nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒04‒04
nine papers chosen by
Karl Petrick
Western New England University

  1. "What's Causing Accelerating Inflation: Pandemic or Policy Response?" By Yeva Nersisyan; L. Randall Wray
  2. Managing Contagion: COVID, Public Health, and Reflexive Behavior By Davis, John B.
  3. Equality Denied: Tech and African Americans By William Lazonick; Philip Moss; Joshua Weitz
  4. Economic Inequality meets Social Stratification: An Application of Stratification Economics to Mexico By Paloma Villagómez-Ornelas; Luis Monroy-Gómez-Franco
  5. "What Is Happening to the New Greek National Accounts Data?" By Gennaro Zezza; Dimitri B. Papadimitriou; Nikolaos Rodousakis
  6. Perspectives on the economics and sociology of health. Contributions from the institutionalist approach of economics of convention -an introduction By Philippe Batifoulier; Rainer Diaz-Bone
  7. Pricing for Medicine Innovation: A Regulatory Approach to Support Drug Development and Patient Access By Rosie Collington; William Lazonick
  8. Facts and their Discontents: A Research Agenda for Online Disinformation, Race, and Gender By Thakur, Dhanaraj; Madrigal, DeVan Hankerson
  9. Varieties of the rat race: Working hours in the age of abundance By Behringer, Jan; Gonzalez Granda, Martin; van Treeck, Till

  1. By: Yeva Nersisyan; L. Randall Wray
    Abstract: This paper examines the recent increase of the measured inflation rate to assess the degree to which the acceleration is due to problems created (largely on the supply side) by the pandemic versus pressures created on the demand side by pandemic relief. Some have attributed the inflation to excess demand, most notably Larry Summers, who had warned that the pandemic relief spending was too great. As evidence, one could point to the quick recovery of GDP and to reportedly tight labor markets. Others have variously blamed supply chain disruptions, shortages of certain inputs, OPEC's oil price increases, labor market disruptions because of COVID, and rising profit margins obtained through exercise of pricing power. We conclude that there is little evidence that excess demand is the problem, although we agree that in the absence of the relief checks, recovery would have been sufficiently slow to minimize inflation pressure. We closely examine the main contributors to rising overall prices and conclude that tighter monetary policy would not be an effective way to reduce price pressures. We also cast doubt on the expectations theory of inflation control. We present evidence that suggests there is currently little danger that higher inflation will become entrenched. If anything, rate hikes now will make it harder for the economy to adjust to current realities. The potential for lots of pain with little gain is great. The best course of action is to tackle problems on the supply side.
    Keywords: COVID-19; Inflation; Pandemic Relief; Pricing Power; Supply Chains
    JEL: E31 E32 E52 E52
    Date: 2022–03
  2. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: This paper characterizes a pandemic as one kind of contagion, and defines a contagion as a two-level, two-direction, reflexive feedback loop system. In such a system, experts' opinions can act as self-fulfilling prophecies that significantly influence social behavior. Also, when multiple experts produce multiple, expert opinions can fragment a society's response to a pandemic worsening rather than ameliorating it. This paper models this with two competing expert opinions, associates them with club good and common pool goods types of circumstances, and argues that to combat fragmentation of opinion a focus on public health public good provision needs to be framed in public choice terms, specifically as choices regarding the nature of democratic deliberative institutions. From a constitutional political economy perspective, it argues this entails asking how public reasoning processes can function in an 'inclusive and noncoercive' way that allows society to reconcile competing visions regarding such issues as how to combat a pandemic.
    Keywords: COVID-19, contagion, self-fulfilling prophecy, public health, club goods, common pool goods, public choice, democratic deliberation
    JEL: H41 H70 I10 A13
    Date: 2022–03
  3. By: William Lazonick (The Academic-Industry Research Network); Philip Moss (The Academic-Industry Research Network); Joshua Weitz (The Academic-Industry Research Network)
    Abstract: Thus far in reporting the findings of our project "Fifty Years After: Black Employment in the United States Under the Equal Employment Opportunity Commission," our analysis of what has happened to African American employment over the past half century has documented the importance of manufacturing employment to the upward socioeconomic mobility of Blacks in the 1960s and 1970s and the devastating impact of rationalization - the permanent elimination of blue-collar employment - on their socioeconomic mobility in the 1980s and beyond. The upward mobility of Blacks in the earlier decades was based on the Old Economy business model (OEBM) with its characteristic "career-with-one-company" (CWOC) employment relations. At its launching in 1965, the policy approach of the Equal Employment Opportunity Commission assumed the existence of CWOC, providing corporate employees, Blacks included, with a potential path for upward socioeconomic mobility over the course of their working lives by gaining access to productive opportunities and higher pay through stable employment within companies. It was through these internal employment structures that Blacks could potentially overcome barriers to the long legacy of job and pay discrimination.
    Keywords: African American, Black. Asian, higher education, employment relations, equal employment opportunity, professionals, technology companies, Silicon Valley, Equal Employment Opportunity (EEO-1) data, social networks, employment discrimination.
    JEL: D2 D3 D8 D91 E23 F22 F23 F66 G35 H11 H52 I2 J15 J21 J24 J31 J44 J53 J71 J82 L2 L63 M14 M5 N82 O15 O32 O36 P12
    Date: 2022–02–18
  4. By: Paloma Villagómez-Ornelas; Luis Monroy-Gómez-Franco (Centro de Estudios Espinosa Yglesias)
    Abstract: This paper argues that explaining both the level and the changes in the inequality of the distribution of economic resources in society requires complementing explanations based on human capital theory with insights from social stratification theory. The integration of both allows explaining horizontal inequalities and explaining the aggregate levels of economic inequality in a society. We exemplify the potential of this integration through a reinterpretation of the literature on economic inequalities in Mexico during the XXIst century. This reinterpretation focuses on how institutions stratify the access to the different components of human capital and how said components are valued in the labour market. We argue that a complete understanding of distributional dynamics in societies with persistent inequalities can be achieved through this interdisciplinary exercise.
    Date: 2021
  5. By: Gennaro Zezza; Dimitri B. Papadimitriou; Nikolaos Rodousakis
    Abstract: In 2020, the Hellenic Statistical Authority (ElStat) started a revision of the national accounts for Greece to bring them into line with the new European System of Accounts. Data from national accounts have gained more relevance as a crucial set of information for policy, especially in the eurozone, since many indicators--like the size of the public deficit relative to GDP--depend on them. It is therefore crucial that these data provide a realistic description of the actual state of the economy. Models that aim at understanding the medium-term trajectory of an economy usually need to abstract from short-term volatility due to the seasonal behavior of some variables, and it is therefore common practice to use seasonally adjusted data rather than the observed seasonal data. Research Scholar Gennaro Zezza, Institute President Dimitri Papadimitriou, and Research Associate Nikos Rodousakis recently noticed that the dynamics of relative prices, as measured by the ratios between the deflators of the different seasonally adjusted components of GDP, had an excess volatility, which made it more difficult to obtain meaningful econometric estimates of their determinants. They have therefore decided to investigate whether this excess volatility could be observed in the original seasonal data, and this note documents their results.
    Date: 2022–02
  6. By: Philippe Batifoulier (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Rainer Diaz-Bone (University of Lucerne)
    Abstract: The article introduces the approach of economics and sociology of conventions (in short EC) as a neopragmatist institutionalism in the field of economics and sociology of health. For EC, conventions are regarded as institutional logics of valuation, valorization and coordination, and EC emphasizes the empirical plurality of orders of worth and values, actors rely on and institutions are built on. Especially health, health care and its institutions are closely linked to value issues and norms. Because of the pluralism of possible value systems and orders of worth, tensions and critiques are an important empirical phenomenon to be addressed in the health care system. The contribution sketches main positions and perspectives of EC in the analysis of values, medical professions and ethics, of datafication, quantification and classification (related to health and health care institutions), of social inequalities, as well as in the analysis of health policies and health capitalism. Also, the COVID-19 pandemic and its consequences are discussed from the standpoint of EC, finally social trends and perspectives in times of the pandemic are outlined.
    Abstract: Cet article est l'introduction du numéro spécial de la revue Historical Social Research (46, 2021) consacré aux apports du courant de l'Economie des conventions dans le domaine de la santé. L'article présente l'approche de l'économie et de la sociologie des conventions (en abrégé EC) comme un institutionnalisme néopragmatiste dans le domaine de l'économie et de la sociologie de la santé. Pour l'EC, les conventions sont considérées comme des logiques institutionnelles d'évaluation, de valorisation et de coordination et l'EC met l'accent sur la pluralité empirique des ordres de valeur sur lesquels les acteurs s'appuient et sur lesquels les institutions sont construites. En particulier, les soins de santé et leurs institutions sont étroitement liés aux questions de valeurs et aux normes. En raison du pluralisme des systèmes de valeurs et des ordres de valeur possibles, les tensions et les critiques sont un phénomène empirique important à prendre en compte dans le système de soins de santé. La contribution esquisse les principales positions et perspectives de l'EC dans l'analyse des valeurs, des professions médicales et de l'éthique, de la quantification et de la classification des données, des inégalités sociales, ainsi que dans l'analyse des politiques de santé et du capitalisme sanitaire. De plus, la pandémie COVID-19 et ses conséquences sont discutées du point de vue de l'EC.
    Keywords: Economis of convention,sociology of conventions,valorization,health economics,COVID-19 pandemic,quantification,social inequality,neopragmatism,health capitalism
    Date: 2022–02–22
  7. By: Rosie Collington (University College London Institute for Innovation and Public Purpose); William Lazonick (The Academic-Industry Research Network)
    Abstract: The United States represents the world's largest market for pharmaceutical drugs. It is also the only advanced economy in the world that does not regulate drug prices. There is no upper threshold for the prices of medicines in the United States. List prices are instead set by manufacturers in negotiation with supply-chain intermediaries, though some federal programs have degrees of discretion in price determinations. In practice, this deregulated system means that drug prices in the United States are generally far higher than in other advanced economies, adversely affecting patient accessibility and system affordability. In this paper, we draw on the "theory of innovative enterprise" to develop a framework that provides both a critique of the existing pricing system in the United States and a foundation for developing a new model of pricing regulation to support safety and effectiveness through drug development as well as accessibility and affordability in the distribution of approved medicines to patients. We introduce a regulatory approach we term "Pricing for Medicine Innovation" (PMI), which departs dramatically from the market-equilibrium assumptions of conventional (neoclassical) economics. The PMI approach recognizes the centrality of collective investments by government agencies and business firms in the productive capabilities that underpin the drug development process. PMI specifies the conditions under which, at the firm level, drug pricing can support both sustained investment in these capabilities and improved patient access. PMI can advance both of these objectives simultaneously by regulating not just the level of corporate profit but also its allocation to reinvestment in the drug development process. PMI suggests that although price caps are likely to improve drug affordability, there remain two potential issues with this pricing approach. Firstly, in an innovation system where a company's sales revenue is the source of its finance for further drug development, price caps may deprive a firm of the means to invest in innovation. Secondly, even with adequate profits available for investment in innovation, a firm that is run to maximize shareholder value will tend to use those profits to fund distributions to shareholders rather than for investment in drug innovation. We argue that, if implemented properly, PMI could both improve the affordability of medicines and enhance the innovative performance of pharmaceutical companies.
    Keywords: Pharmaceuticals, pricing, innovation, strategy, organization, finance, resource allocation, learning, scale, investment, regulation.
    JEL: D2 D4 D8 G3 H3 I11 L2 O3
    Date: 2022–01–28
  8. By: Thakur, Dhanaraj; Madrigal, DeVan Hankerson
    Abstract: The January 6th attack on the U.S. Capitol demonstrated how online disinformation can have severe offline consequences. For some time, the problems and possible impacts on democracy caused by online mis- and dis-information have dominated public policy discussions and thus research about these topics has developed rapidly in the last few years. However, this research generally lacks a focus on the impact of disinformation and misinformation on people of color, women, LGBTQIA+ communities, and other voices that are less prominent in mainstream political discourse in the U.S. Many disinformation campaigns are specifically designed with racist and/or misogynistic content, suggesting that disinformation is a tool used to promote ideologies like white supremacy and patriarchy. In September 2020, CDT brought together an interdisciplinary and international group of experts to share and discuss research on this issue. This report presents some of those ideas and builds upon them to identify key research opportunities, including important unresolved questions around the intersections of online disinformation, race, and gender. This report also makes recommendations for how to tackle the related methodological and technical problems that researchers and others face in addressing these topics. This is important in generating research that will be directly relevant for developing policy solutions to address disinformation.
    Date: 2021–02–11
  9. By: Behringer, Jan; Gonzalez Granda, Martin; van Treeck, Till
    Abstract: We ask why working hours in the rich world have not declined more sharply or even risen at times since the early 1980s, despite a steady increase in productivity, and why they vary so much across rich countries. We use an internationally comparable database on working hours (Bick et al., 2019) and conduct panel data estimations for a sample of 17 European countries and the United States over the period 1983-2019. We find that high or increasing top-end income inequality, decentralized labor relations, and limited government provision of education and other in-kind services contribute to long working hours. Our results are consistent with the hypothesis that upward-looking status comparisons in positional consumption ("Veblen effects") contribute to a "rat race" of long working hours that is more or less pronounced in different varieties of capitalism.
    Keywords: working hours,Veblen effects,income inequality,varieties of capitalism
    JEL: D31 J20 P16 P50
    Date: 2022

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