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on Post Keynesian Economics |
| By: | Lorenzo Esposito; Giuseppe Mastromatteo |
| Abstract: | Since the 2008 crisis, the economics literature has shown a renewed interest in Keynes's "beauty contest" (BC) as a fundamental aspect of the functioning of financial markets. We argue that to understand the importance of the BC, psychological and informational factors are of small importance, and a dynamic-structural approach should be followed instead: the BC framework is paramount because it is rooted in the historical trajectory of capitalism and it is not simply a consequence of "irrational" (i.e., biased) agents. In this genuine form, the BC mechanism allows one to understand the main trends of a financialized world. Moreover, the conventional nature of financial markets provides a sound method for assessing different economic policies whose effectiveness depends on how much they can influence the convention itself. This alternative understanding of the BC can be used to start the needed rethinking of economics, urged by the crisis, that is for now reduced to studying the financial and psychological "imperfections" of the market. |
| Keywords: | Financial Crisis; Financialization; Behavioral Economics; Herd Behavior; Convention |
| JEL: | B15 E12 G01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_972&r=all |
| By: | Fernando Rios-Avila |
| Abstract: | This paper presents a description of the quality of match of the statistical matches used in the LIMTCP estimates prepared for Ethiopia and South Africa. For Ethiopia, the statistical match combines the Ethiopian Socio-economic Survey--Wave 3--2015/2016 (ESS) with the Ethiopian Time Use Survey (ETUS) 2013. For South Africa it combines the October Household Survey (OHS) 1998 with the time use data obtained from the SA-Time Use Survey (SATUS) 2000, and the South African Living Conditions Survey (SALCS) 2014/2015 with the SATUS 2010. In all cases, the alignment of the two datasets is examined, after which various aspects of the match quality are described. Despite the differences in the survey years, the quality of match for South Africa is high and the synthetic dataset appropriate for the time poverty analysis. For Ethiopia, due to data quality differences, we restrict the analysis to married couple households with an employed spouse and young children. Conditioning on the restriction and sample reweighting, the Ethiopian synthetic dataset seems appropriate for the time poverty analysis. |
| Keywords: | Statistical Matching; Time Use; Household Production; Poverty; LIMTCP; Ethiopia; South Africa |
| JEL: | C14 C40 D31 J22 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_970&r=all |
| By: | Roger Backhouse (University of Birmingham [Birmingham], Erasmus University Rotterdam); Antoinette Baujard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Tamotsu Nishizawa (Teikyo University) |
| Abstract: | Our forthcoming book, Welfare Theory, Public Action and Ethical Values challenges the belief that, until modern welfare economics introduced issues such as justice, freedom and equality, economists adopted what Amartya Sen called "welfarism." This is the belief that the welfare of society depends solely on the ordinal utilities of the individuals making up the society. Containing chapters on some of the leading twentieth-century economists, including Walras, Marshall, Pigou, Pareto, Samuelson, Musgrave, Hicks, Arrow, Coase and Sen, as well as lesser-known figures, including Ruskin, Hobson and contributors to the literature on capabilities, the book argues that, whatever their theoretical commitments, when economists have considered practical problems they have adopted a wider range of ethical values, attaching weight to equality, justice and freedom. Part 1 explains the concepts of welfarism and non-welfarism and explores ways in which economists have departed from welfarism when tackling practical problems and public policy. Part 2 explores the reasons for this. When moving away from abstract theories to consider practical problems it is often hard not to take an ethical position and economists have often been willing to do so. We conclude that economics needs to recognise this and to become more of a moral science. |
| Keywords: | individualism,economics,Welfarism,non-welfarism,welfare,public policy,ethics |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02937994&r=all |
| By: | Tanweer Akram; Huiqing Li |
| Abstract: | This paper analyzes the nominal yields of UK gilt-edged securities ("gilts") based on a Keynesian perspective, which holds that the short-term interest rate is the primary driver of the long-term interest rate. Quarterly data are used to model gilts' nominal yields. These models bring to light the complex dynamics relating the nominal yields on gilts to the short-term interest rate, inflation, the growth of industrial production, and the government debt ratio. The results show that the short-term interest rate has a crucial influence on the nominal yields on gilts, even after controlling for various factors. Contrary to widely held views, a higher government debt ratio does not lead to higher nominal yields. |
| Keywords: | UK Gilt-Edged Securities; Government Bonds; Long-Term Interest Rates; Nominal Bond Yields; Government Debt |
| JEL: | E43 E50 E58 E60 G10 G12 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_969&r=all |
| By: | Jonathan F. Cogliano; Roberto Veneziani; Naoki Yoshihara |
| Abstract: | This article surveys computational approaches to classical-Marxian economics. These approaches include a range of techniques - such as numerical simulations, agent-based models, and Monte Carlo methods - and cover many areas within the classical-Marxian tradition. We focus on three major themes in classical-Marxian economics, namely price and value theory; inequality, exploitation, and classes; and technical change, profitability, growth and cycles. We show that computational methods are particularly well-suited to capture certain key elements of the vision of the classical-Marxian approach and can be fruitfully used to make significant progress in the study of classical-Marxian topics. |
| Keywords: | Computational Methods, Agent-Based Models, Classical Economists, Marx |
| JEL: | C63 B51 B41 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:mab:wpaper:2020-02&r=all |
| By: | Harold M. Hastings; Tai Young-Taft; Chih-Jui Tsen |
| Abstract: | In a seminal 1972 paper, Robert M. May asked: "Will a Large Complex System Be Stable?" and argued that stability (of a broad class of random linear systems) decreases with increasing complexity, sparking a revolution in our understanding of ecosystem dynamics. Twenty-five years later, May, Levin, and Sugihara translated our understanding of the dynamics of ecological networks to the financial world in a second seminal paper, "Complex Systems: Ecology for Bankers." Just a year later, the US subprime crisis led to a near worldwide "great recession," spread by the world financial network. In the present paper we describe highlights in the development of our present understanding of stability and complexity in network systems, in order to better understand the role of networks in both stabilizing and destabilizing economic systems. A brief version of this working paper, focused on the underlying theory, appeared as an invited feature article in the February 2020 Society for Chaos Theory in Psychology and the Life Sciences newsletter (Hastings et al. 2020). |
| Keywords: | Stability; Complexity; May-Wigner; Noise; Subprime Crisis; Liquidity Shock |
| JEL: | C02 C62 E17 H12 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_971&r=all |