nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2023‒05‒15
four papers chosen by
Karl Petrick
Western New England University

  1. Gold Rush vs. War: Keynes and the Economics of Digging Holes By Michele Bee; Raphaël Fèvre
  2. A representation of Keynes's long-term expectation in financial markets By Marcello Basili; Alain Chateauneuf; Giuliano Antonio; Giuseppe Scianna
  3. The Disciplinary Mobility of Core Behavioral Economists By Alexandre Truc
  4. Towards a New Non-aligned Movement(NNAM) and a New International Economic Order:A Strategy for Comprehensive Non-capitalist Development in the 21st Century By Khan, Haider

  1. By: Michele Bee (CEDEPLAR, Universidade Federal de Minas Gerais, Brazil); Raphaël Fèvre (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: This paper aims to fully exploit the heuristic virtues of Keynes' famous ‘old bottles' story, deploying a multi-layered argument and drawing out its broadest implications. We show that with this story Keynes was making a very serious point about anti-crisis policies: the need for authorities to stimulate animal spirits by relying on people's natural impulse to action. Rather than taking the place of entrepreneurs and paying people to dig holes, Keynes seems to be arguing that public authorities should put entrepreneurs in a situation where they are so enthusiastic that they go into debt to dig holes, just like during a gold rush. At the same time, it is a question of restoring the banks' willingness to lend for these over-optimistic projects in a period of depression. This article explores the conditions that make public intervention as effective as possible through the enthusiasm and individual initiative that can be generated by an artificial gold rush. Such intervention therefore can be as minimal as possible, without having to resort to the opposite authoritarian solution of war. Since the gold rush builds cities and wars destroy them, Keynes spent considerable energy convincing his contemporaries that liberal-democratic countries would have to take the former path if they wanted to avoid the latter.
    Keywords: Slump, Keynesian Multiplier, Animal Spirits, Artificial Gold-Rush, War
    Date: 2022–08
  2. By: Marcello Basili (DEPS - Dipartimento di Economia Politica e Statistica - UNISI - Università degli Studi di Siena = University of Siena); Alain Chateauneuf (UP1 - Université Paris 1 Panthéon-Sorbonne); Giuliano Antonio; Giuseppe Scianna
    Abstract: This paper advances an intuitive representation of Keynes's notion of long-term expectation. We introduce the epsilon-contamination approach and represent the conventional judgment by the Steiner point of agents' common probability set. We anticipate a change in conventional judgment by updating the Steiner point.
    Keywords: uncertainty, multiple priors. JEL classification: D81, Keynes long-term expectation epsilon contamination uncertainty multiple priors. JEL classification: D81, Keynes, long-term expectation, epsilon contamination
    Date: 2023–03–28
  3. By: Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: Disciplinary mobility occurs when researchers publish outside their disciplines of origin. It is an important mechanism of interdisciplinarity and knowledge transfer. New behavioral economics (BE) was founded by two psychologists, Daniel Kahneman and Amos Tversky, who used disciplinary mobility to influence economics. In this article, we study the disciplinary mobility of seven core behavioral economists to better understand how it has influenced the early development of BE and the interdisciplinary practices of later behavioral economists. Besides the movement of psychologists towards the center of economics, we identify an outward movement of economists away from the discipline. This movement away from economics has allowed some behavioral economists to gain new scientific legitimacy, while escaping some of the normative traditions of economics. This has enabled them to push the frontiers of economics and promote a more radical approach to BE.
    Keywords: Behavioral Economics, Interdisciplinarity, Social Network Analysis
    Date: 2022–08
  4. By: Khan, Haider
    Abstract: The main purpose of this paper is to explore a fairly comprehensive strategy for development as freedom beyond capitalism in the 21st century. Accordingly, I try to find a way to integrate useful markets with the key characteristics of the Enabling Developmental State for the 21st Century in order to build a growing ecologically sustainable economy with equity in terms of capabilities. This will doubtless require a new global financial and ecological architecture. We aim for theoretical clarification as well as for aiding the strategies of popular democratic movements. A few tentative steps are taken here to serve this dual purpose. Proceeding from a critical capabilities perspective that is fully grounded in social reality of deepening structural and ecological crises of the World Capitalist System, we discover that such a perspective leads to the need to include among the characteristics of the Enabling Developmental State for the 21st Century its capacity to build an ecologically sustainable egalitarian development strategy from the beginning. In addition, democracy must be deepened from the beginning. For the Global South including Eurasia, and particularly for Africa and Latin America, a new cooperative community of nations following their own rhythm to reach their own dynamic trajectories towards development as freedom will be possible if they cooperate regionally and globally on the basis of equal sovereignty and mutual respect. One precondition is to pragmatically unite for a common economic strategy. For this a decolonization of the mind in the global south is also necessary. I conclude with some further thoughts on extending the model to an information theoretic based fractal model of development. A mathematical model of integrated financial and real sectors on abstract function space is presented in the appendix that can be extended for this purpose.
    Keywords: New Non-aligned Movement(NNAM), New International Economic Order, Global South, Enabling Developmental State, Egalitarianism, Ecological Crisis, World Capitalist System, Counterhegemonic movements, Nonlinearities, Multiple equilibria, Entropy and Information Theory
    JEL: A1 F5 O1
    Date: 2023–01–31

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