nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒09‒26
four papers chosen by
Karl Petrick
Western New England University

  1. Two classical decompositions of the Gini index by income sources: interpretation of contribution terms By Ivica Urban
  2. A possibilist justification of the ontology of counterfactuals and forecasted states of economies in economic modelling By Imko Meyenburg
  3. La política económica neoclásica en América Latina: génesis y consecuencias de cuatro décadas perdidas en el desarrollo latinoamericano, 1980-2020 By Sánchez-Masi, Luis

  1. By: Ivica Urban (Institute of Public Finance, Zagreb)
    Abstract: Natural Gini decomposition (Rao, V. M., 1969, J R Stat Soc Ser A, 132:418–425) and marginal Gini decomposition (Lerman, R. I., and Yitzhaki, S., 1985, Rev Econ Stat 67:151–156) are the most popular and widely used methods to reveal the contributions of various income sources to total income inequality. Their acceptance and highly spread empirical application have persisted in the face of criticism of the former method. This paper aims to “liberate†the natural Gini decomposition from two major critiques: that the method should be abolished because a uniformly distributed income source obtains zero contribution and that contribution terms lack a meaningful interpretation. Regarding the latter critique, it is shown that the contribution of a certain income source expresses inequality reduction due to the replacement of this source by a marginal uniformly distributed counterfactual income. Concerning the former critique, the argument is as follows: natural Gini decomposition belongs to the absolute inequality view, which commands that equal additions of income leave inequality unchanged. In this sense, it is perfectly normal that the natural Gini decomposition obtains zero contribution of the uniformly distributed income.
    Keywords: decomposition, income inequality, income sources, Gini index
    JEL: D31 D33 D63 H22 H23
    Date: 2022–08
  2. By: Imko Meyenburg (ARU - Anglia Ruskin University)
    Abstract: Economists, like any other social scientist, apply various methodologies and theories in their research to ultimately tell true stories about the world we live in. Moreover, and specifically, they use counterfactual modelling and forecasting to also construct narratives of possible or future states of the economy, which evade classical empirical validation but nonetheless could be true. In this paper, we firstly claim that there is an intuitive notion that those statements about possible states of the economy, or its future state, could be true even in the absence of this empirical validation. To solve this problem, we will make use of modal logic and Lewisian possible world semantics, the idea that statements containing possibilities and necessities are true if they are true in some or all logically possible worlds. Furthermore, we argue that we can be ontologically committed to these postulated possible or future states of economies via commitment to said possible worlds. In other words, possible world semantics allows us to formally analyse our intuitions about the truthfulness of possibility statements arrived by from the use of postulated entities, economies, and worlds.
    Keywords: ontology,semantics,forecasts,epistemology,modelling,possible worlds,possible worlds JEL classification: B1,B16,B23,B59
    Date: 2022–08–18
  3. By: Sánchez-Masi, Luis
    Abstract: The aim of this article is to examine the effectiveness of economic policies based on neoclassical principles which have been implemented in most of Latin American countries since the eighties. Since then, the region has been losing relative importance in the world. The lag in the last “four lost decades” es quite general and compelling. Rather than eliminating the asymmetric relationship between developed and underdeveloped countries, the historical evidence suggests it is perpetuated by the neoclassical economic policy. In Latin America the neoclassical principles such as free market and international free trade have tended to preserve the same productive structure, thus promoting an erratic development, which depends on the demand and prices of primary products. Until now, no underdeveloped country has reached the first world by applying economic policies based on neoclassical principles. The Asian countries which performed that transition applied policies and strategies opposed to neoclassical principles. Raul Prebisch’s analyses about the inconsistency of neoclassical economic policy with Latin American reality are today as valid as seven decades ago. However, for the great majority of Latin American economists is simply inconceivable that basic principles of neoclassical theory may produce adverse effects on underdeveloped countries. Latin America must rethink the economic policy and strategy for attaining its development.
    Keywords: Latin America; economic policy; neoclassical economics
    JEL: N16 O24
    Date: 2022–07–01
  4. By: Archana Dubey; Parinita Ratnaparkhi
    Abstract: Learning community consists of group of people those who collaboratively explore the world around themselves and keep on exploring the knowledge from different points of view which will finally lead to better practices in the society for sustainable future. The concept of learning community is not new rather it exists right from age of early man. The nomads, the group of people, even a tribe is a kind of learning community. The present paper has come up with an idea that how a classroom with mere some of the practices can be transformed as community of learning. The concept of the paper came to the researcher mind looking to the changed scenario of education during the past years as well as the pandemic. The practices followed in the traditional classroom needs to be updated with the time and the needs of the changing time. The paper highlights the points that why there is need for the learning communities. It briefly discuss about the difference between traditional and dialogic interactions. Followed by this it highlights about what actually learning communities mean, essential practices and challenges along with conclusions. Key words: Community, Learning Community, Dialogue
    Date: 2022–03

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