nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒01‒03
twelve papers chosen by
Karl Petrick
Western New England University

  1. Varieties and interdependencies of demand and growth regimes in finance-dominated capitalism By Prante, Franz; Hein, Eckhard; Bramucci, Alessandro
  2. European economic policy and the European Green Deal: An institutionalist analysis By Treude, Sibylle
  3. Structural change, productive development and capital flows: Does financial “bonanza” cause premature de-industrialization? By Alberto Botta; Giuliano Toshiro Yajima; Gabriel Porcile
  4. "Identity and Well-Being in the Skilled Crafts and Trades" By Martin Binder; Ann-Kathrin Blankenberg
  5. Pragmatic Behavior: grounding behavioral economics on pragmatism By Pablo Garcés
  6. The Capitalist Degree of Immortality By Bichler, Shimshon; Nitzan, Jonathan
  7. Revisiting path-as-process: A railroad track model of path development, transformation, and agency By Maximilian Benner
  8. Institutional change through development assistance: The comparative advantages of political and adaptive approaches By Roll, Michael
  9. A Primer on Trade and Inequality By Dani Rodrik
  10. Exposure-adjusted racial/ethnic disparities in mortality in the U.S. By Héctor Pifarré i Arolas; Enrique Acosta; Christian Dudel; Jo M. Hale; Mikko Myrskylä
  11. Economic and social polarization dynamics in the EU By G. Garau; A. Tola; M.V. Camerada; S. Lampreu; S. Carrus
  12. Des égalités fondamentales de Marx à la résolution du problème de la transformation COHÈRENCE DU MODÈLE By Norbert Ankri; Païkan Marcaggi

  1. By: Prante, Franz; Hein, Eckhard; Bramucci, Alessandro
    Abstract: We outline and simulate a stylised post-Keynesian two country stock-flow consistent model to demonstrate the interconnection of three of the main features/outcomes of finance-dominated capitalism, namely worsening income distribution for the bottom 90% households, the rise of international imbalances and the build-up of financial fragility. In the model, twobasic regimesemerge, depending on the institutional setting of the respective model economy:the debt-led private demand boom regime (DLPD) and the export-led mercantilist regime(ELM). We demonstrate the complementarity and interdependence of these two regimesand show how this constellation transformed after the crisis into the domestic demand-led regime (DDL) stabilised by government deficits, on the one hand, andELMregimes, on the other, depending ontherequired deleveraging of private household debt, distributional developments and fiscal policy.
    Keywords: post-Keynesian macroeconomics,financialisation,growth regimes,institutions,inequality,debt,stock-flow consistent model
    JEL: B59 E02 E11 E12 E25 E65 F41 O41
    Date: 2021
  2. By: Treude, Sibylle
    Abstract: The article deals with the influence of the European Commission in the field of economic policy in the European Union (EU) since the beginning of the 21st century. Starting from reflections on the guiding idea of supranationality the question arises if and how the Commission has increased its influence on the economic policies of the EU Member States. The role of the EU's long-term strategies like the European Green Deal are analysed by applying the approach of Evolutionary Institutionalism. Has the European Commission induced institutional change and improved its own institutional fitness? Which role does the European Green Deal play in European economic policy?
    Keywords: European integration,EU,European economic policy,European Green Deal,European integration theory/approaches,Evolutionary Institutionalism
    Date: 2022
  3. By: Alberto Botta; Giuliano Toshiro Yajima; Gabriel Porcile
    Abstract: The outbreak of Covid-19 brought back to the forefront the crucial importance of structural change and productive development for economic resilience to economic shocks. Several recent contributions have already stressed the perverse relation that may exist between productive backwardness and the intensity of the Covid-19 socio-economic crisis. In this paper, we analyze the factors that may have hindered productive development for over four decades before the pandemic. We investigate the role of (non-FDI) net capital inflows as a potential source of premature de-industrialization. We consider a sample of 36 developed and developing countries from 1980 to 2017, with major emphasis on the case of emerging and developing (EDE) economies in the context of increasing financial integration. We show that periods of abundant capital inflows may have caused the significant contraction of manufacturing share to employment and GDP, as well as the decrease of the economic complexity index. We also show that phenomena of “perverse” structural change are significantly more relevant in EDE countries than advanced ones. Based on such evidence, we conclude with some policy suggestions highlighting capital controls and external macroprudential measures taming international capital mobility as useful policy tools for promoting long-run productive development on top of strengthening (short-term) financial and macroeconomic stability.
    Keywords: Structural change; premature de-industrialization; capital Inflows; macroprudential policies
    JEL: F32 F38 O14 O30
    Date: 2021–12
  4. By: Martin Binder; Ann-Kathrin Blankenberg
    Abstract: We analyze the extent to which occupational identity is conducive to worker well-being. Using a unique survey dataset of individuals working in the German skilled crafts and trades, we use a novel occupational identity measure that captures identity more broadly than just referring to organizational identification and social group membership, but rather comprises personal and relational elements inherent in one's work. The latter are linked to significant social interactions a worker has in their job and the former to specific work characteristics of the work conducted itself. We find that higher job satisfaction is related to a stronger sense of occupational identity in our sample. This relationship is quite sizable and robust across model specifications, whereas income is not associated with job satisfaction in most models. Occupational identity is positively associated with a number of work characteristics, viz. task significance, task and skill variety, as well as social support, and our analysis shows that identity mediates the influence of these characteristics with regard to job satisfaction.
    Keywords: Occupational Identity; Identity Utility; Job Satisfaction; Crafts; Work Characteristics
    JEL: J28 J24 I31 B55
    Date: 2021–12
  5. By: Pablo Garcés (Pontifical Catholic University of Ecuador)
    Abstract: Behavioral economics offers an account of actual human behavior. Contrasting with the conventional normative approach to rationality, rational choice theory, describes the deviations from optimal decision making. These are attributed to failures in two systems, one in charge of automatic behavior (System 1) and the other responsible for reflective one (System 2). As important as this is, an elaboration of the interaction between them seems to be lacking. Philosophical pragmatism can contribute to address this want. It provides an evolutionary explanation of how people act accounting for the continuity of behavior including habitual and reflective action. The former is captured by habits and the latter directed towards objects. Additionally, it proposes a dialogical self, consisting of an interaction between the 'I', denoting impulse, and the 'me', referring to reflective action. As such, pragmatism can provide fertile ground on which to cultivate behavioral insights.
    Keywords: behavioral economics,pragmatism,rationality,agency,transaction
    Date: 2021
  6. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: This note offers some speculative ideas worth considering. One of the key features of all hierarchical civilizations is their rulers’ fear of death. This fear was famously narrated in the ancient myth of Gilgamesh – the Sumerian king who realized that, like all other humans, he too was destined to die and embarked on a desperate quest to annul his mortality. According to Lewis Mumford, this quest for immortality is the main reason why society’s rulers are forever obsessed with building and fortifying power hierarchies – or ‘megamachines’, as he called them. Controlling these megamachines, Mumford argued, is the rulers’ way of playing God, a futile yet all-possessive effort to conquer the future and live forever. In capitalism, the rulers finally figured out how to do it – sort of.
    Keywords: capital,capitalization,future,immortality,power
    JEL: P16 G
    Date: 2021
  7. By: Maximilian Benner
    Abstract: In the path development literature, the path-as-process perspective conceptualizes the emergence, evolution, transformation, and decline of regional industries in the long term. However, critical questions about the role of agency in and between episodes of path development and transformation remain open. This article argues that we should see path development as a long-term sequence that includes stretches of path development interrupted by occasional switches of transformation that are driven by changing patterns of agency. This railroad track model focuses attention on how and why the mix of agency changes at critical junctures between path development episodes.
    Keywords: evolutionary economic geography, path development, path transformation, agency, tourism, Israel
    Date: 2021
  8. By: Roll, Michael
    Abstract: Development assistance often fails to achieve institutional change because of a limited consideration of the political nature of these reforms and the local context. In response, political and adaptive development assistance (PADA) approaches, such as 'Thinking and Working Politically' (TWP) and 'Problem-Driven Iterative Adaptation' (PDIA), have been developed in recent years. Politicians, practitioners and researchers increasingly want to know if these approaches are more effective than mainstream approaches to development assistance. To answer this question, this paper develops a framework by asking three more specific questions about the 'which', the 'where' and the 'what'. First, for which types of development problems is political and adaptive development assistance likely to work betterthan mainstream approaches? Second, where or in which contexts might this be the case? And third, what contributions can be expected from these approaches including, but going beyond, effectiveness? Available evidence is used to answer these questions. This paper finds that political and adaptive approaches have comparative advantages over mainstreamapproaches when either the problem is complex, the context is hard to predict, or the solution is contentious. The overall conclusion is that development policy needs a broader variety of approaches from which to choose based on which fits the problem and the context best.
    Date: 2021
  9. By: Dani Rodrik
    Abstract: In the public imagination globalization’s adverse effects have loomed large, contributing significantly to the backlash against the political mainstream and the rise of far-right populism. The literature on trade and inequality is in fact exceptionally rich, with important theoretical insights as well as extensive empirical findings that sheds light on this recent experience. Some of the key results of this literature, discussed here, are as follows: Redistribution is the flip side of the gains from trade, and it becomes larger relative to net gains from trade in the advanced stages of globalization. Compensation is difficult for both economic and political reasons. International trade often differs from other market exchanges, raising fairness concerns in ways that domestic markets do not. The economic benefits of deep integration are generally ambiguous. Dynamic or growth gains from trade are uncertain.
    JEL: F02 F16
    Date: 2021–11
  10. By: Héctor Pifarré i Arolas (Max Planck Institute for Demographic Research, Rostock, Germany); Enrique Acosta (Max Planck Institute for Demographic Research, Rostock, Germany); Christian Dudel (Max Planck Institute for Demographic Research, Rostock, Germany); Jo M. Hale (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Background: Racial mortality disparities in the U.S. are well-documented and central to the debate on social inequalities in health. We argue that standard measures that are used to describe the disparities, such as life expectancy or years of life lost, underestimate those disparities. Methods: We analyze contemporary U.S. mortality disparities comparing Blacks and Hispanics to Whites using CDC and NCHS data. We estimate mortality disparities using standard metrics and a novel approach that weights mortality inequalities by the population fraction that is exposed to the inequalities. We then express the magnitude of these inequalities by comparing them to the loss of life due to leading causes of death. Results: Based on the exposure-adjusted measure, the Black mortality disadvantage is as deadly or deadlier than circulatory diseases, the top cause of death in the U.S; and 43% (men) and 87% (women) larger than the disadvantage as measured by life expectancy. For Hispanics, the exposure-adjusted mortality advantage over Whites is over two times larger, for both men and women, than what life expectancy disparities would imply, and 21% (men) and 11% (women) larger than when measured using standard years of life lost. Conclusions: Mortality inequalities experienced by real populations can differ markedly from the inequalities that are calculated for synthetic populations that are used in standard calculations. We show that racial/ethnic disparities in the U.S. are underestimated if not adjusted for the populations experiencing the inequalities. For health policy the exposure-adjusted inequalities are likely to provide a more reasonable signal on where to allocate scarce resources.
    Keywords: USA, age distribution, differential mortality, racial discrimination, risk exposure
    JEL: J1 Z0
    Date: 2021
  11. By: G. Garau; A. Tola; M.V. Camerada; S. Lampreu; S. Carrus
    Abstract: Inequality, from a social and economic point of view, produces a widespread sense of injustice, which culminates in the erosion of trust in institutions, politics, and the market economy. This is also relevant from a geopolitical perspective, especially when placed in correlation with the crisis of liberal democracies, often accompanied by the spread of nationalist currents capable of bringing into question the pillars of the EU system. In the past, differences in opportunity were prevalent only in less developed countries but recently, disparities have extended to Western countries and industrial economies as well. Financial crisis, market distortions, asymmetrical globalization and political choices are some of the factors underlying growing inequality around the world. We are seeing a progressive impoverishment of the middle class and the correlated concentration of national wealth in favor of a small minority (Stiglitz, 2014), the rise of a hyper-paid elite (Piketty, 2018; Saez and Zucman, 2019), and reduced upward economic mobility (Krueger, 2021). These phenomena should be considered in light of the aggregation of individual behaviors to better understand the increasing disintegration of the social fabric, which is in many cases considered the cause of the political metamorphosis of some States. This research analyzes statistical evidence with the aim of carrying out a comparative analysis between countries and regions, in order to assess dynamics of social and economic polarization in the EU. The results of the study, considered on a local scale, could contribute to better policy making to achieve the Agenda 2030 objectives.
    Keywords: Socio-economic polarization;Poverty;Inequality
    Date: 2021
  12. By: Norbert Ankri (AMU - Aix Marseille Université); Païkan Marcaggi
    Date: 2021–11–30

This nep-pke issue is ©2022 by Karl Petrick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.