nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2023‒05‒22
ten papers chosen by
Karl Petrick
Western New England University

  1. Lender of Last Resort and moral hazard By Goodhart, C. A. E.; Lastra, Rosa
  2. Income inequality, top shares of income and social classes in the 21st century By Luca Giangregorio; Davide Villani
  3. Structural Change, Income Distribution and Unemployment Related to COVID-19: An Agent-based Model By Branimir Jovanović; Michael Landesmann; Oliver Reiter; Bernhard Schütz
  4. Glaserian Grounded Theory and Straussian Grounded Theory: Two Standard Qualitative Research Approaches in Social Science By Mohajan, Devajit; Mohajan, Haradhan
  5. Property, wealth, and social change: Piketty as a social science engineer By Savage, Mike; Waitkus, Nora
  6. Financialisation, Underemployment, & the Disconnected Greek Capitalism By Giorgos Gouzoulis; Panagiotis (Takis) Iliopoulos; Giorgos Galanis
  7. Introduction to the Symposium on the Shadow Economy, Tax Behaviour, and Institutions By Granda-Carvajal, Catalina; Kogler, Christoph
  8. The Institution of American Slavery, Current-Day Preference to Repeal the Affordable Care Act, and Efficacy of the Reform By Vinish Shrestha
  9. From Fabrics to Fossils: What Can the Decline of US Textile Manufacturing Teach Us About the Energy Transition? By Raimi, Daniel; Cook, Kamil
  10. A method for estimating individual socioeconomic status of Twitter users By He, Yuanmo; Tsvetkova, Milena

  1. By: Goodhart, C. A. E.; Lastra, Rosa
    Abstract: In this paper we revisit the Lender of Last Resort (LOLR) function of the central bank and the associated moral hazard incentives. We argue that, from an economic perspective, the strict application of penalties to the operation of LOLR actions can make that instrument unworkable. Instead, we suggest that both penalties and publication should only be applied after such LOLR had been in place for a time. Normative frameworks ought to be adjusted in this regard.
    Keywords: lender-of-last-resort; illiquidity; insolvency; stigma
    JEL: E50 E58 E59 G18
    Date: 2023–03–29
  2. By: Luca Giangregorio (Pompeu Fabra University); Davide Villani (Joint Research Center (EC))
    Abstract: This paper aims at providing new evidence about the link between personal and functional distribution and top-shares composition. We apply a novel class scheme based on two key features of contemporary capitalism i.e., individuals/households receiving multiple types of incomes, and the role of managers. The empirical application in Germany, Spain, and Italy over the period 2000-2017 reveals two main results. First, we observe a direct link between personal and functional distributions. In particular, a marginal increase in wages received by labourers would reduce inequality, whereas those received by capitalist households would increasing it. Second, we find that a significant portion of labour income at the top of the income distribution corresponds to wages received by capitalist households. We conclude that although the linear correspondence between income source and class location is more blurred today than it was 200 years ago, a class divide is still clear.
    Keywords: Income inequality, Functional income distribution, Personal income distribution, Social classes, Top shares of income
    JEL: E25
    Date: 2023–05
  3. By: Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Bernhard Schütz (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: We study the distributional consequences of COVID-19 by using a stock-flow consistent agent-based model that captures some of the aspects of pandemic-related lockdowns. In particular, the model distinguishes between ‘essential’ and ‘non-essential’ industries, between jobs that can be done from home and jobs that must be carried out on site, and takes into account that firms need to hire a certain amount of overhead labour. Allowing for government-financed short-time working schemes and loan guarantees, we find that these policies significantly reduce the rise in firm liquidations and income inequality (the ‘Keynesian’ result). However, we also find that the absence of government policies leads to higher levels of productivity and GDP in the aftermath of the crisis, as it means that more of the less productive firms face liquidation during lockdowns (the ‘Schumpeterian’ result). The last finding must be taken with adequate caution as our model is designed to describe the short run, while statements about the long run would require the inclusion of additional features such as technological progress and the entry of new firms.
    Keywords: stock-flow consistent agent-based models, COVID-19, creative destruction, income inequality, short-time work, public loan guarantees
    JEL: E24 E25 E65
    Date: 2023–02
  4. By: Mohajan, Devajit; Mohajan, Haradhan
    Abstract: Grounded theory (GT) has appeared as a popular research approach in many branches of social science that acts for the well-being of society. It is an inductive methodology and focuses on the discovery of theory from data. Overtimes the original grounded theory of Barney Galland Glaser (1930-2022) and Anselm Leonard Strauss (1916-1996) has evolved, and two grounded theory variants: Glaserian grounded theory and Straussian grounded theory have emerged as qualitative approaches. When a novice qualitative researcher starts data collection on grounded theory; s/he cannot identify the differences between the two approaches. In this paper, some of the key differences and similarities between the two methods are illustrated. So, a confused researcher can easily select the desired grounded theory for his/her research version. In this study, an attempt has been taken to continue the grounded theory research smoothly when novice researchers face uncertainty during the research procedure.
    Keywords: Qualitative approach, Glaserian grounded theory, Straussian grounded theory, novice researcher
    JEL: A13 A14 B54 D6 I31
    Date: 2023–02–16
  5. By: Savage, Mike; Waitkus, Nora
    Abstract: This paper applauds the vision and originality of Piketty's Capital and Ideology. We draw attention to the distinctive methodological perspective which he adopts, which we liken to call “social science engineering.” This allows a problem oriented perspective on long-term global social change which sidesteps siloed disciplinary debates in social science and history about the meaning of modernity, the rise of capitalism, the formation of social groups, and the primacy of nations. We bring out how his theory of property permits him to take forward his overarching insight that economic growth leads to wealth accumulation. This, therefore, challenges long standing sociological perspectives by insisting that modernity is a conservative, rather than a revolutionary and transformative process. We build on this essential contribution by noting some areas where his work can push forward even further, notably that his focus on shifting relativities obscures qualitative historical changes, and more particularly means his analysis of the 20th century is not as provocative as that of the 19th century.
    Keywords: inequality; Matthew effect; Piketty; property & wealth
    JEL: J1
    Date: 2022–03–25
  6. By: Giorgos Gouzoulis (University of Bristol, School of Magagement); Panagiotis (Takis) Iliopoulos (KU Leuven, Faculty of Economics and Business); Giorgos Galanis (Queen Mary, University of London, School of Business and Management)
    Abstract: Recent contributions within the disconnected capitalism literature argue that personal financial insecurity related to household indebtedness and pension fund financialisation is positively associated with underemployment. This is because financially insecure workers are more likely to accept worsening working conditions on the fear of losing their job and defaulting. Using quarterly data from the Eurostat for the period 2008Q3-2020Q4, this paper shows that the persistent rise of underemployment rates in post-crisis Greece is robustly associated with the household debt ratio and pension fund investments in financial derivatives. We also demonstrate that while the effects of financialisation are similar for men and women, the employment-tied and gendered nature of social benefits in the country has disproportionately induced underemployment for women in the context of austerity. The paper concludes that personal financial insecurity is a key missing factor behind rising employment precariousness in Greece since 2008
    Keywords: Financialisation, Labour Process, EU Integration, Underemployment, Greece
    Date: 2023–04
  7. By: Granda-Carvajal, Catalina; Kogler, Christoph
    Abstract: This JOIE Symposium features some of the most influential papers presented in the 7th version of the conference on The Shadow Economy, Tax Behaviour and Institutions. Accordingly, it brings together contributions from several disciplines and schools of thought in the social sciences and the humanities exploring such issues as the role of formal and informal institutions in understanding the shadow economy, the importance of social aversion in the motivations for tax compliance, and the dual nature of corruption. This introduction lays out the scope of the symposium, summarises the preceding literature on the topic, and provides a brief outline of each contributing article, noting that, although each paper focuses on a different economic and cultural context, they share several elements in common with alternative theories addressing the institutional, psychological, and sociological aspects of tax law compliance and other appropriate behaviours.
    Keywords: shadow economy; tax behaviour; informal institutions; regional and country studies
    JEL: D73 H30 K42 O17 O50
    Date: 2023–05
  8. By: Vinish Shrestha (Department of Economics, Towson University)
    Abstract: This study investigates the relationship between the former slavery in the American South, current-day sentiments surrounding the Affordable Care Act (ACA), and its efficacy. We present three main findings. First, the preference to repeal ACA is discernably stronger among White Southerners in counties more dependent on the former slavery within the states that did not expand Medicaid. Second, Whites residing in low slavery dependent counties had higher pre-ACA uninsured rates compared to those living in counties with higher dependency on slavery. The ACA-related Medicaid expansions have closed this gap. The results for Black Southerners on this regard remain ambiguous. Third, the institution of Jim Crow that transcended slavery following the Emancipation and Reconstruction has impeded ACA's efficacy. Overall, the findings indicate that former institutions of racial oppression has affected the implementation of ACA in the American South.
    Keywords: The Patient Protection and Affordable Care Act (ACA), Slavery, Institution, ACA-related preferences, ACA efficacy, American South, Politics.
    JEL: I10 I14 D02 B15 D02
    Date: 2023–04
  9. By: Raimi, Daniel (Resources for the Future); Cook, Kamil
    Abstract: The imperative to reduce greenhouse gas emissions will almost certainly lead to a major economic transition for the people and places where coal, oil, and natural gas are produced, processed, and consumed at certain facilities, such as power plants. Although the needed scale and speed of the energy transition is unique (National Academies of Science, Engineering, and Medicine 2021), previous economic transitions may provide insight for decisionmakers at the local, regional, and national levels. In this analysis, we draw insights from textile manufacturing, which has undergone multiple transitions in the United States. We focus on public policies that were designed to support this industry and its workers during disruptions, and we draw four key lessons for the energy transition:Advanced planning and notification are crucial. This concept applies to individual workers, plants, and communities and extends further to reflect the importance of developing a predictable, long-term timeline for energy transition that allows all actors to plan appropriately for the future.Employment is more than a paycheck. Policymakers need to carefully consider the social dynamics associated with employment and transition. Workers value the identity and community created by their employment, and programs that preserve these connections are more likely to be successful.Flexibility is important. Each worker has a unique set of circumstances and preferences. Programs that restrict eligibility based on arbitrary criteria or impose tight timelines for benefits are unlikely to allow the flexibility that would benefit individuals and families as they make decisions about their future.We can do better. Evidence on the benefits of federal Trade Adjustment Assistance (TAA) is mixed at best, particularly for textile workers. The energy transition will need to improve on these outcomes if it is to be truly equitable.
    Date: 2021–08–31
  10. By: He, Yuanmo; Tsvetkova, Milena
    Abstract: The rise of social media has opened countless opportunities to explore social science questions with new data and methods. However, research on socioeconomic inequality remains constrained by limited individual-level socioeconomic status (SES) measures in digital trace data. Following Bourdieu, we argue that the commercial and entertainment accounts Twitter users follow reflect their economic and cultural capital. Adapting a political science method for inferring political ideology, we use correspondence analysis to estimate the SES of 3, 482, 652 Twitter users who follow the accounts of 339 brands in the United States. We validate our estimates with data from the Facebook Marketing application programming interface, self-reported job titles on users’ Twitter profiles, and a small survey sample. The results show reasonable correlations with the standard proxies for SES, alongside much weaker or nonsignificant correlations with other demographic variables. The proposed method opens new opportunities for innovative social research on inequality on Twitter and similar online platforms.
    Keywords: socioeconomic status; Twitter; correspondence analysis; measurement; social media; cultural capital; Grant Ref. 92 173; Sage deal
    JEL: J1
    Date: 2023–04–16

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