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on Post Keynesian Economics |
| By: | Davis, John B.; ; (Department of Economics Marquette University; Department of Economics Marquette University) |
| Abstract: | This paper discusses Richard Arena’s insightful and original contributions to interpreting the important interaction between Piero Sraffa and Ludwig Wittgenstein. It discusses this in terms of dilemmas they each encountered in transitions in their thinking in the 1930s, emphasizes the influence of Sraffa’s unpublished “Surplus Product†text, compares Sraffa’s critique of “natural science point of view†and Wittgenstein’s critique of logical form, and compares Sraffa’s later understanding of the relationship between production and distribution and Wittgenstein’s later understanding of forms of life and language-games. The paper argues this thinking opened up a approach to economic philosophy in connection with the distinction between open and closed systems. Arena has been a leading proponent open systems thinking in economics. He thus reminds us, in Wittgenstein’s words – ‘Don’t think, but look!’ – or look beyond what one might think ones sees in a closed systems way. |
| Keywords: | Arena, Sraffa, Wittgenstein, surplus product, language games, open-closed systems |
| JEL: | B24 B30 B40 B51 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2023-06&r=pke |
| By: | YOSHIKAWA Hiroshi; ARATA Yoshiyuki |
| Abstract: | Macroeconomics and microeconomics are fundamentally different. In microeconomics such as industrial organization and market for “lemon†, detailed analysis of motives and strategic behavior of micro-agents is necessary. However, in macroeconomics, such analysis is of no use. To understand macroeconomic phenomena, different methodologies are required. Research programs related to the standard microeconomic foundations of macroeconomics are on the wrong track. Taking RBC, Lucas rational expectations model, labor search theory, and the more recent HANK as examples, this paper shows that the standard microeconomic foundations of macroeconomics rest essentially on unrealistic representative agent assumptions and are not worthy of being called microeconomic foundations. It reconsiders Keynesian economics as an indispensable framework for the analysis of business cycles and argues for a stochastic approach in understanding important macroeconomic phenomena such as distributions of personal incomes and firm growth. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23079&r=pke |
| By: | Pianta, Mario |
| Abstract: | In order to understand the rise and fall of inflation of 2022-2023, new theories and analytical frameworks are needed, closely connected the profound changes in monetary and fiscal policies that have accompanied the wave of price increases. This paper proposes a view of inflation as a set of distributive conflicts, develops a set of conceptual tools, reviews the recent empirical evidence and discusses policy responses. The rise of inflation was set in motion by the production distortions that emerged at the end of the covid-19 pandemic and by major rises in energy prices, accelerated by the start of the Ukraine war. Price rises then spread throughtout the economy, due to business search for higher profits. Price levels are now stabilizing at a significantly higher level, with lasting consequences on income distribution, the purchasing power of wages, and financial values. Facing inflation, economic policies have experienced a major turn, with monetary authorities in the United States and Europe turning to restrictive policies. The macroeconomic outlook, the trajectories of structural change, the distribution of income and the dynamics of finance are deeply affected by the new context; possible policy alternative, with a more coordinated framework for public action, are discussed in the conclusions of the paper. |
| Keywords: | Inflation, income distribution, finance, economic policies |
| JEL: | E31 E51 E61 E64 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119345&r=pke |
| By: | Marco Veronese Passarella |
| Abstract: | This paper is organised as follows. Firstly, a simple but complete input-output stock-flow consistent dynamic model of a monetary economy of production is developed, in which credit money is endogenously created by commercial banks, the production sector is split into different industries, and unit prices align with their reproduction values in the long run, while supplies gradually adjust to meet final demands for products. Secondly, after discussing its key features, the model is used to test the impact of technical change on industry-specific financial requirements and profitability |
| Keywords: | Monetary Circuit, Stock-Flow Consistent Models, Input-Output Analysis |
| JEL: | E16 E17 C67 D57 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:903&r=pke |
| By: | Bergquist, Ann-Kristin (Department of Economic History, Uppsala University); Lindmark, Magnus (Unit of Economic History, Umeå University) |
| Abstract: | The climate crisis is at the core of attention to the need for an energy transition at a scale resembling a new ‘low carbon’ industrial revolution. As energy transitions are relatively exceptional and prolonged processes, social scientists have increasingly turned their attention to historical experiences for lessons about how they might unfold in the future. Against this backdrop, the paper examines how the present political economy and barriers for energy transitions compare with past energy transitions. The paper argues that formidable challenges posed by existing energy regimes. Established over centuries and having played a foundational role in the development of modern capitalism since the Industrial Revolution, these 'incumbent' regimes or ‘historical blocks’ are not easily displaced. It urges economic historians to move beyond its traditional focus on how energy via technological change has created new economic growth opportunities and look more into the barriers for energy transition embedded in the architecture of the political economy. |
| Keywords: | Energy transitions; economic history; business history; political economy |
| JEL: | N50 N70 Q40 Q50 |
| Date: | 2023–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uuehwp:2023_011&r=pke |
| By: | Botta, Alberto; Spinola, Danilo; Yajima, Giuliano; Porcile, Gabriel |
| Abstract: | This paper studies the relationship between financial integration, external debt sustainability, and fiscal policy space in emerging and developing (EDE) countries. We do so by applying Pasinetti’s “geometry of debt sustainability” to EDE countries and analysing how it is shaped by exposure to global financial cycles. Through the lenses of Pasinetti’s theoretical framework, we study whether global finance opens “windows of opportunities” or creates more constraints for EDE countries in offering fiscal support for structural changes, including green structural transformations. This analysis is crucial for tackling the pressing issue of the climate crisis. We suggest EDE countries may face a “gridlock”. Global finance and pressures to keep external debt sustainable make them struggle to maintain vital public investment and enact counter-cyclical fiscal actions. Lack of fiscal space in turn exacerbates technological backwardness, which feeds back in the form of more binding external constraints and tighter “surveillance” by international creditors. We support our theoretical analysis with an econometric study over a sample of 55 countries from 1980-2018. Capital controls and external macroprudential policy emerge as fundamental policies enabling EDE countries to adeptly manoeuvre through debt challenges without falling into the pitfalls of stagnation and enduring technological underdevelopment. |
| Keywords: | Financial globalisation; fiscal space; structural change |
| Date: | 2023–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:akf:cafewp:25&r=pke |
| By: | Bavaro, Michele; Carranza, Rafael; Nolan, Brian |
| Abstract: | While the influence of poverty in childhood on adulthood outcomes has been extensively studied, little is known about how the strength of intergenerational persistence in poverty itself varies across countries. Here we examine the intergenerational persistence of poverty in a comparative analysis of 30 European countries using data from the 2019 ad hoc module of the EU-SILC dataset. We construct proxy measures of poverty in the parental household employing information on inability to meet basic needs and financial hardship when growing up, together with parental education and occupational social class. The strength of the association between current poverty based on the indicators at the core of the EU’s social inclusion process and these measures of parental poverty is assessed and compared across countries. The cross-country variation in poverty persistence is probed including with respect to its relationship with the current and past extent of poverty: persistence tends to be stronger where current or parental poverty are higher, analogous to the Great Gatsby Curve relating intergenerational income mobility to income inequality at country level. Mediation analysis highlights the role of own education as well as occupation in underpinning the observed relationship between current and parental poverty. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2023–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:phrq2&r=pke |