nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2023‒08‒14
eleven papers chosen by
Karl Petrick
Western New England University

  1. Conflict inflation and autonomous demand: a supermultiplier model with endogenous distribution By Guilherme Spinato Morlin; Riccardo Pariboni
  2. Growth and sustainability in post-Keynesian perspective: Some notes By Heise, Arne
  3. The Economics of Wellbeing and Psychology: An Historical and Methodological Viewpoint By Drakopoulos, Stavros A.
  4. Evolutionary Economic Policy and Competitiveness By Michael Peneder
  5. Political Economy shaped by Financialization By Saori Katada
  6. Paradigm shifts in macrosociology By Mayntz, Renate
  7. Energy and the Environment in Economic History By Karen Clay
  8. The Marginal Revolution in the light of Foucault's typology of epistemes By Clémence Thebaut
  9. What Did UWE Do for Economics? By Tatyana Avilova; Claudia Goldin
  10. Working from Home Around the Globe: 2023 Report By Cevat Giray Aksoy; Jose Maria Barrero; Nicholas Bloom; Steven J Davis; Mathias Dolls; Pablo Zarate
  11. Sustainable business models: Bean-to-bar generation value in the cocoa production chain By Kever Bruno Paradelo Gomes; Cledinaldo Aparecido Dias

  1. By: Guilherme Spinato Morlin; Riccardo Pariboni
    Abstract: The disciplinary role of unemployment has long been acknowledged in economic theory. Seminal works on conflict inflation have included the unemployment rate as a determinant of workers’ bargaining power, which thus affects distribution and inflation (Rowthorn, 1977). In extensions to the long run, however, conflict inflation models have shifted away from this analytical approach and replaced the unemployment rate with the rate of change in unemployment as a determinant of workers’ claim (Cassetti, 2002; Lavoie, 2022). A similar approach is found in Nah and Lavoie (2019), who introduced conflict inflation in an autonomous demand-led growth model in which the unemployment rate – contrarily to empirical evidence – has no permanent effect on wage claims and income distribution We propose here an alternative way to combine conflict inflation and autonomous demand-led growth in a Sraffian supermultiplier model. We introduce the unemployment rate as a determinant of workers’ claim in a conflicting claims model. Modeling of the labor market relies on an endogenous adjustment of labor supply to demand (Fazzari, Ferri, and Variato, 2020). We extend the typical results of short-run conflict inflation models to the long run, finding that high (low) unemployment rate reduces (increases) both the equilibrium wage share and conflict inflation. By incorporating income distribution as an endogenous factor through a conflicting claims process, we establish a direct relationship between the growth rate of autonomous demand and the wage share. This relation discloses a conflict underlying the determinants of autonomous demand growth. We conclude that in the political economy of growth and distribution it is crucial to consider the impact of autonomous demand growth on workers’ bargaining power and income distribution
    Keywords: Phillips curve; Sraffian supermultiplier; demand-led growth; autonomous demand; inflation; distributive conflict.
    JEL: B51 E11 E24 E31 O41
    Date: 2023–06
  2. By: Heise, Arne
    Abstract: It can hardly be denied that perhaps the most serious challenge to mankind has not yet been addressed properly by post-Keynesianism: the over-stretching of our planetary boundaries. Most of the resources which we need to sustain our lives are non-renewable and, therefore, limited. And most of our production processes produce some kind of joint product (externality) like air, ground or water pollution which hold no value to the producer and instead harm the environment upon disposal. Consequently, the existence of mankind on this planet may be threatened when indispensable resources such as energy are running out and the environmental damage changes our living conditions in a way that mankind cannot survive.
    Keywords: Ecological crisis, monetary production economy, zero growth, stagnation, growth imperative
    JEL: B59 E12 P18 Q50
    Date: 2023
  3. By: Drakopoulos, Stavros A.
    Abstract: Job satisfaction and life satisfaction research (economics of wellbeing) is an established and booming research field. However, until the late 1970s, the study of the impact of economic variables on subjective wellbeing was considered to be outside the domain of economics. The main reason was the methodological hostility of orthodox economists towards incorporating "subjective" and "psychological" variables. The legacy of economics as a positive social science that dealt with observed or revealed behavior only, was a major obstacle for economists to study subjective wellbeing. The main exception was the pioneering work of Richard Easterlin in 1974, who attempted to account for the discrepancy between income increases and overall life satisfaction. Opening up the communication of economists with psychologists in happiness research, Easterlin relied on references from psychology and especially from social psychology in order to construct his arguments. Influenced by Easterlin, references to theoretical and empirical work in psychology became more apparent when happiness economics attracted more interest by the end of the 20th century. After showing its rich historical past of interaction with psychology, the paper argues that this stance is contrary to the established mainstream tradition and methodology. Further, it demonstrates that leading figures of happiness economics adopt a conscious methodological position towards interacting with psychology, and this puts them at odds with the mainstream economics methodological approach. It is also argued that the economics of happiness attitude towards psychology is linked to other important differences of methodological nature. The paper identifies three major points of diversion: utility cardinality and comparability, empirical methodology, and the specification of agents’ utility function and the ensuing policy implications.
    Keywords: Economics and Psychology; Economics of Wellbeing; Economic Methodology; History of Economic Thought
    JEL: B20 B40 I30
    Date: 2023–07
  4. By: Michael Peneder
    Abstract: This paper advances a dynamic rationale for competitiveness policy that focuses on an economy's ability to evolve in order to achieve high real incomes along with desired qualitative changes in the socio-economic system. It highlights that the ubiquitous "rationalities of failure", either of markets, governments, or systems, are rooted in a peculiar habit of accepting hypothetical perfect states as normative benchmarks. In contrast, competitiveness policy starts from the objectives that the system wants to achieve. By combining the structuralist ontology of the micro, meso and macro levels of development with the basic system functions of evolutionary change, a general typology is developed that differentiates, organizes, and integrates various economic policies according to their respective contributions to the evolvability of the system. Among other advantages, the proposed concept of competitiveness policy allows (i) to replace the negative "logic of failure" with the active pursuit of dynamic development goals, (ii) to break the ideologically afflicted dichotomy between "vertical" and "horizontal" policies and (iii) to better align the theoretical rationale with the actual perception of the societal purpose of public interventions by most policy agents.
    Keywords: Austrian economics, Digitization, central bank digital currency (CBDC), crypto coins, currency competition, evolution of money, general ledger
    Date: 2023–07–24
  5. By: Saori Katada (USC - University of Southern California)
    Abstract: Financialization has, in the last several decades, touched many aspects of political economy, intensified politics of distribution and redefined power struggles around the world. Nonetheless, the style and types of financialization and its manifestation in both domestic politics and foreign policy vary greatly among different economies depending on financialization and the important role of financialized wealth both to sustain corporations and savers (especially in rapidly aging population like Japan for the pensioners). Despite its comparatively low level of financialization among the OECD members, the phenomenon have had visible influence in shaping the Japanese government's role both in its monetary policy through the Bank of Japan (BOJ) and for its external geoeconomic strategy of infrastructure investment financing in competition with China's Belt-and-Road Initiative (BRI) since 2013. I argue in this report that due to the rising level of financialization, the Japanese government has faced increased pressure to adjust its policies to accommodate the demands of market-based financial interest, on the one hand, and to direct the country's financial power for its foreign policy goals, on the other hand. The developmental legacy of Japan's institutions, however, continues to influence the government's financial strategy.
    Keywords: Financialization, monetary policy, infrastructure investment, Japan, OECD, derisking
    Date: 2023–05
  6. By: Mayntz, Renate
    Abstract: This paper looks at changes in macrosociological paradigms for social development that traditionally stretch from the primitive society through the stratified medieval society to the image of a functionally differentiated modern society. Changing the perspective from a systems theoretical view of societies to an actor perspective, I focus on populations of individual actors and organizations as collective actors. Over recent decades, important structural changes in the nature of populations and of organizations have taken place in the Western world. The most important relate to economic globalization and financial internationalization. An increasingly flexible population and narrowly goal-specific organizations produce a situation of societal instability that appears to characterize the present, though its causes reach back half a century.
    Keywords: Integrationsbias der Systemtheorie, Konfliktlinien in gegenwärtigen Gesellschaften, Systemzerfall und seine Ursachen, conflict lines in present societies, integration bias of systems theory, system decomposition and its sources
    Date: 2023
  7. By: Karen Clay
    Abstract: Both energy and the environment are inputs into production, influencing the economy and the overall welfare of the population. While the economy itself has been a central focus of economic history from its inception, energy and the environment have received more limited attention. On the energy side, the relative lack of attention reflects economic historians' focus on labor, capital, and technology. Two areas that have received attention are the effects of energy on the spatial location of economic activity and the importance of coal for the Industrial Revolution. On the environmental side, the relative lack of attention likely reflects the focus on the positive aspects of industrialization and the difficulty of finding data related to air, water, and land pollution. One environmental area that has received attention is water pollution from human waste, which had large mortality impacts, particularly in cities. This essay reviews long run trends in energy use and water and air pollution and then turns to the energy and environmental literatures in economic history. The conclusion offers some thoughts regarding opportunities for further research in energy and the environment.
    JEL: N50 N70 Q32 Q53
    Date: 2023–06
  8. By: Clémence Thebaut (NET - Neuroépidémiologie Tropicale - CHU Limoges - Institut d'Epidémiologie Neurologique et de Neurologie Tropicale - INSERM - Institut National de la Santé et de la Recherche Médicale - GEIST - Institut Génomique, Environnement, Immunité, Santé, Thérapeutique - UNILIM - Université de Limoges, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, PSL - Université Paris sciences et lettres, UNILIM - Université de Limoges)
    Abstract: Objective: We seek here to draw on the methods and tools put forward by Michel Foucault in The Order of the Things (1966) to shed light on history of welfare economics. More specifically we consider that the rejection of interpersonal comparisons that foreshadowed the marginalist revolution and the transition to ordinal measures of utility during the 19th century can be explained by the shift from the classical episteme to a modern episteme which is described by Foucault. Method: To explore this hypothesis, we drawn on the method of archaeological knowledge, proposed by Foucault (1966, 1969). We started by building a corpus using an incremental research strategy (the "snowball" method), starting from first bibliographic reference on history of welfare economics Baujard (2013, 2014). Then, we study the various statements within a corpus, in order to identify regularities and turning points both in semantics and concepts, so as to compare discourse "styles". Unlike other approaches in social sciences, the method of knowledge archaeology consists in analysing scientific discourses in themselves, outside the social, economic and political context that led them to emerge. Results: Using this methodology, we first examine to what extent the early utilitarianism is typical of the classical episteme as described by Foucault, which entails (i) the use of a mechanistic framework, (ii) the use of mathematics and more generally (iii) an effort to classify different entities. Second we examined how the rejection of interpersonal comparisons in the marginalist literature and the transition to ordinal utilities could be typical of the modern episteme, through the development of positivist stand and transcendental function of the notion of utility.
    Abstract: Cet article s'inscrit dans le cadre d'un projet de recherche visant à mobiliser les méthodes et outils proposés par Michel Foucault pour apporter un éclairage sur un ensemble de discussions que soulève l'évaluation économique en santé. Nous nous intéressons ici à l'ancrage épistémologique des méthodes de révélation des préférences individuelles issues de l'économie du bien-être, qui sont aujourd'hui utilisées pour valoriser les bénéfices en santé, en nous appuyant sur la typologie des épistémès de Foucault dans les Mots et les choses. Plus précisément, nous envisageons que le rejet des comparaisons interpersonnelles, que préfigure la révolution marginaliste et la transition vers une mesure ordinale des utilités, s'explique par le passage d'une épistémè classique à une épistémè moderne. La question du caractère cardinal ou ordinal de la mesure de l'utilité reste centrale pour l'évaluation économique en santé. En effet, les méthodes d'évaluation des bénéfices en santé, notamment au moyen des QALY, se rapprochent d'une mesure cardinale, contrairement au paradigme de la nouvelle économie du bien-être dans lequel elle est censée s'inscrire.
    Keywords: JEL Classification: B12, D61, D63, I10 Welfare economics, Health economic evaluation, Epistemology, Foucault
    Date: 2023–06–24
  9. By: Tatyana Avilova; Claudia Goldin
    Abstract: Economics is among the most popular undergraduate majors. However, even at the best research universities and liberal arts colleges men outnumber women by two to one, and overall there are about 2.5 males to every female economics major. The Undergraduate Women in Economics (UWE) Challenge was begun in 2015 for one year as a randomized controlled trial with 20 treatment and 68 control schools to evaluate the impact of light-touch interventions to recruit and retain female economics majors. Treatment schools received funding, guidance, and access to networking with other treatment schools to implement programs such as providing better information about the application of economics, exposing students to role models, and updating course content and pedagogy. Using 2001-2021 data from the Integrated Postsecondary Education Data System (IPEDS) on graduating BAs, we find that UWE was effective in increasing the fraction of female BAs who majored in economics relative to men in liberal arts colleges. Large universities did not show an impact of the treatment, although those that implemented their own RCTs showed moderate success in encouraging more women to major in economics. We speculate on the reasons for differential treatment impact.
    JEL: A22 C93 I21
    Date: 2023–07
  10. By: Cevat Giray Aksoy; Jose Maria Barrero; Nicholas Bloom; Steven J Davis; Mathias Dolls; Pablo Zarate
    Abstract: How prevalent is remote work on a global scale? What are the prevailing modes of working arrangements at present? What are the foremost advantages of working from home and on employer's business premises? Is there a need for policy intervention? Our new Global Survey of Working Arrangements provides new insights to answer these questions.
    Date: 2023
  11. By: Kever Bruno Paradelo Gomes (Instituto Federal of Brasília); Cledinaldo Aparecido Dias (University Federal of Minas Gerais)
    Abstract: After a historic period of conventional cocoa bean production, southern Bahia has shown a strong trend towards diversification and inclusion in the special cocoa market. Producers in the region are cultivating fruits of superior quality and low environmental impact. Inserted in a production model based on the concept of sustainable business, these producers, agrifood entrepreneurs, seek to promote experiences to their consumers in their different alternative lifestyles, such as the philosophy of the Bean-to-bar production model. Elaborated as a theoretical essay, the development of this article aims to identify the contribution of the Bean-to-bar process in generating value in the cocoa production chain, inserted within a context of Short Circuits of Commercialization in the generation of innovative business. It is noted that a good monitoring of the entire process of transforming the input into a product allows entrepreneurs to explore with greater vigor the organoleptic properties of cocoa beans. Among the main initiatives that boosted the performance of the cocoa production chain in southern Bahia, Fortaleza Slow Food, the creation of the Cocoa Innovation Center and the Geographical Indication stand out. The strategies developed make it possible to diversify and foster rural communities. It is essential to understand the dynamics of these processes of local productive arrangements from the integration of public policies in the promotion, valuation of family farming products, sustainable cocoa beans with superior quality and local development. The search for recognition of the value attributed to cocoa products in the southern region of Bahia, from production (bean) to transformation into the final product (bar), intensifies the environmental perspective on the part of cocoa farmers. In this process, the sociocultural dimensions are present mainly in the cabucra production system, valuing and strengthening local family farming. The commercialization of almonds in the short chain segment enables business efficiency, giving space for increased profitability and reduced environmental impact. The frugal innovation model, oriented towards sustainability, becomes a path for the development of innovative businesses that generate value in the cocoa production chain. In this sense, for this topic to become solidified as a field of research that can bring relevant theoretical and practical contributions, it is suggested that new studies focus, among others, on business models that prioritize the cause and not simply the trends.
    Keywords: Agri-food chains. Entrepreneurship. Social business. Sustainability
    JEL: L26 Q01 Q19
    Date: 2022–10

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