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on Post Keynesian Economics |
| By: | Xu, Tao Louie; Zhu, Weiwei |
| Abstract: | This research identifies the causality between entrepreneurial behaviour and informal institutions of social trust within the context of China’s development. Revisiting the Polanyi-Schumpeter theoretical framework, entrepreneurship embedded in social relations interlinked by trust is a dynamo of sustainable socioeconomic progress. The institutionalised trust, however, was not clarified. With micro-individual data from the Chinese General Social Survey 2011–2021, our research employs the instrumental variable approach rooted in historical rice farming to tackle endogeneity. The results demonstrate that social trust elevates entrepreneurial engagement by 32.65 and 10.37 percentage points in self-employment and business incorporation, respectively. Increased trust paradoxically hampers self-employment in the central due to insular networks and structural disparities. The findings uncover the nuanced role of social trust in facilitating and constraining entrepreneurship with contextually regional determinants. The research contributes to knowledge and evidence of institutional endowments that mediate entrepreneurial agency and argues for synchronising formal and informal institutions in development. |
| Date: | 2025–03–10 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:nka6s_v3 |
| By: | Martins, Guilherme Klein; Carvalho, Laura |
| Abstract: | This paper investigates the long-term effects of fiscal austerity on democratic institutions. While previous studies have established a link between economic crises, fiscal consolidations, and short-term electoral outcomes, our analysis extends this discussion by examining how austerity-induced economic insecurity undermines key dimensions of democracy over time. Using a comprehensive dataset of narrative fiscal shocks across 17 OECD economies (1978–2020) and 14 Latin American and Caribbean economies (1989–2020), we employ a semi-parametric estimation method to identify the causal impact of fiscal austerity on democratic backsliding. Our findings indicate that contractionary fiscal policies weaken institutional checks, reduce freedom of expression, and erode electoral integrity. These effects persist beyond immediate electoral cycles, leading to broader democratic erosion. The study highlights the importance of policy choices in shaping political institutions and suggests that alternative macroeconomic strategies, such as countercyclical fiscal policies and targeted social protection, may help mitigate the risks associated with austerity while preserving democratic governance. |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2vf5a_v1 |
| By: | Hafner, C.; Harvey, A. C.; Wand, L. |
| Abstract: | Speculative markets may be characterized by sharp falls after a slow build up. Sometimes the converse happens. We suggest a number of mechanisms that are able to produce this kind of behaviour and we demonstrate their plausibility by simulation. The models are then fitted to daily data on Bitcoin. In constructing these models we show that it is essential to take account of volatility and non-normality. We also investigate the possibility of a dynamic tail index. The conclusion, at least for Bitcoin, is that speculative markets are more likely to behave like balloons than bubbles. In other words, there is rapid inflation followed by a slow decline. |
| Keywords: | Bitcoin, Explosive Models, Score-Driven Models, Volatility, Tail Index |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2523 |
| By: | Giovanni Dosi; Marcelo C. Pereira; Gabriel Petrini; Andrea Roventini; Maria Enrica Virgillito |
| Abstract: | Agent-Based Models (ABMs) provide powerful tools for economic analysis, capturing microto- macro interactions and emergent properties. However, integration with empirical data has been a persistent challenge. To address it, we propose a protocol for integration between empirical data and ABM, building a new multidimensional similarity index that aggregates different similarity measures into a composite score, specifically designed to quantify alignment between simulated and real-world data. This metric enables a complete model ranking procedure, facilitating a streamlined model selection. The protocol is designed to be model-agnostic and flexible, allowing its application to a wide range of models beyond ABMs, including aggregate dynamical systems and any type of computational model. As an example, we apply our methodology to different configurations and model versions of the Schumpeter meeting Keynes (K+S) ABM family (Dosi, Fagiolo, and Roventini, 2010) using US data (from 1948Q1 to 2019Q1). Next, we propose a policy-informed application, attributing different weights to variables associated with policy-making decisions and technological change. The exercise is done in order to showcase the capacity of the procedure to target specific policy variables of interest, allowing for the design of empirically informed scenario analyses and projections on real-world dynamics. |
| Date: | 2025–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/17 |
| By: | Emma J Rockall; Ms. Marina Mendes Tavares; Carlo Pizzinelli |
| Abstract: | There are competing narratives about artificial intelligence’s impact on inequality. Some argue AI will exacerbate economic disparities, while others suggest it could reduce inequality by primarily disrupting high-income jobs. Using household microdata and a calibrated task-based model, we show these narratives reflect different channels through which AI affects the economy. Unlike previous waves of automation that increased both wage and wealth inequality, AI could reduce wage inequality through the displacement of high-income workers. However, two factors may counter this effect: these workers’ tasks appear highly complementary with AI, potentially increasing their productivity, and they are better positioned to benefit from higher capital returns. When firms can choose how much AI to adopt, the wealth inequality effect is particularly pronounced, as the potential cost savings from automating high-wage tasks drive significantly higher adoption rates. Models that ignore this adoption decision risk understating the trade-off policymakers face between inequality and efficiency. |
| Keywords: | Artificial intelligence; Employment; Inequality |
| Date: | 2025–04–04 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/068 |
| By: | Kyle Fee |
| Abstract: | Using data from the Occupational Mobility Explorer, this report examines which skills are most in demand by employers, how demand for skills differs across Fourth District states and across the wage distribution, and which skills should be invested in to support economic mobility. |
| Keywords: | Labor economics; Skills; Fourth District |
| Date: | 2025–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:c00034:99915 |
| By: | Yoto Yotov (School of Economics, Drexel University) |
| Abstract: | The gravity equation is the “workhorse†model of international trade and the most popular tool for trade policy analysis. Yet, despite its solid theoretical foundations, remarkable empirical success, intuitive appeal, and ease of implementation, the gravity equation has not received proper introduction and well-deserved coverage that would enable and enhance research by undergraduate students and novices to the gravity literature. The objective of this chapter to introduce the gravity model of trade to the undergraduate student and to translate the theoretical gravity equation into an econometric model that can be used for a wide range of research projects and policy analysis. |
| Keywords: | Gravity model, Methods, Teaching, Theory, Estimation |
| JEL: | F10 F14 F16 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202519 |
| By: | Addis Gedefaw Birhanu (EM - EMLyon Business School) |
| Abstract: | Emerging market multinational enterprises (EMNEs) are vital in achieving the United Nations' Sustainable Development Goals (SDGs) in developing economies that often lack alternative investment avenues. By leveraging an abundant workforce that is largely unskilled and low-skilled, EMNEs not only provide substantial employment opportunities but also contribute to the eradication of poverty (SDG 1). EMNEs' ambitions to expand into adjacent markets offer SMEs valuable opportunities to integrate into regional and global value chains. This in turn spurs economic growth (SDG 8) and reduces inequalities (SDG 10). The access of EMNEs to leapfrogging and relatable technologies mitigates infrastructural bottlenecks and cultivates innovation (SDG 9) in these economies. For EMNEs to successfully deliver on these goals, key stakeholders, especially NGOs and governments, must take an active role in persuading, enabling, and incentivizing these enterprises. |
| Keywords: | MNEs, ESG, Sustainable Development Goals, EMNEs, corporate social responsibility, sustainability |
| Date: | 2025–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05004150 |
| By: | Pascal Stiefenhofer |
| Abstract: | This paper explores how ethical consumption can transform democratic governance toward sustainability by challenging traditional economic models centered on utility and efficiency. As societal values shift toward transparency equity and environmental responsibility ethical consumers increasingly influence markets. Drawing on Whites Kantian economic framework and Ingleharts theory of value change the paper proposes a model integrating moral imperatives into economic theory. Using a vector bundle approach it captures evolving ethical preferences advocating for an inclusive sustainability focused economic paradigm aligned with post materialist values. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.01138 |