nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2020‒10‒19
ten papers chosen by
Karl Petrick
Western New England University

  2. Institutional Roots of Economic Decline: Lessons from Italy By Marco Simoni
  3. Don’t talk to me about Marx any more! By Koehler, Johann
  4. The epistemics of populism and the politics of uncertainty By Richard Bronk; Wade Jacoby
  5. Beyond Financialisation: The Need for a Longue Durée Understanding of Finance in Imperialism By Koddenbrock, Kai; Kvangraven, Ingrid Harvold; Sylla, Ndongo Samba
  6. Unemployed With Jobs and Without Jobs By Robert E. Hall; Marianna Kudlyak
  7. Scaling up alternatives to capitalism: A social movement approach to alternative organizing (in) the economy By Schiller-Merkens, Simone
  8. The Legacy of the Slave Trade: Towards Identifying the Causal Impact of Mistrust in Medicine on Demand for Vaccination in Sub-Saharan Africa By Athias, Laure; Macina, Moudo
  10. The political economy of the resource curse: A development perspective By Antonio Savoia; Kunal Sen

  1. By: Rahman, Jasmeen; Dimand, Robert; Assistant, JHET
    Abstract: We explore disciplinary boundary-making in geographical economics or “the new economic geography” with attention to the approaches taken by, and attempts at communication between, scholars with primary affiliations in economics, geography and regional science. The Dixit-Stiglitz general equilibrium approach to monopolistic competition and increasing returns was applied to agglomeration and location by Paul Krugman, who had previously pioneered the “new trade theory” building on the Dixit-Stiglitz model, and, independently and slightly earlier, by Masahisa Fujita and his student Heshem Abdel-Rahman starting from regional science, a tradition with its own departments, doctorates, conferences and journals distinct from economics and geography. Economic geography, as studied by geographers, had already taken a quantitative and theoretical turn in the 1960s, reviving an earlier tradition of German location theory overshadowed within geography after World War II by areal differentiation. Another strand of economic geography pursued by geographers was influenced by economic theory, but by non-neoclassical Marxian and Sraffian economics. Debates between these scholars raised questions whether these analyses were multidisciplinary, drawing on distinct disciplines, or crossed disciplinary boundaries (as when geographical economics in the style of economists is undertaken in geography departments) or transcends disciplinary boundaries, or involved the emergence of a new discipline.
    Date: 2020–09–21
  2. By: Marco Simoni
    Abstract: The economic decline of Italy since the mid 1990s is a critical case in contemporary political economy because its model of capitalism was deeply reformed at the time when its decline commenced. This paper argues that economic stagnation cannot be attributed to special interest politics, nor to the lack of market-friendly reforms in a globalized economic context, as previous literature argues. Instead, Italian economic decline is a consequence of institutional change which on the one hand has destroyed previous institutional complementarities, and on the other hand has led to an incoherent, or “hybrid,” setting. In the institutional spheres of corporate governance and labor, economic reforms established new institutions alternatively apt to support both strategic coordination and market coordination, resulting in institutional incoherence. In addition, building on the case of Italy and based on patent data relative to 19 OECD countries, this paper unpacks the link between institutional coherence and economic performance. It articulates a novel hypothesis according to which higher specialization in innovation patterns, derived from institutional coherence, also leads to higher overall innovation volumes. Hence, reforms that undermine a prevalent mode of coordination across the economy also undermine innovation capacity, leading to economic decline.
    Keywords: Varieties of Capitalism, Economic Growth, Italy
    Date: 2019–04
  3. By: Koehler, Johann
    JEL: B14 B24 P2 P3
    Date: 2020–12–01
  4. By: Richard Bronk; Wade Jacoby
    Abstract: This paper discusses epistemic aspects of populism – especially its link with radical uncertainty and the tribal construction of facts – that have so far received relatively little attention. We argue that populism is less a backward-looking phenomenon feeding off existing grievances than a narrative-based reaction to an increasingly unsettled future. Many economic factors isolated as causes of populism – especially rapid technological innovation, deregulation, and the globalisation of networks – entail a high degree of indeterminacy in social systems; and the corresponding uncertainty facing voters is a catalyst for many of the pathologies of populism isolated in the literature. In particular, uncertainty undermines the credibility of experts, while the disorientation and anxiety it induces increase reliance on simple narratives to structure expectations. The paper explores the role of narrative entrepreneurs, the relationship between narratives and power, and the dynamics of narrative coups designed to create alternative facts and perform a new reality.
    Keywords: Uncertainty, narrative coups, tribal construction of facts, distrust of experts, populist turn
    Date: 2020–02
  5. By: Koddenbrock, Kai; Kvangraven, Ingrid Harvold; Sylla, Ndongo Samba
    Abstract: One of the central premises of the literature on financialisation is that we have been living in a new era of capitalism, characterised by a historical shift in the finance-production nexus. Finance has begun to behave ‘abnormally’ towards production. It has expanded to a disproportionate economic size and, more importantly, has divorced from ‘legitimate’ economic pursuits. In this paper we explore these claims of ‘expansion’ and ‘divorce’. We argue that although there has been expansion of financial motives and practices the ‘divorce’ between the financial and the productive economy cannot be considered a new empirical phenomenon having occurred during the last decades and even less an epochal shift of the capitalist system. The neglect of the needs of a self-centered economy has been the ‘normal’ and structural operation of finance in most of the former European colonies in the Global South during the last 150 years. We provide evidence to that effect with a longue durée study of the finance-production nexus in Senegal and Ghana. A main result of our empirical exploration is that an understanding of the historical developments of finance under colonialism is key for understanding how capitalist finance works globally. Such a de-centered perspective requires however a serious engagement with the concept and logics of imperialism.
    Date: 2020–09–24
  6. By: Robert E. Hall; Marianna Kudlyak
    Abstract: Potential workers are classified as unemployed if they desire to work but are not working. The unemployed population contains two groups–those with jobs and those without jobs. Those with jobs are on furlough or temporary layoff. They wait out periods of non-work with the understanding that their jobs still exist and they will be recalled. We show that the resulting recall-unemployment dissipates quickly following a shock. Those whose jobs no longer exist constitute what we call jobless-unemployment. Shocks that elevate jobless-unemployment have much more persistent effects. The unemployed without jobs often circle through short-term jobs, spells of unemployment. and spells out of the labor force, before finding stable employment. Historical major adverse shocks, such as the financial crisis in 2008, created mostly jobless-unemployment and consequently caused extended periods of elevated unemployment. The pandemic starting in March 2020 created a large volume of recall-unemployment, most of which dissipated by August. It also created a bulge in jobless-unemployment, which is lingering.
    JEL: E32 J63 J64
    Date: 2020–10
  7. By: Schiller-Merkens, Simone
    Abstract: In these times of crises, capitalism and the far-reaching marketization of our societies has again become a subject of contestation and critique. Alternative organizing is one response to the critique of capitalism. As an embodied and constructive form of critique it takes place in prefigurative organizations and communities on the ground that experiment with alternative forms of organizing economic exchanges and lives. These prefigurative initiatives are seen as central actors in a social transformation toward an alternative economy. However, they oftentimes remain autonomous and disconnected, questioning their potential to contribute to a broader social change. This paper sets out to explore how and when alternative organizing as practiced in communities and organizations can scale upwards to lead to a more profound social transformation of our societies. Building on insights from scholarship on social movement outcomes, I discuss the collective actions, contextual conditions, and social mechanisms that are likely to allow an upward scale shift of alternative organizing.
    Keywords: alternative organizing,critique of capitalism,diffusion,movement outcome,postcapitalism,prefiguration,scale shift,social movement studies,social transformation,alternative Organisationsformen,Bewegungsforschung,Diffusion,Kapitalismuskritik,Postkapitalismus,Präfiguration,scale shift,soziale Transformation,Wirkungen sozialer Bewegungen
    Date: 2020
  8. By: Athias, Laure; Macina, Moudo
    Abstract: There is a large body of anecdotal evidence from sub-Saharan Africa of widespread medical distrust leading to health program failures. In this paper, to isolate an exogenous variation in trust in medicine to explain contemporary health demand in sub-Saharan Africa, we rely on a widespread historical shock: the slave trade. We combine \possessivecite{NunnWantchekon2011} historical data on the slave trade by ethnic group with individual-level data, geolocated at the district level, from the 2010-2014 Demographic and Health Surveys (DHS) to examine the reduced-form relationship between ancestors’ exposure to the slave trade and children vaccination status against measles. Exploiting variations both within countries and districts, we find that children from mothers whose ancestors were exposed to the slave trade are less likely to be vaccinated. The size of the effect offsets or even dominates the ones obtained for standard determinants of health demand, such as education or revenue. Evidence from a variety of identification strategies shows that the slave trade affects demand for vaccination only through trust in medicine. We then provide explanations for the persistent effect of the slave trade. Consistent with the economic approach, we identify religious affiliations and matrilineal lineage systems as important cultural transmission mechanisms. Consistent with the evolutionary anthropology approach, we point to the similarity of the environment across generations due to colonial and contemporaneous abusive medical treatments to explain persistence of optimal mistrusting behavior.
    Keywords: Trust, Medicine, Slave trade, Health, Culture, Cultural transmission
    JEL: D12 I12 I18 J15 N57 Z13
    Date: 2020–09–16
  9. By: Assistant, JHET; Graf, Rüdiger
    Abstract: The article examines an early and idiosyncratic version of behavioral economics or “empir-ical socio-economics,” which the German economist and taxation expert Günter Schmölders developed in the postwar decades. Relying on both his published papers and his lecture notes and correspondence, it scrutinizes Schmölders’ intellectual upbringing in the tradition of the Historical School of Economics (Historische Schule der Nationalökonomie) and his relation to the emerging ordoliberalism, demonstrating that the roads that led to dissatisfaction with the emerging neoclassical mainstream and the unrealistic behavioral assumptions of macro-economic models were manifold. Accordingly, it shows that behavioral economics is compati-ble with various intellectual and political backgrounds and convictions. Yet, it still forms a dis-tinct entity: Comparing Schmölders with contemporary and later behavioral economists, I will show that they shared essential methodological assumptions as well as an understanding of human beings as decision-making organisms.
    Date: 2020–09–21
  10. By: Antonio Savoia; Kunal Sen
    Abstract: This paper reviews the recent literature on the developmental effects of resource abundance, assessing likely effects and channels with respect to income inequality, poverty, education, and health. To date, this area has received less analysis although it is relevant to the Sustainable Development Goals agenda, as a significant number of the world poor live in African resource-rich economies. We argue that the presence of a natural resource sector per se does not necessarily translate into worse development outcomes. The natural resource experience varies to a significant extent.
    Keywords: resource abundance, Inequality, Institutions, Sustainable Development Goals, Poverty
    Date: 2020

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