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on Post Keynesian Economics |
| By: | Mark Setterfield (Department of Economics, New School For Social Research, USA) |
| Abstract: | This paper discusses Victoria Chick's concepts of provisional equilibrium and long run equilibrium of action. Attention is paid to the relationship between these concepts and other strands of thinking in Post Keynesian theory, as well as the relationship of the two concepts to one another. With respect to the latter, it is argued that a long run equilibrium of action is provisional, while provisional equilibrium outcomes in a Post Keynesian system can and should be thought of as depending on a long run equilibrium of action. As such, Chick's writings can be regarded as the source of a consistent vision of both short- and long-term equilibrium in Post Keynesian theory, this vision, in turn, being consistent with her preferred open-systems ontology. |
| Keywords: | Victoria Chick, provisional equilibrium, long run equilibrium of action, uncertainty, open systems |
| JEL: | B41 E12 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2508 |
| By: | Parrinello, Sergio (University of Rome “La Sapienza”) |
| Abstract: | Recent years have seen a reinterpretation of Ricardo's numerical example on foreign trade from Sraffa's note (1930), prompting economic historians and theorists to recon-sider the scope of the example. This article seeks to clarify the revised interpretation and explain the common and distinct principles that govern the laws of comparative and absolute advantage. The condition of balanced trade in aggregated value is emphasized relative to the equations of normal prices based on this revisiting. Its special role is shown by the reformulation of Sraffa's price equations for two trading economies with-out international capital movements. It is proved that there is no additional degree of freedom for the choice of exogenous distributive variables if countries move from a state of autarky to one of free trade. |
| Keywords: | David Ricardo; comparative advantage; absolute advantage; trade balance; global economy |
| JEL: | B12 B17 F10 |
| Date: | 2025–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:ris:sraffa:0072 |
| By: | Luke Petach; Daniele Tavani |
| Abstract: | In this paper, we study a two-class (‘capitalists’ and ‘workers’) model of growth, distribution, and employment that brings together some recent literature in the classical-Marxian tradition (Petach and Tavani, 2019; Franke, 2020; Tavani and Petach, 2021; Petach and Tavani, 2022). The central innovation of the model is the treatment of aggregate demand as a positive externality for individual firms. Despite assuming competitive firms, optimizing behavior, and perfect foresight on behalf of both firms and households, we show that laissez-faire involves underutilization of the economy’s productive capacity. Moreover, both the long-run labor share of income and workers’ share of wealth are higher at full capacity. Thus, fiscal policies aimed at achieving full utilization are unambiguously worker-friendly. For this reason, however, capitalists may oppose fiscal policy aimed at full employment, because such policies reduce the relative standing of the capitalist class in terms of both wealth and income. As such, our model provides a formalization of the argument by Kalecki (1943) regarding the political aspects of full employment. We conclude by responding to some recent criticisms of the aggregate demand externality framework advanced by Gahn (2023). |
| Keywords: | Growth and Distribution, Classical Political Economy, John Maynard Keynes, The End of Laissez-Faire |
| JEL: | B12 E11 E12 O41 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2514 |
| By: | Duygu Buyukyazici; Olivier Brossard; Ron Boschma |
| Abstract: | The transition toward a circular economy (CE) represents not only an economic shift but also a profound social transformation that fundamentally redefines production, consumption, and policy patterns; thus, it necessitates comprehensive institutional change. This study presents the first macro-level empirical assessment of the CE transition across European regions over recent decades. Afterwards, it examines how regional regulative, normative, and cultural/cognitive institutions influence regional CE performance by also considering crucial confounding factors including EU cohesion funds, regional decentralisation, and the EU Circular Economy Action Plan (CEAP). The results reveal strong spatial and temporal heterogeneity as well as the diverse effects of different institutions. Regulative institutions exhibit the most consistent positive effect across and within countries. Normative values matter most within regions, while cultural-cognitive factors modestly support CE efforts. Importantly, combination of all institutional pillars yields the greatest circularity gains. EU cohesion funds significantly boost CE progress, especially in less developed regions, while CEAP marks a structural shift in the role of institutions post-2015. Overall, the findings highlight the importance of coordinated institutional frameworks and targeted policy support for advancing the regional CE transition. |
| Keywords: | circular economy, circular transition, institutions, institutional theory, regions |
| JEL: | Q01 Q50 R11 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2513 |
| By: | Daniel F. Zarama Rojas |
| Abstract: | The role of nudges is not clear in recent behavioral economics literature, while reviews call for scrutiny into the theoretical foundations from which they stem. This essay answers to that call by conceptualizing biases as part of epistemic vices and analyzing the extent to which nudges may be an adequate tool to address them. I propose a new conceptual framework for biases: virtue epistemology (VE). VE allows to associate biases with identifiable individual traits called epistemic vices, which negatively affect an individual’s capacity to judge. In this document, I discuss how a VE framework may be used for the study of cognitive biases and its possible repercussions for behavioral public policy. I advance that the different ways in which epistemic vices could lead to cognitive biases suggest that nudges are better suited to suppress the harm associated with one type of vice (obstructivist) than those brought by another (reliabilist). |
| Keywords: | nudges, biases, virtue epistemology, epistemic vices, public policy. |
| JEL: | B40 D91 D62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-06 |