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on Post Keynesian Economics |
| By: | Dabrowski, Cara; Kuhls, Sonia |
| Abstract: | In this paper, we examine if and to what extent the Kaleckian theory of mark-up pricing can explain changes in functional income distribution in an environment of financialization. Following this approach, we expect financialization to influence the aggregate wage share through three channels: (1) sectoral recomposition, (2) financial overhead costs and rentiers' profits claims, and (3) bargaining power of trade unions and workers. We empirically analyze the long-term trends for each of the channels before and after the Great Financial Crisis and the Great Recession for Austria and Finland. Overall, we find evidence for all three re-distributional channels contributing to the changes in functional income distribution. The explanatory power of the individual channels, however, differs strongly due to the heterogeneity of the countries. |
| Keywords: | Finance-dominated capitalism, financialization, distribution, financial and economic crisis, Kaleckian theory of distribution |
| JEL: | D31 D33 D43 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:287769&r=pke |
| By: | Biagio Bossone |
| Abstract: | This article shows that in highly internationally financially integrated ("globalized") economies, policymakers' ability to implement effective expansionary macroeconomic policies, referred to in the article as "Keynesian policy space, " is influenced by the portfolio decisions of a specific group of investors known as "Global investors." This conclusion arises from a two-country, open-economy model in which Global investors allocate capital internationally based primarily on their perception of the policy credibility of the countries where they invest their managed wealth. In countries that Global investors deem highly credible, expansionary macroeconomic policies prove effective in terms of stimulating output and resource employment. Conversely, in countries perceived as having weak credibility, the portfolio decisions of these investors may undermine the effectiveness of such policies. Consequently, the anticipated real effects of these policies may dissipate into domestic currency depreciation and higher inflation. Following the derivation and evaluation of this conclusion, the article explores various options for countries to establish and maintain Keynesian policy space. |
| Keywords: | credibility; exchange rate; financial integration; global investor; inflation; intertemporal budget constraint; macro-policies |
| JEL: | E31 E40 E50 E62 F31 G15 H30 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2405&r=pke |
| By: | Emboava Vaz, João |
| Abstract: | This paper presents a stock-flow-consistent model in which growth is led by exports and government expenditure. It considers domestic and external debt dynamics and gross capital flows. Countries may choose to not fully use their external space to accumulate international reserves. The model is then applied to an exercise of comparative dynamics to look at how an external shock led by a hike in US Fed foreign interest rates may impact growth and income distribution in a developing country under different policy responses. The shock forces the country to apply at least one contractionary macroeconomic policy or lose its reserves. Countries more financially integrated may only be able to balance external accounts through contractionary monetary policy. Accumulated international reserves may help maintain expansionary policies and higher average growth rates by providing liquidity in foreign currency. |
| Keywords: | Supermultiplier, Structuralism, open economy growth, macroeconomic policy space, stock-flow-consistent modelling |
| JEL: | E62 E63 F32 F43 O40 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:287743&r=pke |
| By: | Khan, Haider |
| Abstract: | We define Trans-development as an overcoming of maldevelopment under capitalism towards building a planetary ecological civilization that is equitable, life-affirming and can ensure flourishing of humans along with nature and other species. How can such a planetary ecological counterhegemony be established in the Global South? I answer this question through exploring a fairly comprehensive strategy for development as freedom beyond the ecological and other crises-filled capitalism in the 21st century. Accordingly, I try to find a way to integrate useful markets with the key characteristics of the Enabling Ecological Trans-developmental State(EETDS) for the 21st Century in order to build a growing ecologically sustainable economy with equity in terms of capabilities. This will doubtless require a new global financial and ecological architecture. Relative Degrowth which involves sustainable people’s capabilities enhancing growth in the Global South, and degrowth in the Global North is a necessary condition for such a postcapitalist planetary civilization. Proceeding from a critical capabilities perspective that is fully grounded in social reality of deepening structural and ecological crises of the Global Capitalist System, we discover that such a perspective leads to the need to include among the characteristics of the EETDS for the 21st Century its capacity to build an ecologically sustainable egalitarian Trans- development strategy from the beginning. In addition, democracy must be deepened from the beginning. For the Global South including Eurasia, and particularly for Africa and Latin America, a new cooperative community of nations following their own rhythm to reach their own dynamic trajectories towards development as freedom will be possible if they cooperate regionally and globally on the basis of equal sovereignty and mutual respect. One precondition is to pragmatically unite for a common economic strategy. For this a decolonization of the mind in the global south is also necessary. The Gramscian idea of counterhegemony can be a fruitful way to carry out a thoroughgoing decolonization that dialectically addresses both material and ideational/ideological aspects of such decolonization. Strengthening the global south counterhegemonic movement built around a strategic program of trans-development is crucial for achieving real decolonization and creating a planetary ecological civilization. |
| Keywords: | Trans-development, Counterhegemony, Decolonization, Global South, Dialectics, Enabling Ecological Trans-developmental State(EETDS), Stoffwechsel, Ecological Imperialism, Relative Degrowth, New Non-aligned Movement(NNAM), New International Economic Order, Democratic Internationalism, Egalitarianism, Ecological Crisis, Global Capitalist System(GCS), Counterhegemonic movements, Ecosocialism, Nonlinearities, Multiple equilibria, Entropy and Information Theory |
| JEL: | F6 O1 P0 |
| Date: | 2024–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120325&r=pke |
| By: | Gabriel Porcile |
| Abstract: | Latin American Structuralism is an important strain in development theory, one which focuses on the center-periphery dynamics arising from an international economy ridden by technological, financial and power asymmetries. This paper discusses recent Structuralist contributions around the concept of sustainable development, defined as a growth path that is sustainable in three dimensions: economic, social and environmental. The economic dimension of sustainability means that the effective rate of growth is compatible with the Balance-of-Payments constraint; the social dimension means that growth is inclusive and reduces inequality; and the environmental dimension means that it respects the ecological boundaries of the planet. There are no endogenous market forces that could deliver a sustainable growth path: the role of politics and political negotiations (at the domestic and international levels) is paramount. The effective path that will be observed emerges as political power and structural change co-evolve and create tensions and disequilibria, shaping income distribution and the direction of industrial transformation and technological change. |
| Keywords: | Center-periphery models; Structuralism; sustainable development |
| Date: | 2024–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/10&r=pke |
| By: | Rauh, C.; Valladares-Esteban, A. |
| Abstract: | In the US economy, Black men, on average, receive lower wages than White men, and the difference increases over the working life. The employment rate and the number of hours worked are also lower for Blacks, but the gap is nearly constant. Together these facts suggest that on-the-job human capital accumulation might explain the diverging wages. However, the wage gap and its evolution over the lifecycle cannot be explained by differences in accumulated experience or educational attainment for the cohort we analyze. Instead, the combination of experience and test scores measured at ages 17-22 accounts for the wage gap and its growth. We propose an on-the-job human capital accumulation model with heterogeneity in the initial human capital endowment and the lifelong ability to accumulate human capital, and endogenous labor supply at the extensive and intensive margins to explain the evolution of the Black-White wage gap over the lifecycle. We discipline the distribution of the ability to accumulate human capital using the power of test scores to predict earnings growth in the data. We find that if the pre-market distributions were the same for Blacks and Whites, the racial gap in hourly earnings would be closed by 84%, with the remaining gap opening throughout life due to higher labor supply amongst White men. That is, the unequal conditions with which men in the two groups enter the labor market are likely to be the key determinant of the differences over the lifecycle. |
| Keywords: | Employment gap, Inequality, Labor supply decision, Lifecycle, Racial gap, Wage gap |
| JEL: | J15 J24 J31 J64 |
| Date: | 2023–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2310&r=pke |
| By: | Paolo Piacentini |
| Abstract: | “Employment and unemployment are determined in the product market, not the labour market”. Thirlwall (1993) put this statement at the first place in a list of six fundamental propositions of Keynesian Economics. This view remains central in a Keynesian approach in the macroeconomic assessment of employment activation, and marks the distance from ‘mainstream’ Labour Economics, engaging in partial analyses of the labour market, modelling for solutions of a stronger or weaker notion for some ‘equilibrium.’ However, while keeping firm the Keynesian direction of causality, a stylized fact evidenced for the Italian case, of a wide instability of employment/output elasticity, suggests us further investigation, for the employment outcomes in the medium run and over cyclical episodes. That’s to say, the quantitative result for additions (reductions) of labour use, given a percentage rise (contraction) of ‘GDP’ , widely differ amongst the countries, or within the same country in diverse epoch or cyclical episode. When employment is simply measured in terms of unadjusted numbers, this is mainly to be ascribed to the possibility of a ‘fractal’ partition of a total labour, into diverse segments for intensity and continuity of use, given the increasing resort to part-time, discontinuous, and short-term contracts for labour engagements. However, even after accounting for the variability of working time , and measuring employment in standardized units, elasticity differentials still appear and more ‘employment friendly’ patterns of growth show their reverse side, a lesser capability of enhancing productivity growth. Differentials in the employment content of output need then to be further explained. Structural composition of the economy and its dynamics, accounting for the composition effects within total employment outcomes, is introduced. After the ‘structural’ factors, it remains eventually to be questioned whether we should admit a residual influence of the institutional arrangements in the exchange of labour , in influencing ‘labour intensity of growth.’ The paper is finalized to first stage discussion addressing to the fundamental question, upon ‘why the employment intensity of growth varies over time and space” |
| Keywords: | Demand for labour, Variable employment, output elasticities |
| JEL: | J23 J63 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0062&r=pke |
| By: | Ozili, Peterson K |
| Abstract: | In a world where banked customers are increasingly aware of social and environmental issues, agents of financial inclusion need to adopt sustainable practices to remain relevant. This brings us to the issue of sustainable financial inclusion which is quite different from the mainstream financial inclusion concept. Sustainable financial inclusion is a concept used to describe the integration of sustainability principles into financial inclusion strategies. This paper provides an in-depth discussion of sustainable financial inclusion. Using the discourse analysis method, the paper provides several definitions of sustainable financial inclusion, and show the importance and benefits of sustainable financial inclusion. The paper also highlights the strategies to achieve sustainable financial inclusion and some challenges that may be experienced in the pursuit of sustainable financial inclusion. The implication of sustainable financial inclusion is that there will be increasing demand for agents of financial inclusion to not only seek profits but to also seek the preservation of society and the environment in their efforts to increase financial inclusion in rural and urban areas. The sustainable financial inclusion agenda will give banked adults an opportunity to pressure agents of financial inclusion to be sustainability oriented. This is a privilege that is non-existent in the mainstream financial inclusion agenda. This calls for a shift from the ‘mainstream financial inclusion’ agenda to a ‘sustainable financial inclusion’ agenda. |
| Keywords: | financial inclusion, sustainable financial inclusion, sustainability, sustainable development, sustainable development goals, SDGs |
| JEL: | G21 G28 I31 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120440&r=pke |
| By: | Leonello Tronti |
| Abstract: | The paper summarizes the evolution of the welfare state concept and its link to economic growth and full employment, along a complex itinerary running for more than a century, from the work of Adolf Wagner (1878) to James Meade’s proposals (1989, 1995). The overview focuses on the theoretical links of the first experiments of the welfare state with the foundation of welfare economics (Pigou, 1920), the establishment of the concept of human capital (Knight, 1944; Schultz, 1961) and the systematization of the welfare state design offered by Beveridge (1942). In the same years, the full employment goal is affirmed as achievable (Keynes, 1936; Beveridge, 1944; Roosevelt, 1945), meanwhile the Italian Constitution (1948) proposes a major advance, affirming full employment as a substantive freedom. With the end of Bretton Woods (1971) and the oil shocks (1973, 1979) stagflation spreads to developed economies, and both the welfare state and full employment face a setback. Wagner’s law finds a more evolved expression in the Laffer curve (1974), while monetary policy becomes restrictive and full employment has to give way to the Nairu (Modigliani and Papademos, 1975; Tobin, 1980). This is the climate in which Meade proposes a new and vital link between the welfare state and full employment: a proposal in which worker shares combine with topsy-turvy nationalization, and public credit with the social dividend. A proposal out of the box, but worth reflecting on in depth |
| Keywords: | Welfare state; Wagner law; full employment; welfare economics; human capital; substantial freedom; capabilities; stagflation; fiscal crisis; Nairu; Laffer curve; social dividend |
| JEL: | P16 E24 E64 H53 I31 J53 M52 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0061&r=pke |