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on Post Keynesian Economics |
| By: | Campana, Juan Manuel; Hein, Eckhard |
| Abstract: | This paper provides a comprehensive analysis of the German demand and growth regimes from 1999 to 2024 within the framework of Eurozone macroeconomic governance for three sub-periods: 1999-2009, 2010-2020, and 2021-2024. Applying a national income and financial accounting decomposition approach, we find an extreme export-led mercantilist (ELM) regime during the first period, a moderated ELM regime in the second period, and a weakly export-led (WEL) regime in the third period. Also, the application of the Sraffian supermultiplier growth accounting approach indicates that exports were the primary autonomous growth driver, though with a declining trend over time. The examination of the structural underpinnings of Germany's export-led regime reveals that exports are mainly in capital goods and medium to high-technology products with a high income elasticity of demand, and thus rely on growth dynamics in the respective destination countries. The analysis of the German macroeconomic policy regime shaped by the Eurozone governance system finds for the first period a restrictive macroeconomic policy stance that suppressed domestic demand, making exports the primary growth driver. The second period saw a more expansionary stance, leading to a less extreme ELM regime. This trend continued into the third period, leading to a WEL regime with balanced domestic and external growth drivers. The paper concludes by advocating for a coordinated Eurozone macroeconomic policy mix that generates sufficient domestic demand and imports to balance the structurally shaped German export dynamics and to prevent regional and global current account imbalances. |
| Keywords: | Eurozone governance, Germany, growth decomposition, macroeconomic policy regime |
| JEL: | E11 E12 E61 O52 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:305270 |
| By: | Andr s Rodr guez-Pose; Javier Terrero-Davila; Neil Lee |
| Abstract: | Economic change over the past twenty years has rendered many individuals and territories vulnerable, leading to greater interpersonal and interterritorial inequality. This rising inequality is seen as a root cause of populism. Yet, there is no comparative evidence as to whether this discontent is the consequence of localised interpersonal inequality or stagnant growth in ‘left-behind’ places. This paper assesses the association between levels and changes in local GDP per capita and interpersonal inequality, and the rise of far-right populism in Europe and in the US. The analysis —conducted at small region level for Europe and county level for the US— shows that there are both similarities and differences in the factors connected to populist voting on both sides of the Atlantic. In the US, neither interpersonal inequality nor economic decline can explain populist support on their own. However, these factors gain significance when considered together with the racial composition of the area. Counties with a large share of white population where economic growth has been stagnant and where inequalities have increased supported Donald Trump. Meanwhile, counties with a similar economic trajectory but with a higher share of minorities shunned populism. In Europe, the most significant factor behind the rise of far-right populism is economic decline. This effect is particularly large in areas with a high share of immigration. |
| JEL: | D31 D72 R11 |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:lis:liswps:859 |
| By: | Borgioli, Stefano; Gallo, Giampiero M.; Ongari, Chiara |
| Abstract: | In 1936, John Maynard Keynes proposed that emotions and instincts are pivotal in decision-making, particularly for investors. Both positive and negative moods can influence judgments and decisions, extending to economic and financial choices. Intuitions, emotional states, and biases significantly shape how people think and act. Measuring mood or sentiment is challenging, but surveys and data collection methods, such as confidence indices and consensus forecasts, offer some solutions. Recently, the availability of web data, including search engine queries and social media activity, has provided high-frequency sentiment measures. For example, the Italian National Statistical Institute’s Social Mood on Economy Index (SMEI) uses Twitter data to assess economic sentiment in Italy. The relationship between SMEI and financial market activity, specifically the FTSE MIB index and its volatility, is examined using a trivariate Vector Autoregressive model, taking into account the impact of the COVID-19 pandemic. JEL Classification: C1, C32, C53, G4 |
| Keywords: | financial market, forecasting, Granger Causality, sentiment analysis, VAR |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242999 |
| By: | Di Carlo, Donato; Ciarini, Andrea; Villa, Anna |
| Abstract: | Comparative political economy scholarship struggles to categorize Italy's model of capitalism between a mixed-market economy and a hybrid, stagnant economic system. To enhance our understanding of the Italian political economy, this paper employs the analytical framework of growth regimes to study Italy's regional economic systems. Our analysis indicates that Italy can hardly be defined as a "national growth regime" due to the presence of two diametrically opposed regional growth regimes: northern regions conform to a manufacturing-based, export-led growth regime supported by competitiveness-enhancing territorial institutions; southern regions conform to a particular variety of the consumption-led growth regime, that is, an administrative Keynesianism regime, which we theorize to typify a regime where growth and employment are systematically dependent on the state's role as employer of last resort, the state's consumption-enhancing social policies, and economic forbearance of labor and corporate tax regulations. The paper suggests that studying regional growth regimes is desirable when marked internal diversity in economic outcomes or productive structures exists across regions within (generally larger) countries, and when subnational governments have powers to develop their own major institutions/policies in support of regional growth regimes. |
| Abstract: | Die Vergleichende Politische Ökonomie tut sich schwer mit einer Kategorisierung des italienischen Kapitalismusmodells, das irgendwo zwischen einer gemischten Marktwirtschaft und einem hybriden, stagnierenden Wirtschaftssystem anzusiedeln ist. Um unser Verständnis der Politischen Ökonomie Italiens auszubauen, untersucht das Papier basierend auf der Wachstumsmodelltheorie Italiens regionale Wirtschaftssysteme. Die Analyse zeigt, dass Italien über zwei diametral entgegengesetzte Wachstumsmodelle verfügt: die nördlichen Regionen mit ihrer umfangreichen Industrieproduktion weisen die Charakteristika eines exportorientierten Wachstumsregimes auf, unterstützt durch wettbewerbsfördernde Institutionen; die südlichen Regionen hingegen entsprechen einer besonderen Variante eines konsumorientierten Wachstumsregimes, die wir administrativen Keynesianismus nennen, in dem Wachstum und Beschäftigung systematisch von der Rolle des Staates als Arbeitgeber letzter Instanz, von den konsumfördernden Effekten von Sozialpolitik und von arbeits- und unternehmenssteuerlichen Begünstigungen abhängen. Die Ergebnisse der Studie legen eine Analyse regionaler Wachstumsmodelle nahe, wenn Regionen (in generell größeren Ländern) eine ausgeprägte Vielfalt im Hinblick auf Wirtschaftskraft und Produktionsstrukturen aufweisen und wenn subnationale Regierungen in der Lage sind, eigene wichtige Institutionen und Regelungen durchzusetzen, um regionale Wachstumsregime zu stärken. |
| Keywords: | comparative economic systems, comparative political economy, growth models, Italy, regional economies, Italien, regionale Ökonomien, vergleichende politische Ökonomie, vergleichende Wirtschaftssysteme, Wachstumsmodelle |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:mpifgd:305294 |
| By: | Gonzalez, Alejandro |
| Abstract: | I develop a Keynesian growth model where conflict over income distribution determines the labor share. Changes in workers’ bargaining power can either raise or depress output, depending on their effects on aggregate demand. An increase in demand reduces slack in the labor market, leading to a higher labor share. I incorporate the empirical implications of the model into a structural vector autoregression (SVAR) with sign restrictions to assess whether shocks to workers’ bargaining power raise or depress output, and to decompose the long-run decline in the labor share into components driven by demand, technology, and bargaining power. I find that an increase in labor’s bargaining power is contractionary in the short run, accounting for a quarter of output fluctuations. Demand shocks explain over 60% of the long-run decline in the labor share, with changes in labor’s bargaining power accounting for the remainder. |
| Date: | 2024–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:78kad |
| By: | Ward, Charley |
| Abstract: | In 1703, the Methuen Treaty removed duties on the exchange of English cloth for Portuguese wine, the trade later immortalised by David Ricardo’s use of it to explain his theory of comparative advantage. While Ricardo described Portugal as productively superior in both goods, he showed how specialisation and trade could still produce a higher level of output and mutual benefits. Ever since, Ricardo’s theory has been used by neoclassical economists as a theoretical tool to assert the logic of free trade. However, a subset of political economists, including Friedrich List, deny that trade liberalisation is always good for growth. These scholars have re-historicised the exchange of English cloth for Portuguese wine, finding that the Methuen Treaty ruined Portugal’s domestic textile industry and left them with a “slow-growing export market for wine.”1 This paper examines historical accounts of the Methuen Treaty and Anglo-Portuguese trade to assess the accuracy of the mainstream and heterodox characterisations of Ricardo’s classic example. It uses articles from prominent 19th and 20th century British, Portuguese, and Brazilian historians to develop a coherent narrative of the circumstances that produced the Methuen Treaty. Ultimately, this paper finds that the treaty was one event in a series that impeded the growth of Portuguese domestic industry, inflated their trade deficit, and produced wealth for the English. This reveals how Ricardo’s theory obscures a very simple insight: that some specialisations are better than others. |
| JEL: | F10 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125859 |
| By: | Obregon, Carlos |
| Abstract: | The main thesis in this manuscript is that a social choice theory based on aggregating individual preferences and values is insufficient to confront the social choices that today’s world is facing. It is defended in here that institutions play a critical role in any social choice, and that the solutions required for today’s global problems necessarily require strengthening the international institutions. In part one of the book, it is shown that socio-economic choices can never be only the consequence of aggregating individuals’ preferences + values and that institutions play a decisive role. Part two of the book extends the results of part one to socio-political choices, and it is shown that they also include the critical role of institutions. It is shown that the design of the international institutional arrangement will be critical for the solutions for global poverty, underdevelopment, financial stability, global health issues, global climate, international crime, and global peace. |
| Keywords: | social choice, theory, individual preferences, values, institutions, global problems, socio-economic, political choices, poverty, underdevelopment, financial stability, global health, global climate, international crime, global peace |
| JEL: | F0 F00 F01 F02 F2 F20 F22 F3 F30 F31 F33 F36 F37 F50 F51 F53 G0 G00 G01 G02 G1 G10 G15 G19 G20 H00 H30 I00 I10 I11 I12 I13 I15 M00 |
| Date: | 2023–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122458 |