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on Post Keynesian Economics |
| By: | Heise, Arne |
| Abstract: | Following Lawrence Klein's designation of a 'Keynesian Revolution', the impact of John Maynard Keynes's The General Theory of Employment, Interest and Money has remained contested. While early interpretations viewed it as a refinement of neoclassical equilibrium theory, later accounts increasingly characterized it as revolutionary break. Drawing on a meta- synthesis of journal articles explicitly addressing the Keynesian Revolution, this paper shows that such claims are typically justified intuitively rather than on explicit philosophy-of-science grounds, even after Thomas S. Kuhn's Structure of Scientific Revolutions. Where analytical criteria are applied, conclusions hinge on whether Keynes's theory transforms the ontological and epistemological foundations of economics or merely modifies them. The findings suggest that most interpretations reflect intra-paradigmatic variation rather than a genuine scientific revolution suggesting 'a revolution that never was'. |
| Keywords: | Keynesian Revolution, Thomas S. Kuhn, Say's Theorem, Walras's Law |
| JEL: | A11 B20 B31 E12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:341982 |
| By: | Michael Cauvel; Y.K. Kim |
| Abstract: | We examine the potential linkages between two empirically-observed patterns in aggregate macroeconomic data. The cyclical relationship between economic activity and the labor share—referred to as the Goodwin pattern—has been well documented by a number of papers in the literature (Barrales-Ruiz et al., 2021). On the other hand, some recent studies have uncovered evidence of a cyclical relationship between economic activity and household credit, suggesting that household debt is a critical driver of macroeconomic cycles (Mian et al., 2017). We study these two cyclical processes in combination with one another. We illustrate the empirical plausibility of a pseudo- Goodwin cycle in which fluctuations in household indebtedness create the appearance of a Goodwin cycle, even in the absence of any causal effects between demand and distribution. Therefore, we argue that it is necessary to consider debt, demand, and distribution as essential elements in an interrelated system. Our analysis of such a three-dimensional system using both U.S. data and a panel of 30 advanced economies suggests that debt is a more important driver of economic activity over the business cycle than income distribution. |
| Keywords: | Goodwin cycle, household debt, income distribution, business cycles |
| JEL: | E12 E25 E32 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2617 |
| By: | phelps, robert |
| Abstract: | We present a minimal (‘toy’) model of an economy as a simple set of equations modelling confidence, consumption, price, investment and debt. Behaviour in the model is grounded in simple heuristics that use available recent information and ‘animal spirits’ instead of complex intertemporal optimization. It is shown that such a model can endogenously generate business cycles where booms are driven by high spirits and credit, while recessions are driven by saving to reduce accumulated debt. We discuss the potential of this minimal model as the basis of a more elaborate core economic model exhibiting cycles and non equilibrium dynamic behaviour |
| Keywords: | macroeconomics economics business cycle debt toy model confidance animal spirits Keynes |
| JEL: | A1 E10 E12 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126453 |
| By: | Galbraith, James; Kanbur, Ravi; Sen, Kunal; Sumner, Andy |
| Abstract: | Seven decades ago, Simon Kuznets put forward the hypothesis that as economies developed, national inequality would first increase and then decrease—an inverted U-shape. He provided preliminary evidence for the hypothesis on the basis of the limited data available at the time, and theorized the genesis of the curve as arising from the twin forces of structural transformation of the economy and political economy pressures. Seven decades on, the Kuznets curve still has a hold on the development discourse as new data is used to test the hypothesis, new theories are elaborated to explain the evolution of inequality, and the metaphor of an inverse U-shape is extended beyond its original realm of national inequality. With this rich history and background, the time is right to examine the Kuznets curve literature broadly construed. This overview takes stock of what has been learned and highlights emerging research and policy questions. |
| Keywords: | Kuznets; structural transformation |
| JEL: | D31 O15 O40 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20474 |
| By: | Claudius Gräbner-Radkowitsch (Department of Plural Economics, Europe University Flensburg, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria) |
| Abstract: | Socio-ecological transformations present regions with the challenge of moving away from established trajectories towards uncertain alternatives. This paper argues that the original institutional economics (OIE) tradition provides powerful yet underused tools for understanding these processes. It demonstrates that classical concepts such as the institutionalist conception of habits and institutions, ceremonial encapsulation, and path dependence remain analytically valuable, despite having been developed under different socio-historical conditions. Building on this foundation, the paper extends the concept of relatedness beyond its established technological meaning to encompass cognitive and institutional dimensions. This extended concept helps explain not only why existing trajectories persist but also which pathways actors are positioned to pursue, thereby clarifying the feasibility of transformation. These arguments are illustrated through the case study of the Lusatian coal region in Germany, drawing on semi-structured interviews with regional stakeholders. The analysis demonstrates how cognitive and institutional relatedness collectively shape the accessible space of transformation. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ico:wpaper:183 |
| By: | Javidanrad, Farzad (University of Warwick) |
| Abstract: | Why can aggregate profit be persistently realised in monetary production economies despite the apparent insufficiency of the initial money supply? Existing explanations have attributed this problem to a variety of institutional mechanisms, including bank credit, capitalist expenditure, government deficits, financial innovation, and foreign trade. This paper argues that these explanations identify different manifestations of a deeper structural phenomenon without explaining its underlying cause. Building on the Credit-Debt Reproduction Mechanism (CDRM), the paper demonstrates that, in debt based monetary production economies, the endogenous reproduction of financial claims systematically exceeds the reproduction of the means of monetary settlement. Consequently, the realisation of aggregate profit in monetary form requires a recurrent source of exogenous purchasing power. The argument is developed in three stages. First, a historical analysis shows that debt remissions, usury restrictions, monetary debasement, and successive monetary innovations can be interpreted as institutional responses to a recurring shortage of circulating liquidity. Second, a formal mathematical model establishes the necessary relationship between profit realisation, debt accumulation, and monetary scarcity. Third, a stock-flow consistent model and dynamic simulations demonstrate that, in the absence of sufficient public-sector monetary injections, the monetary gap expands cumulatively, whereas appropriate fiscal recycling of purchasing power stabilises the system. The paper concludes that the recurrent need for monetary accommodation is not a market imperfection but an endogenous property of debt-based monetary production, offering a unified theoretical explanation for a wide range of historical and contemporary monetary phenomena JEL codes: N1, E4, E5, B5, C6 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1623 |
| By: | Marianna Epicoco |
| Abstract: | This paper analyzes the relationship between climate change, technological change and affluence. Our expected contribution is to provide a deeper conceptualization of technological change, while taking into account ecological limits, justice and democratic concerns. To this end, we analyze and try to combine evolutionary theories of long-run economic development and limits-to-growth theories, i.e., post-growth and degrowth. We suggest that technological change, even if directed by government policies in the “right directions”, is unlikely to rapidly reduce global emissions. Hence, a significant reduction in global affluence is as necessary as a faster low-carbon transition in order to limit climate change, stay within ecological limits and achieve a more just transition. We also suggest that the lowcarbon transition can be conceptualized as an ecological technological revolution, which can originate a new phase of economic development through major qualitative changes of socio-economic systems in dominant technologies, sectors, firms, institutions and societal values. Finally, we propose that a cap on affluence can be conceptualized as a technology cap, which can accelerate and shape a lowcarbon transition by activating two processes. The first is an endogenous process of co-evolution or cumulative causation between minimalist demand and investment in ecological technologies. The second is a process of debate and democratic definition of an ecological technological paradigm, which can enable socio-institutional actors to act as exogenous unlocking factors. Both these processes, and the forces that shape them, should enable the qualitative evolution of socio-economic systems towards ecology, without necessarily produce their quantitative growth. |
| Keywords: | Climate change; Technological revolutions; Affluence; Long-run economic development; Ecological technological revolution; Technology cap. |
| JEL: | Q50 O33 O11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2026-24 |
| By: | Smith, Sarah; Advani, Arun; Harvey, Laura |
| Abstract: | Students may hold stereotyped beliefs about subjects that distort subject choices. For example, economics is believed to be about money, not inequality or well-being, and this perception may attract some students to the subject, while deterring others. We report results from a UK-wide high school outreach program in which undergraduate champions delivered economics taster sessions to 5, 000+ students. The sessions increase students’ reported likelihood of studying economics by ~20 per cent. We shed light on what drives this increase. The sessions broaden students’ understanding of what economics is about and this accounts for ~20 per cent of the increased likelihood. The sessions also change students’ beliefs about (different attributes of) studying economics. The most important drivers of the increased likelihood are students’ increased beliefs that they will do well in economics and that they will enjoy studying the subject. |
| Keywords: | Subject choice; beliefs |
| JEL: | A22 C93 D03 I23 J16 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20483 |
| By: | Rodrik, Dani |
| Abstract: | Economics students today learn about mercantilism through Smith’s prism, as a series of logical and policy errors that Smith clarified and settled for good. But far from settled doctrine, mercantilism encapsulated a variety of pragmatic practices that survived Smith’s critique, often to good effect. It found echo in a continuous tradition of what later came to be called “developmentalism, †running from Alexander Hamilton and Friedrich List’s advocacy of trade protection to Hans Singer and Raul Prebisch’s ideas on import-substitution and, more recently, to East Asian models of export-oriented industrialization. Three of its core tenets hold continued appeal: the primacy of production and jobs (and of their composition) over consumption; preference for close, collaborative relationship between business and government over an arms’ length relationship; and the need for contextual, pragmatic, and often unorthodox policies over universal remedies and “best-practices.†|
| JEL: | B1 O1 F1 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20710 |
| By: | Jean-Philippe Bouchaud |
| Abstract: | Financial and economic history is strewn with bubbles and crashes, booms and busts, crises and upheavals of all sorts. Understanding the origin of these events is arguably one of the most important problems in economic theory: are economies intrinsically unstable, and can one ``stabilize unstable economies''? In this review I argue, from a physicist's vantage point, that the concept of equilibrium -- so central to mainstream economic thinking -- is likely to be the exception rather than the rule in large, complex, interacting systems. Drawing on a series of stylized ``toy'' models, I show how excess volatility, endogenous crises and crashes, inflation swells and persistent inequalities can all emerge naturally from genuinely out-of-equilibrium dynamics, without invoking large exogenous shocks. Three generic mechanisms recur throughout: trapping in a multiplicity of history-dependent equilibria; the impossibility of dynamically reaching equilibrium, leading to oscillations and chaos; and the spontaneous evolution towards fragile, marginally stable states -- the self-organized criticality paradigm. I stress that these are phenomenological scenarios rather than calibrated theories: there is, at this stage, no ``smoking gun''. But the burden of proof, I contend, should be on the equilibrium camp. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.09620 |
| By: | Powis, Carter (Institute for New Economic Thinking at the Oxford Martin School (INET Oxford)) |
| Abstract: | Every public conversation about AI seems to end in one of two places: the machines kill us, or the machines save us. Notice that both stories tell you to do exactly the same thing — nothing. If catastrophe is coming, your choices don't matter. If utopia is coming, they aren't needed. This is a climate scientist's two-year attempt to replace that story with something more useful: a model, built in plain English, of what would have to be true for AI to change everything, and then an honest look at whether or not those things are true, working from "the boundaries inward". Inside, you'll learn: (1) Exactly what it would take for AI to substantially accelerate economic growth; (2) The things that arbitrarily advanced AI will never be able to do (and whether they matter); (3) A rigorous perspective on how humans continue to contribute economically in a world where knowledge work is automated; (4) Why the simulation theory is probably wrong; (5) A perspective on how to live through periods of disorienting change. No part of this essay is arguing that AI will not be transformative, and no part is arguing special insight into what's going to happen. What this essay aims to do is to lay out in one place, and in plain terms, what we know about how the world works today, and how that knowledge constrains possible futures. The aim is not reassurance, but preparedness: whether the future remains human-centric is up to us. |
| Keywords: | artificial intelligence |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2026-17 |