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on Post Keynesian Economics |
| By: | L. Randall Wray |
| Abstract: | This working paper integrates the credit money approach (associated with Post Keynesian endogenous money theory) with the state money approach (associated with Modern Money Theory) by drawing on Wray's 1990 book (Money and Credit in Capitalist Economies: The Endogenous Money Approach, Edward Elgar), his 1998 book (Understanding Modern Money: the Key to Full Employment and Price Stability, Edward Elgar), and his 2004 edited book (Credit and State Theories of Money: The Contributions of A. Mitchell Innes, Edward Elgar). New sources and interpretation of the history of money make it clear that there is no contradiction between state money and private credit money--each played a role in the creation of the modern monetary system. Indeed, today's system was created by bringing state money into the private money giro, thereby strengthening both. |
| Keywords: | credit money; state money; Modern Money Theory (MMT); Bank of England; fiat money; giro money; history of money; central bank; nominalism; origins of money |
| JEL: | B25 B52 E42 E58 E62 N11 N20 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1076 |
| By: | Russo, Alberto |
| Abstract: | Drawing on Peter Turchin’s structural-demographic theory, this paper provides a preliminary examination of how rising inequality and financial liberalization contribute to political instability through the interplay of mass immiseration and elite overproduction. We capture these dynamics through a simplified agent-based macroeconomic model, introducing two structural shocks - growing inequality and financial liberalization - that reflect the transformations reshaping advanced economies in recent decades, a process intertwined with political disintegration. A wealth tax on the richest households can reduce political fragmentation and improve economic performance, but lasting resilience will require embedding such measures within a broader rethinking of the policy paradigm that has prevailed since the 1980s. |
| Keywords: | growing inequality; financial liberalization; political instability; agent-based model |
| JEL: | C63 D31 E02 |
| Date: | 2025–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126357 |
| By: | Gutmann, Jerg; Voigt, Stefan |
| Abstract: | This chapter surveys economic perspectives on the separation of powers, revealing how contemporary research in political economics and the economic analysis of law conceptualize and assess institutional checks on government authority. Emphasizing principal-agent theory, it unpacks how constitutional structures-ranging from presidentialism and bicameralism to federalism-help align the interests of political agents with those of citizens and mitigate moral hazard. The analysis extends to the judiciary's role as a credible commitment device, highlighting empirical evidence on the economic significance of judicial independence. Moving beyond the traditional tripartite model, the chapter explores the rationale and effects of delegating authority to independent agencies and so-called fourth branch agencies such as audit offices and anti-corruption commissions. The chapter concludes by addressing the resilience of separation-of-powers systems in the face of democratic erosion and the idea of militant constitutionalism. It argues that the economic approach offers helpful tools for understanding both the potential and limitations of institutional design in promoting accountable, stable, and adaptive governance, while underscoring the need for further research into how separation of powers can be fortified against contemporary authoritarian threats. |
| Keywords: | Political economy, judicial independence, independent agencies, fourth branch agencies, militant constitutionalism |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ilewps:87 |
| By: | Tucci, Candelaria Fernández |
| Abstract: | This paper extends the post-Keynesian model of the firm to an open-economy context to investigate the determinants of firms' target profit rates in developing and emerging economies (DEEs) and the ways in which these rates have been affected by the financialisation phenomenon. Our findings show that firms' intrinsic vulnerabilities, persistent risks, and tighter financial constraints-stemming from the hierarchical structure of the international monetary system-lead to structurally higher target profit rates in DEEs compared to those in advanced economies. At the microeconomic level, we show that financialisation, in the form of increasing foreign indebtedness, can induce the firm to raise profitability targets through the finance, preference, and distribution transmission channels. Moreover, by establishing the link between the microeconomic effects of financialisation with its macroeconomic implications, we identify the conditions under which the changes in firm behaviour induced by financialisation generate either the same macroeconomic outcomes or micro-macro fallacies, giving rise to a paradox of profits, a paradox of growth, a paradox of risk and a paradox of liquidity. |
| Keywords: | target profit rates, financialisation, theory of the firm, foreign indebtedness, portfolio dollarisation |
| JEL: | D21 E12 F33 F41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:330332 |
| By: | Jose Eduardo Alatorre; Gabriel Porcile; Julia Juarez; Juan Carlos Moreno-Brid |
| Abstract: | The paper presents a Kaleckian extended model exploring sustainable development, defined as growth that is economically stable, socially inclusive, and environmentally respectful. The model links CO2 emission trends with public investments in green capabilities, represented by the share of renewables in total energy supply. It incorporates three key actors: green capitalists (G), brown capitalists (B), and workers (R), whose alliances influence taxes, social expenditure, and green capabilities investments. Three political coalitions are formed: green-red (GR), green-brown (GB), and red-brown (RB). The GR coalition promotes sustainable and inclusive growth but may face trade imbalances depending on public investment's ability to boost non-price competitiveness. The GB alliance yields sustainable but non-inclusive growth with a high long-term deficit. The RB coalition results in environmentally unsustainable outcomes but may produce stable growth with income redistribution during high commodity export demand. Applying the model to Mexico highlights fiscal space challenges for public investment and income redistribution amidst emissions reduction targets. |
| Keywords: | Climate |
| JEL: | B50 Q43 Q56 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1074 |
| By: | Ngunza Maniata, Kevin |
| Abstract: | The recent ascent of Anthropic, a United States-based artificial-intelligence company founded in 2021 by former OpenAI executives, has reignited the debate over whether the global AI boom represents sustainable technological transformation or a new financial bubble. With a private valuation surpassing 180 billion USD and projected annualized revenue exceeding 20 billion USD by 2026, Anthropic embodies both the promise of rapid innovation and the risks of speculative exuberance. This paper examines the firm’s growth within the theoretical frameworks of Schumpeterian innovation, Minskyan financial cycles, and contemporary analyses of digital-economy concentration. Drawing on publicly available financial data, corporate disclosures, and secondary literature, it interprets Anthropic’s trajectory as a case study in the financialization of cognition. The discussion highlights how alliances with Amazon and Google have turned frontier AI into an infrastructure-dependent oligopoly, while unresolved issues of data ownership and legal accountability question the durability of such valuations. The study concludes that Anthropic’s rise illustrates the dual nature of modern technological capitalism: the capacity for exponential value creation tempered by systemic fragility and institutional lag. |
| Keywords: | Artificial Intelligence; Anthropic; Financialization; Valuation; Technological Innovation; Industrial Organization; Intellectual Property; Speculative Cycles. |
| JEL: | G32 K11 L86 M21 O33 |
| Date: | 2025–10–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126512 |
| By: | James K. Galbraith; Pavlina R. Tcherneva |
| Abstract: | The Central Bank of the United States, the Federal Reserve, has a dual mandate to maintain both full employment and price stability. However, inflation-fighting had always eclipsed the full employment objective without much accountability. Today, the Federal Reserve provides regular testimony before Congress on how well it is achieving its dual mandate. Professor Galbraith wrote that section into law (among others), which requires the Federal Reserve to report to Congress on its work. According to Professor Galbraith, the law intentionally kept the scope of Federal Reserve policy wide. The purpose was not to impose some economic theory on the policymaker, but to promote an open dialogue between the Federal Reserve and Congress over what monetary policy is and does. And yet, the legacy of monetarism continues to influence monetary policy today: the belief that there is a trade-off between inflation and unemployment firmly guides contemporary Federal Reserve policy. Even as the Federal Reserve's own research finds that labor markets are not the driver of inflation, economists, including at the Fed, continue to insist that unemployment and labor market slack are the way to fight price increases. In this keynote, Professor Galbraith highlights other, more effective and enlightened ways of dealing with inflation. Originally issued as EDI Working Paper No. 14, May 2023. |
| Keywords: | Economic Insecurity; Money and Finance |
| JEL: | F30 N10 N14 P16 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1071 |
| By: | William Van Lear; Daniel Hutchinson |
| Abstract: | This manuscript presents a detailed summary and reassessment of the 1941 final report of the Temporary National Economic Committee (TNEC). We portion the manuscript into four major parts: background, major themes, assessment of the report, and additional analysis and reflection. In the first section, we cover what compelled the government's investigation and we identify the committee's makeup and mission. We also identify eight historical precedents for the report. In the major themes section, we provide a detailed layout of the TNEC's "monopoly investigation" and its search for what structural impediments may have existed to economic recovery during the 1930s. The themes include competition, concentration, technology, trade barriers, business investment, small business, and fiscal and monetary policy. Part 3 assesses the report by looking at one important early assessment completed in the 1940s. We identify three TNEC concerns, namely the (1) development of oligopoly, (2) savings-investment imbalance, and (3) war mobilization and democracy. Part 3 understands the TNEC report from an institutionalist or stage theory perspective of history and economics. This part ends with a review of conservative thinking at the time of the report and shortly thereafter. The final section looks at the connection between the institutional context of the economy and the economy's economic performance. It is clear that the TNEC understood that systemic economic change had occurred since the Gilded Age, and that the economy had become oligopolized well before the Great Depression. The committee came to believe that the evolution of the economic system into a concentrated corporate one had increased inequality, the effect of which was to boost the volume of savings while retarding the level of investment. |
| Keywords: | Government Report; Economic Concentration; Structural Impediments; Political Economy |
| JEL: | F30 N10 N14 P16 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1078 |
| By: | Clara Punzi |
| Abstract: | The rapid growth of the digital platform economy is transforming labor markets, offering new employment opportunities with promises of flexibility and accessibility. However, these benefits often come at the expense of increased economic exploitation, occupational segregation, and deteriorating working conditions. Research highlights that algorithmic management disproportionately impacts marginalized groups, reinforcing gendered and racial inequalities while deepening power imbalances within capitalist systems. This study seeks to elucidate the complex nature of digital platform work by drawing on feminist theories that have historically scrutinized and contested the structures of power within society, especially in the workplace. It presents a framework focused on four key dimensions to lay a foundation for future research: (i) precarity and exploitation, (ii) surveillance and control, (iii) blurring employment boundaries, and (iv) colonial legacies. It advocates for participatory research, transparency in platform governance, and structural changes to promote more equitable conditions for digital platform workers. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.19450 |
| By: | Gazi Salah Uddin (Linköping University); Anh H. Le (Goethe University Frankfurt); Md. Bokhtiar Hasan (Islamic University); John Beirne (Asian Development Bank); Donghyun Park (Asian Development Bank) |
| Abstract: | We investigate the effects of different components of government spending on inclusive growth. More specifically, we consider the inclusive impact of public spending on environmental protection, health, education, housing, and social protection, all of which can conceivably promote inclusive growth. For our empirical analysis, we apply panel regressions and local projections to a comprehensive database of 191 economies between 1980 and 2023. Our evidence indicates that equity-promoting government spending reduces income inequality, as measured by the Gini index, and improves human development indicators. Moreover, our analysis reveals that poorer households benefit disproportionately, suggesting that targeted fiscal expenditures can promote equity. Notably, the inclusive effects are most pronounced in advanced economies, where robust fiscal frameworks support and amplify such effects. In contrast, emerging and developing economies experience more modest gains. Overall, the findings highlight the importance of well-designed public spending programs for equitable growth. Finally, we conduct state-dependent local projections and regional subsample analysis. |
| Keywords: | government spending;inclusive growth;income inequality;developed and developing economies |
| JEL: | D63 E62 O23 O47 |
| Date: | 2025–10–29 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021714 |
| By: | Tanweer Akram; Khawaja Mamun |
| Abstract: | This paper analyzes the dynamics of Canadian dollar-denominated (CAD) interest rate swap yields. It applies autoregressive distributive lag (ARDL) models, using monthly time series data, to estimate the effects of the current short-term interest rate and other relevant macro-financial variables on interest rate swap yields. It shows that the current short-term interest rate is a crucial driver of the swap yields of different maturity tenors. Similar patterns of interest rate swaps denominated in other hard currencies, such as the US dollar, euro, British pound sterling, and Japanese yen, have been discerned in previous empirical research testing the Keynesian hypothesis, which maintains that the current short-term interest rate has a decisive influence on the long-term interest rate. Thus, the findings of this paper lend additional support to the Keynesian hypothesis by showing that the same pattern holds for CAD interest rate swap yields. The results obtained in the paper can be useful for portfolio managers, corporate leaders, and policymakers. |
| Keywords: | Canadian Dollar Swaps; Interest Rate Swap Yields; Short-Term Interest Rate; Monetary Policy; Bank of Canada |
| JEL: | E43 E50 E60 G10 G12 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1072 |