nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2023‒11‒27
five papers chosen by
Karl Petrick, Western New England University

  1. The long shadow of Versailles: An unusual controversy on John Maynard Keynes between the German ordoliberals Walter Eucken and Wilhelm Röpke By Horn, Karen
  2. Induced Innovation and International Environmental Agreements: Evidence from the Ozone Regime By Eugenie Dugoua
  3. What growth strategies do citizens want? Evidence from a new survey By Baccaro, Lucio; Bremer, Björn; Neimanns, Erik
  4. Financial inclusion, sustainability and sustainable development By Ozili, Peterson K
  5. Lessons in Homebuying from a Behavioral Economist By Daryl Fairweather

  1. By: Horn, Karen
    Abstract: Ordoliberalism and Keynesianism are not exactly known to fit hand in glove. Accordingly, the German economists Walter Eucken, head of the Freiburg school, and Wilhelm Röpke, from his Istanbul and Geneva exiles, were in near perfect agreement in their opposition to the interventionist "full employment" teachings of their English colleague John Maynard Keynes. An article by Röpke on Keynes in the Swiss newspaper Neue Zürcher Zeitung (NZZ) published in 1946 however met with "fundamental objections" by Eucken, and a controversy took off. The bone of contention between the two colleagues and rather dissimilar friends was Keynes's famous earlier critique of the Versailles Peace Treaty, and the lessons to be drawn for the post-WW II situation. This paper tells the story of this unusual and puzzling controversy, quoting from the letters between the two, and contextualizes the exchange in order to make sense of it. It turns out that there was an economic, a human, and - most significantly - a political side to their disagreement. Eucken and Röpke assessed the economic development since 1919 somewhat differently, and Eucken felt compelled to defend Keynes against the heavy moral accusation of having contributed to the Nazi catastrophe. But perhaps most of all, he found it tactically unwise in 1946 to endorse arguments that would support an even harsher attitude by the Allies toward Germany after WW II. In a first translation, the paper's appendixes contain Röpke's NZZ article that sparked the controversy, as well as the rejoinder by Eucken's former student Valentin F. Wagner. A new, full translation of an earlier NZZ article by Röpke on Keynes in lieu of an obituary is also provided.
    Keywords: Eucken, Röpke, Keynes, Versailles Peace Treaty, reparations, full employment policy
    JEL: B20 B31 N14
    Date: 2023
  2. By: Eugenie Dugoua
    Abstract: This paper revisits one of the rare success stories in global environmental cooperation: the Montreal Protocol and the phase-out of ozone-depleting substances. I show that the protocol increased science and innovation on alternatives to ozone-depleting substances, and argue that agreements can indeed be useful to solving global public goods problems. This contrasts with game-theoretical predictions that agreements occur only when costs to the players are low, and with the often-heard narrative that substitutes were readily available. I reconcile theory and empirics by discussing the role of induced innovation in models of environmental agreements.
    Keywords: induced innovation, directed technological change, green innovation
    JEL: O30 Q55
    Date: 2023
  3. By: Baccaro, Lucio; Bremer, Björn; Neimanns, Erik
    Abstract: While research on the economic characteristics of growth models across countries is now extensive, research on the politics of growth models is still in its infancy, even though governments routinely pursue different strategies to generate growth. In particular, we lack evidence on (1) whether citizens have coherent preferences towards growth strategies, (2) what growth strategies citizens prefer, and (3) what shapes their preferences. We address these questions through a new survey of public opinion in Germany, Italy, Sweden, and the United Kingdom, which exemplify different models. We find that preferences for growth strategies are consistent with other policy preferences and are meaningfully structured by class and retirement status, and to a lesser extent by sector of employment. At the same time, differences across class and sector are small, and a large majority of respondents across countries favor wage-led growth. This suggests there is a "representation gap, " since this particular growth strategy is in crisis everywhere.
    Abstract: Es gibt mittlerweile umfassende Forschung zu den ökonomischen Eigenschaften von Wachstumsmodellen in verschiedenen Ländern. Politische Aspekte von Wachstumsmodellen sind dagegen bislang kaum erforscht, obgleich Regierungen unterschiedliche Wachstumsstrategien verfolgen, um Wirtschaftswachstum zu erzielen. Forschungslücken bestehen insbesondere zu den Fragen, 1) ob Bürgerinnen und Bürger kohärente Präferenzen zu Wachstumsstrategien haben, 2) welche Wachstumsstrategien sie befürworten und 3) welche Faktoren ihre Präferenzen beeinflussen. Wir adressieren diese Frage mithilfe einer neuen Meinungsumfrage für Deutschland, Italien, Schweden und das Vereinigte Königreich, welche unterschiedliche Wachstumsmodelle verkörpern. Unsere Ergebnisse zeigen, dass Präferenzen zu Wachstumsstrategien konsistent mit Präferenzen für andere Politikbereiche sind und dass die soziale Klassenzugehörigkeit und, in geringerem Maße, der Wirtschaftssektor des Beschäftigungsverhältnisses einen prägenden Einfluss auf diese Präferenzen haben. Zugleich sind aber die Unterschiede in den Präferenzen über Klassen und Sektoren hinweg relativ gering und es zeigt sich, dass eine große Mehrheit der Befragten über Länder hinweg lohngetriebenes Wachstum befürwortet. Dieser Befund suggeriert eine Repräsentationslücke, da sich diese Wachstumsstrategie überall in einem Krisenzustand befindet.
    Keywords: comparative capitalism, economic growth, growth models, macroeconomic policies, public opinion, unequal representation, makroökonomische Politik, öffentliche Meinung, ungleiche Repräsentation, vergleichende Kapitalismusforschung, Wachstumsmodelle, Wirtschaftswachstum
    Date: 2023
  4. By: Ozili, Peterson K
    Abstract: Given the growing interest in financial inclusion, the possibility of integrating financial inclusion into the sustainability and sustainable development agenda needs to be explored. The purpose of this conceptual paper is to establish a link between financial inclusion, sustainability and sustainable development. The paper used discourse analysis to establish a link between financial inclusion, sustainability and sustainable development. It was argued that financial inclusion contributes to sustainable development by ensuring that access to basic financial services is guaranteed in a sustainable way, and basic financial services are provided in a sustainable way and based on sustainability principles to yield lasting impact for sustainable development. This approach links financial inclusion to sustainable development through the adoption of sustainability principles in offering basic financial services to banked adults. The paper also argued that financial inclusion is more relevant for the economic dimension and social dimension of sustainable development because financial inclusion improves the economic conditions and social welfare of banked adults while it only provides limited benefits for the environmental dimension of sustainable development. There is a need for a merger between financial inclusion and sustainable development based on sustainability principles. This will require polices that integrate financial inclusion to the sustainable development agenda.
    Keywords: sustainable development, financial inclusion, sustainability, financial institutions, unbanked adults, access to finance, poverty reduction, economic dimension, social dimension, sustainable development goals, United Nations.
    JEL: G21 Q01
    Date: 2023
  5. By: Daryl Fairweather
    Abstract: Daryl Fairweather, chief economist at real estate company Redfin, talks about behavioral economics and how it applies to purchasing a house.
    Keywords: behavioral economics; homebuyers; women in economics
    Date: 2023–04–25

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