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on Post Keynesian Economics |
| By: | Gregory Phelan; Jean-Paul L’Huillier; Hunter Wieman |
| Abstract: | This paper offers an economical and internally consistent model to rationalize macrofinancial boom-bust cycles. The authors present a simple model that can clarify the interaction of optimism with capital reallocation and demonstrate how this interaction can generate predictable boom-bust financial cycles. This clarification enhances our understanding of the channels through which credit markets could threaten financial stability (Working Paper no. 23-06). |
| Date: | 2023–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:ofr:wpaper:23-06 |
| By: | Simon Fløj Thomsen; Hamid Raza; Mikael Randrup Byrialsen |
| Abstract: | This paper aims to develop an ecological macroeconomic model for the Danish economy that can link the economic and financial system with some key aspects of the climate. To do so, we combine Stock-flow-Consistent approach (SFC) with Input-Output tables (IO) to build a hybrid model, which we call Ecological Stock-Flow-Consistent Input-Output model (E-SFC-IO). Most parameters of the model are estimated using time series data from 1995 to 2019, after which, we carry out simulations. We find that the model (with some minor adjustments) can replicate the dynamics of our key variables pertaining to the economy, financial system, and climate. To further validate the model, we analyse the response of the economy to various shocks, finding that it can capture the stylised facts. The model offers a foundation for providing a reasonable assessment of the climate policies to the relevant stakeholders. |
| Keywords: | Empirical Stock Flow consistent models, Input-Output modelling, Ecological macroeconomics, Denmark |
| JEL: | E12 E17 F41 L16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:imk:fmmpap:114-2025 |
| By: | Reddy, Niall |
| Abstract: | A large literature in heterodox political economy addresses an apparent puzzle in which investment has declined while profits have held up during the financialization era. The dominant answer to this puzzle centers on the rise of shareholder value orientation and the “downsizing and distributing” (DD) imperative it imposes on firms. Yet the detailed empirical literature on the topic - focussed on partial effects - pays precious little attention to actual observed patterns of growth, investment and distribution at a firm level. Digging deep into firm level data and correcting several conceptual and measurement errors, this paper challenges several key stylized facts of the financialization account, revealing a different set of patterns which are very difficult to square with stronger versions of DD theory. It shows that the profit-investment puzzle is not a paradox of the financialization era, but only of the post-2000 period. Similarly, the ramping up of payout rates only happens in a broad way after the turn of the millennium. While financialization theories cannot account for the 2000s watershed I argued that a trifecta of other structural shifts can. Ultimately this paper questions the widespread practice of giving analytical priority to financialization in heterodox political economy. |
| Date: | 2024–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2zy5h_v2 |
| By: | Smith, Tone |
| Abstract: | As the interest in heterodox economic theories increase, so does the demand for overview articles presenting these theories. This article is an attempt to provide a short overview of the most important elements of the field of ecological economics. |
| Keywords: | Ecological economics, social-ecological economics, limits to growth, degrowth, plural values. |
| JEL: | B59 Q57 |
| Date: | 2025–02–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123544 |
| By: | Fisher, Carolyn; Ranaldi, Marco |
| Abstract: | This paper explores the concept, measurement, principal stylized facts, and theoretical aspects 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 rising capital share. 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: | 2025–02–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:75ghp_v2 |
| By: | Roger E Backhouse; Béatrice Cherrier (CREST - Center for Research in Extreme Scale Technologies [Bloomington] - Indiana University [Bloomington] - Indiana University System) |
| Abstract: | Towards a broader history of modern macroeconomics ✰ ✰ Introduction to the special issue of the European Economic Review on "Histories of Macroeconomics since 1970." 1 An example of a macroeconomics textbook that containing such a history is Blanchard 2017. A much more comprehensive account, centred on a similar narrative, is De Vroey 2016. |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04379141 |
| By: | Nikolaos Chatzarakis (Department of Economics, New School For Social Research, USA) |
| Abstract: | The classical system of production assumes that (i) competition between labourers and capitalists (and among labourers) results to a uniform wage, (ii) competition among capitalists within each industry to a uniform price, and (iii) competition among capitalists in different sectors to a uniform rate of profit. These are the laws of competition Marx attempted to incorporate into his 'transformation' process. Okishio and Shaikh showed that such a `transformation algorithm' indeed exists. However, the inter-sectoral competition wass emphasised, while the intra-sectoral competition almost entirely ignored. In this work, we attempt to incorporate this phase of competition and extend the Okishio-Shaikh algorithm. |
| Keywords: | Labour theory of value, laws of competition, transformation problem, regulating prices |
| JEL: | B14 B24 B51 D46 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2503 |
| By: | Basile Clerc |
| Abstract: | This article seeks to highlight a previously overlooked theoretical continuity in François Perroux's trajectory, linking his "corporatist period" to his post-war writings. We demonstrate that a key aspect of François Perroux's critique of neoclassical economics, which persisted through his efforts to revise general equilibrium theory in the 1970s, originates from his corporatist economic model developed in the 1930s. This core idea can be summarized as follows: the concentrated nature of capitalist structures makes the economic equilibrium indeterminate, necessitating and justifying the intervention of the state to regulate both prices and wages. We argue that the convergence of Perroux's critique of neoclassical economics and his corporatist theorization reaches its peak in a text published during the Liberation of France, a time of profound intellectual transformation for the author. The theoretical elements developed on this occasion permeate the whole of his later works, which must therefore be reinterpreted in the light of his early corporatist writings. Finally, by exhuming a significant yet entirely overlooked theory, this article contributes to the development of a historical perspective on microeconomic theories of price control. |
| Keywords: | François Perroux; price control; neoclassical economics; corporatism |
| JEL: | B21 B31 E64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-12 |
| By: | , Adrian Alexander M.A. in Social Psychology |
| Abstract: | "Divided We Fall: A Multidisciplinary Analysis of Polarisation, Social Divides, and the Fragility of Unity in Human Societies" explores the escalating threat of polarisation and tribalism in modern human societies. By examining historical case studies, such as Nazi Germany and McCarthyism, alongside contemporary events like Brexit and the U.S. elections of 2016 and 2024, the paper identifies recurring patterns in how societal divisions are exploited for political and ideological gain. The analysis integrates insights from social psychology, highlighting cognitive biases like confirmation bias, in-group/out-group dynamics and heuristic-driven decision-making, which leave individuals vulnerable to manipulation. The paper also delves into the role of emerging technologies, such as social media and AI-driven propaganda, in amplifying divisions, creating echo chambers and eroding democratic norms. Beyond diagnosing the problem, it explores opportunities for fostering unity, drawing on historical examples of collective action, such as post-WWII reconstruction and the global response to the COVID-19 pandemic. The findings underscore the fragility of social cohesion and emphasize the urgent need for proactive leadership, media responsibility and grassroots mobilisation to counter polarisation. This multidisciplinary framework aims to provoke discussion on how humanity can navigate its growing divides and build resilience against future existential threats. The paper also explores how modern technologies—such as social media algorithms and artificial intelligence—amplify polarization, creating echo chambers and eroding trust in democratic processes. Insights from social psychology, including heuristics, cognitive biases, and tribalism, highlight the vulnerabilities that make societies susceptible to manipulation. Finally, the paper discusses pathways to unity through shared goals, historical examples of successful collaboration, and the necessity of ethical leadership and robust institutions. The findings underscore the urgent need for proactive measures to counteract polarization, emphasizing education, transparency, and collective action as essential tools for preserving democracy and fostering global unity in the face of existential threats such as climate change and technological disruption. |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wzm5d_v1 |
| By: | Mansoori, Issa |
| Abstract: | The main focus of this paper is to propose a new epistemological framework that addresses challenges in the concept of development. Based on the philosophy of mind and consciousness, this framework suggests a practical approach supported by recent scientific findings in different disciplines, including neuroscience. The article explores a new transformation in the development field, departing from dualistic philosophy and the philosophy of language and embracing a new framework of "development as consciousness" with clear and practical implications. Eventually, based on the introduced epistemology, a logic for economic practices is examined based on the new evidence in the real world. |
| Keywords: | Development, Epistemology, Collective consciousness, Intentionality, Economic logic |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:312155 |
| By: | Ozili, Peterson K |
| Abstract: | This article proposes a financial literacy theory of financial inclusion. It also presents the different possible scenarios of the relationship between financial literacy, financial illiteracy, financial inclusion and financial exclusion using a grid. The theory argues that financial literacy can influence the level of financial inclusion, and it projects low level of financial literacy as a potential cause of low level of financial inclusion. It showed that people who are financially illiterate and are financially included may not be able to maximise their welfare in the formal financial system because they lack financial literacy. By providing financial literacy programs and other incentives to join the formal financial system, many financially illiterate people will be willing to join the formal financial system and use existing formal financial services to meet their needs. The theory is significant because it explains a major reason why the level of financial inclusion in low in some countries. |
| Keywords: | theory, financial literacy, financial inclusion, financial education, access to finance, financial literacy theory of financial inclusion |
| JEL: | G21 G28 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123588 |
| By: | Ware, Alapeti (VoxBox, LLC) |
| Abstract: | By the year 2030, the rapid advancement of artificial intelligence (AI) could lead to transformative global changes—particularly if developed and deployed without ethical guidelines or government oversight. This paper explores how unregulated AI might reshape warfare, drive geopolitical rivalries, and enable misuse by state and non-state actors alike. Through an analysis of potential conflicts, power struggles, and ethical pitfalls, this study examines scenarios in which AI-driven militaries clash, states weaponize data for strategic advantage, and corporate entities develop autonomous systems for profit without regard for societal well-being. The findings reveal a dangerous trajectory where AI could fuel human rights abuses, escalate conflicts, and create a world order defined by unchecked surveillance and algorithmic manipulation. Ultimately, the paper underscores the urgent need for international cooperation and regulation to avoid the dystopian outcomes that could arise from an AI-driven world lacking ethical standards. |
| Date: | 2025–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ymjzr_v1 |
| By: | Jonung, Lars (Department of Economics, Lund University); Laidler, David (Department of Economics, University of Western Ontario) |
| Abstract: | It is widely believed that Friedrich von Hayek’s first encounter with Gunnar Myrdal involved the latter’s last-minute contribution, as a replacement for Erik Lindahl, to a Sammelband edited by the former in 1933, and that Hayek was lukewarm towards Myrdal and his ideas from the very beginning. Correspondence between the two shows that, in fact Myrdal was among Hayek’s original invitees, and that their relationship was co-operative and cordial for two years prior to the publication of this collection. We suggest that the content, and perhaps even more, the tone of Myrdal’s paper, originally intended for the Journal of Political Economy, alienated Hayek, who nevertheless treated Myrdal’s work with academic propriety thereafter. The origin of Myrdal’s famous ex post – ex ante terminology is also revealed. |
| Keywords: | Hayek; Myrdal; Stockholm School; ex ante – ex post |
| JEL: | B20 B30 E10 E20 E30 |
| Date: | 2025–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lunewp:2025_001 |
| By: | Fix, Blair |
| Abstract: | If mainstream economics teaches us one lesson, it’s that when something becomes unaffordable, it’s because of a shortage. And that brings me to the US housing crisis. In America, housing is getting less affordable. So there must be a short supply, right? Not necessarily. You see, shortage is not the only route to unaffordability. There’s also … theft. Here’s how it works. |
| Keywords: | crisis, distribution, housing, affordability, price, United States |
| JEL: | P1 R D3 O15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:312033 |
| By: | Dylan C. Terry-Doyle; Adam B. Barrett |
| Abstract: | The ever-approaching limits of the Earth's biosphere and the potentially catastrophic consequences caused by climate change have begun to call into question the endless growth of the economy. There is increasing interest in the prospects of zero economic growth from the degrowth and post-growth literature. In particular, the question arises as to whether a zero-growth trajectory in a capitalist system with interest-bearing debt can be economically stable. There have been several answers to this question using macroeconomic models; some find a zero-growth trajectory is stable, while other models show an economic breakdown. However, the capitalist system in a period of growth is not guaranteed to be stable. Hence, a more appropriate methodology is to compare the relative stability between a growth and zero-growth scenario on the same model. Such a question has not yet been answered at any disaggregated level. It's important to investigate the consequences of zero-growth on market share instability and concentration, bankruptcy rates, income distribution, and credit network risk. To answer such questions, we develop a macroeconomic agent-based model incorporating Minskyan financial dynamics. The growth and zero-growth scenarios are accomplished by changing an average productivity growth parameter for the firms in the model. The model results showed that real GDP growth rates were more stable in the zero-growth scenario, there were fewer economic crises, lower unemployment rates, a higher wage share of output for workers, and capital firm and bank market shares were relatively more stable. Some of the consequences of zero-growth were a higher rate of inflation than in the growth scenario, increased market concentration for both firms and banks, and a higher level of financial risk in the credit network. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.19168 |