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on Post Keynesian Economics |
| By: | Gräbner-Radkowitsch, Claudius; Kapeller, Jakob |
| Abstract: | At its core, the discussion on the micro-macro link in heterodox economics is concerned with the correct treatment of aggregates and aggregation in social theory. In this chapter we survey heterodox approaches to the micro-macro link with a focus on shared understandings and convictions that apply across different schools of thought. In addition, we illuminate typical fallacies related to the treatment of aggregation and aggregates as well as the philosophical underpinnings of heterodox ontology to better understand conceptual differences between heterodox economics and competing approaches. Given that economics faces myriad problems of aggregation - as in the case of market interaction, macroeconomic aggregates, or interpersonal coordination and contracting - the quest to provide suitable conceptual tools and philosophical foundations to adequately address aggregates and aggregation should be of special interest to economists of different persuasions. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:296479&r= |
| By: | Di Domenico, Lorenzo (Università Cattolica del Sacro Cuore); Gahn, Santiago José (Università degli Studi “Niccolò Cusano”); Romaniello, Davide (Università degli studi della Campania “Luigi Vanvitelli”) |
| Abstract: | Several authors have developed different arguments on the basis of which a negative shock to aggregate demand could have persistent effects on the level of output, an effect known as hysteresis. In some cases, a positive aggregate demand shock could also have persistent effects, as long as GDP is lower than normal. We provide a substantive classification of the literature on hysteresis. We also present a model in which permanent (and positive) demand shocks have a permanent effect on the level of output and transitory effects on inflation. Finally, we analyze empirically the effects of autonomous demand shocks on unemployment, capacity utilization, inflation, capital (productive capacity) and labor participation rate in the US economy for the 1970Q1-2021Q4 period. Our results indicate that the US economy is extremely flexible to positive demand shocks even during good times, at least during the post Bretton-Woods era. |
| Keywords: | hysteresis; inflation; autonomous demand; NAIRU; potential output |
| Date: | 2024–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sraffa:0064&r= |
| By: | Ranaldi, Marco |
| Abstract: | This paper explores the concept, measurement, principal stylized facts, and normative implications of compositional inequality. Compositional inequality refers to how the shares of capital and labor income vary along the income distribution. This analysis is valuable for several reasons. From a macroeconomic perspective, it elucidates the link between functional and personal distributions of income, which is crucial for addressing the drivers of income inequality in a context of AI-driven, technology-augmenting capital accumulation. From a comparative economic perspective, it locates economic systems on the continuum between two extremes: classical capitalism, where the rich earn predominantly from capital and the poor from labor, and new capitalism, where the composition of capital and labor is uniform across the distribution. We refer to the entire range of systems along this continuum as the distributional varieties of capitalism. Recent empirical studies indicate that, in most countries, we are far from classical capitalism, though with notable exceptions, such as Latin American countries. This underscores the need to evaluate the benefits of compositional equality. The paper concludes that compositional equality is desirable for at least two reasons: it promotes fairness and supports an inclusive, profit-driven regime of accumulation and growth. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:75ghp&r= |
| By: | Raphael Porcherot (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, CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord, Université Sorbonne Paris Nord); Mariano Féliz (IdIHCS - Instituto de Investigaciones en Humanidades y Ciencias Sociales [La Plata] - CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas [Buenos Aires] - FaHCE - Facultad de Humanidades y Ciencias de la Educación [La Plata] - UNLP - Universidad Nacional de la Plata [Argentine], CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas [Buenos Aires], UNLP - Universidad Nacional de la Plata [Argentine]) |
| Abstract: | In Marxist dependency theory, the uneven and combined development of productive forces across core and periphery is a key feature of capitalism. The unity of such sys- tematically differing components of the world economy is defined by the combination of borders and nation-wide productivity and labour remuneration standards. Periph- eral value spaces stand in a relationship of dependency with core value spaces, which provides the economic rational for the political domination of the latter over the former. The foundation of this dependency lies in the interaction between unequal exchange dynamic and the heightened exploitation of labour. Indeed, super-exploiting labour allow peripheral capitals to partially compensate for the value their are losing as a consequence of unequal exchange. For that reason, peripheral value spaces exhibit a fundamentally heteronomous and extroverted mode of development. This interaction takes place through the evolution of exchange rates, whose main functions is to verify the monetary character of the various currencies. Through the latter's perpetual comparison, they reproduce the general equivalent whose existence is a structural necessity for any market-based economy, such is capitalism. Doing so, exchange rates formally mediate value spaces that nonetheless retain systematically diverging characteristics. However, on the one hand, Marxist dependency theory does not offer an unified exchange rate theory. On the other, within Marxist economic literature, while several attempts at expounding a model of exchange rate determination are to be found, they yield differing conclusions and more importantly were not integrated with the debates on dependency. This article proposes to revise differing Marxist understanding of the exchange rate, seeing the latter's determination as key mechanisms leading to the reproduction of dependency. It thus discusses insights from Shaikh, Carchedi, Astarita and Ricci with the dependency tradition originating in Marini's work. On this basis, we suggest that as they contributes to the verification of the socially acknowledged monetary character of the various currencies, exchange rates determine the magnitude of unequal exchange. Consequently, the latter is best seen not as a transfer of value but as a loss of value, in contrast with the traditional "phlogistic" understanding of unequal exchange that can be found in the literature on unequal ex- change, especially in Emmanuel's writings. Finally, the point is to explore how the mediating role of exchange rate necessarily implies the super-exploitation of labour-power. |
| Keywords: | exchange rate, dependency, Value transfers, Unequal exchange |
| Date: | 2024–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cepnwp:hal-04599634&r= |
| By: | Petri, Fabio (University of Siena) |
| Abstract: | What of the first chapter of Marx’s Capital remains valid if one adopts Sraffian price theory? More than one might think, given that the thesis that labour is the substance of value must be abandoned; the two main new clarifications the chapter intended to contribute, namely the analysis of fetishism (with that of the forms of value which is its necessary premise), and the concrete labour/abstract labour distinction, remain valid. The reason why the first pages of the chapter are unclear and aprioristic is traced to Marx’s decision to postpone to Volume III the ‘compensation-of-deviations’ argument with its premise that commodities do not exchange in proportion to embodied labour, a decision which obliges him to assume in this chapter a strict labour theory of value without explanation of why it holds. Böhm-Bawerk’s interpretation of the ‘only-one-property-remains’ argument is criticised. Marx’s persuasion that when things are quantitatively comparable relative to a common quality there must be a common ‘substance’ in them determining that comparability is discussed. The need to ‘reduce’ labour to homogeneity clarifies the meaning of abstract labour but contradicts Marx’s insistence on the notions of ‘human labour in general’ and ‘equality and equivalence of all kinds of labour’. |
| Keywords: | Marx; Labour theory of value; fetishism; heterogeneous labour; Böhm-Bawerk |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:ris:sraffa:0065&r= |
| By: | Crespi De Valldaura G, Virginia; Fifi, Gianmarco |
| Abstract: | Why do leftist forces accept, support and adopt free-market policies? To answer this question, we carry out a comparative study of left-wing groups (both parties and trade unions) in France, Italy and Spain during the late 1970s and the early 1980s. This period is widely acknowledged in international political economy to have represented a paradigm shift from post-war Keynesianism to neoliberal policy-making. We employ in-depth content analysis of memoirs, interviews to the press, opinion articles and policy-papers to explain actors’ positions on landmark policies implemented during such transition. In alignment with a developing literature in political economy (e.g. Mudge 2018), we find a proactive role of progressives in developing the ideological justification for the resort to liberal policies. However, we emphasise that widespread consensus among so-called progressives, rather than a leading role of technocrats or party experts, best explains such shifts. In this way, the paper casts doubts on interpretations of the liberalisation process that place excessive emphasis on the role of external constraints as well as on elite power. Drawing on Hall (1993), we argue that left-wing forces in the early 1980s have enacted a ‘second order change’, whereby policymakers use new instruments to meet existing policy objectives. |
| Keywords: | austerity; Left; neoliberalism; trade unions; Western Europe; T&F deal |
| JEL: | J1 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122747&r= |
| By: | Bernardo Modenesi |
| Abstract: | I generalize state-of-the-art approaches that decompose differences in the distribution of a variable of interest between two groups into a portion explained by covariates and a residual portion. The method that I propose relaxes the overlapping supports assumption, allowing the groups being compared to not necessarily share exactly the same covariate support. I illustrate my method revisiting the black-white wealth gap in the U.S. as a function of labor income and other variables. Traditionally used decomposition methods would trim (or assign zero weight to) observations that lie outside the common covariate support region. On the other hand, by allowing all observations to contribute to the existing wealth gap, I find that otherwise trimmed observations contribute from 3% to 19% to the overall wealth gap, at different portions of the wealth distribution. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05759&r= |