nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒01‒24
five papers chosen by
Karl Petrick
Western New England University

  1. Building blocks of a heterodox business cycle theory By Robert Calvert Jump; Engelbert Stockhammer
  2. Kaldor and Kuznets Together in a Three-way Growth-Equity Nexus in Developed and Developing Countries: The Common Decoupling of Functional and Household Income Distribution but Different Details of the Nexus By Juneyoung Lee; Keun Lee
  3. "Technology and Productivity: A Critique of Aggregate Indicators" By Fred Block
  4. Two scenarios for sustainable welfare: a framework for an eco-social contract By Gough, Ian
  5. Reconciling normative and behavioural economics: the problem that cannot be solved By Guilhem Lecouteux

  1. By: Robert Calvert Jump; Engelbert Stockhammer
    Abstract: A key characteristic of heterodox theories of the business cycle is their focus on endogenous business cycle mechanisms. This paper provides an overview and comparison of four models in heterodox business cycle theory: multiplier-accelerator models, Goodwin models, Minskyan debt-cycle models, and momentum trader models. A representative model from each theory is formulated as a two-dimensional predator-prey system in continuous time, which allows us to identify the different stabilising and destabilising mechanisms. We argue that the theories are substantially competing, as they posit different mechanisms that explain cycles, but we also argue that these mechanisms are not mutually exclusive. We suggest that heterodox economists work towards a synthesis.
    Keywords: Business cycles; Endogenous cycles; Crises
    JEL: B41 B50 E32
    Date: 2022–01
  2. By: Juneyoung Lee; Keun Lee
    Abstract: This study analyzes the three-way relationship of economic growth and the two aspects of income distribution, namely, functional income distribution (labor income share) and household income distribution (Gini coefficient). It reveals the more serious nature of inequality in developing countries with a lower value of labor share but a higher Gini coefficient in comparison with developed countries, although both groups show a sharp decline of labor share but stable Gini coefficients over time. The study confirms the same three-way relationship in two groups of countries but with several different determinants and the different trends of the key variables. One contribution of such three-way analysis is to find the ¡®decoupling¡¯ pattern of the growth-equity nexus, namely decoupling between functional income distribution and household income distribution, as it finds that economic growth tends to increase labor income share but worsen household income inequality. Moreover, for both groups, higher labor income shares and household income inequality lead to a higher rate of economic growth. These findings are indicative of the common growth mechanism driven by skill-biased technical changes. The study also confirms the different determinants of equity. That is, declining labor share and stable Gini coefficients seem to be caused by the slow growth and increasing years of schooling in developed countries, whereas by sharp decreases in fertility rates and government expenditure in developing countries.
    Keywords: Income Distribution; Economic Growth; Simultaneous Equations System; Gini Coefficient; Labor Income Share; Kuznets;
    JEL: O11 O15 O47
    Date: 2022–01
  3. By: Fred Block
    Abstract: Economic analysts have used trends in total factor productivity (TFP) to evaluate the effectiveness with which economies are utilizing advances in technology. However, this measure is problematic on several different dimensions. First, the idea that it is possible to separate out the relative contribution to economic output of labor, capital, and technology requires ignoring their complex interdependence in actual production. Second, since TFP growth has declined in recent decades in all of the developed market societies, there is good reason to believe that the decline is an artifact of the slower rates of economic growth that are linked to austerity policies. Third, reliance on TFP assumes that measures of gross domestic product are accurately capturing changes in economic output, even as the portion of the labor force producing tangible goods has declined substantially. Finally, there are other indicators that suggest that current rates of technological progress might be as strong or stronger than in earlier decades.
    Keywords: Total Factor Productivity; Technology; Economic Growth; Economic Output
    JEL: D24 O40 O47
    Date: 2022–01
  4. By: Gough, Ian
    Abstract: More nation states are now committing to zero net carbon by 2050 at the latest, which is encouraging, but none have faced up to the transformation of economies, societies and lives that this will entail. This article considers two scenarios for a fair transition to net zero, concentrating only on climate change, and discusses the implications for contemporary ‘welfare states’. The first is the Green New Deal framework coupled with a ‘social guarantee’. I argue that expanded public provision of essential goods and services would be a necessary component of this strategy. The second scenario goes further to counteract runaway private consumption by building a sufficiency economy with ceilings to income, wealth and consumption. This would require a further extension of state capacities and welfare state interventions. The article provides a framework for comparing and developing these two very different approaches.
    Keywords: Green New Deal; Universal Basic Services; sufficiency; floors; ceilings; CUP deal
    JEL: J1 N0
    Date: 2021–11–18
  5. By: Guilhem Lecouteux (UCA - Université Côte d'Azur, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)
    Abstract: Behavioural economics has challenged the normative consensus that agents ought to choose following their own preferences. I argue that normative economists implicitly defended a criterion of the sovereignty of the autonomous consumer, and that current debates in normative behavioural economics arise from disagreements about the nature of the threats to autonomy that are highlighted by behavioural economics. I argue that those disagreements result from diverging ontological conceptions of the 'self' in the literature. I distinguish between the unitary, psychodynamic, and socio-historical conceptions of the self, and show how different positive theories about preferences and the nature of the agent may determine normative positions in normative behavioural economics.
    Keywords: preference satisfaction,autonomy,welfare,reconciliation problem,socio-historical self
    Date: 2021

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