nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒07‒18
eight papers chosen by
Karl Petrick
Western New England University

  1. Some Recent Developments on the Explanation of the Empirical Relationship between Prices and Distribution By Ferrer-Hernández , Jacobo; Torres-González, Luis Daniel
  2. Demand-growth in support of structural change: evidence from Nigeria’s formal manufacturing sector By Christina Wolf
  3. Advances in Socially Responsible Investments in Resilience Finance By Julia M. Puaschunder
  4. The influence of Sen’s applied economics on his non-welfarist approach to justice By Muriel Gilardone
  5. A new social contract inclusive of informal workers By Martha Alter Chen; Sophie Plagerson; Laura Alfers
  6. How the Digital Economy Challenges the Neoliberal Agenda: Lessons from the Antitrust Policies By David Cayla
  7. Financialization in emerging Europe By Kazandziska, Milka
  8. Temporary Layoffs, Loss-of-Recall and Cyclical Unemployment Dynamics By Mark Gertler; Christopher K. Huckfeldt; Antonella Trigari

  1. By: Ferrer-Hernández , Jacobo (New School for Social Research); Torres-González, Luis Daniel (Benemérita Universidad Autónoma de Puebla)
    Abstract: The paper complemets recent contributions towards the explanation of the regularities in the behaviour of prices and capital intensities as an effect of hypothetical changes in the rate of profit in empirical production-price models. It is shown that theoretical price and capital curvers, i.e. prices and capital values as a function of the rate of profits, depend on the product of the eigenvalues and what we call the eigenlabours - the representation of the labour vector in the space spanned by the eigenvectors of the input matrix. We report robust evidence that the eigenvalues by themselves cannot produce the curves regulary reported in the literature, but rather it is the joint action of the eigenvalues and the eigenlabours. It is conjectured that the tendency towards zero of the subdominant eigenlabours is driven by the statistical tendency towards the proportionally between the labour vector and the Perron-Frobenius eigenvector of the input matrix.
    Keywords: Sraffian price models; price-profit rate curves; capital value; spectral representation; labour vector-Perron-Frobenius eigenvector relation
    JEL: B51 C67 D57
    Date: 2022–05–22
  2. By: Christina Wolf
    Abstract: An emerging literature on demand-led structural transformation and structuralist macroeconomics finds that demand-growth can positively complement industrial policy and drive structural transformation but there is no firm consensus which policies can achieve a sustained virtuous circle of demand-, output- and productivity growth. Looking at evidence from manufacturing companies listed on the Nigerian Stock Exchange (NSE), this paper supports the view that demand-growth can be a catalyst of structural transformation but only if demand problems of different nature are addressed simultaneously. Increases in government spending need to be combined with distributional policies favouring the disposable income of workers and subsistence communities and with policies that can address country-specific and historically formed supply-side problems in vertically linked sectors to counteract external demand problems manifesting through the balance of payments.
    Keywords: Demand-led Structural Transformation, Industrial Policy, Nigeria, NSE-listed manufacturing companies
    JEL: L16 O11 O14 O25 O55
    Date: 2022–06
  3. By: Julia M. Puaschunder (The New School, New York, USA)
    Abstract: Resilience finance is understood as an advancement of Socially Responsible Investments. In the wake of the COVID-19 economic fallout, unprecedented amounts of governmental rescue and recovery aid were allocated towards social and environmental causes. This paper argues that advances in Socially Responsible Investments are resilience finance pegged to noble causes but also ethics and ideologies. The COVID-19 bailout and recovery packages can potentially provide, if well-designed and properly-used, a unique opportunity to develop fairer and sustainable societies. Finance can imbue responsibility in the post-COVID-19 era in the establishment and fortification of the current Sustainable Development Goals but potentially also in negative screenings and sanction mechanisms in international law infringements. The article argues for a comparative Behavioral Law and Economics approach to understand the most contemporary international finance politics and responsible investment trends around the world.
    Keywords: Climate Change, Climate Stabilization, Coronavirus crisis, COVID-19, Digitalization, Economics, Economics of the Environment, Environmental Justice, Environmental Governance, Equality, Law, Economics, Healthcare, Monetary policy, Rescue and recovery aid, Redistribution, Social Justice,
    Date: 2022–03
  4. By: Muriel Gilardone (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This chapter shows that Sen's (2009) non-welfarist approach to justice is greatly influenced by 1) his work on famines; 2) his empirical work on gender inequalities, specifically within the Indian society, that helped him to refine his approach to hunger; and 3) his involvement in the creation of the human development approach. All these engagements — seemingly completely separate from his theoretical work in welfare economics — have, in fact, fostered the formulation of a novel approach in which agency and public reasoning are the core elements.
    Keywords: Amartya Sen,agency,public action,famines,gender inequalities,human development,perception bias,democracy,public reasoning,non-welfarism
    Date: 2021–03–04
  5. By: Martha Alter Chen; Sophie Plagerson; Laura Alfers
    Abstract: This paper makes the case that current social contracts are often inadequate, irrelevant, or unjust for informal workers. It outlines three possible future scenarios: the bad old contract, an even worse contract, and a better new contract. Under the bad old contract, informal workers lacked legal recognition, were stigmatized and penalized, and were excluded as partners. The intensification of predatory capitalism, repressive state policies and the collusion of state and capital, in the wake of the COVID-19 pandemic recession, makes the possibility of a worse new deal all too real.
    Keywords: Informal work, Informal economy, Social contract, State, Capital
    Date: 2022
  6. By: David Cayla (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage)
    Abstract: Conceived in the 1930s as a way to renew free market liberalism, neoliberal doctrines aim to institute a competitive order that would regulate the market as well as society. Yet, interpretations of how competition should be enforced have varied throughout history. The European Union, with its ordoliberal origins, tends to follow an interventionist approach while the United States, where the Chicago School has gained influence, fears that inadequate public interventions may diminish global efficiency. The digital revolution and the appearance of the Tech Giants introduces a new challenge. Faced with massive increasing returns to scale, the competition authorities initially reduced their interventionism to enjoy more market efficiency. But the emergence of digital platforms and the will to protect personal data from abusive uses pushes them now to adopt a new strategy for more interventions that goes beyond the economic and efficiency issues. This paper argues that the neoliberal vision is no longer accurate to regulate the digital economy. It shows that the platform economy is not an alternative way to manage the market, but an alternative to the market itself. To face these issues, a completely new conception of public regulation is therefore needed.
    Keywords: Digital economy,Personal data,Competition policy,Neoliberalism,Ordoliberalism JEL Classification Codes: B05
    Date: 2022–06
  7. By: Kazandziska, Milka
    Abstract: This paper contributes to the financialization literature exploring the dynamics of financialization in eight emerging European economies (EEEs) compared to the Anglo-Saxon countries. Our analysis encompasses the decade before and the years following the financial crisis in 2008, including the latest developments in conjunction with the Covid-pandemic. Hungary, Bulgaria, Croatia, Turkey, and to a lesser extent, Czech Republic and Poland experienced strong financial inflows, and an accumulation of foreign liabilities. Foreign financial flows in Russia were not as significant for the process of financialization, but rather the state itself. In this paper we identify two types of financialization: 'foreign-finance-led' and 'state-led' financialization, where 'foreign-finance-led' financialization is characterized by increase in net capital inflows and subsequently, foreign indebtedness, whereas the government (the state) in the 'state-led' financialization has a predominant role in the financialization process. Most of the EEEs fit the 'foreign-finance-led' financialization, but with a tendency of a significant state involvement in the financial systems during the Covid-pandemic. Based on the analysis of financialization in EEEs, our findings show that EEEs had variegated financialization dynamics. Financialization in the EEEs was less pronounced compared to United States and United Kingdom. Despite this fact, the dynamics of financialization took a significant pace in the EEEs in the years following the financial crisis of 2008, with rising debt levels during the Covid-pandemic.
    Keywords: financialization,financial crises,emerging countries,Central Eastern Europe
    JEL: E44 F34 F36 F65 G01 G20 P51 P52
    Date: 2022
  8. By: Mark Gertler; Christopher K. Huckfeldt; Antonella Trigari
    Abstract: We revisit the role of temporary layoffs in the business cycle, motivated by their unprecedented surge during the pandemic recession. We first measure the contribution of temporary layoffs to unemployment dynamics over the period 1979 to the present. While many have emphasized a stabilizing effect due to recall hiring, we quantify an important destabilizing effect due to “loss-of-recall”, whereby workers in temporary-layoff unemployment lose their job permanently and do so at higher rates in recessions. We then develop a quantitative model that allows for endogenous flows of workers across employment and both temporary-layoff and jobless unemployment. The model captures well pre-pandemic unemployment dynamics and shows how loss-of-recall enhances the recessionary contribution of temporary layoffs. We also show that with some modification the model can capture the pandemic recession. We then use our structural model to show that the Paycheck Protection Program generated significant employment gains. It did so in part by significantly reducing loss-of-recall.
    JEL: E0 E24
    Date: 2022–06

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