nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2022‒10‒24
five papers chosen by
Karl Petrick
Western New England University

  1. Looking for growth imperatives under capitalism: money, wage labour, and market exchange By Cahen-Fourot, Louison
  2. Methodological Individualism and Holism in Economics and Economics Education: Friends or Foes? By Giancarlo Ianulardo; Aldo Stella
  3. Moving the center: Adapting the toolbox of growth model research to emerging capitalist economies By Mertens, Daniel; Nölke, Andreas; May, Christian; Schedelik, Michael; Ten Brink, Tobias; Gomes, Alexandre
  4. Evolutionary Economic Geography and Policy By Ron Boschma; ; ;
  5. The macroeconomic effects of climate policy: A Keynesian point of view By Nicolas Piluso; Edwin Le Heron

  1. By: Cahen-Fourot, Louison
    Abstract: First, I update and wrap up the discussion on a monetary growth imperative, namely the argument that debt-moneybearing interest triggers real GDP growth. I provide a detailed account of thedifferent versions of the argument and show why none of them hold. In allcases, the argument is shown to be inconsistent in macro-accounting terms or tobe at odds with the functioning of the monetary system. The general solution tothe monetary growth imperative is that a sufficient share of wealth must be putback in circulation, for example via higher consumption out of wealth ortaxation. Moreover, I show that a monetary growth imperative could equally welloccur in an economy without debt-money or interest. However, the solution tothe monetary growth imperative entails a sustainability paradox: more wealthput back in circulation allows to reach a stable full stationary state but maybe environmentally unsustainable. I also highlight convergences between thecritique of the monetary growth imperative and the monetary circuit literature.Second, I address the criticism that no net wealth accumulation is unrealistic.It requires to explain why there is accumulation in the first place. Buildingfrom post-Keynesian and institutionalist perspectives, I argue that we need tolocate the analysis at the level of the definitional social relations ofcapitalism: market exchange and wage labour. Growth imperatives are emergingproperties of these two social relations. I develop a critique of steady stateeconomics and underline the ontological difference between a zero -growth capitalism and a post -growth economy.
    Keywords: growth imperative; capitalism; paradox of profit; ecological macroeconomics; post-growth
    Date: 2022–08
  2. By: Giancarlo Ianulardo (University of Exeter Business School - University of Exeter); Aldo Stella (UNIPG - Università degli Studi di Perugia)
    Abstract: In social sciences and, in particular, in economics the debate on the most adequate model of explanation of social phenomena has been centred around two models: Methodological Individualism and Holism. While Methodological Individualism claims to be the most rigorous attempt to explain social phenomena by reducing them to their ultimate components, Holism stresses the primacy of the social relation, outside of which individuals cannot be understood as analytical units. In the analysis, we will refer to the way the debate has influenced economics education too through the debate on microfoundations and the role of individual preferences. In synthesis, we aim to show that the two explanatory models, rather than being opposed need to be integrated, because they need each other. But for this to be done, we need to reflect on the role that the concept of "relation" plays in our understanding of the social structure and of the dynamics that characterise it. Indeed, the holistic-systemic model, though privileging the relation, must acknowledge that the relation needs some ultimate elements (the individuals), which in turn are prioritised by methodological individualism. But these entities, the individuals, in order to be what they are, i.e., each a determinate identity, need each to be referred to other individuals, which are essential to determine the single determinate identity. This means that each individual needs the relation. To prevent a circular explanation, we claim that a correct methodology should understand both the individual and society in the light of the unity of sense that emerges at the end of the process, rather than focusing on its starting point.
    Keywords: Methodological Individualism,holism,systemism,relation,unity
    Date: 2022–09–07
  3. By: Mertens, Daniel; Nölke, Andreas; May, Christian; Schedelik, Michael; Ten Brink, Tobias; Gomes, Alexandre
    Abstract: The growth model perspective has provided positive momentum for Comparative and International Political Economy. This article seeks to move beyond the existing geographical confines of this perspective to elaborate on its potential for enhancing our understanding of the trajectories of different emerging capitalist economies (ECEs), the center of global economic growth during the last decades. Using national accounts data, we calculate the relative contributions of demand components to GDP growth for nine large emerging economies in the period from 2001 to 2016. Departing from the prevalent juxtaposition of consumption-led and export-led growth models, we add an investment-led model within a variegated set of ECE accumulation strategies. Subsequently, we employ case vignettes from Brazil, China, India and Indonesia to highlight ECE specificities in (1) the effects of international interdependencies on growth models, (2) the political underpinnings of growth models through social blocs, and (3) the existence of structural productive heterogeneities leading to regional growth models in very large economies. We conclude that these macro-political and institutional specificities should serve as a point of departure for a more global research agenda on growth models.
    Keywords: Comparative capitalism,growth models,emerging capitalist economies,commodity super cycles,social blocs
    JEL: O11 O19 O43 O57 P52
    Date: 2022
  4. By: Ron Boschma; ; ;
    Abstract: The literature of Evolutionary Economic Geography (EEG) has received little attention in Evolutionary Economics, despite overwhelming evidence that time-space dimensions are crucial to understand economic evolution. This chapter will focus on the relationship between EEG and regional policy. We will discuss how evolutionary principles like proximity, relatedness and path dependency have been used to construct regional innovation policy in the European Union.
    Keywords: Evolutionary Economic Geography, regional innovation policy, Smart Specialization, relatedness, complexity
    JEL: O25 O38 R11
    Date: 2022–10
  5. By: Nicolas Piluso (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2J - Université Toulouse - Jean Jaurès - UT3 - Université Toulouse III - Paul Sabatier - Université Fédérale Toulouse Midi-Pyrénées - CNRS - Centre National de la Recherche Scientifique, UT3 - Université Toulouse III - Paul Sabatier - Université Fédérale Toulouse Midi-Pyrénées); Edwin Le Heron (CED - Centre Émile Durkheim - IEP Bordeaux - Sciences Po Bordeaux - Institut d'études politiques de Bordeaux - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique, Institut d'Études Politiques [IEP] - Bordeaux)
    Abstract: The paper analyzes the effects of introducing a corporate carbon tax on GDP and the effectiveness of this macroeconomic policy. The study is based on constructing a simple Keynesian model with flexible prices. It shows that the carbon tax can have a double beneficial effect on the economy in addition to its favorable effect on the environment: i.e., an increase in GDP and employment. The initial values (y = 100; C = 60; I = 18; G = 16; g(A) = 6) was used to simulate a positive shock of the carbon tax T, increasing from 1.75 to 1.9. The paper considers three different cases depending on the low (Case 1), medium (Case 2), or high (Case 3) sensitivity of the marginal propensity to consume in response to an increase in the prices of goods. In addition, case 4 is considered: stimulus policy associated with climate policy; and case 5 is: policy to increase nominal wages. The results show that the carbon tax can lead to an increase in prices. Although the tax does not excessively negatively affect consumption, it has a positive effect on GDP via the increase in green investments and the induced increase in public spending. Households are, therefore, not necessarily penalized because they benefit from the multiplier effects of the increase in public spending due to the introduction of the ecological tax. Furthermore, stimulus policy is even more effective when combined with an emissions tax.
    Keywords: pollution,carbon tax,inflation,fiscal policy,employment,GDP
    Date: 2022–09–14

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