nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2023‒01‒02
four papers chosen by
Karl Petrick
Western New England University

  1. Financial integration, productive development and fiscal policy space in developing countries By Alberto Botta; Gabriel Porcile; Danilo Spinola; Giuliano Toshiro Yajima
  2. Correspondence between Exploitation and Profits in General Neoclassical Production Economies By Yoshihara, Naoki
  3. From one crisis to another: the new interdependencies between the state and global finance. By Rafaël Cos; Sarah Kolopp; Ulrike Lepont; Caroline Vincensini
  4. A postcolonial and pan-African feminist reading of Zimbabwean women entrepreneurs By Imas, J. Miguel; Garcia-Lorenzo, Lucia

  1. By: Alberto Botta; Gabriel Porcile; Danilo Spinola; Giuliano Toshiro Yajima
    Abstract: This paper offers a simple, tractable post-Keynesian model, which highlights the importance of structural change and productive development in defining the dynamics of the Real Exchange Rate (RER) and foreign debt in a small open developing economy. The argument is that in countries that keep the capital account open and rely on austerity policies to induce a notional surplus in the Balance of Payment, the RER can hardly be used as a tool aimed at smoothing the impacts of changes in international financial markets (as argued in the classical macroeconomic trilemma). In our model, capital flows and fluctuations in the RER endogenously feed back into each other and give rise to cyclical macroeconomic volatility. Fiscal austerity supposedly taming external imbalances exacerbates such instability. More diversified productive structures and stronger non-price competitiveness open more space for expansionary fiscal policies, make the economy more resilient to finance-led macroeconomic cycles, and make external debt more sustainable. Capital controls together with stronger price sensitivity of net exports can further stabilize the economy. The paper carries important policy implications, in particular for the combination of industrial and macroprudential policies in peripheral economies, whose pattern of specialization is highly dependent on a few, low-tech commodities. The adoption of industrial policies to foster non-price competitiveness and diversification is critical to sustain macroeconomic stability, both in the short and the long run.
    Keywords: Structural Change; Capital Inflows; Macroprudential Policies
    JEL: F32 F38 O30
    Date: 2022–12
  2. By: Yoshihara, Naoki
    Abstract: This paper axiomatically characterizes the appropriate definitions of exploitation as unequal exchange of labour (UE exploitation) that satisfy the axiom called Profit-Exploitation Correspondence Principle (PECP) in every equilibrium under a general model of capitalist economies with neoclassical production functions. PECP requires that, whatever the definition of exploitation is, it must follow that for any capitalist economy and any market equilibrium, total profits are positive if and only if any propertyless employee is exploited in terms of this definition, assuming the definition of exploitation is deemed admissible. The main result is that every admissible definition of UE exploitation can verify PECP under the neoclassical production economies whenever it satisfies an axiom called Labor Value Theory of Exploitation (LVE).
    Keywords: Domain Axiom of UE Exploitation, Profit-Exploitation Correspondence Principle, Neoclassical Production Economies
    JEL: D63 D51
    Date: 2022–12
  3. By: Rafaël Cos (UB - Université de Bordeaux); Sarah Kolopp (CESSP - Centre européen de sociologie et de science politique - UP1 - Université Paris 1 Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Ulrike Lepont (CEE - Centre d'études européennes et de politique comparée (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Caroline Vincensini (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay)
    Abstract: More than ten years after the crisis of 2008, the role of finance questions: how is it now at the center of public policies when, only a short time ago, it was accused of being the cause of the most serious economic crisis since the 1929 crash? How did finance go from being a "problem" to be solved to being a solution to govern crises? How has the relationship between governments and finance shifted since 2008? And to what extent do they contribute to the recomposition of political and social orders? In this interview, we present three perspectives on this new age of financialization - from heterodox political economy (Daniela Gabor), to neo-institutionalist sociology (Wolfgang Streeck) and to critical sociology (Frédéric Lebaron). Daniela Gabor proposes the notion of "derisking state" to think about the new techniques by which the state has opened up new areas of the society to finance since 2008, transforming these areas into asset classes and reducing the risk for investors. Wolfgang Streeck insists on the transformations of the consolidation state, in which markets function as a tool for disciplining public spending, while their stability depends on state debt. Finally, Frédéric Lebaron shows that these new interdependencies between states and private investors cannot be understood without analyzing the specific dynamics through which central banks establish themselves within the fields of power. In doing so, we offer a range of tools to interpret the political and social transformations that are taking place today in the rearrangement between states, central banks and finance.
    Abstract: Un peu plus de dix ans après la crise de 2008, cette place de la finance interroge : comment cette dernière se retrouve-t-elle aujourd'hui au cœur des dispositifs d'action publique quand, il y a encore si peu de temps, elle était mise au banc des accusés pour avoir été à l'origine de la plus grave crise économique observée depuis le krach de 1929 ? Comment la finance est-elle passée du statut de « problème » à résoudre à celui de solution pour gouverner les crises ? Dès lors, comment les rapports entre les États et la finance se sont-ils déplacés depuis 2008 ? Et dans quelle mesure contribuent-ils à recomposer les ordres politiques et sociaux ? Dans cet entretien croisé, nous présentons trois éclairages sur ce nouvel âge de la financiarisation – celui de l'économie politique hétérodoxe (Daniela Gabor), celui de la sociologie néo-institutionnaliste (Wolfgang Streeck) et celui de la sociologie critique (Frédéric Lebaron). Daniela Gabor propose la notion de « derisking state » pour penser les techniques inédites par lesquelles l'État ouvre, depuis 2008, de nouveaux espaces de la vie sociale à la finance, en transformant ces espaces en classes d'actifs, et en réduisant le risque pour les investisseurs. Wolfgang Streeck insiste sur les transformations du consolidation state, dans lequel les marchés fonctionnent comme un outil de disciplinarisation de la dépense publique, tandis que leur stabilité dépend elle-même de la dette des États. Enfin, Frédéric Lebaron montre que ces nouvelles interdépendances entre États et investisseurs privés ne peuvent se comprendre sans analyser la dynamique singulière par laquelle les banques centrales s'affirment au sein des champs du pouvoir. Ce faisant, nous offrons une palette d'outils pour déchiffrer les transformations politiques et sociales qui se jouent aujourd'hui dans les réassemblages entre les États, les banques centrales et la finance.
    Keywords: Finance,Economic policies,2008 crisis,derisking state,consolidation state,politiques économiques,crise de 2008
    Date: 2022–01–17
  4. By: Imas, J. Miguel; Garcia-Lorenzo, Lucia
    Abstract: This paper challenges the Eurocentric entrepreneurship narrative from postcolonial and pan-African feminist perspectives. Based on interview research conducted with 24 Zimbabwean women entrepreneurs, we narrate their microstorias in order to expose the legacy of entrepreneurial colonialism and patriarchy in Africa. The microstorias reveal the colonial past as well as the patriarchal norms that disenfranchise women entrepreneurs in Zimbabwe. Yet, they also reveal their struggle, resilience, resistance and their ongoing fight to construct their own identities as entrepreneurs. The paper contributes to enhance and advance further postcolonial, decolonial and critical voices in entrepreneurship and organization studies by challenging the prevailing western discourse of entrepreneurship from the introduction of necroentrepreneurism; giving support to intersectional postcolonial and Pan-African feminist perspectives that voice global South women entrepreneurship and, by decolonizing and decentring the theoretical debates on entrepreneurship and organization.
    Keywords: Africa; colonialism; decolonialism; entrepreneurship; hustler; microstorias; necroentrepreneurship; pan-African feminism; postcolonialism; Zimbabwe
    JEL: R14 J01
    Date: 2022–11–09

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