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on Post Keynesian Economics |
| By: | Mark Setterfield (Department of Economics, New School For Social Research, USA) |
| Abstract: | Two salient features of the canonical Kaleckian growth model are the Keynesian stability condition and the paradox of costs. Both of these features are controversial. Harrodians contest the Keynesian stability condition on the grounds that it understates the reaction of investment spending to variations in the capacity utilization rate. Meanwhile, neo-Goodwinians argue that the demand regime is profit-led. A third salient feature of the Kaleckian model, following the contributions of Joan Robinson, is its assumption that the parameters of the investment function are conditioned by animal spirits. This paper shows that the treatment of animal spirits can affect both of the first two salient features of the Kaleckian model mentioned above. Specifically, it is shown that allowing for variation in animal spirits can: reconcile the Keynesian stability condition with the observation that there is a greater reaction of investment spending than saving to variation in the rate of capacity utilization; and complicate the effects of distribution on growth in an otherwise intrinsically wage-led economy. |
| Keywords: | Animal spirits, Keynesian stability condition, paradox of costs, wage-led growth, shifting equilibrium, pseudo-instability |
| JEL: | E11 E12 E22 E25 O41 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2501 |
| By: | Jonas Grangeray (Université Sorbonne Paris Nord, CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord) |
| Abstract: | What is Modern Monetary theory (MMT)? Just vulgar and dangerous "money printing" economics as many of its critics claim? By articulating it with with circuitist and horizontalist post-keynesian theories, we demonstrate that MMT is not "money printing" economics and that the development of a neo chartalist perspective, based on an in-depth description of interbank transactions and their interactions with monetary and fiscal policies, highlights the central bank stabilization of the interest rate in face of treasury securities issues. In the United States, this stabilization requires a coordination between the Fed and the treasury. |
| Abstract: | Qu'est-ce que la Modern Monetary Theory (MMT) ? Juste une vulgaire et dangereuse économie de la « planche à billets » comme l'affirme nombre de ses critiques ? En l'articulant avec les théories post-keynésiennes circuitiste et horizontaliste, nous démontrons que la MMT n'est pas une économie de la « planche à billets » et que le développement d'une perspective néo-chartaliste, s'appuyant sur une description approfondie des opérations interbancaires et de leurs interactions avec les politiques monétaire et budgétaire, met en évidence la stabilisation du taux d'intérêt opérée par la banque centrale face aux émissions de titres du trésor. Aux États-Unis, cette stabilisation nécessite une coordination entre la Fed et le trésor. |
| Keywords: | Modern monetary theory, monetization, interest rate, endogenous money, theory of the monetary circuit, horizontalism, Théorie monétaire moderne, monétisation, taux d'intérêt, monnaie endogène, théorie du circuit monétaire, horizontalisme |
| Date: | 2024–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04812626 |
| By: | Christian Flamant (AFD - Agence française de développement) |
| Abstract: | The labor theory of value has been rejected by Morishima on the grounds that it would be incompatible with joint production, which would create negative labor values. This article starts by recalling the various definitions of joint production, as well as the way they relate to the real world. For Morishima, the labor theory of value is a particular case of Sraffa's theory of production prices; it is recalled that in Sraffa's treatment of joint production the occurrence of negative multipliers and therefore of negative quantities comes from the construction of a standard commodity. Morishima extends this demonstration to labor values in the case of joint production, but the article shows that his example of giving negative labor values is absurd. Finally, using a method initially developed by statisticians to deal with joint production and simple matrix calculations, it is demonstrated that it is perfectly possible to obtain positive labor values in a theoretical but realistic model of joint production. |
| Keywords: | labor value, joint production, system of national accounts, input-output accounts |
| Date: | 2023–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04796268 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Örebro University School of Business, Örebro, Sweden) |
| Abstract: | The neo-Schumpeterian growth models, which appeared in the early 1990s, have ostensibly reintroduced the entrepreneur into mainstream growth theory. However, we show that by ignoring genuine uncertainty and by assuming that profits follow an objectively true and ex ante known probability distribution, the entrepreneur is made redundant. Thus, the theory fails to exhaustively explain innovation, the role of ownership competence, profits, the function of financial markets, wealth and income distribution, and, ultimately, economic growth. These shortcomings risk leading to erroneous or overly narrow policy conclusions by overestimating the importance of supporting R&D investments. Rather, the presence of genuine uncertainty forms a fundamental theoretical basis for the importance of new venture creation as a source of innovation-driven growth; entrepreneurs must establish and expand firms to capture the subjectively perceived profit opportunities. Therefore, tax policy is decisive for the commercialization and dissemination of innovations by providing incentives to uncertainty-bearing, not only for entrepreneurs, but also for intrapreneurs and financiers taking an active part in the governance and development of firms based on innovations characterized by genuine uncertainty. Furthermore, taxation can distort the evolutionary selection of innovations and firms, for instance, by taxing owners and firms differently. |
| Keywords: | Creative destruction; Economic growth; Entrepreneur; Entrepreneurship policy; Innovation; Judgment; Knightian uncertainty |
| JEL: | B40 O10 O30 |
| Date: | 2025–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1514 |
| By: | Heng-fu Zou (The World Bank) |
| Abstract: | By the 1880s, the United States had surpassed Britain as the world's largest economy, and by the 1920s, New York City had overtaken London as the world's leading financial center. This remarkable ascent cannot be adequately explained by models of economic growth focused on human capital accumulation, R&D, or technological innovation as championed by Paul Romer (1986, 1991), Robert Lucas (1988), and Aghion and Howitt (1992). These theories, while offering insights into the mechanics of innovation, fail to capture the true drivers of the U.S. economic miracle: liberal ideas of liberty, equality, dignity, and individualism. As Deirdre McCloskey has argued, and Edmund Phelps has elaborated in Mass Flourishing, it was these ideas—rooted in England's traditions yet unfettered by aristocratic constraints in America—that enabled ordinary people to act as entrepreneurs and grassroots innovators, fueling the dynamism of the U.S. economy. |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:723 |
| By: | Heng-fu Zou (The World Bank) |
| Abstract: | Alan Macfarlane's analysis of England's pre-industrial capitalism underscores the critical structural and institutional foundations that facilitated its economic ascent. England's enduring market economy, financial advancements, relatively free labor market, robust legal protections, and agrarian capitalism fostered a dynamic economic environment well before the Industrial Revolution. Complementing this perspective, Deirdre McCloskey's Bourgeois Trilogy highlights the transformative cultural and ideological shifts that legitimized and accelerated these economic developments. McCloskey emphasizes that England's pivotal innovation was its cultural reevaluation of commerce, innovation, and entrepreneurship. The emergence of bourgeois virtues -- prudence, industriousness, and ingenuity—created a societal ethos that celebrated enterprise, risk-taking, and creativity. According to McCloskey, these ideological transformations distinguished England from other regions with comparable structural advantages, enabling the rapid economic expansion of the Industrial Revolution. Combined, these viewpoints illustrate that England's capitalist success was not solely the outcome of institutional frameworks or economic practices but also the result of a profound cultural shift. The interplay between structural readiness and ideological evolution provides a holistic explanation for England's unique position as the birthplace of modern capitalism. |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:722 |
| By: | Rémy Herrera (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This new volume of Research in Political Economy is devoted to themes related to various "trajectories of declining and destructive capitalism, " within the framework of contemporary Marxism. To discuss these themes, we brought together 15 texts, written by 20 social scientists from 10 countries. These authors are, for some, internationally renowned and experienced personalities, and for others, young researchers starting their careers, but all working in their own way to strengthen Marxism in order to apply its powerful methods to the interpretation and, above all, the transformation of the world. Their contributions deal with 12 economies, covering five continents: Germany, Great Britain, France, Spain, Senegal, South Africa, Lebanon, Iran, India, Papua New Guinea and Chile in the current period or very near pastplus two other countries, China and Cuba, in their more distant past preceding their respective socialist revolutions. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04796827 |