nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2019‒08‒19
eight papers chosen by
Karl Petrick
Western New England University

  1. The financial crisis, poverty and vulnerability: from social investment to an EU social union By Messkoub, M.
  2. The power of economic textbooks: A discourse analysis By Bäuerle, Lukas
  3. Commanding Nature by Obeying Her: A Review Essay on Joel Mokyr's A Culture of Growth By Enrico Spolaore
  4. "Positional Views" as the Cornerstone of Sen's Idea of Justice By Antoinette Baujard; Muriel Gilardone
  5. Changing perspectives in political economy By Mayntz, Renate
  6. Growth, Prosperity and the environment: Integrating environmental and social indicators into QUEST By Gran, Christoph; Gechert, Sebastian; Barth, Jonathan
  7. The Roots of Female Emancipation: From Perennial Cool Water via Pre-industrial Late Marriages to Post-industrial Gender Equality By Manuel Santos Silva; Amy C. Alexander; Stephan Klasen; Christian Welzel
  8. The Remarkable Unresponsiveness of College Students to Nudging and What We Can Learn from It By Oreopoulos, Philip; Petronijevic, Uros

  1. By: Messkoub, M.
    Abstract: The financial crisis of 2009 has had a devastating impact on the people of Europe, throwing millions into unemployment and poverty. The impact was most severe in the Southern and Eastern members of the EU. The EU’s response was more concerned with the impact of the crisis on the viability of the banking and financial sector than on employment, poverty and livelihood. Following a brief discussion of the empirical evidence on the social impact of the crisis, this paper provides a critical appraisal of a major EU initiative in 2013: the Social Investment Package (SIP). The social investment (SI) approach to social policy has its origin in the social democratic response to the Great Depression of the 1930s. In Sweden Ava and Gunnar Myrdal argued for a new approach to social policy that would focus on social investment in human capital. Notwithstanding the intrinsic merits of a SI approach this paper argues that it is a policy paradigm without a foundation in any specific economic theory, and its adoption has been influenced by country specific historical, social and economic institutions and developments. The SIP has been primarily focused on the supply side of the labour market in order to increase people’s skills and their participation in the labour market and society at large. It also covered other related key areas of early childhood education, housing and social protection. The SIP has been complemented by the launch of the European Pillar of Social Rights that if backed up by appropriate legislation and setting up of rules similar to the European Monetary Union would strengthen the social dimension of the EU leading to a European Social Union. The EU has to balance its plan for economic and monetary union based on free market with its desire for social cohesion and a social union. The latter requires some degree of fiscal union to provide support for regions and people who have been left behind and have been negatively affected by the economic policies of the EU and member states. Social cohesion calls for asymmetric solidarity and redistributive policies. A Europe that has defined itself by its enlightenment and progressive ideas since the French revolution has to go back to the basics and invoke the rich intellectual heritage that aspired to ‘equality, fraternity and liberty’ for human kind. The idea of a social contract between citizens and the state should be put at the heart of economic and social policies at European level in order to mitigate and eventually eliminate not only the negative social impact of the crisis but move towards a more equitable, democratic and prosperous Europe.
    Keywords: EU, Financial Crisis 2009, Inequality, Social Investment, Social Policy, Social Investment Package
    Date: 2019–08–08
  2. By: Bäuerle, Lukas
    Abstract: By conducting a discourse analysis (SKAD) in the field of academic economics textbooks, this paper aims at reconstructing frames and identity options offered to undergraduate students relating to the questions "Why study economics?"and "Who do I become by studying economics?". The analysis showed three major frames and respective identity offerings, all of which are contextualized theoretically, with prominent reference to the Foucauldian reflection of the science of Political Economy. Surprisingly, none of them encourages the student to think critically, as could have been expected in a pedagogical context. Taken together, economics textbooks appear as a "total structure of actions brought to bear upon possible action" (Foucault), therefore, as a genuine example of Foucauldian power structures.
    Keywords: Economic education,textbook economics,discourse analysis,SKAD,Foucault,subjectivation
    JEL: A11 A14 A20 A22
    Date: 2019
  3. By: Enrico Spolaore
    Abstract: Why is modern society capable of cumulative innovation? In A Culture of Growth: The Origins of the Modern Economy, Joel Mokyr persuasively argues that sustained technological progress stemmed from a change in cultural beliefs. The change occurred gradually during the seventeenth and eighteenth century and was fostered by an intellectual elite that formed a transnational community and adopted new attitudes toward the creation and diffusion of knowledge, setting the foundation for the ethos of modern science. The book is a significant contribution to the growing literature that links culture and economics. This review discusses Mokyr’s historical analysis in relation to the following questions: What is culture and how should we use it in economics? How can culture explain modern economic growth? Will the culture of growth that caused modern prosperity persist in the future?
    Keywords: technological progress, innovation, useful knowledge, cultural change
    JEL: N13 N33 O30 O52 Z10
    Date: 2019
  4. By: Antoinette Baujard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Muriel Gilardone (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Our paper offers a novel reading of Sen's idea of justice, beyond the standard prisms imposed by theories of justice-resting on external normative criteria-and formal welfarism-involving the definition of individual welfare and its aggregation. Instead we take seriously Sen's emphasis on personal agency and focus on his original contribution to the issue of objectivity. Firstly, we demonstrate that Sen's idea of justice, with at its core "positional views", is more respectful of persons' agency than would be a theory based on individual preference or capability. Secondly, we argue that Sen's conception of objectivity considers that both information and sentiments are relative to a position. Such an alternative approach to subjectivity allows the formation of more impartial views through collective deliberation and a better consideration of justice by agents themselves.
    Keywords: Individual preferences,positional objectivity,sentiments,public reasoning,agency,justice
    Date: 2019
  5. By: Mayntz, Renate
    Abstract: The history of a research field called political economy dates back to the eighteenth century, giving rise to a variety of disciplinary approaches, and experienced a renaissance as a multidisciplinary field after the Second World War, combining economic, political science, and sociological approaches. The divergence between economic globalization and the nationally restricted scope of economic policy directs interest to the relationship between politics and the economy. A quantitative analysis of the articles published in two dedicated political economy journals shows major trends of the developing research field. The relationship between politics and economy is interpreted rather widely, and research is largely focused on Western capitalist nations. In conclusion, two avenues for further research in the field are briefly discussed.
    Keywords: capitalism,history of political economy,relationship politics/economy,Western capitalist nations,Geschichte der politischen Ökonomie,Kapitalismus,Verhältnis Politik/Ökonomie,westliche kapitalistische Nationen
    Date: 2019
  6. By: Gran, Christoph; Gechert, Sebastian; Barth, Jonathan
    Abstract: Currently the EU and the world face several complex and interconnected challenges. These range from climate change and loss of biodiversity to high levels of inequality and precarious work. At the same time, there is a growing discontent with politics not being able to provide appropriate problem solutions. Over the last years, however, an enormous quantity of ecological and social indicators has been brought up that may serve as a new compass in addressing these challenges and accessing wellbeing and sustainability at the same time. Our contribution shows how these indicators can help to better navigate policymaking while considering sustainability and wellbeing and to replace the currently dominant, GDP-focused approach. The paper gives an insight into the results of an ongoing research project funded by the German Federal Environment Agency, exploring how ecological and social indicators can be better integrated into macroeconomic models (Diefenbacher et al. 2019). The focus of the paper lies on integrating new ecological and social indicators into QUEST, the global macroeconomic policy simulation model of the European Commission's Directorate-General for Economic Affairs and Finance (DG ECFIN).
    Keywords: Sustainability,Beyond GDP,macroeconomic models,QUEST,ecological and social indicators
    Date: 2019
  7. By: Manuel Santos Silva; Amy C. Alexander; Stephan Klasen; Christian Welzel
    Abstract: Reviewing the burgeoning literature on the deep historic roots of gender inequality, we theorize and provide evidence for an overlooked trajectory that (1) originates in a climatic configuration called the “Cool Water” (CW-) condition, from where the trajectory leads to (2) late female marriages in pre-industrial times, which eventually pave the way towards (3) various gender-egalitarian outcomes today. The CW-condition is a specific climatic configuration that combines periodically frosty winters with mildly warm summers under the ubiquitous accessibility of fresh water. The CW-condition is most prevalent in Northwestern Europe and its former colonial offshoots and embodies opportunity endowments that significantly reduce fertility pressures on women, which favored late female marriages already in the pre-industrial era. The resulting family and household patterns placed women into a better position to struggle for more gender equality during the subsequent transitions toward the industrial and post-industrial stages of development. Hence, enduring territorial differences in the CW-condition predict differences in pre-industrial female marriage ages, which in turn explain differences in gender equality today. The role of CW retains significance along this causal chain after controlling for other ‘deep drivers’ of gender inequality that have been discussed in the literature. We summarize these findings in a “seed theory of female emancipation” and conclude with a discussion of its broader implications.
    Keywords: Cool water; Economic development; Gender equality; Historic drivers; Seed theory
    JEL: J12 J16 N30 O15
    Date: 2017–11–13
  8. By: Oreopoulos, Philip (University of Toronto); Petronijevic, Uros (York University, Canada)
    Abstract: We present results from a five-year effort to design promising online and text-message interventions to improve college achievement through several distinct channels. From a sample of nearly 25,000 students across three different campuses, we find some improvement from coaching-based interventions on mental health and study time, but none of the interventions we evaluate significantly influences academic outcomes (even for those students more at risk of dropping out). We interpret the results with our survey data and a model of student effort. Students study about five to eight hours fewer each week than they plan to, though our interventions do not alter this tendency. The coaching interventions make some students realize that more effort is needed to attain good grades but, rather than working harder, they settle by adjusting grade expectations downwards. Our study time impacts are not large enough for translating into significant academic benefits. More comprehensive but expensive programs appear more promising for helping college students outside the classroom.
    Keywords: behavioural economics of education, nudge, college student achievement, coaching, mindset, RCT
    JEL: I2 J24
    Date: 2019–07

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