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on Post Keynesian Economics |
| By: | Engelbert Stockhammer; Karsten Kohler |
| Abstract: | In this article, we analyze the implications of financialization for domestic demand formation by linking the concept of financialization to the post-Keynesian analysis of demand regimes. We examine how the financialization of households in advanced economies gave rise to distinct but interdependent demand regimes. In the Anglo-Saxon and southern European countries, financialization in the form of property price inflation and rising household debt contributed to the development of a debt-driven demand regime with large current account deficits. Economic development in eastern Europe was shaped by catching-up through foreign direct investment from northern Europe and accompanied by worsening current account positions. Northern Europe, in contrast, relied on an export-driven demand regime with a weaker role for financialization. The export-driven demand regime relies on the financialization of southern Europe and the Anglo-Saxon countries, which helped create export demand for northern Europe. We argue that this constellation of demand regimes gives rise to divergent economic performance and macroeconomic instability. While with deleveraging the growth effects of the debt-driven model have gone into reverse, the fundamental configuration has not changed since the crisis. |
| Keywords: | Financialization, demand regimes, post-Keynesian economics |
| JEL: | E02 E60 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1911&r=all |
| By: | Aspromourgos, Tony (University of Sydney) |
| Abstract: | The recently published Elgar Companion to John Maynard Keynes (2019) is a major new contribution to Keynes scholarship, with sixty-three participants contributing ninety-five distinct entries, in 632 pages of text proper. This review essay provides an overview and assessment of the character and content of the work. It does so also via consideration of the question of Keynes’s key theoretical achievements; the relation between Keynes’s thought and the main currents of subsequent Keynesian economics; Keynes’s policy sensibility vis-à-vis ‘Keynesian’ policy; and finally, the question as to what is of endur-ing validity and greatest importance in Keynes’s economics, for the future. |
| Keywords: | John Maynard Keynes; Keynesianism; Pierangelo Garegnani. |
| JEL: | B22 B31 |
| Date: | 2019–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sraffa:0035&r=all |
| By: | Hein, Eckhard |
| Abstract: | This paper compares Marx's economics with those by Sraffa, Keynes, Kalecki and Minsky. The paper takes an "ex post" view on the matter and rather looks at the output side of the respective authors, but not at the input side. This means no attempt is made at studying in a systematic way, if and to what extent Sraffa, Keynes, Kalecki and Minsky were individually influenced by Marx's work. First, the relationship between Marx's theory of value and Sraffa's reformulation of the classical theory of prices and distribution is reviewed. Then the relationship between Marx's and Keynes's monetary theory is examined relying on an interpretation of Marx's theory of value as a "monetary theory of value". Next, some light is shed on the Marx-Kalecki connection focusing on Marx's theory of simple and extended reproduction and the built-in, although not fully elaborated "principle of effective demand" and the related theories of distribution and accumulation. Finally, Marx's and Minsky's views on financial instability and crises are scrutinised. It is concluded that Marx should not be considered as an "early post-Keynesian" but rather as an important forerunner of modern post-Keynesianism, with certain similarities, but also some important differences, and several areas of compatibility. |
| Keywords: | Marx,Kalecki,Keynes,Minsky,Sraffa,comparison of economic theories |
| JEL: | B14 B24 B50 B51 E11 E12 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1182019&r=all |
| By: | Prante, Franz J.; Barmucci, Alessandro; Hein, Eckhard; Truger, Achim |
| Abstract: | The aim of our contribution is to present an innovative instrument to teach macroeconomics at the undergraduate and master level. We develop a digital learning platform to present and explore some controversies at the very foundations of macroeconomic theory. For this purpose, we explicitly present two competing paradigms, the new-Keynesian and the post-Keynesian one. Several interactive scenarios are made available where the user can take control over different economic policy instruments and is guided through a set of problems that require appropriate actions in the context of the different approaches. |
| Keywords: | macroeconomics teaching,simulations,pluralism,new Keynesian macroeconomics,post-Keynesian macroeconomics |
| JEL: | A22 A23 E12 E17 E60 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1172019&r=all |
| By: | Kretschmer, Mark |
| Abstract: | Since the crisis of 2008 the liberal market order has been challenged by several (populist) social movements and has become object of political regulation. Whereas in the late 70s and early 80s politics tend to deregulate the market, nowadays deregulation seem to be a synonym for the negative externalities of a free global market. Following Polanyi (The Great Transformation, 1944), societies with market market economies tend to experience a double movement - the Polanyi's Pendulum - between phases in which the policies are designed to restrict the markets or liberalize them. This paper raises the question if these indicated changes have an impact on the economic research topics. Referring to modern Varieties-of-Capitalism literature bibliometric data of the period between 1950 and 2015 are used to analyze if there is a Polanyi's Pendulum within the economic literature. Looking for specific key words, e.g. liberalization, and using correlation analyses and time-series regressions it is possible to determine changes of the topics economists worked on and to identify those economic macro-forces that have been driven these changes. The political development in recent years can be considered as a new swing of Polanyi's pendulum. Economics itself is part of the double movement. A second look at Polanyi's might be fruitful to face present challenges better equipped. |
| Keywords: | political economy,double movement,bibliometry,Varieties of Capitalism,economics |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:opodis:201904&r=all |
| By: | Gallo, Ettore |
| Abstract: | In recent years, the role attached to the autonomous components of aggregate demand has attracted rising attention, as testified by the development of the Sraffian Supermulti plier model (SSM) and the attempts to include autonomous demand in the Neo-Kaleckian model. This paper reviews and empirically tests the validity and the policy conclusions of the two models in the Euro Area. First, we theoretically assess whether the SSM may con stitute a complex variant of the Neo-Kaleckian model. In this sense, it is shown that results compatible with the SSM can be obtained by implementing a set of mechanisms in a modified Neo-Kaleckian model, leading to the convergence towards a desired rate of utilization. Furthermore, the chief diffierence between the models is recognized to be the role attached to the rate of capacity utilization in the long run. Second, the paper empirically tests the main implications of the models in the Euro Area, based on Eurostat data. In particular, the discussion outlines the short and long-run relation between autonomous demand and output, by testing both the cointegration and the direction of causality between the two with a VECM model. Moreover, the role accounted by both theories to the actual rate of capacity utilization and its discrepancies from the normal rate is empirically assessed, through a time-series estimation of the Sraffian and Neo-Kaleckian investment functions. While confirming the theoretical relation between autonomous demand and output in the long run, the results show that the dynamics of the rate of capacity utilization still plays a key role in the short-run adjustment mechanism - despite its stationary behaviour in the long term. Therefore, admitting that Keynesian results may hold even after the traverse, our work suggests to be Kaleckian in the short run and Sraffian in the long run. |
| Keywords: | distribution,effective demand,Eurozone,growth,Neo-Kaleckian,Sraffian,Supermultiplier |
| JEL: | B51 E11 E12 O41 O47 O52 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1162019&r=all |
| By: | Dimitri B. Papadimitriou; Michalis Nikiforos; Gennaro Zezza |
| Abstract: | Although the ongoing recovery is about to become the longest in the history of the United States, it is also the weakest in postwar history, and as we enter the second quarter of 2019, many clouds have gathered. This Strategic Analysis considers the recent trajectory, the present state, and the future prospects of the US economy. The authors identify four main structural problems that explain how we arrived at the crisis of 2007-09 and why the recovery that has followed has been so weak-as well as why the prospect of a recession is increasingly likely. The US economy is in need of deep structural reforms that will deal with these problems. This report analyzes a pair of policies that begin to move in that direction, both involving an increase in the tax rate for high-income and high-net-worth households. Even if the primary justification for these policies is not economic, this report shows that if such an increase in taxes is accompanied by an equivalent increase in government outlays, the redistributive impact will have a positive macroeconomic effect while moving the US economy toward a more sustainable future. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levysa:sa_4_19&r=all |
| By: | Paolo Savona |
| Abstract: | While a consensus has formed that the eurozone's economic governance mechanisms must be reformed, and some progress has been made on this front, what has been agreed to so far falls short of what is needed to address the central imbalances caused by the eurozone setup, according to Paolo Savona. The key elements that are missing from the current package of reforms are interrelated: a common insurance scheme for bank deposits, the possible regulation of banks' sovereign exposure, and the existence of a common safe asset. Savona outlines a proposal to increase the supply of safe assets provided by a common European issuer (the European Stability Mechanism) and explains how the plan could be made economically and politically satisfactory to all member states while facilitating progress on the deposit insurance and sovereign exposure issues. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:19-1&r=all |
| By: | Marcelo Piancastelli; A.P.Thirlwall |
| Abstract: | This paper measures the tax effort of a sample of fifty-nine developed and developing countries over the period 1995-2015 by comparing a country’s actual tax/GDP ratio with the ratio predicted derived from an international tax function which relates tax revenue to various measures of a country’s taxable capacity such as the level of per capita income; the share of trade in GDP; the productive structure, and the level of financial deepening. The tax function is estimated using cross section data; pooled time series/cross section data, and panel data using a fixed effects estimator. The results are compared and show a range of tax effort from South Africa with the highest effort and Switzerland with the lowest effort. Implications for policy are drawn. |
| Keywords: | Tax ratios; tax effort |
| JEL: | H2 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1903&r=all |
| By: | EL OTHMANI, Jawad (Bank Al-Maghrib, Département de la Recherche) |
| Abstract: | Ce travail porte sur l'estimation d'un modèle hybride néo-keynesien (HNKM) formé de trois équations structurelles caractérisant l'économie marocaine. Il s'agit de la courbe de demande, de la courbe d'o¤re et d'une règle Taylor augmentée des réserves de change. Le modèle est estimé par une approche bayésienne à partir des données trimestrielles couvrant la période 1998Q1-2016Q4. Parallèlement et s'inspirant des travaux de Del Negro et Schorfheide (2004), un modèle BVAR-DSGE a été estimé en exploitant les priors issus du modèle HNKM. Les fonctions de réponse impulsionnelles ont été comparées et les performances prédictives de ces deux modèles structurels ont été confrontées à des modèles statistiques alternatifs: le VAR classique et le BVAR. Il ressort des résultats des modèles HNKM et BVAR-DSGE que les réactions des variables aux di¤érents chocs sont globalement similaires et conformes aux prédictions de la théorie économique. L'étude de la qualité prévisionnelle des di¤érents modèles indique que le BVAR-DSGE et le HNKM présentent des avantages comparatifs mais sans dominer, en tous points, les modèles statistiques tels que le VAR classique et le VAR bayésien. |
| Keywords: | HNKM; BVAR-DSGE; BVAR; estimation bayésienne |
| JEL: | C10 C11 C13 E10 E12 E17 |
| Date: | 2018–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:bkamdt:2018_005&r=all |