nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2019‒10‒07
five papers chosen by
Karl Petrick
Western New England University

  1. Stock-flow ratios and the paradox of debt in canonical neo-kaleckian and supermultiplier models By Brochier, Lidia; Freitas, Fábio
  2. The Real U.S. Unemployment Rate Is Twice the Official Rate, and the Phillips Curve By John Komlos
  3. Making America Great Again By Bichler, Shimshon; Nitzan, Jonathan
  4. The economics of eudaimonia By Pugno, Maurizio

  1. By: Brochier, Lidia; Freitas, Fábio
    Abstract: The paper addresses the features of stock-flow consistent (SFC) canonical versions of neo-kaleckian and supermultiplier models that introduce the accumulation of debt of households and firms. The aim of this comparison is twofold: (i) to analyze under which conditions the paradox of debt emerges in the household and firms sector in each model; (ii) to evaluate the extent in which these conditions differ due to each models' specific closure. Preliminary results suggest that the paradox of debt in firms' sector is not a necessary result of supermultiplier models. As for households sector, the paradox of debt is a feature of the canonical supermultiplier model, yet there may be episodes of rising debt-to-income ratios and financial crisis as precipitated by policy decisions.
    Keywords: Paradox of debt, neo-Kaleckian model, Supermultiplier model, autonomous expenditures, SFC
    JEL: E11 E12 O41
    Date: 2019–09–30
  2. By: John Komlos
    Abstract: The official unemployment rate has become an inadequate measure of labor market conditions. This poses a major challenge for basic research as well as for the formulation of adequate economic policy. We propose a new definition of the unemployment rate by weighing part-time workers with 62.5%, the proportion of the time they work relative to full-time workers. We provide new monthly estimates of the unemployment rate for the period 1994-2019 and find that their average during this 25-year period was 10.1% or 4.4 percentage points above the average of the official rate of 5.7%. The gap between the two rates fluctuated between 3.6 and 5.6 percentage points and rose in wake of the recession of 2008 reaching a peak in 2014 only to decrease slowly thereafter back to its pre-recession level of 4 percentage points. The Phillips curve is investigated with the new unemployment rate as well as with U3 and U6 in seven specifications for the period 2008-2019 confirming the very shallow slope found in other studies. However, in one of the specifications the slope is much steeper, mysteriously reminiscent of the coefficients estimated for the 1970s providing a conundrum for further study.
    Keywords: unemployment, labor market slack, discouraged workers, involuntary part-time workers, Phillips curve
    JEL: J40 J49
    Date: 2019
  3. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: Trump has promised to ‘make America great again’. As a self-proclaimed expert on everything of import, he knows exactly how to increase domestic investment and consumption, boost exports, reduce the country’s trade deficit, expand employment and bolster wages. And as America’s leader-and-policymaker-in-chief, he has taken the necessary steps to achieve every one of these goals, or so he says. Capitalists and pundits follow him like imprinted ducks. His tweets rattle markets, his announcements are dissected by academics and his utterances are analysed to exhaustion by various media. A visiting alien might infer that he actually runs the world. And the alien wouldn’t be alone. The earthly population too, conditioned by ivory-tower academics and popular opinion makers, tends to think of political figureheads as ‘leaders’ and ‘policymakers’. Situated at the ‘commanding heights’ of their respective nation states and international organizations, these ‘leaders’ supposedly set the rules, make policies, steer their societies and determine the course of history. Or at least that’s the belief. The reality, though, is quite different.
    Keywords: America's decline,capitalist mode of power,economic policy,Trump
    JEL: E61 F13 F1 P16 F23 F51 D3 O24
    Date: 2019
  4. By: Pugno, Maurizio
    Abstract: Research in the Economics of Happiness has recently paid increasing attention to ‘eudaimonia’, which is a conception of happiness originated in ancient Greek philosophy, and in particular in Aristotle’s philosophy. Since ‘eudaimonia’ is a way of life rather than a circumscribed goal, its understanding requires a dynamic analytical structure. To this end, the paper provides two main contributions. First, in order to facilitate reading by the economists of Aristotle’s work, this is translated in modern economic terms, i.e. eudaimonia is described as an individual activity that transforms inputs into outputs. Second, this description is reformulated, with the help of studies in psychology and anthropology, in a modern ‘economic approach to eudaimonia’, which focuses on human development, i.e. on the development of the skills which are typically human. A number of implications are then discussed: about how some weaknesses of Aristotle’s conception of eudaimonia can be amended (e.g. the objective/subjective reconciliation); about the greater robustness of eudaimonia with respect to hedonism as two alternative pathways to happiness that people can choose; and about the advantages of the policy implications of eudaimonia.
    Keywords: happiness; eudaimonia; Aristotle; well-being; hedonism
    JEL: A12 I31 O15
    Date: 2019–09–30
  5. By: Mejia, Carlos Alberto
    Abstract: El propósito de este documento de trabajo consiste en controvertir mediante el uso de evidencias documentales diversas críticas hechas en distintas épocas y lugares a la obra de Karl Marx, centrándose particularmente en la obra de Jon Elster, uno de sus críticos más incisivos. Partiendo de su consideración sobre lo que denomina oscurantismo en las Ciencias Sociales, el texto debate en torno de si el pensador de Tréveris desconocía las diferencias individuales en el proceso de trabajo, de si buena parte de su obra intenta explicar la existencia de la sociedad a partir del denominado determinismo tecnológico, presente en la exposición de sus teorías sobre el desarrollo de las fuerzas productivas y de la tecnología, de si Marx olvidó tratar el tema de la relación entre religión y capitalismo o si sus escritos eludieron la problemática de la acción colectiva de los empresarios y los capitalistas. El texto intenta arrojar alguna luz sobre el tema.
    Keywords: Marx, trabajo, tecnología
    Date: 2019–08–30

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