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on Post Keynesian Economics |
| By: | David Laidler (University of Western Ontario) |
| Abstract: | Peter Howitt is best known for his contributions to growth theory, but his work in short-run economics, which began with his Ph.D thesis and still continues, is important and deserves attention. It lies firmly in the Keynesian macro-disequilibrium tradition of Clower and Leijonhufvud, and for a long time has been overshadowed by New-classical and New-Keynesian orthodoxy. However, the development of agent based modelling and behavioural economics will perhaps give disequilibrium macroeconomics a new lease on life. |
| Keywords: | equilibrium, disequilibrium, money, New classical Economics, New Keynesian Economics, Keynes, Lucas, Howitt, Clower, Leijonhufud, Phelps. |
| JEL: | B22 B59 E12 E13 E31 E32 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:uwowop:202211&r= |
| By: | Engelbert Stockhammer; Rob Calvert Jump |
| Abstract: | This paper explores the degree of hysteresis in EU unemployment rates. The hysteresis hypothesis holds that actual (demand-determined) unemployment can turn into structural unemployment. The European Commission estimates and reports NAIRUs as part of the AMECO dataset, which also inform the EU fiscal policy rules. These exclude the possibility of hysteresis by assumption. We present a simple model to estimate hysteresis effects. We demonstrate that there is significant evidence for the existence of unemployment hysteresis in the majority of the EU15 countries. In the EU15 as a whole, we find the average degree of hysteresis to be 80%. Our findings suggest that the European Commission could profitably consider alternative NAIRU estimation strategies that allow for unemployment hysteresis. These results have two important consequences for policy makers. First, they indicate that a lack of government intervention in response to negative shocks has immediate effects in the form of increasing unemployment as well as long-lasting effects on the NAIRU. This is consistent with the OECD Employment Outlook 2017. Second, as the NAIRU estimates enter the calculation of the output gap and the structural deficit, the EU Fiscal Compact should be reconsidered. |
| Keywords: | unemployment, unemployment hysteresis, Europe, NAIRU |
| JEL: | E24 E60 E61 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2221&r= |
| By: | Davis, John B. (Department of Economics Marquette University) |
| Abstract: | As an interdisciplinary field, economics and ethics has been taught in many different ways, including in my experience teaching the course over many years. This paper describes the challenges teaching this subject involves and the strategy I ultimately adopted for doing so after trying different approaches. This strategy was meant to address the needs of a heterogenous collection of students, many of whom had limited knowledge of economics and were likely not take many additional courses in it. The course was structured around four modules opposed to one another in two pairs: (1) Ways economics influences ethics: The market vision (2) Ways economics influences ethics: Rationality and efficiency (3) Ways ethics influences economics: Moral limits of markets (4) Ways ethics influences economics: Taming the market Each module was built around real world applications. The course finished with a fifth module in the form of a capstone exercise – Rationing health care – that required students rank who had a priority for care from four individual cases of varying life circumstances drawn from Cookson and Dolan (2000). Students used the views they had developed in the first four modules to do this, and then explained and discussed both their rankings and the overall rankings that prevailed over all students. The course was taught both in person and online and in both long and short teaching terms, emphasized student interaction and openness to different views of how economics and ethics can be connected, and argued for democratic values in pluralist societies. |
| Keywords: | economics and ethics, teaching, interdisciplinary, health care |
| JEL: | A12 A13 A22 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2022-07&r= |
| By: | Seyyed Ali Zeytoon Nejad Moosavian |
| Abstract: | Macroeconomics essentially discusses macroeconomic phenomena from the perspectives of various schools of economic thought, each of which takes different views on how macroeconomic agents make decisions and how the corresponding markets operate. Therefore, developing a clear, comprehensive understanding of how and in what ways these schools of economic thought differ is a key and a prerequisite for economics students to prosper academically and professionally in the discipline. This becomes even more crucial as economics students pursue their studies toward higher levels of education and graduate school, during which students are expected to attain higher levels of Bloom's taxonomy, including analysis, synthesis, evaluation, and creation. Teaching the distinctions and similarities of the two major schools of economic thought has never been an easy task to undertake in the classroom. Although the reason for such a hardship can be multi-fold, one reason has undoubtedly been students' lack of a holistic view on how the two mainstream economic schools of thought differ. There is strong evidence that students make smoother transition to higher levels of education after building up such groundwork, on which they can build further later on (e.g. Didia and Hasnat, 1998; Marcal and Roberts, 2001; Islam, et al., 2008; Green, et al., 2009; White, 2016). The paper starts with a visual spectrum of various schools of economic thought, and then narrows down the scope to the classical and Keynesian schools, i.e. the backbone of modern macroeconomics. Afterwards, a holistic table contrasts the two schools in terms of 50 aspects. Not only does this table help economics students enhance their comprehension, retention, and critical-thinking capability, it also benefits macroeconomic instructors to ... |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.02683&r= |
| By: | Giovanni Dosi |
| Abstract: | This essay outlines the evolutionary research agenda thoroughly explored in its microeconomic aspects in the forthcoming Manual, The Foundations of Complex Evolving Economies. Part One: Innovation, Organization and Industrial Dynamics, Oxford University Press, 2023. But is there an ''evolutionary paradigm'', in the first place? And if yes, what is it? In brief, in such a paradigm, the economy is interpreted as a complex evolving system. In that, a wide set of techno-economic phenomena are understood as emergent properties - outcomes of far-from-equilibrium interactions among heterogeneous agents - characterized by endogenous preferences, most often ''boundedly rational'' - but always capable of learning, adapting, and innovating with respect to their understandings of the world in which they operate, the technologies they master, their organizational forms, and their behavioral repertoires. All that involves some crucial properties. First, if the entities are genuinely evolving, new elements, new technologies, new organizational forms, new patterns of interaction are bound to appear along the course of evolution. Second, evolution is a multi-scale phenomenon. This is a fundamental property of biological evolution, and even more so is the evolution of economies and whole societies, nested in different institutions - possibly evolving at different paces, and coupled with technological and organizational changes. Third, but relatedly, economies are complex interactive systems. Interaction generally implies emergence. There is no isomorphism between macroscopic phenomena, say, the dynamics of industries, markets, and whole economies, on the one hand, and the behaviours of individual entities, on the other. More is different (Anderson, 1972). Fourth, complexity is intimately linked with non-linearities, and thus multiple possible dynamical paths. History counts. And this, even more so, in socio-economic environments characterized by knowledge accumulation. Knowledge builds upon itself, thus involving what economists in their jargon call dynamic increasing returns. As summarized in this essays Part One of the Manual addresses in the foregoing perspective, (i) Innovation and technological evolution; (ii) The theory of the firm in evolving environments; (iii) The formalization of learning processes; (iv) the theory of production; (v) consumption patterns; (vi) economic interactions and the working of markets; and, (vii) The ensuing structures and evolution of industries. Further in this essay we sketch some fundamental topics of the macroeconomic and developmental research ahead, which we mean to explore in Part Two of the Manual, in progress. At the same time the reader is warned against multiple risks of ''normalization'' by which 'evolution' is reduced to sheer 'innovation', and the latter is handled by standard econometric instruments, which are inevitably bound to largely neglect, among other features, the emergence of novelty, coupled dynamics, profound heterogeneities at all levels, and various forms of complementarities. |
| Keywords: | Economic evolution; complex systems; technological and organizational innovation; heterogeneity; market processes; bounded rationality; organizational capabilities; routines and heuristics; theory of production; industrial structures. |
| Date: | 2022–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2022/24&r= |
| By: | Martin Pfaffenbach; Tobias Kronenberg; Wolf Rogowski |
| Abstract: | In the light of anthropogenic climate change, a polarized discussion about the right measures to keep economic activity within the planet's ecological boundaries has emerged: Advocates of de-growth argue that continuous GDP growth is impossible because of natural limits to growth. They call for measures to change individual consumption patterns, to constrain affluence in wealthy countries, and to reform the economic system in such a way that it can fulfil its functions even without continuously growing GDP. Advocates of green growth argue that GDP growth and ecological impacts are conceptionally independent and call for promoting entrepreneurial activity which facilitates the transition towards a carbon-neutral, circular economy without curtailing economic growth. At first sight, the two views appear in unresolvable conflict. After sketching the two approaches, we point towards their common ground and argue that the conflict may concern ideologies rather than evidence-based policy proposals. Taken seriously, both call e.g. for urgent action; for fundamental reforms to correct faulty price signals; for promoting a circular economy powered by regenerative energy sources; for political measures which enable sufficient life styles; and for evidence-based rather than ideological economic analysis. Focusing on this common ground may accelerate the vital transition to a sustainable economy. |
| Keywords: | Economic growth, green growth, de-growth, ideological economics |
| JEL: | O44 Q54 D63 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2207&r= |
| By: | Castanheira, Micael; Huck, Steffen; Leutgeb, Johannes; Schotter, Andrew |
| Abstract: | While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump's victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to self-destruct and hence unworthy of attack. We model such primaries as a truel (a three-way duel), solve for its equilibrium, and test its implications in a laboratory experiment. We find that people recognize a buffoon when they see one and aim their attacks elsewhere with the unfortunate consequence that the buffoon has an enhanced probability of winning. This result is strongest amongst those subjects who demonstrate an ability to best respond suggesting that our results would only be stronger when the game is played by experts and for higher stakes. |
| Keywords: | truel,political primaries,Trump |
| JEL: | C72 C92 D72 D74 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2020307r&r= |