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on Post Keynesian Economics |
| By: | Yeva Nersisyan; L. Randall Wray |
| Abstract: | This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the "costs" of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as well as shifting resources from current destructive and inefficient uses to GND projects. We argue that financial affordability cannot be an issue for the sovereign US government. Rather, the problem will be inflation if sufficient resources cannot be diverted to the GND. And if inflation is likely, we need to put in place anti-inflationary measures, such as well-targeted taxes, wage and price controls, rationing, and voluntary saving. Following Keynes, we recommend deferred consumption as our first choice should inflation pressures arise. We conclude that it is likely that the GND can be phased in without inflation, but if price pressures do appear, deferring a small amount of consumption will be sufficient to attenuate them. |
| Keywords: | Green New Deal; Keynes; How to Pay for the War; Modern Money Theory |
| JEL: | B50 E0 E2 E3 E6 H6 Q0 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_931&r=all |
| By: | Eric Kemp-Benedict (Stockholm Environment Institute (SE)) |
| Abstract: | This paper describes a hybrid post-Keynesian and classical/neo-Marxian model with a 'center of gravity' where the actual, warranted, and natural growth rates coincide. In the model, investment determines saving in the short run, while investment depends on anticipated demand. The Keynesian stability is assumed not to hold, so the model features short-run Harrodian instability, which is bounded by a ceiling and floor. The resulting Kaleckian-Harrodian model is shown to produce some key stylized facts as long-run tendencies, to exhibit wage-led behavior, and to produce depressions in some circumstances. |
| Keywords: | Kaleckian, Harrodian, classical, neo-Marxian, cycles, technological change |
| JEL: | B50 E32 O40 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1913&r=all |
| By: | Roger E.A. Farmer |
| Abstract: | This article surveys a subset of literature in macroeconomics which embraces the existence of multiple equilibria. This indeterminacy agenda in macroeconomics uses multiple-equilibrium models to integrate economics with psychology. Economists have long argued that business cycles are driven by shocks to the productivity of labour and capital. According to the indeterminacy agenda, the self-fulfilling beliefs of financial market participants are additional fundamental factors that drive periods of prosperity and depression. The indeterminacy agenda provides a microeconomic foundation to Keynes’ General Theory that does not rely on the assumption that prices and wages are costly to change. |
| JEL: | D5 E40 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25879&r=all |
| By: | Emilio Ocampo |
| Abstract: | Although the application of the conceptual and analytical framework of economics to the study of populism is still in its infancy, great advances have been made in recent years. This paper reviews some key contributions behind this progress. When analyzing populism, economists face two methodological hurdles: lack of consensus and clarity about its definition and reconciling the populist vote with voter rationality. The former has plagued sociologists and political scientists for decades. As to the latter, it raises a conundrum: if populist policies are detrimental to economic growth, as most economists agree, the vote for a populist candidate suggests some irrationality or inefficiency in the political markets. The works reviewed in this paper propose alternative approaches to address both issues. The most promising line of research in the economic analysis of populism draws concepts from other social sciences such political theory, sociology, history and social psychology. |
| Keywords: | Populism, political economy, voter behavior, rationality, democracy. |
| JEL: | B2 D72 D78 D83 H0 P47 P48 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:694&r=all |
| By: | Ötsch, Walter; Pühringer, Stephan |
| Abstract: | The paper compares neoliberal market-fundamentalism and right-wing populism on the basis of its core patterns of thinking and reasoning. Based on an analysis of the work of important founders of market fundamental economic thinking (particularly Mises, and Hayek) and the arguments brought forward by leading right-wing populist we find highlight conceptual resemblances of these two approaches: Both show a world that is split into only two countervailing parts. Right-wing populism shows a society split into two groups, fighting against each other. In a similar vein, neoliberal market-fundamentalism shows only two possible countervailing economic and societal orders. Thus, we develop a scheme of the similar dual social worlds of right-wing-populism and market-fundamentalism and offer some examples in the history of the Republican Party, where these concepts mutually reinforced each other or served as a gateway for each other. The main conclusion of the paper is that neoliberal market-fundamentalism and right-wing populism can be perceived as two mutually reinforcing and radicalizing threats to democracy in the 21st century. |
| Keywords: | Right-wing populism,market-fundamentalism,inner images,Donald Trump,patterns of thinking |
| JEL: | A12 A14 B41 B59 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cuswps:oek48&r=all |
| By: | Mark Setterfield (Department of Economics, New School for Social Research) |
| Abstract: | This reply to Botte (2019) responds to criticisms of the methods used to estimate the normal rate of capacity utilization and a tolerable interval of variation in the actual rate of capacity utilization around the normal rate in Setterfield (2019a). It concludes with some further reflections on the concept of corridor instability. |
| Keywords: | Normal rate of capacity utilization, Harrodian instability, corridor instability |
| JEL: | E11 E12 O41 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1905&r=all |
| By: | Achyuta Adhvaryu; Teresa Molina; Anant Nyshadham |
| Abstract: | Hirschman's (1970) seminal thesis that enabling worker “voice” prevents exit from the employment relationship has played a foundational role in labor economics. We provide the first experimental test of this hypothesis in a real-world setting via a randomized controlled trial in Indian garment factories. Just after what proved to be a disappointing wage hike, workers were chosen at random to participate in an anonymous survey in which they were asked for feedback on job conditions, supervisor performance, and overall job satisfaction. Enabling voice in this manner reduced turnover and absenteeism after the hike, particularly for the most disappointed workers. |
| JEL: | C93 J20 J30 M50 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25866&r=all |
| By: | Marx, Paul (University of Duisburg-Essen) |
| Abstract: | Many observers have noticed the importance of anger in contemporary politics, particularly with reference to populism. This article addresses the question under which conditions people become angry about a specific aspect of their lives: their personal financial situation. Specifically, it asks if populist anti-elite rhetoric has a causal influence on anger and if this influence differs across socio-economic groups. The theoretical expectation is that populist rhetoric allows people to externalize responsibility for an unfavorable financial situation and thereby to turn negative self-conscious emotions into anger. The argument is tested with original survey data from France, Germany, and the United States. The empirical analysis yields three main insights. First, negative emotional reactions to respondents' personal finances (and anger in particular) are surprisingly widespread in all three countries. Second, there is a pronounced socio-economic gradient in anger and other negative emotions. Third, and most importantly, randomly exposing participants to (mildly) populist anti-elite rhetoric causes considerably higher expressed anger about one's financial situation in France and Germany, but less so in the United States. This suggests a causal role of populist rhetoric in stirring 'pocketbook anger'. This is true in particular in the middle classes. The notion that populist rhetoric reduces negative self-conscious emotions, such as shame, is not supported by the data. |
| Keywords: | populism, anger, socio-economic problems, middle class, survey experiments |
| JEL: | D72 D74 P16 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12342&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria) |
| Abstract: | The central thesis of the paper is that Multinational Companies (MNC) should invest in the use of “soft” methods (socially responsible behavior) to mitigate costs in society accrued due to use of “hardcore” tax evasion tactics (Transfer mispricing) to maximize profits from operations in developing countries and/or countries with weak or inefficient tax laws and tax collection institutions. Therefore, we articulate the argument of Corporate Social Responsibility (CSR) as an indirect compensation for transfer mispricing. Our aim is not to present CSR as solution to transfer mispricing. An analytical approach is based on a content analysis of the existing literature with emphasis on a case study. We first discuss the dark side of transfer pricing (TP), next we present the link between TP and poverty and finally we advance arguments for CSR as a compensation for transfer mispricing. While acknowledging that TP is a legal accounting practice, we argue that in light of its poverty and underdevelopment externalities, the practice per se should be a strong defence for CSR because it is also associated with schemes that deprive developing countries of the capital essential for investment in health, education and development programmes. |
| Keywords: | Corporate Social Responsibility; Transfer pricing; Extreme poverty |
| JEL: | F20 H20 M14 O11 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:19/029&r=all |
| By: | Cox, Michael |
| Abstract: | This article is based on the author's keynote address at the annual conference of the International Affairs Standing Committee of the Royal Irish Academy, titled ‘Retreat from Globalisation? Brexit, Trump and the New Populism’, which took place at the Royal Irish Academy in Dublin on 31 May 2017 |
| Keywords: | populism; globalization; liberalism; voting; Irish politics; free trade; international economics; economic globalization; Irish studies; political parties |
| JEL: | N0 |
| Date: | 2017–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86880&r=all |
| By: | Cormac Ó Gráda |
| Abstract: | Ireland on the eve of the Great Famine was a poor and backward economy. The Great Irish Famine of the 1840s is accordingly often considered the classic example of Malthusian population economics in action. However, unlike most historical famines, the Great Famine was not the product of a harvest shortfall, but of a major ecological disaster. Because there could be no return to the status quo ante, textbook famine relief in the form of public works or food aid was not enough. Fortunately, in an era of open borders mass emigration helped contain excess mortality, subject to the limitation that the very poorest could not afford to leave. In general, the authorities did not countenance publicly assisted migration. This paper discusses the lessons to be learned from two exceptional schemes for assisting destitute emigrants during and in the wake of the Famine. |
| Keywords: | Malthus; Famine; Population |
| JEL: | N00 N33 N53 N93 B12 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201821&r=all |