nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒01‒17
seven papers chosen by
Karl Petrick
Western New England University

  1. Anti-Meritocratic Economics in the Contemporary Era: The Issues with the Neoclassical Theory By Maxfield, Sean
  2. Inflation and conflicting claims in the open economy By Guilherme Spinato Morlin
  3. Steve Keen's The New Economics: A Manifesto By Bichler, Shimshon; Nitzan, Jonathan
  4. Growth led by government expenditure and exports: public and external debt stability in a supermultiplier model By Guilherme Spinato Morlin
  5. U.S. Bubble-Led Macroeconomics By Otaviano Canuto
  6. Specialize or diversify? And in What? Trade composition, quality of specialization and persistent growth By Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito
  7. Winning a battle against the odds: a cleaners’ campaign By Pannini, Elisa

  1. By: Maxfield, Sean
    Abstract: No longer does society consider the full extent of the argument and consequences or benefits of a system change. All the record-breaking economic success of the last few decades simply furthers a divide between people/organizations that have money and people/organizations that need money. However, those that can view this divide assign the capitalistic system as the culprit when in fact it is the modern mutation of capitalism that is at fault. Within modern neoclassical economies, there is no form of value-based meritocracy between people and organizations.
    Keywords: economics, econ, economic, economy, economies, neoclassical, classical, capitalism, Adam Smith, socialism, price, prices, markets, valuation, value, hierarchies, hierarchical, monetary, equity, finance, financial, financial services, exchanges, stock markets, secondary markets, businesses, inflation
    JEL: A1 A10 A11 A13 A2 A20 B0 B1 B2 B3 B4 E0 E6 G0 N0 N1 P1 P10 P12 P16 P5 P51
    Date: 2021–12–18
  2. By: Guilherme Spinato Morlin
    Abstract: Exchange rates and international prices are fundamental to explain inflation in open economies. Conflict inflation models account for these variables by including imported inputs and, in some cases, a distributive impact of exchange rates. A different viewpoint emerges from the Classical-Keynesian theory of distribution for a price-taker open economy. Thus, we explore this alternative by developing a conflict inflation model building on Classical Keynesian approach. The paper contributes to the literature by combining the conflicting claims approach with the Classical-Keynesian open economy framework. Including tradable prices, the model considers their direct impact on distribution. Therefore, it addresses a cause of inflation overlooked in the literature. Finally, conflict inflation affects the real exchange rate, which becomes an important distributive variable
    JEL: B51 D33 E11 E31 F41
    Date: 2021–10
  3. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: Neoclassical economics is the official scientific underpinning of capitalism as well as its main ideological defence, and according to Keen, it fails in both tasks. Contrary to received opinion, neoclassicism cannot explain capitalism – either in detail or in the aggregate – and the policies it prescribes do not support but undermine the very system it defends. It must be scrapped, says Keen, and the purpose of his book is to explain why and outline what should come in its stead.
    Keywords: banks,climate,complex systems,credit,debt,finance,macroeconomics,money,neoclassical economics,policy
    JEL: P16 E4 G21 E61 G01 G E13 Q54
    Date: 2021
  4. By: Guilherme Spinato Morlin
    Abstract: The Sraffian supermultiplier model revealed the role of autonomous demand in economic growth. Nevertheless, the long-run sustainability of a growth process driven by autonomous demand requires the stability of the financial stocks behind it. Growth led by government expenditure and exports is thus stable if both public and external debts present convergent dynamics. Thus, in this paper, we develop a supermultiplier model for an open economy with government to assess the stability of growth led by government expenditure and exports. We analyze the stability conditions for public debt and foreign debt ratios. Public debt-to-income ratio stability requires that the interest rate is smaller than the output growth rate. Foreign debt-to-exports ratio stability requires that the international interest rate is smaller than the growth rate of exports. The external constraint may appear as a restriction to external indebtedness, imposing an upper limit to growth. Nonetheless, the presence of a domestic autonomous expenditure may relax the external constraint. The model allows for two demand-led growth regimes: balance of payments constrained and policy constrained. A fiscal policy rule is proposed to keep the foreign debt ratio below an upper limit. Simulations of five cases show the conditions for stability of debt ratios, and the outcomes of the fiscal policy rule and a structural change policy. In the simulations, fiscal policy successfully reduces the equilibrium foreign debt-to-export ratio by decreasing the share of government expenditures in autonomous demand. Successful industrial policies that increase exports’ growth keep the foreign debt ratio below the threshold with a higher growth rate than the fiscal policy rule. Altogether, the model provides stability conditions for growth in an open economy paying its international liabilities in foreign currency
    Keywords: : Sraffian supermultiplier; Thirlwall’s Law; demand-led growth; public debt;external debt
    JEL: E12 F41 F43 E62 O41
    Date: 2021–10
  5. By: Otaviano Canuto
    Abstract: Macroeconomic dynamics in the U.S. economy has increasingly become associated with asset price fluctuations in the past few decades. Financial conditions have increasingly become an influential factor shaping the cyclical pace of the macroeconomy. There has been a mismatch between rising financial wealth and the pace of creation and incorporation of new assets. Several secular stagnation hypotheses offer explanations for the insufficient creation of new assets. Public debt—and its partial monetization by central banks—has played a stabilizing role by boosting the net supply of assets available to accommodate the demand for financial assets. The U.S. big balance sheet economy has been on a growth path highly dependent on the continuity of low real interest rates, as well as stretched price-earnings ratios of stocks and high corporate debt. Periodic episodes of downward adjustment of asset prices have been countervailed with lax monetary policies.
    Date: 2021–08
  6. By: Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito
    Abstract: This paper, using a long-term, product-level cross-country dataset, analyzes the trade-growth nexus by introducing two novel indicators able to capture demand and supply attributes of countries' quality of specialization. The Keynesian efficiency index measures demand attractiveness of the export baskets, estimating product-level demand elasticities and weighting them by diversification; the Schumpeterian efficiency index tracks the export basket' technological dynamism proxied by product-level patent intensities. These two dimensions of quality of specialization are effective in explaining the rate and volatility of growth and the duration of growth episodes, identified as periods longer than 8 years of 2% average growth and, even more, of exceptional growth episodes (>=5%). Our results, robust to a wide range of control variables, suggest that specialization per se' is detrimental for growth resilience while countries with a diversified export structure, specialised either in demand-elastic and technological-dynamic productions are likely to experience longer growth episodes.
    Keywords: Structural Change; International Trade; Growth Episodes.
    Date: 2022–01–04
  7. By: Pannini, Elisa
    Abstract: This article analyses a campaign urging a British university to re-establish in-house cleaning services after years of outsourcing. The small independent union leading the campaign began from an extremely low level of power resources and managed to build enough associational and societal power to win the dispute on cleaners’ working conditions. The study is based on participant observation of the union’s activities, document analysis and interviews. The article argues that the strategy emerging from the study, centred around three key strategies (collectivization of individual grievances, education, and disruption of core business activities), can be articulated in a process following the main categories of Mobilization Theory: organization, mobilization and collective action. Additionally, the union managed to conciliate servicing and organizing strategies, as well as attention to class-oriented and migrant-specific issues.
    Keywords: cleaners; mobilization; power resources; precarious workers; trade unions; union organizing; Sage
    JEL: R14 J01
    Date: 2021–12–01

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