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on Post Keynesian Economics |
| By: | Peter Skott; Adam Aboobaker |
| Abstract: | Like the functional distribution of income, wage inequality is subject to fairly regular cyclical fluctuations. In this paper, we (i) analyze sources of these fluctuations, (ii) present models of endogenous cycles that in- clude heterogeneous labor and wage inequality, (iii) show that these mod- els generate patterns of both wage inequality and the functional income distribution that are in line with the evidence, and (iv) caution against any extrapolation of cyclical patterns to long-term trends and beliefs in expansionary aggregate demand policy as the key instrument to promote greater economic equality. |
| Keywords: | Wage inequality, Goodwin cycles, functional distribution, aggregate demand policy |
| JEL: | D31 D33 E32 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2512 |
| By: | Vinicius Curti Cicero (Department of Global Commerce, Denison University, USA); Daniele Tavani (Department of Economics, Colorado State University) |
| Abstract: | This paper addresses the factors driving economic stagnation and inequality in the US over recent decades. We study a demand-driven model with joint adjustment of the functional distribution and capacity utilization in the short run, and explore the dynamics of wealth accumulation and labor productivity growth in the long run. Our analysis formally explains several stylized facts observed in the US economy in the neoliberal period: the decline in labor share of income, the increase in the top 1% wealth share, the slowdown in labor productivity growth, and the reduction in the income-capital ratio. Institutional changes that weakened workers’ bargaining power or strengthened firms’ market power have reduced the labor share of income. While these changes may have initially stimulated short-term economic activity and accumulation, their long-term effects are concerning. In particular, a lower labor share negatively impacts labor productivity growth and, in turn, slows down the growth rate of the economy in the long run. To achieve balanced growth, the rate of capacity utilization must eventually decrease. Importantly, our model’s long run boils down to a simple 2D dynamical system in the capitalist wealth share and the labor share of income. Our findings demonstrate that an institutionally-driven decline in the labor share exacerbates wealth inequality and ultimately depresses demand in the long run; and that taxation of capital gains can lower both wealth and income inequality. These results point to the importance of policies counterbalancing the labor-crushing developments of the past decades. |
| Keywords: | Secular stagnation, income shares, wealth inequality, aggregate demand |
| JEL: | D31 D33 E12 E21 E25 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2506 |
| By: | Davis (Department of Economics Marquette University); (Department of Economics Marquette University) |
| Abstract: | Hans-Michael Trautwein’s presidential address to the European Society raised provocative questions regarding the nature of current economics that should concern not just historians of economics but economists as well (Trautwein, 2017). Are the processes driving current research in economics creating a greater and greater specialization in subjects and economic thinking that is fragmenting and disunifying the field? Here I discuss Trautwein’s question and his answer to it particularly as bear on the future status and responsibilities of the history of economics as a field within economics. First, I give an account of what is involved in research specialization in science and economics. Second, I place increasing specialization in the subjects investigated in economics in an historical context, specifically, the postwar WWII history of the field. Third, I discuss Trautwein’s recommendations regarding a possible special, future role for the field of history of economics. Last, I offer praise for Trautwein for his perceptiveness and leadership as both an economist and historian of economics, and frame this in terms of what his insights can mean for thinking about the state of pluralism in economics. |
| Keywords: | Trautwein, history economics, specialization |
| JEL: | B20 B31 B41 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2025-01 |
| By: | Krebs, Tom (University of Mannheim); Weber, Isabella (University of Massachusetts Amherst) |
| Abstract: | The structural theory of green transformation acknowledges the complexity of the transformation process and suggests a state-led approach with green industrial policy at its core. In contrast, the market-fundamentalist approach to the transformation problem relies on carbon pricing and the assumption of smooth adjustment to rising market prices. We argue that the recent energy crisis in Germany provides a test of market fundamentalism. We show that the behavior of key macroeconomic variables contradicts the market-fundamentalist theory of green transformation. We also detail how mainstream economists and the policy establishment held on to their belief in self-regulating markets despite the empirical failure of market fundamentalism, which led to policy mistakes with large economic and political costs. Policy making based on market fundamentalism caused substantial damage to Germany’s economy and helped the far-right Alternative for Germany (AfD) double its political support. |
| Keywords: | inflation, energy crisis, market fundamentalism, green industrial policy, green transformation, fiscal austerity, price controls. |
| JEL: | E12 E32 E64 L50 L60 Q43 Q48 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17834 |
| By: | Garfield, Zachary H (University of Mohammed VI Polytechnic); Redhead, Daniel Dr. |
| Abstract: | This chapter explores leadership and followership through the lens of evolutionary social science, integrating insights from anthropology, psychology, sociology, and biology. Leadership is defined as a process of social influence that facilitates group coordination and goal achievement, distinct from power or status. The chapter examines how leadership emerges and functions across diverse socio-cultural and ecological contexts, highlighting the roles of dominance and prestige in shaping leadership strategies. It also underscores the reciprocal relationship between leaders and followers, where followership is an active and adaptive social strategy. Drawing on ethnographic and theoretical frameworks, the chapter reviews leadership in egalitarian and hierarchical societies, from situational leadership in small-scale groups to formalized structures in chiefdoms and stratified societies. Key theories, such as dominance-prestige models, reverse dominance hierarchies, and managerial mutualism, are discussed to illuminate the ecological drivers and cultural variability of leadership. By adopting an evolutionary approach, this work reveals the universal and variable dimensions of leadership, offering a deeper understanding of its role in human social organization and group success. |
| Date: | 2025–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:r7ekn_v1 |
| By: | James A. Robinson |
| Abstract: | My research suggests that world inequality is explained by the incidence of extractive and inclusive institutions. But why do some countries have extractive institutions? I distinguish between two main reasons; first, power relations; second, the “normative order.” Normative orders provide justifications and legitimacy for institutions which may not generate prosperity, but may achieve other goals. These distinctions are critical because they create very different challenges in trying to make institutions more inclusive and create prosperity. I show how countries move from the economic periphery as a consequence of changing both. My own intellectual journey has been in the other direction, however, hence the title of the paper: I was fortunate to be born in Britain, but I have had to unlearn much of my own experience, socialization and training in order to see other societies on their own terms. That’s crucial to be able to help them, but also to learn from them. |
| JEL: | D70 O10 P52 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33671 |
| By: | Francisca M. Antman; Sheng Qu; Trevon D. Logan; Bruce A. Weinberg |
| Abstract: | We conduct a long-run evaluation of one of the oldest professional mentoring programs for underrepresented groups in economics, the American Economic Association Mentoring Program (AEAMP). The AEAMP was established to address the underrepresentation of racial/ethnic minority groups by mentoring doctoral students and new Ph.D.s in economics. We compare professional outcomes of mentees with similar individuals from the same Ph.D. cohort who did not participate in the program. While there are no differences for many outcomes, mentees are more likely to hold a tenure-track or tenured position. Our results point to the potential for mentoring programs to address persistent racial/ethnic disparities. |
| JEL: | I23 J15 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33689 |
| By: | Matthew Smith; Francisco Alvarez |
| Abstract: | Machine learning (ML) is becoming an essential tool in economics, offering powerful methods for prediction, classification, and decision-making. This paper provides an intuitive introduction to two widely used families of ML models: tree-based methods (decision trees, Random Forests, boosting techniques) and neural networks. The goal is to equip practitioners with a clear understanding of how these models work, their strengths and limitations, and their applications in economics. Additionally, we briefly discuss some other methods, as support vector machines (SVMs) and Shapley values, highlighting their relevance in economic research. Rather than providing an exhaustive survey, this paper focuses on practical insights to help economists effectively apply ML in their work. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaddt:2025-03 |