{"title":"Book review: Imad Moosa, Fintech: A Revolution or a Transitory Hype? (Edward Elgar Publishing, Cheltenham, UK and Northampton, MA, USA 2022, hardcover, ISBN 978-1-80220-633-3, US$117) 227 pp.","authors":"Gonzalo Cómbita Mora","doi":"10.4337/roke.2024.01.08","DOIUrl":"https://doi.org/10.4337/roke.2024.01.08","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590816","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The specialized literature on the political economy of income redistribution in Argentina usually focuses on economic limits. It discusses the incompatibility between redistributive policies and the external balance or their effect on the long-term growth rate. However, less attention has been paid to the political resistance exerted by the winners of international trade to sharing their gains and to the role of financial integration. In this paper, we develop a model, framed in the modern revival of Classical theory, of a small open economy with differential rent to account for these factors. First, we include interests as an income category to assess the impact of financial integration. Second, we introduce the concept of ‘political stalemate’ – the resistance of productive classes to economic policies that go against their economic interest. We show how financial integration and the political resistance of landowners are behind the failure of income redistributive policies in favor of workers. In this context, we analyze the necessary economic and political conditions for such policies to succeed.
{"title":"The limits to redistribution in small open economies: the case of Argentina","authors":"Ramiro E. Álvarez, Gabriel Brondino","doi":"10.4337/roke.2024.01.03","DOIUrl":"https://doi.org/10.4337/roke.2024.01.03","url":null,"abstract":"The specialized literature on the political economy of income redistribution in Argentina usually focuses on economic limits. It discusses the incompatibility between redistributive policies and the external balance or their effect on the long-term growth rate. However, less attention has been paid to the political resistance exerted by the winners of international trade to sharing their gains and to the role of financial integration. In this paper, we develop a model, framed in the modern revival of Classical theory, of a small open economy with differential rent to account for these factors. First, we include interests as an income category to assess the impact of financial integration. Second, we introduce the concept of ‘political stalemate’ – the resistance of productive classes to economic policies that go against their economic interest. We show how financial integration and the political resistance of landowners are behind the failure of income redistributive policies in favor of workers. In this context, we analyze the necessary economic and political conditions for such policies to succeed.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Neoliberalism, Keynesian economics, and responding to today’s inflation*","authors":"J. Stiglitz","doi":"10.4337/roke.2024.01.01","DOIUrl":"https://doi.org/10.4337/roke.2024.01.01","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139591035","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this paper is to show that the Sraffian supermultiplier is compatible with functional finance and can be used to discuss macroeconomic policy in a simplified way, providing an alternative to Lerner and Modern Monetary Theory (MMT). We argue that the general functional finance framework (FFF) can be separated from Lerner’s specific views on how the economy works and its policy recommendations. Then, we propose that FFF can be combined with different views on how the economy works as well as policy objectives and instruments. For this, we construct three comparable ‘toy models’ to evaluate the alternative uses of functional finance from Lerner, MMT, and the Sraffian supermultiplier. We use these toy models to provide an alternative comparison between Lerner and the MMT to that proposed by Wray (2018), and we argue that Lerner never abandoned his FFF or his theoretical principles towards Monetarism. We use this same scheme to evaluate the FFF from the standpoint of the Sraffian supermultiplier. The presentation of these three comparable ‘toy models’ helps to stress the shared principles and specific disagreements among Lerner, MMT, and the Sraffian supermultiplier and to discuss their implications for active economic policies and their constraints in open economies.
{"title":"Alternative uses of functional finance: Lerner, MMT, and the Sraffian supermultiplier","authors":"Ricardo Summa","doi":"10.4337/roke.2024.01.02","DOIUrl":"https://doi.org/10.4337/roke.2024.01.02","url":null,"abstract":"The purpose of this paper is to show that the Sraffian supermultiplier is compatible with functional finance and can be used to discuss macroeconomic policy in a simplified way, providing an alternative to Lerner and Modern Monetary Theory (MMT). We argue that the general functional finance framework (FFF) can be separated from Lerner’s specific views on how the economy works and its policy recommendations. Then, we propose that FFF can be combined with different views on how the economy works as well as policy objectives and instruments. For this, we construct three comparable ‘toy models’ to evaluate the alternative uses of functional finance from Lerner, MMT, and the Sraffian supermultiplier. We use these toy models to provide an alternative comparison between Lerner and the MMT to that proposed by Wray (2018), and we argue that Lerner never abandoned his FFF or his theoretical principles towards Monetarism. We use this same scheme to evaluate the FFF from the standpoint of the Sraffian supermultiplier. The presentation of these three comparable ‘toy models’ helps to stress the shared principles and specific disagreements among Lerner, MMT, and the Sraffian supermultiplier and to discuss their implications for active economic policies and their constraints in open economies.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590754","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book review: John Komlos, Foundations of Real-World Economics: What Every Student Needs to Know, Third Edition (Routledge, New York, NY, USA 2023, softcover, ISBN 9781032001722, US$54.95; hardcover, US$160; ebook, US$49.95) 420 pp.","authors":"Thomas E. Lambert","doi":"10.4337/roke.2024.01.07","DOIUrl":"https://doi.org/10.4337/roke.2024.01.07","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Carlos Bianchi, Fernando Isabella, Santiago Picasso
We develop a balance-of-payments-constrained growth (BPCG) model to explain the specific conditions of small commodity-dependent countries. Based on Thirlwall’s model and subsequent contributions, we elaborate a new model that assumes exogenous export prices, infinite price elasticity of export demand, and supply of commodities that react to prices with positive, but not infinite, elasticity. We contribute to explaining the central role of export prices and the relevance of price competitiveness in the growth dynamics. It is shown that a real devaluation and an improvement in terms of trade (TT) in a context of increasing international prices increase the equilibrium growth rate. However, export prices are more relevant than import prices in determining the growth of these countries, challenging the traditional interpretation of TT. Moreover, our model enriches the extensive literature which has corroborated that a development strategy based exclusively on increasing production capacity in commodity sectors is doomed to fail.
{"title":"Rethinking the balance-of-payments-constrained approach, in the light of the recent commodity boom","authors":"Carlos Bianchi, Fernando Isabella, Santiago Picasso","doi":"10.4337/roke.2024.01.04","DOIUrl":"https://doi.org/10.4337/roke.2024.01.04","url":null,"abstract":"We develop a balance-of-payments-constrained growth (BPCG) model to explain the specific conditions of small commodity-dependent countries. Based on Thirlwall’s model and subsequent contributions, we elaborate a new model that assumes exogenous export prices, infinite price elasticity of export demand, and supply of commodities that react to prices with positive, but not infinite, elasticity. We contribute to explaining the central role of export prices and the relevance of price competitiveness in the growth dynamics. It is shown that a real devaluation and an improvement in terms of trade (TT) in a context of increasing international prices increase the equilibrium growth rate. However, export prices are more relevant than import prices in determining the growth of these countries, challenging the traditional interpretation of TT. Moreover, our model enriches the extensive literature which has corroborated that a development strategy based exclusively on increasing production capacity in commodity sectors is doomed to fail.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139590950","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims to contribute to a more in-depth discussion of the financial subordination of peripheral emerging economies (PEEs) by connecting financial asymmetry with productive asymmetry. For this purpose, it sets out a Keynesian–Structuralist approach to the financial subordination of PEEs, and to the center–periphery relationship applied to the process of international financial integration. To that end, the paper shows that productive and financial asymmetries are related to each other, that is, they are ‘two sides of the same coin’: PEEs which have low-complexity productive structures and are commodity exporters tend to be much more volatile – that is, they are more subject to the boom and bust of the commodity cycle and the liquidity cycle – and therefore are more financially subordinated than PEEs which have more complex productive structures and are exporters of manufactured goods.
{"title":"Financial subordination of peripheral emerging economies: a Keynesian–Structuralist approach","authors":"Luiz Fernando de Paula, J. Leal, Mateus Ferreira","doi":"10.4337/roke.2024.01.05","DOIUrl":"https://doi.org/10.4337/roke.2024.01.05","url":null,"abstract":"This paper aims to contribute to a more in-depth discussion of the financial subordination of peripheral emerging economies (PEEs) by connecting financial asymmetry with productive asymmetry. For this purpose, it sets out a Keynesian–Structuralist approach to the financial subordination of PEEs, and to the center–periphery relationship applied to the process of international financial integration. To that end, the paper shows that productive and financial asymmetries are related to each other, that is, they are ‘two sides of the same coin’: PEEs which have low-complexity productive structures and are commodity exporters tend to be much more volatile – that is, they are more subject to the boom and bust of the commodity cycle and the liquidity cycle – and therefore are more financially subordinated than PEEs which have more complex productive structures and are exporters of manufactured goods.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139591057","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper argues for broadening the application of hysteresis to institutions, policy lock-in, psychology, identity, and economic ideas. Hysteresis is an element of historical processes, and the real world is historical. That explains why hysteresis is pervasive and important. Hysteresis should be a fundamental building block of political economy. Expanding its application in economics is both an opportunity and a challenge. The opportunity is that it provides a means for incorporating political, sociological, and psychological forces, which economics tends to neglect. That will enrich economics and can also provide a mutually enriching bridge to other social sciences. The challenge is introducing such concerns raises questions about the character of economics’ knowledge claims, which is likely to trigger resistance from economists.
{"title":"Broadening the application of hysteresis in economics: institutions, policy lock-in, psychology, identity, and ideas","authors":"Thomas Palley","doi":"10.4337/roke.2023.04.02","DOIUrl":"https://doi.org/10.4337/roke.2023.04.02","url":null,"abstract":"This paper argues for broadening the application of hysteresis to institutions, policy lock-in, psychology, identity, and economic ideas. Hysteresis is an element of historical processes, and the real world is historical. That explains why hysteresis is pervasive and important. Hysteresis should be a fundamental building block of political economy. Expanding its application in economics is both an opportunity and a challenge. The opportunity is that it provides a means for incorporating political, sociological, and psychological forces, which economics tends to neglect. That will enrich economics and can also provide a mutually enriching bridge to other social sciences. The challenge is introducing such concerns raises questions about the character of economics’ knowledge claims, which is likely to trigger resistance from economists.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136229428","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book review: Dong Wang and Dejun Cao, Re-Globalisation: When China Meets the World Again (Routledge, London, UK 2020, ISBN 978-1-0031-2693-5) 168 pp.","authors":"Oktay Özden","doi":"10.4337/roke.2023.04.07","DOIUrl":"https://doi.org/10.4337/roke.2023.04.07","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139276453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The emergence of private digital currencies poses a threat to payment systems and monetary policy because they challenge all functions of money as we know them. In this paper, we focus mainly on the banking and monetary policy issues raised by stablecoins and Central Bank Digital Currencies (CBDCs). We begin by describing the current working of bank-centered payment systems. We next touch upon cryptoassets and focus on the domestic and international impact of stablecoins. We identify two problems with stablecoins: their role in the breakup of uniform currency, and as a source of financial instability due to the lack of a monetary backstop in the event of a run to withdraw funds in adverse situations. We then deal with the pros and cons of CBDCs, whether they are an adequate response to the challenges raised by stablecoins, their possible impact on monetary and banking policy, and some open economy issues. While we do not see major advantages in private digital currencies as a payment system or as an investment, we also do not find any robust motivation for the introduction of CBDCs beyond geopolitical reasons and the oversight of a technological area.
{"title":"Central Bank Digital Currencies: a proper reaction to private digital money?","authors":"S. Cesaratto, Eladio Febrero","doi":"10.4337/roke.2023.04.05","DOIUrl":"https://doi.org/10.4337/roke.2023.04.05","url":null,"abstract":"The emergence of private digital currencies poses a threat to payment systems and monetary policy because they challenge all functions of money as we know them. In this paper, we focus mainly on the banking and monetary policy issues raised by stablecoins and Central Bank Digital Currencies (CBDCs). We begin by describing the current working of bank-centered payment systems. We next touch upon cryptoassets and focus on the domestic and international impact of stablecoins. We identify two problems with stablecoins: their role in the breakup of uniform currency, and as a source of financial instability due to the lack of a monetary backstop in the event of a run to withdraw funds in adverse situations. We then deal with the pros and cons of CBDCs, whether they are an adequate response to the challenges raised by stablecoins, their possible impact on monetary and banking policy, and some open economy issues. While we do not see major advantages in private digital currencies as a payment system or as an investment, we also do not find any robust motivation for the introduction of CBDCs beyond geopolitical reasons and the oversight of a technological area.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.6,"publicationDate":"2023-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139276775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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