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on Post Keynesian Economics |
| By: | S Devrim Yilmaz (AFD - Agence française de développement, CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Engelbert Stockhammer (Kingston University [London]) |
| Abstract: | While there exists a substantial literature on different business cycle mechanisms, there is little literature on economies with more than one business cycle mechanism operating and the relation of stability of these subsystems with the stability of the aggregate system. We construct a model where a multiplier-accelerator subsystem in output-investment space (a real cycle) and a Minskyian subsystem in investment-debt space (a financial cycle) can generate stable/unstable cycles in 2D in isolation. We then derive a theorem showing that if two independent cycle mechanisms that generate stable closed orbits in 2D share a self-destabilizing common variable and the true representation of the system is a fully-coupled 3D system where a weighted average of the common variable is in effect, then the 3D system will generate locally stable closed orbits in 3D if and only if the subsystems have the same frequencies and/or the self-destabilizing effects of the common variable evaluated at the fixed point are equal in both subsystems. Our results indicate that in the presence of multiple cycle mechanisms which share common variables in an economy, the stability of the aggregate economy crucially depends on the frequencies of these sub-cycle mechanisms. Abstract While there exists a substantial literature on di¤erent business cycle mechanisms, there is little literature on economies with more than one business cycle mechanism operating and the relation of stability of these subsystems with the stability of the aggregate system. We construct a model where a multiplier-accelerator subsystem in output-investment space (a real cycle) and a Minskyian subsystem in investment-debt space (a …nancial cycle) can generate stable/unstable cycles in 2D in isolation. We then derive a theorem showing that if two independent cycle mechanisms that generate stable closed orbits in 2D share a self-destabilizing common variable and the true representation of the system is a fully-coupled 3D system where a weighted average of the common variable is in e¤ect, then the 3D system will generate locally stable closed orbits in 3D if and only if the subsystems have the same frequencies and/or the self-destabilizing e¤ects of the common variable evaluated at the …xed point are equal in both subsystems. Our results indicate that in the presence of multiple cycle mechanisms which share common variables in an economy, the stability of the aggregate economy crucially depends on the frequencies of these sub-cycle mechanisms. |
| Keywords: | Business cycles,Minsky models,Multiplier-accelerator |
| Date: | 2019–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02012724&r=all |
| By: | Antoine Monserand (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Situated at the interface between post-Keynesian and ecological economics, this article investigates the theoretical possibilities for a degrowth transition to take place while preserving macroeconomic stability. More precisely, the objective is to find whether in a neo-Kaleckian model of growth and distribution an equilibrium with a zero or even negative rate of accumulation can coexist with the Keynesian stability condition being verified. Our results are threefold. First, we confirm that adding the rate of depreciation to the canonical model allows for such an equilibrium to exist, but argue in favor of considering animal spirits rather than the depreciation factor as a potential policy variable for the management of the degrowth transition. Second, other elements such as overhead labour, a tax on capital, an autonomous component in consumption expenditures and a budget deficit can all give this result and provide more 'space' for the equilibrium with a negative rate of accumulation. Finally, we use the mechanism of the Sraffian supermultiplier to illustrate that combined political action and adoption of a more ecological mode of living can be the drivers of a stable degrowth transition. After the transition is completed, the stabilisation of aggregate consumption maintains the economy in a stationary state, at an ecologically sustainable level. |
| Keywords: | Neo-Kaleckian,Degrowth,Transition,Stability,Autonomous consumption,Super-multiplier |
| Date: | 2019–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02012632&r=all |
| By: | Vassilis Droucopoulos (Emeritus Professor of the Department of Economics of the University of Athens.) |
| Abstract: | It is my intention to address, primarily within the scope of mainstream macroeconomic theory, three of the questions making up the main theme of the conference, namely: “How a very problematic theory continues to survive and dominate both the policy and the academic scene. What are the processes in the economy and the society that sustain its dominance? What is the condition of the economic Orthodoxy (particularly under its current form of the New Macroeconomic Consensus, that is the hybrid of mild neoliberalism with conservative New Keynesianism)?”. A good many orthodox economists hold the view that there is no necessity for a paradigm shift. On the contrary, a mere “evolution towards a more pluralistic discipline” would suffice. Hence the title of my talk. |
| Keywords: | Economic Pluralism, Macroeconomic Theory |
| JEL: | A20 B40 B50 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:abe:wpaper:0001&r=all |
| By: | Chwieroth, Jeffrey M.; Walter, Andrew |
| Abstract: | The co-evolution of democratic politics and mass, financialized wealth has destabilized highly integrated financial systems and the socio-political underpinnings of neoliberal policy norms at domestic and global levels. Over the long run, it has increased the political pressure on governments to undertake bailouts during major banking crises and, by raising voters’ attentiveness to wealth losses and distributional inequities, has sharply raised the bar for government performance. The result has been more costly bailouts, greater political instability and the sustained politicization of wealth cleavages in crisis aftermaths. We underline the crucial importance and modernity of this phenomenon by showing how the high concentration of wealth in pre-1914 Britain and America among elites was associated with limited crisis interventions and surprisingly tranquil political aftermaths. By contrast, the 2007–2009 crises in both countries epitomise the political dilemmas facing elected governments in a new world of mass financialized wealth and the impact on political polarization and democratic politics. We show that these dilemmas were embryonic in the interwar period and highlight how the evolutionary forces shaping policy and political outcomes reveal the importance of time, context and the effects of long cycles in the world economy and global politics. |
| Keywords: | crisis; financialization; global finance; globalization; international history; political economy |
| JEL: | F3 G3 |
| Date: | 2019–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100765&r=all |
| By: | Stiglitz Joseph |
| Abstract: | Success in development over the past half-century was based on manufacturing-led export growth.Because the share of global employment in manufacturing will decline, manufacturing won’t play the same role in the coming decades. An increase in manufacturing employment won’t suffice to meet the need for new jobs, especially in Africa with its burgeoning population. There has to be another strategy.I deconstruct what enabled manufacturing to generate growth and structural transformation. It simultaneously provided needed foreign exchange, promoted learning, and provided employment. The new strategy I propose is more multi-pronged, addressing separately, in different sectors, the challenges of learning, foreign exchange, and employment.A carefully designed, co-ordinated multi-sector strategy, with sectoral policies in agriculture, natural resources, manufacturing, and especially services, has the prospect of attaining the same success as the old manufacturing export-led strategy. The development state will continue to be central, but has to be redefined. The new development strategies will require greater balance between the market, the state, and the community, a perspective articulated in the Stockholm Statement. |
| Keywords: | Stockholm Statement,Structural economic transformation,Manufacturing,Dynamic comparative advantage,Employment generation,Exports,Global reserve system,Inclusive growth,Industrial policy |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-176&r=all |
| By: | Baum, Matthew A. (Harvard Kennedy School); Dietrich, Bryce J. (Harvard Kennedy School); Goldstein, Rebecca (Harvard University); Sen, Maya (Harvard Kennedy School) |
| Abstract: | Whether it is defining Native Americans as non-citizens in 1800 or introducing a “mulatto†category in 1850, the classification of race and ethnicity on the U.S. Census has long been inherently political (Nobles 2000). This is why many paused when the Census Bureau announced it would include, for the first time since 1950, a question on residents’ citizenship status on the 2020 Census. An obvious concern is that some residents may refuse to participate altogether. Another less-well understood concern is that such a question may make any omissions more difficult to interpret. Are respondents who fail to report a Hispanic household member doing so in order to avoid potential prosecution? Or are they simply forgetting to include pertinent information? This ultimately affects data quality, which carries broader implications for the way federal funds are allocated and congressional districts are apportioned. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-015&r=all |
| By: | Fix, Blair; Nitzan, Jonathan; Bichler, Shimshon |
| Abstract: | The study of economic growth is central to macroeconomics. More than anything else, macroecon-omists are concerned with finding policies that encourage growth. And by ‘growth’, they mean the growth of real GDP. This measure has become so central to macroeconomics that few economists question its validity. Our intention here is to do just that. We argue that real GDP is a deeply flawed metric. It is presented as an objective measure of economic scale. But when we look under the surface, we find crippling subjectivity. Moreover, few economists seem to realize that real GDP is based on a non-existent quantum – utility. In light of these problems, it seems to us that much of macroeconomics needs to be rethought. |
| Keywords: | aggregation,national accounting,economic growth,neoclassical economics,quality change,utility |
| JEL: | C18 M4 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:195950&r=all |
| By: | Evans Peter; Heller Patrick |
| Abstract: | Using a comparative frame that draws on the variation of developmental trajectories in Asia from Northeast Asia to China to Southeast Asia and to India, this paper explores the changing role of the state in these countries and the contributions that the analysis of the Asian state has made to general theoretical understandings of the role states can play in promoting economic and social transformation.The emergence and evolution of the concept of the ‘developmental state’ is a central focus. The ambiguous relation between the developmental state and the politics of representation and redistribution is a second central concern. Building on region-wide comparative analysis, we examine how state structures and possibilities for state action in Asia have been shaped by geo-political context and colonial heritage.We analyse the ways in which development, defined as enhanced well-being and human flourishing, and democracy, defined as accountability to the deliberatively constructed goals of society, have been facilitated or frustrated by state structures and state action. We consider what general lessons the comparative history of the Asian state offers for development theory and policy possibilities. |
| Keywords: | Redistribution,State,Democracy |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-112&r=all |
| By: | Wier Ludvig; Reynolds Hayley |
| Abstract: | Globally, the largest 0.001 per cent of firms earn roughly one-third of all corporate profits. Nonetheless, there is little understanding of how profit shifting differs across firm size.Using South African corporate tax returns from 2010–14, we investigate the link between firm size and profit shifting. We estimate that firms owned by a parent in a tax haven avoid taxation on as much as 80 per cent of their true income. However, this aggregate tax loss conceals large differences across firms.The majority of firms shift little income to tax havens, while a few large firms shift a lot. The top decile of foreign-owned firms accounts for 98 per cent of the total estimated tax loss. This extreme concentration of tax planning has not been documented before and has implications for both research and policy.First, our results imply that tax havens create competitive distortions as larger firms benefit more. Second, as past research does not account for heterogeneity across firms, it may underestimate the total tax loss caused by profit shifting.As an illustration of this, we revisit the OECD’s official estimate of profit shifting and find that profit shifting may have been dramatically underestimated.Resources Appendix.xlsx Appendix.pdf |
| Keywords: | Multinational firms,Profit shifting,Tax,Developing countries,International taxation |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-111&r=all |
| By: | Sen, Sugata; Sengupta, Soumya |
| Abstract: | Exclusion arising out of caste is one of the major instances of social exclusion in India. Historical facts have shown that caste has appeared as a tool of political economy to deprive a large section of the Indian society from their due returns. This study wants to know the historical sequence of political economy to develop caste as a major tool of exploitation. Determining the nature of caste-based exclusion in India is another aim of this work. This study also wants to develop the optimum policy measures to eradicate the menace of caste based exclusion. Examining the feasibility of the development path towards inclusive growth under neo-liberal globalization is also under the purview of this study. Sample has been chosen from 16 Indian villages through multistage stratified sampling. As exclusion can be explained as capability deprivation this study has taken into consideration health, education and income as the domains of exclusion. The idea of Genetic Algorithm has been applied to substantiate the existence of exclusion due to genetic divergence. The idea of Hamming distance is applied to find the inter-group and inter-optima distances in the exclusion space. To determine the optimum policy mix to achieve inclusive growth the techniques of Knapsack Optimisation has been used. It is observed that different social groups on the basis of caste have different outcomes. These differences are the results of a strong historical process of subordination. Brahmanical social order has been used in this process as a tool of exploitation. The complementarity between hierarchical social system and political economy under the Hindu philosophy helped to sustain this exploitation through the name of genetic divergence. Here Genetic Algorithm substantiates that the backwardness of the lagging ethnic groups appeared due to Brahmanical social order. Estimated Hamming distances show that the inter caste distances in the exclusion space are substantial. But Knapsack Optimisation has found that the different policy mix can minimise these distances and improve the level of inclusion, but complete eradication of exclusion is not possible in a limited resource economy. At the same time it is also observed that the development of bourgeoisie and the emergence of capital intensive skill-based market economy though the current form of globalization have broadened the process of further marginalization of the lagging ethnic groups. |
| Keywords: | Social exclusion, Resource Constraint, Caste, Ethnicity, Class, History, Neo-liberal Globalisation, Hamming Distance, Hypothetical Genetic Crossover, Genetic Algorithm, Global Optima, Knapsack Optimisation. |
| JEL: | C61 |
| Date: | 2017–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81036&r=all |