Metroeconomica最新文献

This paper constructs a unified framework to evaluate the Marxian transformation models, where the exploitation rate is an endogenous variable determined within value and price of production systems. All different procedures are based on two different value-price invariance equations. These could be chosen among either two aggregate product equations (gross or net output) or three capital invariant equations (total, variable or constant). Different combinations of invariance equations result in most Marxian solutions developed in recent decades. The solution does not imply that one model (prices) is logically prior to the other (values), but that in fact that the joint solution is needed.

The aim of this paper is to elaborate a Sraffian production model with banks, corporations, shareholders and managers to argue that the expansion of the financial sector contributes to the decrease of the wage-share. The model introduces joint production to take into account fixed capital and corporate firms and provides rigorous foundations for the description of an economy characterised by unbalanced growth with the financial sector growing at the highest rates. Besides demonstrating that the analysis generates non-negative solutions for prices and quantities, the paper concludes that, if workers' debt grows faster than the rest of the economy, the wage share diminishes and that the greater the size of the dividends that corporate companies decide to distribute, the larger the reductions in the wage share.

The paper proposes the application of a generalised withholding tax scheme to business-to-business transactions, in order to combat the evasion of income-related taxes levied on self-employed workers and businesses, as an alternative to the standard regime based on self-reporting. The scheme proposed here is comprehensive in scope, since it applies to all B2B transactions involving the self-employed and businesses, and can be regarded as an extension of the withholding tax regimes which are currently applied to specific sectors and/or business categories and self-employed taxpayers in some countries. We argue, even on the basis of a simple conceptual framework, that the benefit of extending such a withholding mechanism to profit taxes is twofold. On the one hand, consisting of an advance payment on the effective profit tax liability, it contributes to curbing tax evasion due to non-payment in a system characterised by a standard self-reporting mechanism. On the other hand, and more importantly, the withholding system—retaining information about each transaction subjected to it—enhances third-party information reporting if the withholding tax is applied to transactions that are otherwise excluded. This paper offers details on operational aspects of the proposed withholding tax mechanism. In particular, a critical issue in implementing the withholding regime lies in the choice of the tax rate, and more specifically in setting a level that is effective in reducing tax evasion without generating excessive tax refunds. This issue is discussed by applying the withholding mechanism to balance sheet microdata of all non-financial Italian companies.

This article aims to refine the Post Keynesian long run financial frontier models under an intermediate run called the ‘implementation period,’ the time horizon to finance and implement long run strategic plans. During this period, the availability of debt finance is crucial to bridge the time gap before future free cash flows validate the investment. Therefore, firms' long run investment plans may be modified or suspended during this time horizon subject to bankers' uncertainty perception and state of confidence, which constrain debt capacity and firms' investment decisions. Uncertainty and the measures to enhance confidence, such as banking convention, mimetic behaviours, and bankers' spontaneous optimism, are critical to determining the financial frontier because they affect the lending amount, tenor, and refinancing potential. The proposed model focussing on bankers' convention and susceptibility explains the volatile nature of the financial frontier, investment instability, downward sloping effective loan supply and credit rationing under new perspectives.

We apply a B-VAR technique to 28 high-income countries and 11 Euro area countries in 1999–2019 to analyze the causal relationships between centralization of capital measured in terms of network control and solvency conditions represented by the difference between GDP growth and interest rate. Results show a relationship that goes in two directions. First of all, divergent solvency conditions lead to an average increase in capital centralization and its greater convergence between countries. In turn, an average increase in capital centralization and its greater convergence produces a convergence of solvency conditions between countries. These outcomes are consistent for both groups of high-income countries and Euro area countries. Finally, in the group of high-income countries, we also note that an average deterioration in solvency conditions leads to a convergence of capital centralization between countries.

The paper develops an information-theoretic model of induced technical change where payoff-maximizing agents are exposed to a positive degree of uncertainty when adopting new technology due to unobserved cost factors. The derived equilibrium of the model comes in the form of a non-degenerate probability distribution that defines the distance of productivity growth from the potential maximum growth on the innovation possibilities frontier, often called the technical inefficiency function (TIF) in the frontier estimation literature. Many forms of the TIF are shown to be derived by specifying a particular functional form of the payoff function in our model. The paper estimates the innovation possibilities frontier and the TIF using the KLEMS data for 1995–2015 and documents the time evolution and sectoral heterogeneity of the innovation possibilities frontier.

In recent years, Post-Keynesian analysis has been characterized by a renewed interest in long-run theories of growth and distribution. While many authors have focused on the convergence of demand-led growth models to a fully adjusted equilibrium, relatively little attention has been given to the time required to reach this long-run position. In order to fill the gap, this paper seeks to answer the question of when is the long run in demand-led growth models. By making use of numerical integration, it analyses the time of adjustment from one steady-state to the other in two well-known demand-led growth models: the Sraffian Supermultiplier and the fully adjusted version of the neo-Kaleckian model. The results show that the adjustment period is generally beyond an economically meaningful time span, suggesting that researchers and policy makers ought to pay more attention to the models' predictions during the traverse rather than focusing on steady-state positions.

Why do economies fall into depression equilibria with output and inflation below target? What is the appropriate monetary policy? We examine the so-called “Neo-Fisherian” claim that, at the zero lower bound of the policy interest rate, and the economy in a depression equilibrium, in order to restore the desired inflation rate the policy rate should be raised consistently with the Fisher equation. To this end, we study a New Keynesian economy where we introduce a process of expectations formation, less explored in the relevant literature, such that agents, facing multiple equilibria, seek to figure out their subjective probabilistic beliefs about the future long-run equilibrium of the economy (“normality”, with inflation and output reverting to target, or “depression”, with inflation and output remaining below target), driven by the observed state of the economy. Therefore, key to the macroeconomic process is the dynamic interaction between the agents' state of confidence in the return to normality and monetary policy. Differently from comparable works, we find that the Neo-Fisherian claim is a theoretical possibility depending on the interplay of a set of parameters and very low levels of agents' confidence. Yet, on the basis of simulations of the model, we may say that this possibility is remote for most commonly found empirical values of the relevant parameters. Moreover, the Neo-Fisherian policy-rate peg is not sustained by the expectations formation process.

This paper develops a kaleckian economy in a stock-flow consistent (SFC) model to assess the effect of contingent convertible bonds (CoCos) in terms of stability through numerical simulations. The specific characteristics of the model are a dual sector of households (workers and investors) and a dual banking system (retail banks and investment banks). Two simulations are implemented. One focuses on an increase in defaults on workers' loans which triggers a write-down of CoCos issued by retail banks and the other on a decrease in corporate share prices which triggers a write-down of CoCos issued by investment banks. The overall effects are qualitatively similar. There is a shift of risks and adjustment costs from issuers to holders of CoCos which reduces companies' investment and investing-households’ consumption. The simulations show that the triggering of CoCos has a positive effect on the balance sheet of CoCos issuers. It also reduces the cost of bailouts. In return, there is an increase in real and financial instability. Two regulatory recommendations follow from this research. (1) Banks could be required to issue a fraction of their debt in CoCos in order to reduce bailout costs. (2) When CoCos are activated, their issuer could be forced not to intervene on all or part of the financial markets, for a predefined period of time and/or value, in order to limit the destabilisation of price assets.