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on Post Keynesian Economics |
| By: | Elveren, Adem Yavuz |
| Abstract: | Introduction: Global military expenditure increased to about $2.4 trillion in 2023, basically driven by the Russia-Ukraine war and other geopolitical tensions (SIPRI 2024). According to SIPRI, the 6.8% rise in total military spending was the largest since 2009. As a result, the global military burden reached 2.3% of world GDP, with governments allocating an average of 6.9% of their budgets to defense. Policymakers frequently frame high levels of military spending as indispensable for maintaining deterrence and protecting national interests, thereby legitimizing disproportionate defense budgets. However, higher levels of military expenditure do not necessarily translate into greater peace or stability. On the contrary, they tend to intensify arms races and escalate geopolitical rivalries, thereby heightening the likelihood of conflict (UN 2025). A growing body of empirical evidence indicates that military spending crowds out resources vital for social investment, poverty reduction, quality and extensive education and healthcare, gender equality, infrastructure development, and environmental protection (Elgin et al. 2022; UN Women 2022; Elveren 2025a). (...) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:330668 |
| By: | Palma, J. G. |
| Abstract: | Krugman identified the enigma of Latin America's underperformance as one of the greatest analytical challenges of economic theory today. Indeed, when compared with the other regions and main countries, since implementing its neo-liberal economic reforms Latin America has become a region of extremes: while its employment creation in services since 1980 ranks top in the world, its productivity growth ranks bottom; in turn, while the share of market income (i.e., before taxes and transfers) of LA's richest 1% and 10% also ranks among the top in the world, its investment as a percentage of GDP ranks bottom in the world. One narrative that helps understand this contrasting scenario is that of the classical economist David Ricardo (perhaps the greatest of the classical economists), who was the first to analyse why 'rentier-led' economies would be held back precisely by the debilitating effect of a likely 'trilogy' of high market inequality, low investment rates and meagre productivity growth. To keep exporting "more of the same" unprocessed commodities or products from "shallow" manufacturing assembly-operations is no longer a valid growthoption for Latin America ―just a recipe to continue being stuck in the middle-income trap. But domestic rigidities and markets imperfections and failures (home and abroad) are blocking the necessary "upgrade" of these exhausted productive strategies. But the conventional hegemonic wisdom still expects these countries to leap from mid-table to higher income-per capita through policies based on the same institutional setting, elite-preferences, and ideology that got them stuck in mid-table —this is not a realistic solution. Furthermore, the escape route for LA from its "neo-liberal trap", and nearly half a century of productivity stagnation, requires more than just a Keynesian/Structuralist macro, together with an ('incentive' based) industrial policy; these may well be necessary conditions for sustainable growth, but they are certainly not sufficient ones. What it needs as well is to get rentiers on board: unless one can enforce 'productive' behaviour from them, sustainable growth is not an option. The key challenge in rentier-led economies, then, comes from what I like to call a 'post-Ricardian' perspective: how to 'discipline' rentiers to be able to redirect their income towards socially desirable investment strategies. |
| Keywords: | Latin America, "easy" rents, rentier elites; "extractivism", productivity growth, inequality, "reverse" flying geese, middle-income trap, neo-liberalism, emerging Asia, David Ricardo |
| JEL: | E20 N10 O11 O47 B00 G01 Q02 |
| Date: | 2025–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2572 |
| By: | Gouzoulis, Giorgos; Papadopoulou, Aggela |
| Abstract: | This paper examines the Black-White pay gap in the United States from 1989 to 2024 using quarterly data from the Bureau of Labor Statistics and the Federal Reserve's Distributional Financial Accounts. Building on existing political economy research, which suggests that personal debt reduces workers' bargaining power by making them more risk-averse in wage negotiations - particularly when job loss threatens their ability to service debt - this study argues that racial discrimination in both personal credit markets and wage negotiations disproportionately disciplines racialized social groups. Regression analysis shows that rising household debt liabilities-to-assets ratios for Black households and a higher share of white business owners have crucially contributed to the persistent wage gap between Black and White Americans. Interestingly, interacting the two coefficients shows that a higher share of white businesses slightly mitigates the effect of debt held by Black workers on the black-white earnings gap. This potentially implies that, despite discriminatory practices, white businesses might represent a relatively more stable employment option for indebted Black workers, thereby reinforcing a vicious cycle of self-perpetuating racialized economic inequality. |
| Keywords: | Racial Pay Gap, Personal Debt, Household Financialization, United States |
| JEL: | B50 J15 J31 J70 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1686 |
| By: | Stefano Di Bucchianico; Alessandro Le Donne |
| Abstract: | This paper offers new textual evidence supporting the Sraffian 'corn-ratio' interpretation of David Ricardo's early theory of profits. We analyze the first edition (1825) of John Ramsay McCulloch's Principles of Political Economy, arguing that it provides a clear articulation of the profit rate’s physical determination. McCulloch, Ricardo’s pupil, defines profit as the excess of commodities produced over those expended in production and calculates the profit rate directly in physical quantities of corn. This finding parallels the evidence found in Torrens, ultimately reinforcing the argument that the ‘corn model’ was deeply rooted in the early classical tradition. At last, our comparative analysis contrasts this initial, clear physical framework with McCulloch’s later shift towards value-centric reasoning. |
| Keywords: | John R. McCulloch, corn model, Sraffian interpretation, David Ricardo, rate of profit Jel Classification: A31, B12, B30 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:933 |
| By: | Barra Novoa, Rodrigo |
| Abstract: | The study examines the evolution of Chile’s industrial policy between 1990 and 2022 through the lens of state capacity, innovation, and endogenous development. In a global context where governments are reclaiming a proactive role in fostering innovation, Chile presents a paradox. It is a stable and open economy that has expanded investment in science, technology, and innovation but still faces structural barriers to turning that investment into sustainable capabilities. Drawing on the works of Mazzucato, Aghion, Howitt, Mokyr, Samuelson, and Sampedro, the research integrates evolutionary economics, public policy, and humanist ethics to assess Chile’s capacity for innovation-driven transformation. Using a longitudinal case study approach and official data, the study finds institutional progress but persistent coordination gaps, regional disparities, and a fragile culture of knowledge. It concludes that inclusive and sustainable innovation will require adaptive governance, long-term vision, and an ethical understanding of innovation as a public good. |
| Keywords: | State capacity, Innovation, endogenous development, industrial policy, Chile, entrepreneurial state |
| JEL: | O25 O1 O38 E02 L52 P42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:330597 |
| By: | Korolija, Aleksandar |
| Abstract: | The paper discusses the role of higher education in the reproduction of society. In the context of the world system, an attempt is made to shift the focus of reproduction from individual social formations to the world system as a whole. While Marxist and functionalist theories, which are used as a theoretical framework in this paper, were primarily focused on the reproduction of class societies at the level of social formations, this paper considers reproduction at the level of the world system. Analogous to internal class selection, it is claimed that nation-states are drawn into the reproduction of the world system so that peripheral countries train a part of their personnel for free for the countries of the core. This reproduction, which is based on unequal relations in the wider world economy, explains the phenomenon of ‘brain drain.’ In accordance with that, the possibility of political interventions within the individual states of the (semi)periphery, which would significantly disrupt the current systemic processes of reproduction, is viewed as pessimistically inadequate. |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:afq2t_v1 |
| By: | Korolija, Aleksandar |
| Abstract: | This paper examines the concept of extractive imperialism through the lens of the experiences in the “Lithium Triangle.” Extractive imperialism represents a contemporary iteration of historical colonial practices, characterised by the exploitation of natural resources by transnational corporations in underdeveloped countries, frequently resulting in socio-environmental conflicts. This work concentrates on the Lithium Triangle in South America, comprising Chile, Argentina, and Bolivia, where extensive lithium deposits have attracted considerable foreign investment. The analysis demonstrates how the interplay between global capital and national governments frequently results in the marginalisation of local communities, thereby exacerbating social tensions and environmental degradation. The work elucidates the contrasting definitions of extractivism and neo-extractivism, underscoring the persistent exploitation and centralisation of wealth. By focusing on the socio-political dynamics and ownership structures in these regions, the paper emphasises the necessity for sustainable and equitable resource management practices. The work contributes to a broader understanding of extractive practices in the Global South, advocating for policies that prioritise the rights and livelihoods of indigenous populations and local communities over transnational corporate interests. |
| Date: | 2025–05–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ksf8v_v1 |
| By: | Oded Galor; Daniel C. Wainstock |
| Abstract: | Is income inequality in the United States primarily driven by disparities between ethnic groups or within them? Contrary to conventional wisdom, this study uncovers a striking and transformative empirical regularity: an overwhelming 96% of contemporary inequality arises from disparities within groups sharing a common ancestral origin, dwarfing the comparatively minor contribution of inequality between groups. This extraordinary pattern persists across time, educational attainment, demographic characteristics, and geographic regions. The findings represent a shift in the empirical understanding of inequality in the United States, revealing that the deepest and most persistent economic divides run within, rather than between, ethnic communities. |
| Keywords: | inequality, ethnicity, within group inequality, between group inequality |
| JEL: | O15 Z13 D63 J15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12245 |
| By: | Nollenberger, Jeremiah |
| Abstract: | Pro-cyclical fiscal policy is considered harmful. Nonetheless, pro-cyclicality is widespread and the cyclicality of fiscal policy isstrongly heterogenous in advanced economies. This paper investigates how differences in the cyclicality of fiscal policy can be understood through the lens of Varieties of Capitalism (VoC). The VoC-perspective argues for systematic differences between coordinated market economies (CMEs) and liberal market economies (LMEs). Because of consensus-based decision making and a wage bargaining system characterized by economy-wide large but non-encompassing wage setters, fiscal policy is reasoned to be less expansionary during downturns in CMEs and thus less counter-cyclical. During upswings, however, both channels may aid stronger fiscal retrenchment, making CMEs more fiscally conservative rather than less counter-cyclical overall. Thus far, the empirical literature has only investigated the overall differences in the cyclicality of fiscal policy between LMEs and CMEs, reporting contradictory results. Building and expanding on this literature, we analyze an unbalanced panel of 29 OECD countries from 1985 to 2021. We find LMEs to be consistently more counter-cyclical than CMEs, due to CMEs being less expansionary during downturns. During upswings, however, we do not identify a systematic difference between the archetypes. We furthermore find dependent market economies (DMEs) and mixed market economies (MMEs) to be more expansive during good times than the CME-group. Our results thus suggest that the capacity for counter-cyclical fiscal policy is deeply embedded in national institutional arrangements, rather than being merely a technical matter. Our findings aid in furthering our understanding of the institutional underpinnings of the export reliance in CMEs and interest rate differentials across Eurozone countries. |
| Keywords: | Fiscal Policy, Comparative Political Economy, Business Cycle, Institutions, Varieties of Capitalism |
| JEL: | E62 E32 H30 P51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:330684 |
| By: | Claire Crawford (Institute for Fiscal Studies; UCL Centre for Education Policy & Equalising Opportunities); Robbie Maris (UCL Centre for Education Policy & Equalising Opportunities); Fabien Petit (University of Barcelona; UCL Centre for Education Policy & Equalising Opportunities); Gill Wyness (Centre for Economic Performance, LSE; UCL Centre for Education Policy & Equalising Opportunities) |
| Abstract: | Tuition fees are a critical source of revenue for universities, yet how student demand responds to changes in fees remains poorly understood. Using administrative data from one of the largest UK universities between 2019 and 2025, we estimate the price elasticity of demand for both undergraduate and postgraduate degrees. Our analysis distinguishes between the application and enrolment stages, accounts for persistence in demand across cohorts, and incorporates fee data from competitor institutions to estimate cross-price elasticities. We find that postgraduate students are substantially more price-sensitive than undergraduates, with estimated elasticities of -0.27 for applications and -0.13 for enrolments. Undergraduate demand is largely price-inelastic. Elasticities vary sharply across countries: applicants from emerging markets such as India, Indonesia, and Turkey display positive application elasticities - consistent with tuition functioning as a signal of quality - while students from Europe and the Americas exhibit conventional price sensitivity. Subject-level variation is more muted: demand for engineering and other STEM disciplines is effectively inelastic, consistent with high expected earnings, while other subjects display stronger negative elasticities. We also document strong persistence in demand across cohorts within countries, suggesting peer-driven information spillovers. Finally, we find limited responsiveness to competitors' tuition at the application stage but positive cross-price elasticity at enrolment, indicating substitution effects once offers are received. These results provide the most comprehensive and recent evidence on tuition responsiveness in UK higher education, highlighting how price sensitivity differs across stages, markets, and subjects. |
| Keywords: | Higher Education; Tuition Fees; Price Elasticity; International Students; Cross-Price Elasticity. |
| JEL: | I22 I23 D12 L11 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:25-13 |