nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2020‒11‒16
ten papers chosen by
Karl Petrick
Western New England University

  1. Alfred Marshall, Evolutionary Economics and Climate Change: Raffaelli Lecture By Sheila Dow
  2. "When Will Italy Recover?" By Dimitri B. Papadimitriou; Francesco Zezza; Gennaro Zezza
  3. "Argentina's (Macroeconomic?) Trap: Some Insights from an Empirical Stock-Flow Consistent Model " By Sebastian Valdecantos
  4. Whither pluralism in economics education? New empirical evidence By Martina Cioni; Maria Alessandra Rossi
  5. Influence of Karl Marx’s Political Thought in 20th Century By Anand, Sanjeev; Mishra, Mukesh Kumar
  6. Schumpeter and Keynes: Economic growth in a super-multiplier model By Nomaler, Önder; Spinola, Danilo; Verspagen, Bart
  7. A Note on the Interpretation of Financialization as the ‘Sixth Countertendency’ to Marx’s Law of the Tendency of the Rate of Profit to Fall By Stefano Di Bucchianico
  8. Typologies of "Just Transitions": Towards Social-Ecological Transformation By Kreinin, Halliki
  9. Capitalist Systems and Income Inequality By , Stone Center; Ranaldi, Marco; Milanovic, Branko
  10. From the Core to the Cores: Surplus Approach, Institutions and Economic Formations By Cesaratto, Sergio; Di Bucchianico, Stefano

  1. By: Sheila Dow (Department of Economics, University of Victoria)
    Abstract: The way in which any topic is analysed in economics depends on methodological approach. The purpose here is to explore the argument that the way in which climate change is addressed depends on how economics is understood to relate to the physical environment and also to the social and ethical environment. This involves an exploration of the formation of knowledge, both in economics and in the economy. Alfred Marshall’s evolutionary approach to knowledge formation was central to his approach to economics and to his understanding of economic behaviour. Here we consider the application of Marshall’s approach to issues around climate change, through the lens of the subsequent development of evolutionary economics and ecological economics.
    Keywords: Alfred Marshall, evolutionary economics, environmental economics, ecological economics
    Date: 2020–10–19
  2. By: Dimitri B. Papadimitriou; Francesco Zezza; Gennaro Zezza
    Abstract: Italy was the first European country to be impacted by COVID-19, rapidly overwhelming healthcare facilities in some areas and prompting the government to shut down nonessential economic activities, with an inevitable (asymmetric) impact on production and income. Though the gradual reopening of most business activities began in 2020Q3, the extent of the shutdown’s damage is difficult to assess. The current political debate is now focusing on what can be achieved with European funds (in the form of both grants and loans), which should become available beginning in 2021. In this Strategic Analysis, Institute President Dimitri B. Papadimitriou, Research Associate Francesco Zezza, and Research Scholar Gennaro Zezza detail the shutdown's impact on business activities in Italy, incorporating the planned government intervention with preliminary evidence available through 2020Q3 to evaluate a baseline projection for the Italian economy up to 2022.
    Date: 2020–10
  3. By: Sebastian Valdecantos
    Abstract: The Argentinean economy has just ended another lost decade. After the peak registered in 2011, the per capita GDP has oscillated with a decreasing trend, leaving the economy poorer than it was ten years before. During these ten years, different governments with conflicting macroeconomic programs were in power, none of them able to save the economy from stagflation. The goal of this paper is to address to what extent the economic performance would have been better had other policy combinations been implemented. The analysis is made through an empirical quarterly stock-flow consistent (SFC) model for the period 2007-19 in order to ensure the coherence of the results and to give the outcomes of the simulations a holistic and dynamically consistent interpretation. From the results of the simulations it seems that the problem that is keeping Argentina in stagflation goes beyond the domain of macroeconomics. The fact that in practice two divergent macroeconomic programs were implemented--neither of them being able to produce good and sustainable macroeconomic performance--is a first symptom that favors the case for that hypothesis. When the model is used to counterfactually test the policy recommendations of these approaches with the external conditions that prevailed while the opposite program was implemented, none of them yield results that can be deemed sustainable. Yet, the model developed in this paper can be useful for studying the different policy combinations that, given a specific context, can bring about more stable and sustainable dynamics for the Argentinean economy.
    Keywords: Stock-Flow Consistent Models; Argentina; Economic Policy
    JEL: C54 E17 E61 E65
    Date: 2020–11
  4. By: Martina Cioni; Maria Alessandra Rossi
    Abstract: In the past two decades, dissatisfaction for the state of introductory economics teaching and standard textbooks has grown among economists, students and employers alike. The collective project under the acronym “CORE” – Curriculum Open-access Resources in Economics – has proposed a prominent alternative, fiercely criticized mostly by heterodox economists, which broadens the range of topics featured in the textbook, but presents them without emphasizing controversy and disagreement within the discipline (an approach their proponents have described as “pluralism by integration”). This paper provides preliminary empirical evidence on the question whether this approach leads to “indoctrination effects” similar to those the literature has highlighted for standard introductory economics courses. It finds evidence of these effects and identifies some students’ features associated with them. Overall, the results point to the need for a variant of pedagogical pluralism that places greater emphasis on the comparison of alternative perspectives without falling prey to “paradigm tournament”.
    Keywords: Economics Education, Pluralism, Mainstream and Heterodox Economic Approaches
    JEL: A22 B41 B50
    Date: 2020–10
  5. By: Anand, Sanjeev; Mishra, Mukesh Kumar
    Abstract: The task of this paper discusses the role of Marx in 20th Century and culture today. An analysis of contemporary political economy Studies works that with the new global crisis of capitalism, a new interest in Karl Marx’s works has emerged. Karl Marx—German philosopher, economist, and revolutionary—believed a just world could be achieved only through the evolution of humanity from a capitalist to a socialist economy and society. The new world economic crisis that started is the most obvious reason for the return of the interest in Marx. The paper argues that Marx’s Both a scholar and a political activist, Marx addressed a wide range of political as well as social issues, and is known for, among other things, his analysis of history. The interpretations of his theories, particularly those on political economy, have in the course of history generated decades of debate, inspired revolutions and cast him as both devil and deity in political and academic circles.
    Keywords: Karl Marx,Marxist theory,Global Economy
    Date: 2020
  6. By: Nomaler, Önder (UNU-MERIT); Spinola, Danilo (UNU-MERIT, Maastricht University); Verspagen, Bart (UNU-MERIT, Maastricht University)
    Abstract: We present a model of economic growth that is based on Keynesian ideas (the role of autonomous demand in economic growth) as well as Schumpeterian notions (technological change). Our model fits in the Sraffian supermultiplier (SSM) tradition, and we endogenise the growth rate of autonomous demand, and semi-endogenise productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilisation falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.
    Keywords: Economic growth model, Sraffian supermultiplier, Research and Development , R&D, Keynesian theory, Technological change
    JEL: O31 O33 O41 E11 E12 E62
    Date: 2020–11–06
  7. By: Stefano Di Bucchianico
    Abstract: Marxian economics has been dealing extensively with the phenomenon of financialization. Among the wide variety of approaches, there are those putting at the center of the stage the issue of faltering profitability. Besides the analytical arguments, one finds in this line of research contributions linking financialization and the list of counter-elements to the Law of the Tendency of the Rate of Profit to Fall. Financialization is thus interpreted as the 'sixth' countertendency to that law (the ‘increase of stock capital’), referring to the list in Chapter XIV of Capital, Vol. III. We aim to provide an alternative interpretation of that last counter-factor. The proposal is based on three elements. First, the role of joint-stock companies issuance of long-term financing instruments yielding low remuneration. Second, how the average rate of profit is calculated. Third, the role of the organic composition of capital in determining differences in sectoral profitability. We eventually claim that the sixth element should be read as referring to the convergence of the rate of profit towards a uniform value and not as a prediction of the emergence of financialization
    Keywords: Law of the Tendency of the Rate of Profit to Fall; Karl Marx; financialization; Capital, Volume III; rate of profit
    JEL: B14 B26 B51
    Date: 2020–10
  8. By: Kreinin, Halliki
    Abstract: The "Just Transition" (JT) approach emerged as an answer to balancing human welfare, jobs and the need for deep decarbonisation. The concept was developed by trade unions in the industrialised world as a unifying rallying cry around the demand that ecological transformation be undertaken in a socially just way. Starting out in the US in the 1970s, it has increasingly been adopted and adapted by different groups, including unions and workers themselves, environmentalists, academics, governments, international institutions and nongovernmental organisations. While the flexibility of the concept and the easy translatability of “fairness” have arguably been its strength and the reason for its popularity, JT has also been criticised for its vagueness, inoperability in practice, and in particular for being used to fight for various, and sometimes antithetical, conceptualisations of justice. Without negating the political challenges of JTs, this paper will look at divergent types of current formulations of JT, within a modified framework of Hampton’s (2015) trade union climate approaches, which includes 1) "neoliberal political economy/market" (NPE), 2) "ecological modernisation/state" (EM), and 3) "social-ecological transformation" (SET) climate approaches. Different JT approaches are aligned along "Market Policies" and "Just Transition" axes (Figure 1) of which NPE and SET form two extreme approaches. This paper will elaborate on why a radical SET formulation of JT, which moves past only class-based climate approaches (Hampton’s (2015) Marxist Political Economy) to include broader critiques based on environmental justice, degrowth and ecofeminism, is needed to adequately challenge current multiple crises related to the environment and society.
    Keywords: Just Transition, social-ecological transformation, environmental labour studies
    Date: 2020–01
  9. By: , Stone Center (The Graduate Center/CUNY); Ranaldi, Marco; Milanovic, Branko
    Abstract: The paper investigates the relationship between capitalism systems and their levels of income and compositional inequality (how the composition of income between capital and labor varies along income distribution). Capitalism may be seen to range between Classical Capitalism, where the rich have only capital income, and the rest have only labor income, and Liberal Capitalism, where many people receive both capital and labor incomes. Using a new methodology and data from 47 countries over the past 25 years, we show that higher compositional inequality is associated with higher inter-personal inequality. Nordic countries are exceptional because they combine high compositional inequality with low inter-personal inequality. We speculate on the emergence of homoploutic societies where income composition may be the same for all, but Gini inequality nonetheless high, and introduce a new taxonomy of capitalist societies. (Stone Center Working Paper Series)
    Date: 2020–10–22
  10. By: Cesaratto, Sergio (University of Siena); Di Bucchianico, Stefano (University of Siena)
    Abstract: The paper moves from Garegnani’s “core” of the classical income distribution theory to propose a deeper integration of the concept of social surplus and institutions. Our main tenet is that the social surplus does not exist independently of the institutions (or social order) that oversee its production and distribution, starting from those that prevail in the sphere of production. In this sense we supplement the surplus approach with important insights from the Polanyian approach, from economic archaeology and anthropology, but also from Sraffian authors and Sraffa’s manuscripts. Taking inspiration from Garegnani’s core while also considering its specificities, this work is a premise to the design of different economic “cores” for different stylized economic formations.
    Keywords: surplus approach; economic anthropology; economic formations; institutions; capitalism
    JEL: A12 B51 B52
    Date: 2020–10–26

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