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on Post Keynesian Economics |
| By: | Mark Setterfield (Department of Economics, New School For Social Research, USA) |
| Abstract: | The Kalecki-Robinson tradition in growth theory is surveyed, focusing on a central theme of this literature: the relationship between distribution and growth. A generic model is used to develop successive variants of the Kalecki-Robinson tradition: the neo- Keynesian (Robinson) model; the Kalecki-Steindl (Kaleckian) model; and the Bhaduri- Marglin model. Selected recent developments that offer new insights into the relationship between distribution and growth are then outlined. |
| Keywords: | Growth, distribution, technical change, Kalecki, Robinson |
| JEL: | E11 E12 O41 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2402&r=pke |
| By: | Codrina Rada (Department of Economics, University of Utah, USA); Ansel Shiavone (Department of Economics, St. John's University, USA); Rudiger von Arnim (Department of Economics, University of Utah, USA) |
| Abstract: | Neo-Goodwinian theory builds on and extends the classical growth cycle (Goodwin, 1967). It facilitates investigation of short run business cycles and long run economic growth in a unified framework. This paper makes two contributions. First, we summarize recent research on a Keynesian distributive cycle in income-capital ratio, employment rate and labor share. This model generates the Goodwin pattern (short run counter-clockwise cycles in activity-labor share planes) with the Goodwin mechanism (profit-led activity and profit squeeze distribution). Further, the natural rate of growth is wage-led through a positive effect of the labor share on labor productivity growth. The connection of short run profit-led cycles and long run wage-led growth allows for a nuanced discussion of relevant constraints and trade-offs. Second, we respond to renewed criticism that the Goodwin pattern is an artefact of pro-cyclical labor productivity. To clarify this debate, we demonstrate that a two-dimensional model in income-capital ratio and labor share with pro-cyclical labor productivity cannot generate the Goodwin pattern, unless it also features a sufficiently strong Goodwin mechanism. Extending the baseline three-dimensional Keynesian distributive cycle with pro-cyclical labor productivity does not alter key conclusions concerning short run profit led cycles and long run wage led growth. |
| Keywords: | Neo-Goodwinian theory, cyclical growth, labor productivity, secular stagnation |
| JEL: | E12 E25 E32 J50 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2403&r=pke |
| By: | Giovanni Dosi; Lucrezia Fanti; Maria Enrica Virgillito |
| Abstract: | The current phase of capitalism has been defined in many alternative ways, ranging from techno-capitalism, turbo-capitalism, unbridled capitalism, unleashed capitalism, managerial capitalism. In this paper we put forward the notion of rentified capitalism defined as a configuration of capitalism based on the progressive rentification of the socio-economic fabric acting via three mechanisms: Appropriation, Exclusion and Commodification. Delving into a classical political economy distinction of rents from a distributive versus a production perspective, we ask the following research questions: are rents simply a form of functional income source or rather a process of redefinition of property rights allowing for unjust resource accumulation? What are the attributes and trends of a rentified capitalism? How can we distinguish realms and spaces under the process of rentification? How can we measure the degree of rentification of an economy? In order to address the latter questions we identify realms and spaces of rentified capitalism (e.g., resource distribution; economic crises; finance and pseudo wealth; finance vs welfare state; housing; IPRs and Big Pharma) distinguishing countries characterised by different social and economic architectures (US, Germany, Italy) as representative of a variety of capitalisms approach. We conclude that economists are in need of a new analytical thinking advancing on the understanding of the causes and consequences of rentified capitalism. |
| Keywords: | Rents, political economy, modern capitalism, accumulation regime, power asymmetry |
| Date: | 2024–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/01&r=pke |
| By: | Luca Zamparelli (Department of Social and Economic Sciences, Sapienza University of Rome, Italy) |
| Abstract: | This paper investigates alternative ways of introducing technological progress in heterodox theories of economic growth. We model technical change as: i) exogenous and costless; ii) a positive externality of capital accumulation, the wage share or the employment rate; iii) endogenous and costly. We implement these formalizations in Classical growth theories, where investments coincide with full capacity savings, and Keynesian theories where capital accumulation is demand constrained. We also distinguish between abundant and inelastic labor market closures. We discuss the outcomes of these models in terms of long-run growth, functional income distribution and employment. |
| Keywords: | Technical change, heterodox growth models, R&D, factor income shares, employment |
| JEL: | D24 E25 D33 O30 O41 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2404&r=pke |
| By: | Alberto Botta; Danilo Spinola; Giuliano Toshiro Yajima; Gabriel Porcile |
| 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 |
| JEL: | F65 O14 O23 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2401&r=pke |
| By: | Andrea Roventini |
| Abstract: | This work presents the evolutionary growth theory, which studies the drivers and patterns of technological change and production together with the (imperfect) mechanisms of coordination among a multitude of firms. This requires to studies economies as complex evolving systems, i.e. as ecologies populated by heterogenous agents whose out-of-equilibrium local market interactions lead to the emergence of some collective order at higher level of aggregation, while the system continuously evolves. Accordingly a multi-country multi-industry agent-based model is introduced, where the restless competition of firms in international markets lead to the emergence of growth and persistent income divergence among countries. Moreover, each economy experiences a structural transformation of its productive structure during the development process. Such dynamics results from firm-level virtuous (or vicious) cycles between knowledge accumulation, trade performances, and growth dynamics. The model also accounts for a rich ensemble of empirical regularities at macro, meso and micro levels of aggregation. Finally, the model is employed to assess different strategies that laggard countries can adopt to catch up with leaders. Results show that in absence of government interventions, laggards will continue to fall behind. On the contrary, industrial policies can successfully drive international convergence among countries. |
| Keywords: | Endogenous growth, structural change, technology-gaps, industrial policies, evolutionary economics, agent-based models |
| Date: | 2024–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/02&r=pke |
| By: | Dimitrios, Theodoridis (Unit for Economic History, School of Business, Economics and Law, Göteborg University); Klas, Rönnbäck (Unit for Economic History, School of Business, Economics and Law, Göteborg University); Stefania, Galli (Unit for Economic History, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Was there any redistribution of resources in the Caribbean societies after emancipation from slavery? What were ex-slaves’ prospects to improve their socioeconomic status after emancipation? To shed some light on these questions this paper provides unique empirical evidence on patterns of wealth inequality before and after emancipation for the island of St. Croix, a typical slave-based sugar island in the Caribbean. Our findings suggest that there was no decrease in inequality following the institutional break of emancipation. A key explanation, we argue, rest on factor endowments and more specifically on the restrictive land-labor ratios that prevailed on several Caribbean islands, such as St. Croix. Due to these factor endowments, former slaves remained unable to accumulate any substantial amounts of wealth for decades after emancipation. |
| Keywords: | inequality; wealth; slavery; Caribbean; emancipation |
| JEL: | D31 J47 N36 |
| Date: | 2024–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunhis:0033&r=pke |