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on Post Keynesian Economics |
| By: | Dimitri B. Papadimitriou; Michalis Nikiforos; Gennaro Zezza |
| Abstract: | Senators Elizabeth Warren and Bernie Sanders, along with Representative Alexandria Ocasio-Cortez, recently proposed to increase the rate of taxation on very high incomes and net worth. One of the primary justifications for such policies is that reducing inequality would help safeguard political equality. However, Dimitri B. Papadimitriou, Michalis Nikiforos, and Gennaro Zezza show how these tax policies, if matched by comparable increases in government spending, have the potential to boost aggregate demand while helping reform the unstable structure of the US economy. |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levyop:op_60&r=all |
| By: | Eckhard Hein |
| Abstract: | The notion of dynamic instability of demand driven growth put forward by Harrod (1939) has triggered several responses in the history of economic thought. The modern Kaleckian solution, including Bhaduri/Marglin (1990) among several others, considers the rate of capacity utilisation to be endogenous beyond the short run, thus assuming, explicitly or implicitly, that Harrod's warranted rate of growth is either irrelevant or endogenous in the long run, eliminating the problem of Harrodian instability. In the modern debate several authors have criticised this Kaleckian approach, as reviewed in Hein/Lavoie/van Treeck (2011, 2012). In this debate, however, two arguments proposed by Steindl (1979, 1985) in favour of at least partial endogeneity of the warranted rate of growth have received little attention. The first is related to the endogeneity of the capital output ratio through endogenous capital scrapping (Steindl 1979); the second refers to government budget balances and the related effects on the aggregate propensity to save (Steindl 1979, 1985). In this paper we will therefore discuss in particular the two Steindlian arguments. For this purpose the model framework proposed by Hein/Lavoie/van Treeck (2011, 2012) will be extended in order to allow for endogenous capital scrapping and endogenous overall propensities to save through variations in the government financial balance. |
| Keywords: | Kaleckian distribution and growth models, Harrodian instability, Steindl |
| JEL: | E12 E20 O41 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:imk:fmmpap:46-2019&r=all |
| By: | Alves, C.; Toporowski, J. |
| Abstract: | This paper examines the increasing cross-border flows of capital involving developing and emerging economies in the past few decades. The discussion challenges the traditional economic theories based on net capital flows and deficits in current accounts to explain international borrowing by developing countries, and on the current account imbalances approach to explain financial crises. We argue that the increasing involvement of the private sector in developing countries’ external debt and the fact that the public sector, previously reliant almost entirely on official credit, has become able to access private debt markets, reflect the increasing integration of developing countries into the global financial system, and this process has particular features. A closer look at data on gross capital flows reveals that net capital flows neither explain nor capture this global financial integration. |
| Keywords: | developing and emerging economies, private Non-Guaranteed external debt, cross-border flows, financial globalisation, Borio and Disyatat |
| JEL: | F3 G1 G3 H6 |
| Date: | 2019–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1930&r=all |
| By: | Michael Cauvel |
| Abstract: | This paper estimates the relationship between aggregate demand and the functional distribution of income in the U.S. economy using a series of aggregative VAR models. Like most previous aggregative studies, it finds evidence of Goodwin cycle effects - i.e. profit-led demand and a profit-squeeze effect - for the U.S. economy in baseline estimates using assumptions traditionally used in the aggregative literature. However, the results of other specifications suggest that these observed Goodwin cycle effects likely reflect a misinterpretation of procyclical variation in labor productivity - one of the main components of the wage share. When correcting for the cyclical effects of demand on productivity, the results differ dramatically; estimates are indicative of wage-led demand, and the effects of demand on distribution are mixed or insignificant. These findings suggest that evidence of Goodwin cycle effects is likely the result of biased estimates. Instead, it appears that the short-run relationship between the wage share and demand should be viewed as a combination of wage-led demand and procyclical productivity effects. |
| Keywords: | Functional distribution of income, neo-Kaleckian model, wage-led and profit-led demand regimes |
| JEL: | E25 E11 E12 E32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:imk:fmmpap:47-2019&r=all |
| By: | Dalton, John; Logan, Andrew |
| Abstract: | This paper was written for a symposium on "Reconsidering the Classics." Rereading Joseph Schumpeter's Capitalism, Socialism and Democracy (CSD) for today, we argue Schumpeter's vision for a dynamic world remains essential for understanding the world. We begin the paper by briefly describing some background on Schumpeter and the context in which CSD was written. Then, we summarize the book, which Schumpeter divided into five separate parts on Marx, capitalism, socialism, democracy, and a history of socialist parties. Throughout our summary, we highlight the key arguments and touch on many ideas in the book, such as Schumpeter's description of socialism and his theory of democracy. Instead of tackling all these ideas in depth, we discuss the book's usefulness for readers today by focusing on Schumpeter's Big Idea--"creative destruction." We conclude by discussing how influential CSD has been, and continues to be, in the social sciences and then provide suggestions for those interested in reading CSD today. |
| Keywords: | Joseph Schumpeter; Capitalism, Socialism and Democracy; Innovation; Entrepreneurship; Creative Destruction |
| JEL: | B31 O3 P0 |
| Date: | 2019–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95012&r=all |
| By: | José Espinoza-Delgado (University of Goettingen / Germany); Jacques Silber (Bar-Ilan Univesity, Ramat-Gan / Israel) |
| Abstract: | The Alkire and Foster (2011) methodology, as the mainstream approach to the measurement of multi-dimensional poverty in the developing world, is insensitive to inequality among the multidimensionally poor individuals and does not consider simultaneously the concepts of efficiency and distributive justice. Moreover, the vast majority of empirical indices of multi-dimensional poverty in the literature overlook intra-household inequalities, an issue that is crucial to a better understanding of gender inequalities, because they equate the poverty status of the household with the poverty status of all individuals in the household. Consequently, using the general framework proposed by Silber and Yalonetzky (2013) and Rippin’s ideas on multi-dimensional poverty measurement (2013, 2017), we propose in this paper to depart somehow from the mainstream approach and take an individual-based and inequality sensitive view of multi-dimensional poverty when only ordinal (dichotomized) variables are available. We use such an approach to estimate multi-dimensional poverty among individuals aged 18 and 59 years living in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica, shedding thus some light on gender differences in poverty and inequality in those countries. Overall, we find that individuals living in Guatemala have the highest probability of being multidimensionally poor, followed by the ones from Nicaragua; people living in Costa Rica, by contrast, have by far the lowest probability of being poor. In the middle appears Honduras and El Salvador, Hondurans having a larger probability of being multi-dimensionally poor than the Salvadorians. Regarding the gender gaps, the overall estimates suggest that the incidence and the intensity of multidimensional poverty in Central America are higher among females; inequality, however, is somewhat higher among males. |
| Keywords: | multi-dimensional poverty measurement, inequality, gender inequality, Latin America, Central America |
| JEL: | I3 I32 D1 D13 D6 D63 O5 O54 |
| Date: | 2018–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:237&r=all |
| By: | Solms, Mark |
| Abstract: | In his paper Emotion and reasoning in human decision-making (Economics Discussion Papers, No 2019-8) Edmund Rolls points out that multiple and independent types of reinforcement exist in the human brain, and that they cannot be reduced to a common currency. The present commentary introduces non-specialist readers to this wide variety of reinforcers, each of which carries equal biological value. The evolutionary forces underwriting them reveal much about the causes of our apparently irrational choices - which is why it is important for economists to acquaint themselves with such things. |
| Keywords: | decision-making,brain mechanisms,basic emotions,reward value,economicvalue,dominance hierarchies,macroeconomics,microeconomics,affective neuroscience |
| JEL: | D01 D87 D91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201945&r=all |
| By: | Vernon L. Smith (Economic Science Institute, Chapman University); Sabiou M. Inoua (Economic Science Institute, Chapman University) |
| Abstract: | We argue that neoclassical value theory suffers from a more basic and serious logical indeterminacy, which is inherent in the axiom of price-taking behavior, and which renders price dynamics indeterminate before inquiring as to its stability. If everyone in the economy takes price as given, whence come these prices? Who is giving these prices? Jevons avoided the indeterminacy by assuming that people must have complete information on supply and demand, and the consequent equilibrium prices—‘perfect competition.’ Walras in effect imported an external agent who found the prices by trial-and-error-correction (the Walrasian Auctioneer). Paradoxically, both approaches had the potential better to serve central planning, than a market economy. A theory based on price taking agents required some agency for giving prices. Indeed, the fit with socialism was rigorously established by influential neoclassical authors starting from Wieser (1893, ch. VI) and Pareto (1897, 364-371; 1909, 362-364), and, more formally during the Socialist Calculation Debate, by Barone ([1908] 1935), Lerner (1934), and Lange (1936, 1937). The paradox is hidden in the idea of ‘perfect competition’ a passive treatment of individuals who are not even interacting, let alone interacting in a rivalrous manner. ‘Perfect competition’ is the negation of any real competition, as Hayek (1948) emphasized. |
| Keywords: | Methodology of Economics, Micro-economic Theory, Experimental Economics, History of Economic Thought. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:19-15&r=all |
| By: | Donato Masciandaro; Davide Romelli |
| Abstract: | This chapter reviews the evolution of the theory of monetary policy design since the 1980s, highlighting the emerging role of central banker psychology. Three subsequent stages are evident. First, the central bank was considered as an independent institution (modern economics). Second, central bankers were assumed to be delegated bureaucrats (advanced political economy). Third, a link with psychology was established (behavioural economics). |
| Keywords: | MONETARY POLICY, POLITICAL ECONOMICS, BEHAVIORAL ECONOMICS |
| JEL: | E52 E58 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp19105&r=all |
| By: | Silvia Blasi (Department of Economics and Management, University of Padova); Silvia Rita Sedita (Department of Economics and Management, University of Padova) |
| Abstract: | The paper explores the emergence of a new research field, implementing a bibliometric analysis of the literature on the B Corp. We built a database including 82 articles collected by Scopus and published from 2009 to 2019 that discuss the B Corp, or the benefit corporation, or, more generally, social entrepreneurship. We performed descriptive and citation analyses, with the objective of identifying the roots and the evolution of the concept of B Corp. This emergent field is an important component of the structural change occurring in our society, which, in recent years, has seen the emergence of new for-profit organizational forms with a strong social consciousness. The bibliometric analysis reveals the foundational works and the historical evolution of the research field, which, while rooted in the corporate social responsibility literature, opened up into the analysis of how the legislation, the firm’s strategy, the entrepreneurial orientation, and the policy interventions are intertwined in the concrete development of socially and environmentally conscious businesses. |
| Keywords: | B Corp, benefit corporation, social entrepreneurship, sustainability, bibliometric analysis |
| JEL: | M10 M14 L31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0236&r=all |
| By: | Azam, Jean-Paul |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:123287&r=all |