{"title":"Book review: Thomas Palley, Neoliberalism and the Road to Inequality and Stagnation: A Chronicle Foretold (Edward Elgar Publishing, Cheltenham, UK and Northampton, USA 2021, ISBN: 978180220 0072) 320 pp.","authors":"","doi":"10.4337/roke.2023.01.09","DOIUrl":"https://doi.org/10.4337/roke.2023.01.09","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44221648","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 note comments on a corollary of the neo-Pasinetti Theorem – the dependence of national saving on corporate saving – as elaborated by Peter Skott in his model of corporate capitalism. The central insight is that, under an alternative closure that treats the wealth effect conveyed by the q-ratio as a mechanism for coordinating corporate investment and national saving, this corollary will not go through. An increase in corporate retentions will not affect the q-ratio or national saving; it will reduce the dividend yield and increase the rate of capital gains. This creates the impression that equity-owning households have ‘pierced the corporate veil’ when in fact this outcome follows from the logic of the corporate capitalist system under the alternative closure. The note thus qualifies the neo-Pasinetti result by showing that it depends on the choice of closure.
{"title":"Asset market closure and the neo-Pasinetti theorem","authors":"","doi":"10.4337/roke.2023.01.06","DOIUrl":"https://doi.org/10.4337/roke.2023.01.06","url":null,"abstract":"This note comments on a corollary of the neo-Pasinetti Theorem – the dependence of national saving on corporate saving – as elaborated by Peter Skott in his model of corporate capitalism. The central insight is that, under an alternative closure that treats the wealth effect conveyed by the q-ratio as a mechanism for coordinating corporate investment and national saving, this corollary will not go through. An increase in corporate retentions will not affect the q-ratio or national saving; it will reduce the dividend yield and increase the rate of capital gains. This creates the impression that equity-owning households have ‘pierced the corporate veil’ when in fact this outcome follows from the logic of the corporate capitalist system under the alternative closure. The note thus qualifies the neo-Pasinetti result by showing that it depends on the choice of closure.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43994432","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: Domenica Tropeano, Financial Regulation in the European Union after the Crisis. A Minskian Approach (Routledge, New York, NY, USA 2018) 173 pp.","authors":"","doi":"10.4337/roke.2023.01.08","DOIUrl":"https://doi.org/10.4337/roke.2023.01.08","url":null,"abstract":"","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46524100","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 study tests the hybrid New Keynesian Phillips curve using a novel panel dataset of the 50 US states from 1977 to 2018. The results suggest that the hybrid New Keynesian Phillips curve is a robust representation of the evolution of US inflation, and emphasise the role of unit labour cost as a driving variable. Consistent with , we find relatively larger weights for future inflation than for lagged inflation. This finding confirms the theory of forward-looking behaviour. Furthermore, we obtain more evidence of dominant forward-looking behaviour by using principal component-based instruments, finding that using principal components is a good option to overcome weak identifications.
{"title":"Inflation dynamics: forward or backward looking?","authors":"","doi":"10.4337/roke.2023.01.03","DOIUrl":"https://doi.org/10.4337/roke.2023.01.03","url":null,"abstract":"This study tests the hybrid New Keynesian Phillips curve using a novel panel dataset of the 50 US states from 1977 to 2018. The results suggest that the hybrid New Keynesian Phillips curve is a robust representation of the evolution of US inflation, and emphasise the role of unit labour cost as a driving variable. Consistent with , we find relatively larger weights for future inflation than for lagged inflation. This finding confirms the theory of forward-looking behaviour. Furthermore, we obtain more evidence of dominant forward-looking behaviour by using principal component-based instruments, finding that using principal components is a good option to overcome weak identifications.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43994525","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 work aims to contribute to recent literature that empirically analyses the relationship between inequality in the labour market and economic growth. To do so, we measured wage inequality by using the ratio between the wages of the 10% of workers with the highest earnings and the wages of the bottom 40% of workers with the lowest earnings (10/40 ratio), capturing the wage gap between the two extreme classes of wage earners. We also used a panel data modelling approach, assuming that the main relationship studied is endogenous, and a sample with 189 countries in the period between 2004 and 2017. Our findings indicate a negative effect of wage inequality on economic growth.
{"title":"Mind the wage gap: an empirical analysis of the impact of labour income inequality on economic growth*","authors":"","doi":"10.4337/roke.2023.01.02","DOIUrl":"https://doi.org/10.4337/roke.2023.01.02","url":null,"abstract":"This work aims to contribute to recent literature that empirically analyses the relationship between inequality in the labour market and economic growth. To do so, we measured wage inequality by using the ratio between the wages of the 10% of workers with the highest earnings and the wages of the bottom 40% of workers with the lowest earnings (10/40 ratio), capturing the wage gap between the two extreme classes of wage earners. We also used a panel data modelling approach, assuming that the main relationship studied is endogenous, and a sample with 189 countries in the period between 2004 and 2017. Our findings indicate a negative effect of wage inequality on economic growth.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45543280","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}
Going beyond the Varieties of Capitalism comparative analysis, a theory of advanced capitalism is developed to explain what has been driving advanced capitalism through the massive creative destruction of the information and communication technologies (ICT) revolution of recent decades. Second, it is argued – reconfiguring Varieties of Capitalism – that the advanced capitalist economies should be seen not just in terms of comparative capitalisms, but as an advanced world innovation system of interacting advanced economies. Critically, the dominant position in that system is the (hegemonic but also fragile, problematic and handicapped) United States as the world driver of radical innovation: this reflects the key role of its top research universities, their diasporas and associated deregulated high-risk-taking venture capitalist and investment banking ecosystems; its decentralised and business-porous political and legal systems; and its dominance ab initio of digitalisation. Problematic has been the major reduction since the early 1990s in Federal R&D, itself a consequence of the anti-public-expenditure Republican gridlock in Congress, and in turn the result of the political, geographical and socioeconomic polarisation associated with technological creative destruction more dramatically in the US than elsewhere. Third, it addresses the paradox – in the contemporary technologically revolutionary age – of productivity growth falling below that of the Fordist era. It is argued that Schumpeterian growth expectations play a much larger role in R&D investment in the high-sunk-cost and high-risk US-centred ICT era than in the relative stability of Fordism and Chandlerian corporations; the author sets out a simple Keynesian–Kaldorian expectations-based multiple equilibrium productivity growth model, where major crashes shift economies down to lower growth equilibria. The conclusion raises six areas of future work which stem from the approaches outlined above.
{"title":"Rethinking Varieties of Capitalism and growth theory in the ICT era*","authors":"D. Soskice","doi":"10.4337/roke.2022.02.05","DOIUrl":"https://doi.org/10.4337/roke.2022.02.05","url":null,"abstract":"Going beyond the Varieties of Capitalism comparative analysis, a theory of advanced capitalism is developed to explain what has been driving advanced capitalism through the massive creative destruction of the information and communication technologies (ICT) revolution of recent decades. Second, it is argued – reconfiguring Varieties of Capitalism – that the advanced capitalist economies should be seen not just in terms of comparative capitalisms, but as an advanced world innovation system of interacting advanced economies. Critically, the dominant position in that system is the (hegemonic but also fragile, problematic and handicapped) United States as the world driver of radical innovation: this reflects the key role of its top research universities, their diasporas and associated deregulated high-risk-taking venture capitalist and investment banking ecosystems; its decentralised and business-porous political and legal systems; and its dominance ab initio of digitalisation. Problematic has been the major reduction since the early 1990s in Federal R&D, itself a consequence of the anti-public-expenditure Republican gridlock in Congress, and in turn the result of the political, geographical and socioeconomic polarisation associated with technological creative destruction more dramatically in the US than elsewhere. Third, it addresses the paradox – in the contemporary technologically revolutionary age – of productivity growth falling below that of the Fordist era. It is argued that Schumpeterian growth expectations play a much larger role in R&D investment in the high-sunk-cost and high-risk US-centred ICT era than in the relative stability of Fordism and Chandlerian corporations; the author sets out a simple Keynesian–Kaldorian expectations-based multiple equilibrium productivity growth model, where major crashes shift economies down to lower growth equilibria. The conclusion raises six areas of future work which stem from the approaches outlined above.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49653275","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 authors outline and simulate a stylized Post-Keynesian two-country stock–flow consistent model to demonstrate the interconnection of three of the main features/outcomes of finance-dominated capitalism, namely worsening income distribution for the bottom 90 per cent of households, the rise of international imbalances, and the build-up of financial fragility. In the model, two basic regimes emerge, depending on the institutional setting of the respective model economy: the debt-led private demand boom regime and the export-led mercantilist regime. The authors demonstrate the complementarity and interdependence of these two regimes and show how this constellation transformed after a crisis into the domestic demand-led regime stabilized by government deficits, on the one hand, and export-led mercantilist regimes, on the other, depending on the required deleveraging of private household debt, distributional developments and fiscal policy.
{"title":"Varieties and interdependencies of demand and growth regimes in finance-dominated capitalism: a Post-Keynesian two-country stock–flow consistent simulation approach","authors":"F. Prante, Eckhard Hein, Alessandro Bramucci","doi":"10.4337/roke.2022.02.07","DOIUrl":"https://doi.org/10.4337/roke.2022.02.07","url":null,"abstract":"The authors outline and simulate a stylized Post-Keynesian two-country stock–flow consistent model to demonstrate the interconnection of three of the main features/outcomes of finance-dominated capitalism, namely worsening income distribution for the bottom 90 per cent of households, the rise of international imbalances, and the build-up of financial fragility. In the model, two basic regimes emerge, depending on the institutional setting of the respective model economy: the debt-led private demand boom regime and the export-led mercantilist regime. The authors demonstrate the complementarity and interdependence of these two regimes and show how this constellation transformed after a crisis into the domestic demand-led regime stabilized by government deficits, on the one hand, and export-led mercantilist regimes, on the other, depending on the required deleveraging of private household debt, distributional developments and fiscal policy.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45409926","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}
Are varieties of capitalism real things in the world, or analytic artifacts that scholars project into the world? The first part of this essay considers the utility of sorting different capitalist economies into different types. We build upon Hay (2020) to argue that some varietals are both more real and more useful than others. Specifically, we argue that recent work on growth models (Baccaro and Pontusson 2016) marks a progressive extension of the Comparative Political Economy research program on advanced capitalist states. But from an International Political Economy perspective, this research program can only reach its potential by clearly determining whether the causal origins of variety lie in either unit or system-level characteristics. We argue for incorporating a more system-led explanation of variety that focuses upon fallacies of composition, power asymmetries, and credit cycles. To show this, we walk through four different arguments about system–unit relations – the ‘four Galtons’ – and add in Minsky’s argument about financial crisis cycles.
资本主义的多样性是世界上真实存在的东西，还是学者们投射到世界上的分析产物?本文的第一部分考虑了将不同的资本主义经济分类为不同类型的效用。我们以Hay(2020)为基础，认为一些品种比其他品种更真实，更有用。具体而言，我们认为，最近关于增长模型的研究(Baccaro and Pontusson 2016)标志着对发达资本主义国家的比较政治经济学研究计划的逐步延伸。但从国际政治经济学的角度来看，只有明确地确定多样性的因果起源是在单位层面还是在系统层面，这一研究方案才能发挥其潜力。我们主张采用一种更以系统为导向的解释，将重点放在构成谬误、权力不对称和信贷周期上。为了说明这一点，我们回顾了关于系统-单位关系的四种不同观点——“四个高尔顿”——并加入了明斯基关于金融危机周期的观点。
{"title":"In search of varieties of capitalism: hardy perennial or troublesome weed?","authors":"M. Blyth, H. Schwartz","doi":"10.4337/roke.2022.02.02","DOIUrl":"https://doi.org/10.4337/roke.2022.02.02","url":null,"abstract":"Are varieties of capitalism real things in the world, or analytic artifacts that scholars project into the world? The first part of this essay considers the utility of sorting different capitalist economies into different types. We build upon Hay (2020) to argue that some varietals are both more real and more useful than others. Specifically, we argue that recent work on growth models (Baccaro and Pontusson 2016) marks a progressive extension of the Comparative Political Economy research program on advanced capitalist states. But from an International Political Economy perspective, this research program can only reach its potential by clearly determining whether the causal origins of variety lie in either unit or system-level characteristics. We argue for incorporating a more system-led explanation of variety that focuses upon fallacies of composition, power asymmetries, and credit cycles. To show this, we walk through four different arguments about system–unit relations – the ‘four Galtons’ – and add in Minsky’s argument about financial crisis cycles.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45571840","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 article develops a framework for studying the politics of growth models. These, the authors posit, are sustained by ‘growth coalitions’ based in key sectors. Their members are first and foremost firms and employer associations, but fractions of labor are also included, if their interests do not impair the model’s functionality. There is no guarantee that a growth coalition and a winning electoral coalition coincide. In normal times, a growth coalition effectively insulates itself from political competition, and mainstream political parties converge on key growth model policies. In moments of crisis, however, the coalition shrinks, favoring the emergence of challengers that fundamentally contest the status quo. The way governing parties respond to electoral pressures can also play an important role in the recalibration of growth models. The authors illustrate the argument by examining the politics of ‘export-led growth’ in Germany, ‘construction-led growth’ in Spain, and ‘balanced growth’ in Sweden.
{"title":"The politics of growth models","authors":"Lucio Baccaro","doi":"10.4337/roke.2022.02.04","DOIUrl":"https://doi.org/10.4337/roke.2022.02.04","url":null,"abstract":"This article develops a framework for studying the politics of growth models. These, the authors posit, are sustained by ‘growth coalitions’ based in key sectors. Their members are first and foremost firms and employer associations, but fractions of labor are also included, if their interests do not impair the model’s functionality. There is no guarantee that a growth coalition and a winning electoral coalition coincide. In normal times, a growth coalition effectively insulates itself from political competition, and mainstream political parties converge on key growth model policies. In moments of crisis, however, the coalition shrinks, favoring the emergence of challengers that fundamentally contest the status quo. The way governing parties respond to electoral pressures can also play an important role in the recalibration of growth models. The authors illustrate the argument by examining the politics of ‘export-led growth’ in Germany, ‘construction-led growth’ in Spain, and ‘balanced growth’ in Sweden.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46342770","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 critically analyses the literature spawned by Peter Hall and David Soskice’s influential book on the varieties of capitalism. It takes as a starting point the critiques within the comparative political economy literature about the supply-side views on economic growth, and the problems with emphasizing the nature of firm behavior as the source of institutional variety. It argues that demand-led growth, as discussed by Post-Keynesian authors, provides an important alternative to the conventional approach to the explanation of varieties of institutional experience. It suggests that understanding the reasons for institutional variety within capitalism requires incorporating the work of Cambridge Keynesians which recovered the work of Classical political economy authors and extended Keynes’s ideas on effective demand to explain the process of accumulation. It also requires incorporating the ideas of Prebisch and the Latin American Structuralists, who analysed the limits to accumulation in peripheral countries. The paper also discusses the limitations of Neo-Kaleckian models of demand-led growth used by some authors in the comparative political economy literature, and it suggests a new taxonomy for ordering varieties of capitalism.
{"title":"Varieties of peripheral capitalism: on the institutional foundations of economic backwardness*","authors":"Esteban Pérez Caldentey, M. Vernengo","doi":"10.4337/roke.2022.02.06","DOIUrl":"https://doi.org/10.4337/roke.2022.02.06","url":null,"abstract":"This paper critically analyses the literature spawned by Peter Hall and David Soskice’s influential book on the varieties of capitalism. It takes as a starting point the critiques within the comparative political economy literature about the supply-side views on economic growth, and the problems with emphasizing the nature of firm behavior as the source of institutional variety. It argues that demand-led growth, as discussed by Post-Keynesian authors, provides an important alternative to the conventional approach to the explanation of varieties of institutional experience. It suggests that understanding the reasons for institutional variety within capitalism requires incorporating the work of Cambridge Keynesians which recovered the work of Classical political economy authors and extended Keynes’s ideas on effective demand to explain the process of accumulation. It also requires incorporating the ideas of Prebisch and the Latin American Structuralists, who analysed the limits to accumulation in peripheral countries. The paper also discusses the limitations of Neo-Kaleckian models of demand-led growth used by some authors in the comparative political economy literature, and it suggests a new taxonomy for ordering varieties of capitalism.","PeriodicalId":45671,"journal":{"name":"Review of Keynesian Economics","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43218920","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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