nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2020‒03‒16
six papers chosen by
Karl Petrick
Western New England University

  1. Growth models in advanced countries before and after the 2008 crisis: competitiveness, financial cycles and austerity By Karsten Kohler; Engelbert Stockhammer
  2. A note on "zero growth and structural change in a post Keynesian growth model" By Antoine Monserand
  3. Modern Monetary Theory and the public purpose By Ehnts, Dirk H.; Höfgen, Maurice
  4. Economic Insecurity and the Rise of the Right By Walter Bossert; Andrew E. Clark; Conchita D'Ambrosio; Anthony Lepinteur
  5. The Keynesian Growth Approach to Macroeconomic Policy and Productivity By Luca Fornaro; Gianluca Benigno
  6. Environmental Economics: The 50th Anniversary of the Birth of This Field around the First Earth Day By Don Fullerton

  1. By: Karsten Kohler (King’s College London); Engelbert Stockhammer
    Abstract: The paper contributes to the recent growth models debate through a cross-country analysis of macroeconomic growth drivers after the 2008 crisis. It examines the role of competitiveness, finance, and fiscal policy as sources of foreign, private and public demand. While all countries experienced a slowdown in economic growth and a stronger export-orientation, macroeconomic performance has been highly uneven. Growth drivers have partly changed, calling for reconsideration of some key topics in the growth models debate. We argue that (i) non-price competitiveness has gained importance compared to price competitiveness, (ii) debt-driven growth models are cyclical and financial booms come with busts and debt overhang, (iii) post-crisis growth models are strongly shaped by fiscal policy. Northern Europe reinforced its export-orientation despite some wage and property price inflation, but with limited effects on growth. Eastern Europe benefitted from an improvement in export sophistication prior to the crisis and outperforms in terms of growth. Southern Europe underwent a debt-driven depression, exacerbated by contractionary austerity policies. While also affected by the downturn of a financial cycle, the English-speaking countries sustained demand through slower fiscal consolidation.
    Keywords: growth models, austerity, financial cycles, comparative political economy, post-Keynesian macroeconomics
    JEL: B50 O47 O57
    Date: 2020–03
  2. By: Antoine Monserand (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This note is a critique of the results found by Rosenbaum concerning zero growth and structural change in a post-Keynesian growth model, some of which are shown to be problematic. First, the (im)possibility for a neo-Kaleckian model of growth and distribution to generate a profit-led growth regime is discussed. Next, we review the role played by the "paradox of costs" when introducing the depreciation of capital and how this changes the stability characteristics of the model presented by Rosenbaum. Finally we show that, contrary to what is claimed in the article, the proposed model is not able to show that zero growth is compatible with a positive net rate of profit.
    Keywords: Kaleckian,Stability,Wage-led/Profit-led,Profit rate,Zero growth
    Date: 2020
  3. By: Ehnts, Dirk H.; Höfgen, Maurice
    Abstract: This paper investigates how the concept of public purpose is used in Modern Monetary Theory (MMT). As a common denominator among political scientists, the idea of public purpose is that economic actions should aim at benefiting the majority of the society. However, the concept is to be considered as an ideal of a vague nature, which is highly dependent on societal context and, hence, subject to change over time. MMT stresses that government spending plans should be designed to pursue a certain socio-economic mandate and not to meet any particular financial outcome. The concept of public purpose is heavily used in this theoretical body of thought and often referred to in the context of policy proposals as the ideas of universal job guarantee and banking reform proposals show. MMT scholars use the concept as a pragmatic benchmark against which policies can be assessed. With regards to the definition of public propose, MMT scholars agree that it is dependent on the social-cultural context. Nevertheless, MMT scholars view universal access to material means of survival as universally applicable and in that sense as the lowest possible common denominator.
    Keywords: Modern Monetary Theory,Public Purpose,Economy for the Common Good,Fiscal Policy,Monetary Policy
    Date: 2020
  4. By: Walter Bossert (Department of Economics and CIREQ, University of Montreal); Andrew E. Clark (Paris School of Economics); Conchita D'Ambrosio (INSIDE, University of Luxembourg); Anthony Lepinteur (INSIDE, University of Luxembourg)
    Abstract: Economic insecurity has attracted growing attention in social, academic and policy circles. However, there is no consensus as to its precise definition. Intuitively, economic insecurity is multi-faceted, making any comprehensive formal definition that subsumes all possible aspects extremely challenging. We propose a simplified approach, and characterize a class of individual economic-insecurity measures that are based on the time profile of economic resources. We then apply our economic-insecurity measure to data on political preferences. In US, UK and German panel data, and conditional on current economic resources, economic insecurity is associated with both greater political participation (support for a party or the intention to vote) and notably more support for parties on the right of the political spectrum. We in particular find that economic insecurity predicts greater support for both Donald Trump before the 2016 US Presidential election and the UK leaving the European Union in the 2016 Brexit referendum.
    Keywords: Economic index numbers; Insecurity; Political participation; Conservatism; Right-leaning political parties; Trump; Brexit.
    JEL: D63 D72 I32
    Date: 2020–01
  5. By: Luca Fornaro; Gianluca Benigno (Centre for Economic Performance (CEP); London School of Economics (LSE); Centre for Economic Policy Research (CEPR))
    Abstract: Productivity is one of the key determinants of potential output?that is, the trend level of production consistent with stable inflation. A productivity growth slowdown has occurred in several advanced economies in the aftermath of the global financial crisis, raising concerns about long-term growth. In response, a variety of supply-side policy options have been proposed, such as reforms to increase labor and product market flexibility. In this blog post, we consider the role of demand-side policies in raising trend productivity growth.
    Keywords: monetary policy Keynesian
    JEL: E2
  6. By: Don Fullerton
    Abstract: How was the birth of “Environmental Economics” related to the first Earth Day fifty years ago (April 22, 1970)? This short note introduces some ideas about an amazing burst of intellectual activity from 1968 to 1974. Environmental economics was not a field of economics before this brief period, but the main field journal was up and running by the end of it. This note on “environmental economics” will be published in the forthcoming “Earth 2020: An Insider’s Guide to a Rapidly Changing Planet” by Philippe D. Tortell (Cambridge: Open Book Publishers), along with a score of other notes about the fifty years of progress on air pollution, water, climate, oceans, fish, land, forest, biodiversity, plastics, contaminants, space junk, geo-engineering, media, law, and politics.
    Keywords: environment, policy, climate, Earth Day
    JEL: Q20 Q30 Q40 Q50
    Date: 2020

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