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on Post Keynesian Economics |
| By: | Sheila Dow (Department of Economics, University of Victoria) |
| Abstract: | In order to consider the problem of the relationship between central banks and governments, it is necessary to go back to first principles and consider what society needs from central banks. The role of the central bank is explored as being to provide a stable financial environment as a basis for real economic activity. This involves the provision of a safe money asset; an appropriate level and composition of lending to the corporate sector to finance capital investment; and lending to government as required, subject to maintaining the value of the currency. The evolution of this traditional role in relation to banks and government is analysed in terms of collateral, emphasising their interdependencies. The argument developed here is that the problem of insufficient collateral for the financial system is a product of weak economic conditions and financial instability which has eroded confidence in the valuation of assets, and that this has been compounded by central bank independence. As a result, it is argued that central banks should not be independent of government, but rather that the traditional constructive mutual relationships between central banks and government (and retail banks) be restored. |
| Keywords: | central banks, monetary policy, bank regulation |
| Date: | 2024–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicddp:2014&r=pke |
| By: | Basile Clerc |
| Abstract: | Why do some economists support price controls in the face of inflation during peacetime? Our thesis is that, in the history of economic thought, understanding the role of profits in inflationary dynamics is the crucial variable. To demonstrate this, we investigate the extensive literature on incomes policy, insofar as much of the thinking on macroeconomic price controls in peacetime is part of this literature. This corpus is crossed by a major schism: some advocate price and wage controls while others limit control to wages alone. We show that the defense of price controls is always based on the thesis that profits play an autonomous role in inflationary dynamics. Conversely, the advocates of an incomes policy reduced to wage controls see margins as mere transmission belts for excessive wage increases into prices. Price controls are thus rejected ex ante, even before any criticism of the consequences of their application. |
| Keywords: | Price controls - Wage controls - Incomes policy - Inflation - Unemployment |
| JEL: | B22 E64 E12 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2024-11&r=pke |
| By: | Raphaël Orange-Leroy (AGORA - EA 7392 - Laboratoire AGORA - CY - CY Cergy Paris Université, IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay, CRHIA - Centre de recherches en histoire internationale et Atlantique - UR 1163 - ULR - La Rochelle Université - Nantes Univ - UFR HHAA - Nantes Université - UFR Histoire, Histoire de l'Art et Archéologie - Nantes Université - pôle Humanités - Nantes Univ - Nantes Université) |
| Abstract: | This paper shows that the United Nations Conference on Trade and Development (UNCTAD) and the group of 77 developing countries (G77) participated in the 1960s international monetary negotiations. This involvement was based on the agenda built by a group of experts gathered by UNCTAD in 1965. The group was composed of academic and practitioner economists from all over the world, including some famous names, such as Richard Kahn, Tibor Scitovsky, and Trevor Swan, as well as less-known though influential figures, including I. G. Patel, Gamani Corea, and Jorge Gonzalez del Valle. UNCTAD served as an "institutional infrastructure" (Gasper 2011) that allowed for the emergence of new analyses and narratives on the interests of developing countries in the international monetary reform that was being discussed among the wealthy countries of the Group of Ten (G10). The report of the experts proved influential. At the intellectual level, it convinced IMF economists, including Jacques Polak, to change their frame of analysis for a more global vision. At the political level, it was endorsed by G77 and participated in the G10 agreement for universal distribution of the newly created Special Drawing Rights (SDRs). Based on international organizations' archives, this paper, therefore, challenges the invisibilization process of the G10 over G77 ideas. Multilateral negotiations also offer a "keyhole" to study new economist figures from developing countries. Thanks to prosopographic methodology, this paper attempts to follow the national and international connections of the experts as a way to open new research areas for the history of economics. |
| Keywords: | Diplomatic History, Economic History, International Relations, History of Political Economy, United Nations, UNCTAD, IMF, World Bank, G77, G10, G24, Global South, Periphery, Third World, Money, Finance, Development, Development Finance, Special Drawing Rights, SDRs, economists, 1960s, 1970s |
| Date: | 2023–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04498357&r=pke |
| By: | Gianluca Pallante; Mattia Guerini; Mauro Napoletano; Andrea Roventini |
| Abstract: | We extend the Schumpeter meeting Keynes (K+S; see Dosi et al., 2010, 2013, 2015) to model the emergence and the dynamics of an interbank network in the money market. The extended model allows banks to directly exchange funds, while evaluating their interbank positions using a network- based clearing mechanism (NEVA, see Barucca et al., 2020). These novel adds on, allow us to better measure financial contagion and systemic risk events in the model and to study the possible interactions between micro-prudential and macro-prudential policies. We find that the model can replicate new stylized facts concerning the topology of the interbank network, as well as the dynamics of individual banks’ balance sheets. Policy results suggest that the economic system at large can benefit from the introduction of a micro-prudential regulation that takes into account the interbank network relationships. Such a policy decreases the incidence of systemic risk events and the bankruptcies of financial institutions. Moreover, a trade-off between financial stability and macroeconomic performance does not emerge in a two-pillar regulatory framework grounded on i) a Basel III macro-prudential regulation and ii) a NEVA-based micro-prudential policy. Indeed, the NEVA allows the economic system to achieve financial stability without overly stringent capital requirements. |
| Keywords: | Financial contagion, Systemic risk, Micro-prudential policy, Macro-prudential policy, Macroeconomic stability, Agent-based computational economics |
| Date: | 2024–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/08&r=pke |
| By: | Jeffry Frieden; Richard S. Grossman; Daniel Lowery |
| Abstract: | We investigate how Reconstruction affected Black political participation and socio-economic advancement after the American Civil War. We use the location of federal troops and Freedmen’s Bureau offices to indicate more intensive federal enforcement of civil rights. We find greater political empowerment and socio-economic advances by Blacks where Reconstruction was more rigorously enforced and that those effects persisted at least until the early twentieth century, although these advances were weaker in cotton-plantation zones. We suggest a mechanism leading from greater Black political power to higher local property taxes, through to higher levels of Black schooling and greater Black socio-economic achievement. |
| Keywords: | reconstruction, institutions, US Civil War, economic development |
| JEL: | N31 P10 O10 O51 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10971&r=pke |