nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2020‒03‒09
four papers chosen by
Karl Petrick
Western New England University

  1. Injecting power dynamics and biodiversity protection into elementary microeconomics By David Martin
  2. Why does inclusion matter?: Assessing the links between inclusive processes and inclusive outcomes By Alina Rocha Menocal
  3. How Much Does Reducing Inequality Matter for Global Poverty ? By Lakner,Christoph; Mahler,Daniel Gerszon; Negre,Mario; Prydz,Espen Beer
  4. Human Capital and Macro-Economic Development : A Review of the Evidence By Rossi, Federico

  1. By: David Martin (Department of Economics, Davidson College)
    Abstract: Microeconomic theory is applied to protecting the biodiversity that conservation biologists have identified as important and threatened in several ways, including creating market values for ecosystem services and providing incentives for local people to protect habitats. Yet, economists frequently ignore the power dynamics inherent in the social systems involved with the biodiversity measures they propose and assess, which brings them into conflict with political ecologists. To bridge this gap between economists, political ecologists, and conservation biologists, I discuss how to frame the important introductory microeconomic topics of consumer sovereignty and the equimarginal rule with the additions of the type of power dynamics commonly used by political ecologists. I use the topics of shade grown coffee and the Noah’s Ark framework, both very familiar to conservation biologists, to place this discussion within the context of protecting biodiversity. I conclude that introducing these topics will better serve the biodiversity analysts who take only the economics principles course.
    Keywords: Biodiversity protection, consumer sovereignty, equimarginal rule, shade grown coffee, Noah’s Ark
    JEL: Q57 A12 A13
    Date: 2020–03
  2. By: Alina Rocha Menocal
    Abstract: Inclusion in terms of both process (how decisions are made and who is included in that process and how and why) and outcomes (how wealth and prosperity are distributed and shared across a population and why) is a leading priority in international development, with the Sustainable Development Goals as perhaps the most ambitious articulation of this. As the evidence overwhelmingly shows, over the long term, more open and inclusive states and societies tend to be more prosperous, effective and resilient. And yet, it is far less clear how countries that can be considered more inclusive in terms of both process and outcome got to where they are. This paper explores the relationship between inclusive governance and inclusive development, which is complex and non-linear. Analysing existing research on the politics of development, it finds that there is no automatic causal relationship between inclusion as process and inclusion as outcome in either direction. The paper then highlights several factors that have been important in fostering inclusive development through inclusive governance. By way of conclusion, the paper draws out a few key implications for how international development actors can support inclusion more effectively through more politically aware ways of thinking and working.
    Date: 2020–03–06
  3. By: Lakner,Christoph; Mahler,Daniel Gerszon; Negre,Mario; Prydz,Espen Beer
    Abstract: The goals of ending extreme poverty by 2030 and working toward a more equal distribution of income are prominent in international development and agreed upon in the United Nations'Sustainable Development Goals 1 and 10. Using data from 164 countries comprising 97 percent of the world's population, this paper simulates a set of scenarios for global poverty from 2018 to 2030 under different assumptions about growth and inequality. This allows for quantifying the interdependence of the poverty and inequality goals. The paper uses different assumptions about growth incidence curves to model changes in inequality and relies on the Model-based Recursive Partitioning machine-learning algorithm to model how growth in GDP is passed through to growth as observed in household surveys. When holding within-country inequality unchanged and letting GDP per capita grow according to International Monetary Fund forecasts, the simulations suggest that the number of extreme poor (living below $1.90/day) will remain above 550 million in 2030, resulting in a global extreme poverty rate of 6.5 percent. If the Gini index in each country decreases by 1 percent per year, the global poverty rate could reduce to around 5.4 percent in 2030, equivalent to 100 million fewer people living in extreme poverty. Reducing each country's Gini index by 1 percent per year has a larger impact on global poverty than increasing each country's annual growth 1 percentage point above the forecasts, suggesting an important role for inequality on the path to eliminating extreme poverty.
    Date: 2019–05–30
  4. By: Rossi, Federico (University of Warwick)
    Abstract: The role of human capital in facilitating macro-economic development is at the center of both academic and policy debates. Through the lens of a simple aggregate production function, human capital might increase output per capita by directly entering in the production process, incentivising the accumulation of complementary inputs and facilitating the adoption of new technologies. This paper discusses the advantages and limitations of three approaches that have been used to evaluate the empirical importance of these channels: cross-country regressions, development accounting and quantitative models. The key findings in the literature are reviewed, and some of them are replicated using updated data. The bulk of the evidence suggests that human capital is an important determinant of cross-country income gaps, especially when its measurement is broadened to go beyond simple proxies of educational attainment. The paper concludes by highlighting policy implications and promising avenues for future work.
    Keywords: Human Capital ; Development ; Growth JEL codes: E24 ; O11 ; O47 ; I25

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