nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2021‒01‒04
seven papers chosen by
Karl Petrick
Western New England University

  1. Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the Great Financial Crisis and the Great Recession By Eckhard Hein; Judith Martschin
  2. From Keynes' Liquidity Preference to Gesell's Basic Interest By Ahmed Anwar
  3. From ‘Capital and Ideology’ to ‘Democracy and Evidence’: a review of Thomas Piketty By McGaughey, Ewan
  4. From Regulation to Deregulation and (Perhaps) Back: A Peculiar Continuity in the Analytical Framework By McColloch, William; Vernengo, Matías
  5. California’s COVID-19 economic shutdown reveals the fingerprint of systemic environmental racism By Bluhm, Richard; Polonik, Pascal; Hemes, Kyle; Sanford, Luke; Benz, Susanne; Levy, Morgan C.; Ricke, Katharine; Burney, Jennifer
  6. Reconciling agency and impartiality: positional views as the cornerstone of Sen’s idea of justice By Antoinette BAUJARD; Muriel GILARDONE
  7. The Economics of Environment and Ecology for Sustainable Development By Jakhanwal, Meeta; Mishra, Mukesh Kumar

  1. By: Eckhard Hein (Berlin School of Economics and Law (DE)); Judith Martschin
    Abstract: We contribute to the recent debates on demand and growth regimes in modern finance-dominated capitalism linking them to the post-Keynesian research on macroeconomic policy regimes. We examine the demand and growth regimes, as well as the macroeconomic policy regimes for the big four Eurozone countries, France, Germany, Italy and Spain, for the periods 2001-09 and 2010-19. First, our approach supports the usefulness of the identification of demand and growth regimes according to growth contributions of the main demand components and financial balances of the macroeconomic sectors. This allows for an understanding of the demand sources of growth, or stagnation, if there is a lack of demand, of how these sources are financed and of potential financial instabilities and fragilities. Second, when it comes to the macroeconomic policy drivers of demand and growth regimes, as well as their respective changes, we show that the exclusive focus on fiscal policies, as in the previous literature, is too limited, and that it is the macroeconomic policy regime which matters here, i.e. the combination of monetary, fiscal and wage policies, as well as the open economy conditions.
    Keywords: Demand and growth regimes, macroeconomic policy regimes, post-Keynesian macroeconomics
    JEL: E11 E12 E61 E63 E65 O57
    Date: 2020–12
  2. By: Ahmed Anwar
    Abstract: In his General Theory of Employment, Interest and Money, John Maynard Keynes devotes a section in chapter 23 on the theories of Silvio Gesell, best known for the proposal to use stamped money. Although the account is generally favourable, Keynes finds key defects in Gesell’s proposed monetary reforms. We look carefully at this section together with Keynes’ own theory of liquidity preference which Keynes considers a completion of Gesell’s imperfect insights. We will argue that Keynes was in fact mistaken on these defects and that although both Keynes and Gesell identify the same theoretical problem, a special role that money plays in preventing the optimal accumulation of capital, it is only Gesell’s reform that in theory provides a solution.
    Date: 2020–12
  3. By: McGaughey, Ewan (King's College, London)
    Abstract: Thomas Piketty’s Capital and Ideology (2020) is a major, encyclopaedic and data-driven contribution to the effort of constructing a better human civilization. This review summarises the main argument: a positive thesis that in every society, ideology feeds laws and institutions that create inequality, and inequality then bolsters ideology; a normative thesis that we need a better ideology, including ‘participatory socialism’, to solve our biggest challenges. The review then complements and critiques three central issues in the argument, that (1) the true concentration of economic power, the votes in the economy, is even more extreme than inequality of wealth and income, (2) the legal construction of markets, through property, contract, corporate, or human rights law, can ‘pre-distribute’ income and wealth to a vast extent before tax, and (3) social justice means expanding (not merely correcting or re-distributing) everyone’s opportunity, creative capacity, and human potential, and helps everyone to develop their personality to the fullest. Social justice is an unparalleled force, and is still the best answer to far-right, authoritarian or other failed ideologies, which have escalated inequality and driven climate damage. Perhaps the greatest achievement of Piketty’s work could be to bring economics firmly back to the values in the Universal Declaration of Human Rights. (2020) Oeconomia.
    Date: 2020–12–14
  4. By: McColloch, William (Keene State College); Vernengo, Matías (Bucknell University)
    Abstract: The rise of the regulatory state during the Gilded Age was closely associated with the development of Institutionalist ideas in American academia. In their analysis of the emergent regulatory environment, Institutionalists like John Commons opera-ted with a fundamentally marginalist theory of value and distribution. This engagement is a central explanation for the ul-timate ascendancy of neoclassical economics, and the limitations of the regulatory environment that emerged in the Progres-sive Era. The eventual rise of the Chicago School and its deregulatory ambitions did constitute a rupture, but one achieved without rejecting preceding conceptions of competition and value. The substantial compatibility of the view of markets underlying both the regulatory and deregulatory periods is stressed, casting doubt about the transformative potential of the resurgent regulatory impulse in the New Gilded Age.
    Keywords: John Commons; George Stigler; Regulatory Capture; Deregulation
    JEL: B13 B15 B25 K20 L51
    Date: 2020–12–16
  5. By: Bluhm, Richard; Polonik, Pascal; Hemes, Kyle; Sanford, Luke; Benz, Susanne; Levy, Morgan C.; Ricke, Katharine; Burney, Jennifer
    Abstract: Racial and ethnic minorities in the United States often experience higher-than-average exposures to air pollution. However, the relative contribution of embedded institutional biases to these disparities can be difficult to disentangle from physical environmental drivers, socioeconomic status, and cultural or other factors that are correlated with exposures under status quo conditions. Over the spring and summer of 2020, rapid and sweeping COVID-19 shelter-in-place orders around the world created large perturbations to local and regional economic activity that resulted in observable changes in air pollution concentrations, compositions, and distributions. Here, we use the pandemic-related emergency order and subsequent economic slowdown to causally estimate pollution exposure disparities in California. Using both public ground-based sensor data and a citizen-science network of monitors for respirable particulate matter (PM2.5), along with satellite records of nitrogen dioxide (NO2), we show that the initial sheltering-in-place period produced disproportionate air pollution reduction benefits for Asian, Hispanic/Latinx, and low- income communities. By linking these pollution data with weather, geographic, socioeconomic, and mobility data in difference-in-differences models, we demonstrate that these disparate pollution reductions cannot be explained by environmental conditions, geography, income, or local economic activity and are instead driven by non-local activity. This study thus provides causally-identified evidence of systemic racial and ethnic bias in pollution control under business-as-usual conditions.
    Date: 2020–12–16
  6. By: Antoinette BAUJARD (Université Jean Monnet, Université de Lyon, GATE Lyon Saint-Etienne CNRS); Muriel GILARDONE (Université de Caen Normandie, UNICAEN, CREM CNRS)
    Abstract: Our paper offers a novel reading of Sen’s idea of justice, going beyond two standard prisms that we have identified as obscuring the debate: 1) welfarism, i.e.the focus on one definition of individual welfare; and 2)transcendentalism, i.e.resting on external normative criteria. Instead we take seriously Sen’s emphasis on personal agency,and we focus on his original contribution to the issue of positional objectivity.Firstly, we demonstrate that Sen’s idea of justice, with the notion of “positional views” at its core, is more respectful of persons’agency than any theory based on individual preference or capability could be. Secondly, we argue that Sen’s conception of positional views considers that both information and sentiments are relevant. Such an alternative approach to both objectivity and subjectivity in their standard meanings allows the formation of more impartial views through collective deliberation and a better consideration of justice by agents themselves. This paper contributes to better articulating Sen’s constructive proposal regarding justice and clarifying its anti-paternalistic nature.
    Keywords: individual preferences, positional objectivity, sentiments, public reasoning, agency, justice, welfarism, transcendentalism, impartiality, anti-paternalism
    JEL: A13 B31 B41 D63 I31
    Date: 2020–12
  7. By: Jakhanwal, Meeta; Mishra, Mukesh Kumar
    Abstract: Economic growth and development are intricately linked to the sound management of environmental resources. Reducing inequalities in society and maintaining healthy ecosystems are fundamental to achieving sustainable development, yet the interactions between these goals have been largely underexplored. Ecology and economy are derived from the same root words and concerns. Economics provides important tools for understanding and managing resources. Ecological economics focuses on the value of natural services and tries to include those services into price calculations. This Paper brief focuses on how societies can create opportunities for a green and inclusive economic recovery and, aims to achieve this goal by a structured approach to valuation that helps decision-makers recognize the wide range of benefits provided by ecology and ecosystems, their values in economic terms and in decision-making. A green recovery will significantly enhance the resilience of economies and societies in the face of both the severe recession and accelerating environmental challenges. Through education, research, policy and social action, needs to transform towards an equitable and ecologically sustainable society with respect for the rights of people and nature, biological cultural diversity and to respect its ecological limits.
    Keywords: Ecological Economics,Environmental Economics,Sustainable Development
    JEL: Q56 Q57 Q58
    Date: 2020

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