidimensional poverty measures have challenged this established assumption, claiming that the correlation between the various dimensions of poverty is in fact not strong enough for income to serve as a proxy for them. Instead, the multiple dimensions of poverty should be measured one by one". (...)
    Keywords: Income, poverty, multidimensional, international, comparison
    Date: 2018–09

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