Metroeconomica最新文献

The name of Schumpeter is not among those of the precursors of post-Keynesian monetary theory. This seems understandable when considering Schumpeter's ferocious criticism of The General Theory. However, in recent years various authors have highlighted significant points of contact between Schumpeter's monetary theory and that of Keynes and of post-Keynesians. The objective of this work is not only to indicate the similarities between Schumpeter's monetary theory and that of the post-Keynesians, but rather to show that Schumpeter's approach to money and credit allows making post-Keynesian monetary theory more solid. In particular, we will show that Schumpeter's monetary theory enables to develop an explanation of the principle of effective demand sounder than that based on the simple presence of endogenous money and on the liquidity preference theory.

Developing country inflation is in the headlines again. Mainstream macroeconomics typically ignores the role of conflict while non-mainstream work tends to ignore macroeconomic constraints. This paper revisits the issue employing a dependent economy framework with eclectic characteristics. Specifically, I explore the mechanisms that propagate both real and monetary sources of inflation in the presence of real wage resistance and distributional conflict. The analysis shows that the inability to pay for subsidies with taxes or bond issuance in a stylized developing economy could create a situation where a relatively small shock leads to sustained and accelerating inflation and a wage-price spiral, thanks to conflicting claims on income. Subsidies to protect consumers from external price shocks could, similarly, leave a country vulnerable to accelerating wage-price spirals as the stabilizing relative price effects of a declining foreign asset position are dampened. Distributional conflict thus plays the role of sustainer rather than the primum mobile. Price controls could, in theory, better enable inflation management if these do not result in redistribution toward spenders. Such controls, however, create other trade-offs for countries facing balance-of-payments fragility.

We estimate a modified demand-and-distribution system for the 48 contiguous US states and the District of Columbia (DC) employing dynamic spatial panel data for 1980–2019. We allow for endogenous regressors, test for the presence, significance, and magnitude of spatial spillovers, and estimate immediate and cumulative effects on our endogenous variables of interest. Without testing for spatial dependence and spillovers, we estimate that output growth and capacity utilization in the sample US states and DC rise in response to an increase in their own wage share. When we test for spatial dependence and spillovers as required by the state-level nature of the data, and consider that the functional distribution of income and the level of economic activity are jointly determined, we estimate that a higher state wage share raises output growth in the own state and the neighboring states. Yet the effect of a change in the state wage share on capacity utilization in the own state and the neighboring states is not statistically significant. Meanwhile, a higher state output growth raises the wage share in the own state, but its impact on the wage share in the neighboring states is not statistically significant. A higher state capacity utilization raises the wage share in the own state, yet it reduces the wage share in the neighboring states.

This article considers a quantity-setting duopoly (Cournot rivalry) in which firms adopt an abatement technology as a device to improve the quality of products. Consumer preferences capture vertical product differentiation (quality) towards “green” products. This introduces a trade-off on the production side, as firms that do not abate, in turn, do not sustain any abatement cost but the demand for their product is low. On the contrary, firms that choose to abate incur abatement costs, but the demand for their product is high. The article aims to study and understand whether this kind of preference may lead firms to strategically invest in green technology and introduces a new, private-based (that contrasts the well-known public-based) mechanism through which pollution abatement can emerge as a sub-game perfect Nash equilibrium (SPNE) of a non-cooperative abatement decision game with product quality and complete information. The model is developed in a parsimonious way to pinpoint the main determinants of the endogenous market outcomes ranging from an anti-prisoner's dilemma in which self-interest and mutual benefit of non-abatement do not conflict to an anti-prisoner's dilemma in which self-interest and mutual benefit of abatement do not conflict, passing through to an anti-coordination scenario. Additionally, the welfare analysis reveals the existence of a win-win solution from a societal perspective. The article shows that the results obtained in the Cournot setting also hold considering a Bertrand duopoly.

The purpose of this paper is to provide a micro-economic foundation for an argument that the direct employment by the government is more desirable than the government purchase of private goods to eliminate unemployment. A general equilibrium model with monopolistic competition is devised, and the effects of policies (government purchase, tax rate operation, and government employment) on macroeconomic variables (consumption, price, and profit) are investigated. It is shown that (1) the government purchase is inflationary in the sense that additional effective demand by the government not only increases private employment but also raises prices; (2) the government employment can achieve full employment without causing a rise in prices.

Carbon prices have grown remarkably in the European Union (EU) Emissions Trading System (ETS) in recent years, raising distributional concerns. Revenues are expected to grow with higher carbon prices, thus providing resources to address distributional issues. Beyond a certain point, however, higher prices can discourage the purchase of allowances and ultimately reduce revenues, describing a Carbon Laffer Curve (CLC). We empirically investigate the CLC in the EU ETS between 2012 and 2021 using auction revenues at the country level. Results indicate that ETS revenues follow an inverted-U relationship in both the volume and the price of auctioned allowances, with an estimated optimal price between 86 and 125 euros.

In contrast to Mandler's generic determinacy of steady-state equilibria, we first show that any non-trivial steady-state equilibrium is indeterminate under a general overlapping generation (OLG) economy with a fixed Leontief technique. We also check that this indeterminacy is generic. These results are obtained by explicitly introducing a general model of every generation's utility function and individual optimization program to the OLG economy, which also verifies that Mandler's claim on generic determinacy is invalid. We also argue the distinctiveness of our results in comparison with the standard literature of OLG indeterminacy.

This article models the process of structural transformation and catching-up in a demand-led Southern economy constrained by its balance of payments. Starting from the Sraffian Supermultiplier Model, we model a dual-sector small open economy with a traditional and a modern sector that interacts with a technologically advanced Northern economy. We propose two (alternative) autonomous elements that define the growth rate of this demand-led economy: government spending and exports. Drawing from the Structuralist literature, productivity in the technologically laggard Southern economy grows by absorbing technology from the Northern economy, by both embodied and disembodied spillovers, and potentially closing the technology gap. The gap affects the income elasticity of exports, bringing a supply-side mediation to the growth rates in line with the Balance of Payments Constrained Model. We observe that a demand-led government policy plays a central role in structural change, pushing the modern sector to a larger share of employment than what results under export-led growth. Such a demand policy is the only way in which partial catching up (in productivity and GDP per capita) can result, and this is facilitated by a global market place in which the balance of payments constraint is relatively soft.

This paper analyzes the transfer pricing decision of the multinational firm. There are differences in profit tax rates between home-country and host-country. The multinational firm determines the transfer price to its overseas affiliate and delegates the responsibility of deciding on the final sales to its affiliate manager. We find that: (1) The multinational firm will set a higher transfer price if its affiliate hires a manager. If the host-country firm also hires a manager, the managerial delegation may lead to an asymmetry “prisoner's dilemma”. (2) When home-country's tax rate is higher than that in the host-country, multinational firm tends to set a lower transfer price relative to the marginal production cost. (3) When host-country's tax rate is higher than that in the home-country, an increase in the host-country corporate tax rate decreases multinational firm's profit and the consumer surplus, while its impact on the host-country firm's profit is non-monotone; an increase in the home-country tax rate decreases host-country firm's profit, increases consumer surplus, but has a non-monotone impact on multinational firm's profit.

We integrate the notion of task-based automation into a two-class model and study the interaction between endogenous automation and the wealth distribution between capitalists and workers. We find that, as the economy becomes more automated, the possibility of a sustained capitalist class naturally arises. We show that capital-augmenting technical progress induces automation and that it can generate a historical path from the dual equilibrium (where workers own all wealth), over the Pasinetti equilibrium (where capitalists own some wealth) to the anti-dual outcome (where capitalists own all wealth). The model's implications are related to Piketty's account of rising wealth inequality.