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on Post Keynesian Economics |
| By: | Engelbert Stockhammer |
| Abstract: | One of Tom Palley’s many contributions has been on developing Minsky’s theory of financial cycles and propose empirical tests for cycles with a central role for household debt (Palley 1994, 2011). Minsky developed a rich theoretical argument, but there is no canonical Minsky model. One feature that sets Minsky’s approach apart from mainstream models of financial instability is that it features endogenous cycles. Such models need an overshooting and a dampening force. Most of Minsky’s original writings were centered on business debt, with investment as the overshooting and business debt as the dampening force. In the Global Financial Crisis, however, household debt played the key role. This paper suggests that Minksy models can be grouped along two axes: whether the core cycle mechanisms is a real expenditures-debt interaction cycle or a speculative asset price cycle; and whether the indebted sector is businesses or households. Thus there are types of Minsky models. After reviewing empirical evidence the paper concludes that two are empirically particularly relevant: first, corporate debt seems to follow business investment-business debt interaction cycle; second for household debt speculative house price dynamics are the key driver and momentum trader-fundamentalist models help to understand these housing cycles. |
| Keywords: | financial cycles, Minsky models, household debt, house price cycles |
| JEL: | E12 E50 G01 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2513 |
| By: | Rudiger von Arnim; Luis Felipe Eick |
| Abstract: | Barbosa-Filho and Taylor (2006) propose a theoretical model with the Goodwin mechanism (profit-led economic activity and profit-squeeze distribution of income) that generates the Goodwin pattern (a counter-clockwise cycle in activity-labor share space), which fits data well. Stockhammer and Michell (2017) investigate a three-dimensional model in output, labor share and firms' debt, and demonstrate that the inclusion of the financial linkage produces the Goodwin pattern in simulations even if demand is not profit-led (or weakly wage-led). This paper extends neo-Goodwinian theory to include the valuation ratio q. In two different models, we corroborate that the Goodwin pattern can indeed arise in simulations without profit-led demand when a financial linkage is present. Further, the Keynesian distributive cycle theory we build on clearly distinguishes between short run (usually profit-led) cycles, and a long run (potentially wage-led) steady state. In the two models discussed here, redistribution has no steady state effects. |
| Keywords: | Goodwinian theory; cyclical growth, growth and distribution. JEL Classification: E12, E25, E32, J50. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:uta:papers:2025-02 |
| By: | Stanley, Isaac |
| Abstract: | This paper, building on recent contributions from Cesaratto and Di Bucchianico, explores the possibilities offered by an ‘anthropological economics’. De L’Estoile has highlighted economic anthropology’s problematic tendency to self-define in opposition to the study of ‘modern’ economy, and the risks of depoliticisation engendered by a reliance on the category of the ‘economic’. As an alternative, he proposes an anthropology of oikonomia — the practices and imaginaries through which people ‘govern the house’ (oikos), and strive for a ‘good life’. But does grappling with oikonomia require moving beyond the ‘economic’ altogether? An ‘anthropological economics’ approach may provide a pathway through these problems. Synthesising elements of substantivism and the classical surplus approach, ‘anthropological economics’ aims to illuminate the ways in which political, social and moral practices and ideas shape distribution. At its heart, then, is an inquiry into the relationship of oikonomia and production — of oikos and surplus. For illustration, the paper considers applications of an anthropological economics approach to two important topics: capitalist penetration in (post)colonial contexts, and crises of social reproduction in post-industrial societies. It concludes by considering the relevance of anthropological economics to the broader struggle for a ‘human economy’, directed towards human wellbeing rather than merely material abundance. |
| Keywords: | economic anthropology; surplus approach; Sraffa; capitalist penetration; social reproduction |
| JEL: | B51 B54 F54 Z13 |
| Date: | 2025–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127135 |
| By: | Jose Barrales-Ruiz; Ivan Mendieta-Muñoz; Codrina Rada; Rudiger von Arnim |
| Abstract: | The literature on the empirical linkages between economic growth (or other measures of macroeconomic performance) and the functional distribution of income is copious on the short run. The sustained and simultaneous decline in average rates of real GDP growth and the labor share of income in the US in recent decades has led to renewed interest in the long run, in light of the hypothesis of inequality-induced secular stagnation. This paper employs a vector error correction model with time-varying parameters and stochastic volatility to estimate the long run interaction between real GDP growth, labor share and the unemployment rate. Our key result indicates that a lower labor share is associated with a decline in the growth rate - economic growth is wage-led in the long run. |
| Keywords: | Growth and distribution; stagnation; demand regime. JEL Classification: C32, E12, E25, E32, O40. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:uta:papers:2025-03 |
| By: | Widmer, Elisabeth Theresia |
| Abstract: | Unlike Johann Benjamin Erhard’s views on art, right, revolution, and structural misrecognition, his discussion of economic injustice, here understood as the lawful economic oppression of one’s end-setting human nature, has garnered little attention. To begin filling this gap, I focus on central passages from his 1795 book On the Right of the People to a Revolution wherein Erhard discusses two cases of economic injustice. By reconstructing these claims within his Kantian perfectionist framework, I pursue two goals. First, I seek to demonstrate that his fundamental ‘duty to oneself’ lays out a comprehensive framework for duties grounding moral obligations to remedy economic practices. My second aim is to utilize this framework to explain how he defends a natural law position that views the legal system as both a remedy for and an ideological tool of economic oppression. I argue that this twofold perspective is a strength of Erhard’s theory as it allows for the detection of oppressive economic structures without letting go of a principle of external freedom from where coercive juridical laws can be derived. |
| Keywords: | perfectionism; perfect and imperfect duties; capitalism; Marxism |
| JEL: | J1 |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127477 |
| By: | Gil-Hernández, Carlos J.; Salas-Rojo, Pedro; Vidal, Guillem; Villani, Davide |
| Abstract: | Wealth is a central determinant of life chances and intergenerational status persistence in modern societies. Despite increasing attention, sociologists traditionally overlooked its role in class-based economic disparities, while most economists focused on the elites’ accumulation. This article combines sociological and economic perspectives to test whether big occupational classes, the most standardised and operationalisable approach, depict the wealth distribution. Drawing from the Luxembourg Wealth Study (2002–2018) in five European countries, we explore (1) how wealth is distributed and stratified by big occupational classes over time and cross-nationally and (2) to what extent classes account for aggregate wealth inequality trends compared with income. Unlike bold claims on class 'death' or 'decomposition', inequality of outcomes in wealth accumulation is firmly rooted across big occupational classes in contemporary capitalism, potentially harming social mobility in future generations. Still, occupational classes better capture between-group income inequality and stratification than wealth, emphasising the importance of economic resources beyond labour market attachment. Against the backdrop of previous research and our findings, we discuss the role of wealth in contemporary class analysis. |
| JEL: | J1 |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127479 |
| By: | Robert Allen |
| Abstract: | The paper uses basic theories of Marx on social structure and Malthus on demography to explain many features of Arabia in terms of the arid environment. The focus is on traditional Arabia, but it is argued that the same consideration continue to apply to modern Arabia. Beginning with the desert, it is argued that the only viable economic activity in ‘traditional’ Arabia was herding, and the only feasible system of property was communal ownership. Malthusian demography implies that the population expanded until the average product of labour equaled subsistence. Since labour was at subsistence and land had no value, neither could provide a tax base for a state. Hence, the social system was tribal–tribes had no budgets. There were two exceptions: International trade could be taxed, as in Yemen. Oasis land could also be taxed. Water meant that the average product of labour exceeded the marginal, which equaled subsistence. The difference was a taxable surplus. Some Bedouin tribes claimed ownership of oases and the implications are analyzed. The Saudi states that emerged beginning in the eighteenth century were Bedouin sheikhdoms writ large. Their finance came from oases like al-Hasa and al-Qatif near the Gulf Coast. With Shiite populations, Wahabism proved a useful ideology to justify their plundering by Sunni tribes from the interior. The finances of the Gulf Sheikhdoms are also analyzed as are the finances and investment strategies of the rulers of Oman as well as the role of slavery. Oman is a good example of a hydraulic civilization. Oil replaces water in modern Arabia, and guest workers replace slaves, but the system continues much as before since it continues to meet many needs. Wahabism continues its useful ideological role since the oil fields happen to be adjacent to the al-Hasa oasis. |
| Date: | 2025–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:esohwp:_220 |