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on Post Keynesian Economics |
| By: | Juan Manuel Campana; Eckhard Hein |
| Abstract: | This paper investigates the drivers of economic growth by focusing on macroeconomic policy regimes (MPRs) as a key dimension of demand and growth regime (DGR) and growth model (GM) analysis. Building on Campana and Hein’s (2026) results on demand-led growth decomposition based on the national income and financial accounting (NIFA) and the Sraffian supermultiplier (SSM) approaches for seven economies—Germany, Spain, Argentina, Brazil, India, South Africa, and Turkey—across the periods 2000–2007 and 2011–2019, this paper applies the MPR approach to understand the differences in DGRs and their respective changes. The paper thus contributes to post-Keynesian and comparative political economy literature. The analysis shows that the configuration and coordination of monetary, wage, fiscal, and external policies play a central role in shaping dominant sources of autonomous demand and explaining regime shifts over time. While some countries, such as Germany and India, display stability in their MPRs, DGRs, and dominant autonomous demand components, others—Spain, Brazil, South Africa, and Turkey—have undergone significant transformations driven by policy changes and external conditions. Overall, the findings highlight the explanatory power of MPR analysis in understanding growth trajectories and provide foundations for the examination of the political economy dimension of these trajectories. |
| Keywords: | macroeconomic policy regimes, growth decomposition, post-Keynesian macroeconomics, growth drivers, growth models, demand and growth regimes |
| JEL: | E11 E12 E60 F43 O57 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2611 |
| By: | Nitin Nair |
| Abstract: | This paper causally shows that non-financial corporate liquidity dampens monetary policy transmission. While standard analyses of financial heterogeneity rely on exposure-based esti- mates, I additionally employ Granular Instrumental Variables (GIV) to overcome endogeneity concerns. GIVs exploit idiosyncratic shocks to the largest corporate cash holding firms to identify exogenous variation in the aggregate cash ratio. I then develop a stock-flow consistent growth model to identify the structural conditions under which corporate cash accumulation weakens transmission. These results have direct implications for the effectiveness of monetary policy and motivate the inclusion of corporate liquidity into mechanisms like the financial accelerator and investment functions. |
| Keywords: | Monetary Policy Transmission; Local Projections; Granular Instrument Variables; Corporate Finance; Stock–flow consistent model |
| JEL: | C36 E12 E22 E52 G32 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2610 |
| By: | Greitens, Jan |
| Abstract: | This paper critically examines the relationship between Georg Friedrich Knapp's "State Theory of Money" and today's Neo-Chartalism, often associated with Modern Monetary Theory (MMT). Several contributions have questioned whether the Neo-Chartalists are right to claim Knapp as their predecessor. However, these analyses do not pay sufficient attention to the historical context in which Knapp wrote. This includes contemporary debates and the monetary history of his time. The Neo-Chartalists' reception of Knapp's ideas was almost exclusively through the 1924 translation of the "State Theory of Money". Problematically, this translation has many shortcomings, in particular a narrow focus on the legislative state. But Knapp's focus was on country-specific examples of currencies, in particular the 1892 currency reform in Austria-Hungary. There are significant differences between Knapp's published and unpublished writings. Archival findings reveal Knapp's reflections on inflation, which align him with the Real Bills Doctrine and a proto-Fiscal Theory of the Price Level. He argued that monetary state financing should be used only as a last resort. Contrary to MMT's advocacy for state-funded expenditures, Knapp supported a balanced budget, expressing concern over the impact of monetary inflation on exchange rates. Apart from fairly general principles such as the nominality of money, the similarities between Knapp and the Neo-Chartalists diminish as one critically examines Knapp's writings. Therefore, the claim that MMT is based on Knapp should be rejected. |
| Keywords: | Neo-Chartalism, Georg Friedrich Knapp, Modern Monetary Theory (MMT), Real Bills Doctrine, Fiscal Theory of the Price Level |
| JEL: | B31 E42 B50 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:340197 |
| By: | Oyvat, Cem; Elgin, Ceyhun; Elveren, Adem Yavuz |
| Abstract: | Minimum wage policies are a central instrument for reducing poverty, improving income distribution, and enhancing social protection. Yet their broader macroeconomic impacts remain contested, particularly in developing economies with persistent high inflation. Drawing on a Post-Keynesian framework, this paper examines the impact of minimum wage increases on inflation, unemployment rate, demand, and the trade balance in Türkiye, a country characterized by persistent high inflation and where approximately three-quarters of the workforce earns between 50% and 150% of the minimum wage. Using monthly data from 2005 to 2024 and Structural Vector Autoregression (SVAR) models, we analyze the relationships between minimum wage adjustments, consumer prices, unemployment, capacity utilization, and trade balance. We employ two distinct inflation measures: the Consumer Price Index from TurkStat and the Cost of Living Index from the İstanbul Chamber of Commerce. Our findings indicate that a 10% increase in the minimum wage raises annual inflation by 1.0-2.0 percentage points. This inflationary effect is primarily driven by the cost channel, as opposed to the demand channel. Exchange rate movements emerge as a more powerful inflation driver than wage adjustments in Türkiye's context. The analysis finds no significant evidence that minimum wage increases influence demand-side factors such as capacity utilization, industrial growth, or retail sales. Contrary to traditional predictions, the impact on unemployment is minimal —0.10 to 0.15 percentage points. Moreover, a 10% rise in the minimum wage generates an extra trade deficit amounting to 0.11–0.27% of annual GDP. These results suggest that while minimum wage policy remains a viable tool for improving low-wage workers' welfare, given its moderate inflationary effect and minimal impact on employment, policymakers should consider complementary measures to enhance productivity and non-price competitiveness to mitigate mild negative external balance effects. |
| Keywords: | minimum wage; inflation; unemployment; trade balance; Post-Keynesian economics; Türkiye |
| Date: | 2025–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:gpe:wpaper:51078 |
| By: | Ristolainen, Kim |
| Abstract: | We develop a novel sentiment measure from survey forecasts that captures the component of beliefs arising from the systematic misaggregation of public information relative to a machine benchmark based on the same information set. We extend this sentiment measure historically for a panel of 78 countries using machine learning models trained on BERT embeddings of historical news articles (1903-2020). The backcasted sentiment shows that shocks in median sentiment predict credit booms in the non-tradable corporate sector, which prior research has linked to financial crises. We further find that this sentiment component is shaped by memory-related dynamics, as the time elapsed since major crises and the share of young-to-old people in the population predict surges in optimism even when recent economic developments are controlled for. Taken together, the findings provide new historical evidence consistent with the Minsky-Kindleberger view on financial crises. |
| Keywords: | Survey data, Sentiment, Memory, Machine Learning, Text Data, Credit growth, Financial Crisis |
| JEL: | E44 E51 G01 D84 G41 E32 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:340165 |
| By: | Leiashvily, Paata |
| Abstract: | Classical general equilibrium theory specifies the conditions under which equilibrium may exist, but offers limited insight into the dynamics of its attainment. This paper addresses that gap by developing a recursive dynamic formulation of the Symmetric Model of General Economic Equilibrium, interpreted here as the Autopoietic Model of Economic Reproduction (AMER). The economy is represented as an operationally closed system in which products and resources recursively reproduce one another through decentralized exchange and feedback. The analysis shows that, once realistic time lags in price transmission between interdependent product and resource markets are introduced, the adjustment process does not converge to equilibrium but generates persistent endogenous oscillations. Explicit analytical conditions for the emergence of such dynamics are derived and linked to behavioral parameters, including the speed of price adjustment, demand inertia, and cyclical changes in the propensity to save and the propensity to expand production. These propensities are themselves influenced by optimistic and pessimistic expectations generated by the cycle. The paper further shows that this mechanism is robust across extensions with money, foreign trade, and multi-level production, thereby shifting the focus of general equilibrium analysis from equilibrium states to the recursive dynamics of decentralized coordination. |
| Keywords: | general equilibrium; business cycles; recursive dynamics; endogenous instability; behavioral feedback; market coordination; autopoiesis; matrix models |
| JEL: | C62 D50 E32 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128833 |
| By: | Patrick Bayer; Kerwin Charles; Ellora Derenoncourt |
| Abstract: | In this chapter, we introduce a new framework for studying the evolution of racial inequality in the labor market. The framework encompasses two broad forces - distributional and positional - that affect labor market gaps by racial and ethnic identity over time. We provide long-run results on the evolution of Black-White earnings gaps, including new results for Black and White women, and we review the evidence on historical factors affecting racial gaps. We then provide new results on racial gaps among other groups in the U.S. and discuss the evidence on racial gaps outside the U.S. We then discuss the role of prejudice-based discrimination in driving racial gaps, particularly in the post-civil-rights era, a period when such discrimination has been thought to play a declining role in racial inequality. We describe forces that can amplify existing discrimination, such as monopsony and workers' perceptions of prejudice in the economy, and we discuss recent literature directly measuring discrimination through expanded audit studies and quasi-experimental variation. We conclude with a discussion of existing and new frontiers on race in the labor market, including stratification, reformulations of prejudice, and understanding the way race has shaped purportedly race-neutral institutions throughout the economy. |
| Keywords: | Race, labor markets, inequality |
| JEL: | J15 J31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25106 |