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on Post Keynesian Economics |
| By: | Michalis Nikiforos |
| Abstract: | This policy brief provides a discussion of the relationships between austerity, Greece's macroeconomic performance, debt sustainability, and the provision of healthcare and other social services over the last decade. It explains that austerity was imposed in the name of debt sustainability. However, there was a vicious cycle of recession and austerity: each round of austerity measures led to a deeper recession, which increased the debt-to-GDP ratio and therefore undermined the goal of debt sustainability, leading to another round of austerity. One of the effects of these austerity policies was the significant reduction in healthcare expenditure, which made Greece more vulnerable to the recent pandemic. Finally, it shows how recent pre-COVID debt sustainability analyses projected that Greek public debt would become unsustainable even under minor deviations from an optimistic baseline. The pandemic shock will thus lead to an explosion of public debt. This brings the need for a restructuring of the Greek public debt to the fore once again, as well as other policies that will address the eurozone’s structural imbalances. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_151&r=all |
| By: | Roger Sandilands (Department of Economics, University of Strathclyde); Ramesh Chandra |
| Abstract: | Kaldor, a student of Allyn Young, made much of Verdoorn’s Law but the evidence for this ‘law’ is at best mixed. Verdoorn himself in his 1980 Economic Journal paper made it clear that his law did not have as general a validity as he had earlier believed. Evidence suggests that it is possible for agricultural productivity to grow many times faster than that in manufacturing, as in the US during 1947-84. Also, Young (1928) himself did not regard the law of diminishing returns as useful for prophesying the prospects of agriculture as the agricultural fields of newer lands had been brought closer to the older world through revolution in transportation and technical change in agriculture. Moreover, the logic of Verdoorn’s Law of favouring manufacturing at the cost of other sectors distorts intersectoral relationships, leads to adverse terms of trade for agriculture, and is likely to pose a demand constraint for industry itself. To undo one wrong (i.e., protection to industry), one has to match it with other wrongs like price support and marketing board in agriculture, and dual exchange rates to promote exports. The whole economic system becomes an intricate maze with adverse consequences for growth and productivity for the whole economy. |
| Keywords: | Verdoorn’s Law, Increasing returns, Nicholas Kaldor, Allyn Young, Lauchlin Currie |
| JEL: | B10 B20 B31 O21 O14 O41 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:2002&r=all |
| By: | Ogawa, Shogo |
| Abstract: | In this study, we present a baseline monetary growth model for disequilibrium macroeconomics. Our model is similar to the existing Keynes-Wicksell models, but we highlight a characteristic of disequilibrium (non-Walrasian) macroeconomics, that is, the regime dividing in the static model. In addition, since we synthesize demand-side factors (Keynesian) and supply-side factors (neo-classical), we find a new effect on dynamical feedback loops, that is, the dual-decision effect. This new effect stabilizes (resp. destabilizes) an unstable (resp. a stable) feedback loop when the regime switches from the demand-side to the supply-side. Moreover, this dual-decision effect partly works on the real wage adjustment process and it enhances the instability if the economy is in Keynesian regime. We implement numerical experiments to confirm these results, and find that Walrasian equilibrium itself is not always stable. |
| Keywords: | Disequilibrium macroeconomics; Non-Walrasian analysis; Keynes-Wicksell model; Economic growth |
| JEL: | E12 E40 O42 |
| Date: | 2020–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101236&r=all |
| By: | Rickard, Stephanie J. |
| Abstract: | Globalization has reduced the importance of distance between countries. Yet, within countries, geography matters now more than ever. Economic activities, including production and employment, occur unevenly across space within countries, and globalization consequently impacts various regions differently. Some areas benefit from international economic integration while others lose, and as a result, economic geography shapes citizens¤rsquo¤ experience of globalization. Economic geography also influences governments¤rsquo¤ responses to globalization and economic shocks. Economic geography consequently merits the attention of political scientists. By examining economic geography, researchers will find new traction on long-standing theoretical debates and valuable insights on recent developments, including the growing backlash against globalization. The challenges of studying economic geography include causal complexity and measurement issues. |
| Keywords: | economic geography; electoral institutions; geography of discontent; globalization; left-behind places; populism |
| JEL: | L81 |
| Date: | 2020–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104716&r=all |
| By: | Cormac Ó Gráda |
| Abstract: | This paper offers (yet another) reflection on the history and current status of economic history. No other sub-discipline of economics or history has tried so hard to be loved as economic history. That love is unrequited, because economic history’s problem is existential: it is an inherently interdisciplinary field. Economists and historians are interested in only small parts of what economic history should embrace. Some examples are given of how narrow views of the past the impoverish research. Not all is gloom and doom, however. The controversies economic history provokes and the insights it provides touch on issues that resonate and that will continue to do so. |
| Keywords: | Economic history; Cliometrics |
| JEL: | N00 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:202001&r=all |
| By: | Sabina Alkire, Selim Jahan |
| Abstract: | Early in 2018, the United Nations Development Program’s Human Development Report Office (HDRO) and the Oxford Poverty and Human Development Initiative (OPHI) agreed to adjust and unify their methodologies on poverty measurement and consider indicator improvements, in order to better monitor the Sustainable Development Goals (SDGs). This paper sets out the specifications of a joint global Multidimensional Poverty Index first published in 2018, which is an internationally comparable measure of acute poverty that captures the multiple deprivations poor people experience with respect to health, education and living standards. It builds on the original MPI launched in 2010, and an innovative MPI launched in 2014. The best features of both of these are subsumed in the joint global MPI 2018, which also reflects new data possibilities to better align the global MPI to the Sustainable Development Goals. Because the objective of revising the MPI to create a more credible and legitimate measure of multidimensional poverty that enables comparisons across countries using existing data was challenging to realize, the paper first sets out five key principles for a global poverty measure related to data coverage, communicability, comparability, disaggregation, and robustness. Drawing on expert interventions, a global consultation, empirical trials, and these principles, the paper then explains conceptually the motivation and nature of adjustments that were made to five of the ten included indicators. It also recognizes desirable changes that could not be made due to data constraints - for example including data on the environment, work, and security, or on intra-household inequalities. And it identifies key issues for future research related to household composition and the use of land and livestock variables. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp121&r=all |
| By: | Kitov, Ivan |
| Abstract: | Income inequality between different races in the U.S. is especially large. This difference is even larger when gender is involved. In a complementary study, we have developed a dynamic microeconomic model accurately describing the evolution of male and female incomes since 1930. Here, we extend our analysis and model the disparity between black and white population in the U.S., separately for males and females. Unfortunately, income microdata provided by the U.S. Census Bureau for other races and ethnic groups are not time compatible or too short for modelling purposes. We are forced to constrain our analysis to black and white population, but all principal results can be extrapolated to other races and ethnicities. Our analysis shows that black females and white males are two poles of the overall income inequality. The prediction of income distribution for two extreme cases with one model is the main challenge of this study. |
| Keywords: | personal income, evolution, age, race, GDP per capita, USA |
| JEL: | D01 D31 E17 E64 J1 O12 |
| Date: | 2020–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101019&r=all |
| By: | Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Eichengreen, Barry; Saka, Orkun (University of Essex) |
| Abstract: | What will be political legacy of the Coronavirus pandemic? We find that epidemic exposure in an individual's "impressionable years" (ages 18 to 25) has a persistent negative effect on confidence in political institutions and leaders. We find similar negative effects on confidence in public health systems, suggesting that the loss of confidence in political leadership and institutions is associated with healthcare-related policies at the time of the epidemic. In line with this argument, our results are mostly driven by individuals who experienced epidemics under weak governments with less capacity to act against the epidemic, disappointing their citizens. We provide evidence of this mechanism by showing that weak governments took longer to introduce policy interventions in response to the COVID-19 outbreak. These results imply that the Coronavirus may leave behind a long-lasting political scar on the current young generation ("Generation Z"). |
| Keywords: | epidemics, trust, democracy, political approval, COVID-19 |
| JEL: | D72 F50 I19 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13351&r=all |
| By: | Gouzoulis, Giorgos (University College London); Constantine, Collin |
| Abstract: | This paper undertakes a comparative study on the topographies of neoliberalism in Latin America (Chile and Mexico) and provides empirical estimates of how the varied geographies of neoliberalism affect functional income inequality between 1980-2011. Our empirical strategy employs a single-equation Unrestricted Error-Correction Model that tests an exploratory baseline specification. We find robust evidence that government consumption is a positive driver of the respective wage shares. Since Chile has entrenched austerity as opposed to Mexico, it is a fundamental explanation for its falling wage share. Private debt is the second most important explanation for why wage shares have fallen in Chile. We find no evidence of this channel in the Mexican case. The article also finds similarly varied effects of globalisation on the respective wage shares. These results demonstrate the importance of country-level studies and how new spatialities of neoliberalism through different state reconfigurations can tell unique distributional stories. |
| Date: | 2020–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:gruzp&r=all |
| By: | Fix, Blair (York University) |
| Abstract: | Free markets are, according to neoclassical economic theory, the most efficient way of organizing human activity. The claim is that individuals can benefit society by acting only in their self interest. In contrast, the evolutionary theory of multilevel selection proposes that groups must suppress the self interest of individuals. They often do so, the evidence suggests, by using hierarchical organization. To test these conflicting theories, I investigate how the 'degree of hierarchy' in societies changes with industrial development. I find that as energy use increases, governments tend to get larger and the relative number of managers tends to grow. Using a numerical model, I infer from this evidence that societies tend to become more hierarchical as energy use grows. This result is inconsistent with the neoclassical theory that individual self-interest is what benefits society. But it is consistent with the theory of multilevel selection, in which groups suppress the self-interest of their members. |
| Date: | 2020–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:g86am&r=all |