Pub Date : 2021-07-03DOI: 10.1080/01603477.2021.1961549
{"title":"Announcing the Levy Economic Institute’s 11th Hyman P. Minsky Summer Seminar June 12–18, 2022","authors":"","doi":"10.1080/01603477.2021.1961549","DOIUrl":"https://doi.org/10.1080/01603477.2021.1961549","url":null,"abstract":"","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48366200","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}
Pub Date : 2021-06-28DOI: 10.1080/01603477.2021.1913753
David Dequech
Abstract The role of conventions in Keynes’s theory has been controversial. When dealing with investment and production decisions, Keynes referred to a projective rule that is his main example of convention. In addition, conventions appear in the practical techniques that Keynes attributed to agents concerned with the accumulation of wealth. Two important points have been neglected in existing interpretations. First, all these practical rules are directly present in goods markets and are not just rules used in financial markets that possibly influence agents in goods markets. Second, Keynes’s conventions in investment decisions are characterized by two properties: conformity with conformity and arbitrariness. The mechanisms underlying conformity with conformity include informational differences and possibly epistemic legitimacy, but, in contrast to Keynes’s discussion of financial markets, not a coordination effect with self-fulfilling prophecies. Those two properties are not clear in the case of production decisions.
{"title":"Conventions in Keynes’s theory of goods markets: investment and production decisions","authors":"David Dequech","doi":"10.1080/01603477.2021.1913753","DOIUrl":"https://doi.org/10.1080/01603477.2021.1913753","url":null,"abstract":"Abstract The role of conventions in Keynes’s theory has been controversial. When dealing with investment and production decisions, Keynes referred to a projective rule that is his main example of convention. In addition, conventions appear in the practical techniques that Keynes attributed to agents concerned with the accumulation of wealth. Two important points have been neglected in existing interpretations. First, all these practical rules are directly present in goods markets and are not just rules used in financial markets that possibly influence agents in goods markets. Second, Keynes’s conventions in investment decisions are characterized by two properties: conformity with conformity and arbitrariness. The mechanisms underlying conformity with conformity include informational differences and possibly epistemic legitimacy, but, in contrast to Keynes’s discussion of financial markets, not a coordination effect with self-fulfilling prophecies. Those two properties are not clear in the case of production decisions.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1913753","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48315042","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}
Pub Date : 2021-06-23DOI: 10.1080/01603477.2021.1932524
J. Harvey
Abstract In Keynes’ model, no variety of private sector spending plays a more critical role than investment. This is so because reaching full employment requires that it be large enough to offset the volume of saving that would be forthcoming at that level of economic activity, which occurs only rarely and by coincidence. Despite its key role, very few Post Keynesians have undertaken empirical studies of Keynes’ approach (as opposed to one based on Keynes). While I suspect that there are a number of reasons for this, perhaps the greatest stumbling block is one related to data: how do we measure not just investors’ expectations, but the difference between what was expected and what actually transpired? I believe I have developed a defensible solution to this problem, one that not only allows for a more direct test of Keynes’ theory but also offers tremendous support for it.
{"title":"Testing Keynes’ aggregate investment function","authors":"J. Harvey","doi":"10.1080/01603477.2021.1932524","DOIUrl":"https://doi.org/10.1080/01603477.2021.1932524","url":null,"abstract":"Abstract In Keynes’ model, no variety of private sector spending plays a more critical role than investment. This is so because reaching full employment requires that it be large enough to offset the volume of saving that would be forthcoming at that level of economic activity, which occurs only rarely and by coincidence. Despite its key role, very few Post Keynesians have undertaken empirical studies of Keynes’ approach (as opposed to one based on Keynes). While I suspect that there are a number of reasons for this, perhaps the greatest stumbling block is one related to data: how do we measure not just investors’ expectations, but the difference between what was expected and what actually transpired? I believe I have developed a defensible solution to this problem, one that not only allows for a more direct test of Keynes’ theory but also offers tremendous support for it.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1932524","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42351199","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}
Pub Date : 2021-06-03DOI: 10.1080/01603477.2021.1932525
M. Cedrini, J. Dagnes, Ç. Akdere
Abstract In Stephen King’s horror novel Needful Things, a stranger comes to town and opens a shop wherein any inhabitant can find exactly the thing s/he desires most, in exchange for playing “pranks” that cause distress to other members of the community, until the whole town is caught in a war of all against all. The paper analyses the novel as a “satire of Reaganomics,” as the author himself happened to describe it. Using insights from economics, economic sociology, and economic anthropology, it aims at demonstrating that the book provides an opportunity to explore the actual and possible evolution of individual behavior in consumer societies, as well as the tensions that such societies engender between ideals of self-realization (via market logics and consumption) and social relationships.
{"title":"Stephen King’s \"Needful Things\": a dystopian vision of capitalism during its triumph","authors":"M. Cedrini, J. Dagnes, Ç. Akdere","doi":"10.1080/01603477.2021.1932525","DOIUrl":"https://doi.org/10.1080/01603477.2021.1932525","url":null,"abstract":"Abstract In Stephen King’s horror novel Needful Things, a stranger comes to town and opens a shop wherein any inhabitant can find exactly the thing s/he desires most, in exchange for playing “pranks” that cause distress to other members of the community, until the whole town is caught in a war of all against all. The paper analyses the novel as a “satire of Reaganomics,” as the author himself happened to describe it. Using insights from economics, economic sociology, and economic anthropology, it aims at demonstrating that the book provides an opportunity to explore the actual and possible evolution of individual behavior in consumer societies, as well as the tensions that such societies engender between ideals of self-realization (via market logics and consumption) and social relationships.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1932525","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48395556","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}
Pub Date : 2021-05-21DOI: 10.1080/01603477.2021.1913752
Giacomo Bracci, Walter Paternesi Meloni, P. Tridico
Abstract Recently, some attempts to increase the stance for fiscal policies in the European budgetary framework have followed the line of reducing the estimated “structural” unemployment rate (NAIRU), with the ensuing increase in the computation of the output gap. A similar effect can be obtained by increasing the actual participation rate. In this paper, we propose the introduction of a deficit-financed conditional minimum income (CMI) to discouraged people which are outside the labor force. By stimulating participation, this measure would bring about an upward revision of Italy’s potential output, and this in turn will contribute to generate a greater fiscal stance. We empirically assess the reliability of this measure by using both comparative statics and empirical estimations carried out via the simulation procedure used by the Output Gaps Working Group of the European Commission. Assuming one million newcomers in the labor force, our findings indicate that the measure would have produced a greater fiscal space of approximately €19 billion in 2016 and €12 billion in 2017. We also forecast the impact of the introduction of the deficit-financed CMI on real GDP and public finance indicators. We finally discuss the feasibility and the main criticisms of the proposal.
{"title":"Output gap, participation and minimum income: a proposal for Italy","authors":"Giacomo Bracci, Walter Paternesi Meloni, P. Tridico","doi":"10.1080/01603477.2021.1913752","DOIUrl":"https://doi.org/10.1080/01603477.2021.1913752","url":null,"abstract":"Abstract Recently, some attempts to increase the stance for fiscal policies in the European budgetary framework have followed the line of reducing the estimated “structural” unemployment rate (NAIRU), with the ensuing increase in the computation of the output gap. A similar effect can be obtained by increasing the actual participation rate. In this paper, we propose the introduction of a deficit-financed conditional minimum income (CMI) to discouraged people which are outside the labor force. By stimulating participation, this measure would bring about an upward revision of Italy’s potential output, and this in turn will contribute to generate a greater fiscal stance. We empirically assess the reliability of this measure by using both comparative statics and empirical estimations carried out via the simulation procedure used by the Output Gaps Working Group of the European Commission. Assuming one million newcomers in the labor force, our findings indicate that the measure would have produced a greater fiscal space of approximately €19 billion in 2016 and €12 billion in 2017. We also forecast the impact of the introduction of the deficit-financed CMI on real GDP and public finance indicators. We finally discuss the feasibility and the main criticisms of the proposal.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1913752","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44071226","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}
Pub Date : 2021-05-04DOI: 10.1080/01603477.2021.1913755
G. Ingham
Abstract “Historicizing the money of account: a critique of the nominalist ontology of money” (Journal of Post Keynesian Economics, 3, 43) argues that “money itself” is always something more than money of account; that nominalists mistakenly believe that Keynes shared their position; and that money of account is historically specific to medieval Europe. This response contends that the case is based on misinterpretation, misunderstanding, and imprecise arguments.
{"title":"In defence of the nominalist ontology of money","authors":"G. Ingham","doi":"10.1080/01603477.2021.1913755","DOIUrl":"https://doi.org/10.1080/01603477.2021.1913755","url":null,"abstract":"Abstract “Historicizing the money of account: a critique of the nominalist ontology of money” (Journal of Post Keynesian Economics, 3, 43) argues that “money itself” is always something more than money of account; that nominalists mistakenly believe that Keynes shared their position; and that money of account is historically specific to medieval Europe. This response contends that the case is based on misinterpretation, misunderstanding, and imprecise arguments.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1913755","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48495689","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}
Pub Date : 2021-04-03DOI: 10.1080/01603477.2021.1872031
Alex T. Williams
Abstract Arguments against providing fiscal aid to state governments usually rely on a simplistic moral hazard argument: supporting states through a cyclical downturn encourages them to overspend. This argument undergirds the policy recommendations made by the mainstream literature on Fiscal Federalism. I argue that these accounts are predicated on a misunderstanding of what it means to be an agent with respect to one’s budget over the business cycle. Basic corporate finance theory teaches us that in order to have control over the relative movement of income and expenditure in the current period, one must be able to design one’s own capital structure. US State governments are institutionally and constitutionally prevented from designing their own capital structures, and as such, cannot be judged to have budgetary agency across the business cycle. I show that the moral hazard problem presented in the fiscal finance literature is ill-posed, and obscures a second, more important problem of moral hazard. Namely, that politicians at the federal level reap the political rewards of pursuing austerity at the state level while remaining insulated from any political, economic, or social costs or responsibility. This second moral hazard problem admits of a simple solution: trigger-based fiscal aid to state governments.
{"title":"Moral hazard in a modern federation","authors":"Alex T. Williams","doi":"10.1080/01603477.2021.1872031","DOIUrl":"https://doi.org/10.1080/01603477.2021.1872031","url":null,"abstract":"Abstract Arguments against providing fiscal aid to state governments usually rely on a simplistic moral hazard argument: supporting states through a cyclical downturn encourages them to overspend. This argument undergirds the policy recommendations made by the mainstream literature on Fiscal Federalism. I argue that these accounts are predicated on a misunderstanding of what it means to be an agent with respect to one’s budget over the business cycle. Basic corporate finance theory teaches us that in order to have control over the relative movement of income and expenditure in the current period, one must be able to design one’s own capital structure. US State governments are institutionally and constitutionally prevented from designing their own capital structures, and as such, cannot be judged to have budgetary agency across the business cycle. I show that the moral hazard problem presented in the fiscal finance literature is ill-posed, and obscures a second, more important problem of moral hazard. Namely, that politicians at the federal level reap the political rewards of pursuing austerity at the state level while remaining insulated from any political, economic, or social costs or responsibility. This second moral hazard problem admits of a simple solution: trigger-based fiscal aid to state governments.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1872031","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42113331","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}
Pub Date : 2021-04-03DOI: 10.1080/01603477.2021.1875246
Amanda Page-Hoongrajok
Abstract This paper investigates the extent to which state and local government capital spending in the United States can be an effective vehicle for countercyclical policy. Policy responses to recent cyclical downturns have included a variety of policies to encourage greater spending at the state and local level, including efforts to lower borrowing costs for these governments, but the effectiveness of these policies remains unclear. To examine the effectiveness of state-local capital spending as a countercyclical tool, I use a unique data set consisting of open-ended interviews with state and local budget officers and a survey of state governments. I find that at present, there are significant barriers preventing countercyclical state-local capital spending. First, interventions to stimulate capital spending via easing financing conditions are likely limited by two factors: some governments use minimal amounts of borrowing to finance capital spending, and for governments that do rely primarily on borrowing, capital spending appears insensitive to interest rates. Second, state and local capital spending decisions involve substantial lags, making it a poor vehicle for countercyclical fiscal policy even in the absence of financing constraints. Third, state-local budget officials do not view capital spending as a tool for economic stabilization.
{"title":"Can state and local government capital spending be a vehicle for countercyclical policy? Evidence from new interview and survey data","authors":"Amanda Page-Hoongrajok","doi":"10.1080/01603477.2021.1875246","DOIUrl":"https://doi.org/10.1080/01603477.2021.1875246","url":null,"abstract":"Abstract This paper investigates the extent to which state and local government capital spending in the United States can be an effective vehicle for countercyclical policy. Policy responses to recent cyclical downturns have included a variety of policies to encourage greater spending at the state and local level, including efforts to lower borrowing costs for these governments, but the effectiveness of these policies remains unclear. To examine the effectiveness of state-local capital spending as a countercyclical tool, I use a unique data set consisting of open-ended interviews with state and local budget officers and a survey of state governments. I find that at present, there are significant barriers preventing countercyclical state-local capital spending. First, interventions to stimulate capital spending via easing financing conditions are likely limited by two factors: some governments use minimal amounts of borrowing to finance capital spending, and for governments that do rely primarily on borrowing, capital spending appears insensitive to interest rates. Second, state and local capital spending decisions involve substantial lags, making it a poor vehicle for countercyclical fiscal policy even in the absence of financing constraints. Third, state-local budget officials do not view capital spending as a tool for economic stabilization.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2021.1875246","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41885916","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}
Pub Date : 2021-01-02DOI: 10.1080/01603477.2020.1840282
Claudio H. Dos Santos
Abstract The text has three main goals. The first is to share some of the author’s personal recollections on (briefly) working as Wynne Godley’s research assistant. The second is to reflect on the origins of the term/brand “stock-flow consistent” (or SFC, for insiders), which is at once successful (given the number of people who seem to like using it) and controversial. The third and most important is to reflect on Wynne Godley’s approach to macroeconomics—however, one wants to call it—and legacy.
{"title":"A passionate craftsman and his craft: reflections on Wynne Godley’s work and legacy","authors":"Claudio H. Dos Santos","doi":"10.1080/01603477.2020.1840282","DOIUrl":"https://doi.org/10.1080/01603477.2020.1840282","url":null,"abstract":"Abstract The text has three main goals. The first is to share some of the author’s personal recollections on (briefly) working as Wynne Godley’s research assistant. The second is to reflect on the origins of the term/brand “stock-flow consistent” (or SFC, for insiders), which is at once successful (given the number of people who seem to like using it) and controversial. The third and most important is to reflect on Wynne Godley’s approach to macroeconomics—however, one wants to call it—and legacy.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2020.1840282","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41289056","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}
Pub Date : 2021-01-02DOI: 10.1080/01603477.2020.1835495
S. Bibi
Abstract This work builds upon “Keynes, Kalecki and Metzler in a Dynamic Distribution Model”. In that paper the dynamics of an economy from the ultra-short to the short period inside a Post-Keynesian perspective were studied questioning the general shared assumption of equilibrium between aggregate demand and aggregate supply in the short and long run Kaleckian models. This paper responds to some unresolved issues of the model proposed there considering a proper analysis of the Kaleckian investment function and a more realistic scenario with the presence of the government sector. Moreover, even if that model tried to deal with firms’ expectations in producing goods, some values boundaries were exogenously established. Here, those boundaries are questioned again. In fact, the novelty of this work is that an active role of the government can actually influence both the values of the expectations and their respective boundaries. It is argued that is particularly the case when the government is engaged in policies which aim is to support and secure a high level of economic activity and to smooth and steer the cycles phases toward a sustainable development path. Particularly we focus on the role of different fiscal policies aimed at obtaining such goals.
{"title":"The stabilizing role of the government in a dynamic distribution growth model","authors":"S. Bibi","doi":"10.1080/01603477.2020.1835495","DOIUrl":"https://doi.org/10.1080/01603477.2020.1835495","url":null,"abstract":"Abstract This work builds upon “Keynes, Kalecki and Metzler in a Dynamic Distribution Model”. In that paper the dynamics of an economy from the ultra-short to the short period inside a Post-Keynesian perspective were studied questioning the general shared assumption of equilibrium between aggregate demand and aggregate supply in the short and long run Kaleckian models. This paper responds to some unresolved issues of the model proposed there considering a proper analysis of the Kaleckian investment function and a more realistic scenario with the presence of the government sector. Moreover, even if that model tried to deal with firms’ expectations in producing goods, some values boundaries were exogenously established. Here, those boundaries are questioned again. In fact, the novelty of this work is that an active role of the government can actually influence both the values of the expectations and their respective boundaries. It is argued that is particularly the case when the government is engaged in policies which aim is to support and secure a high level of economic activity and to smooth and steer the cycles phases toward a sustainable development path. Particularly we focus on the role of different fiscal policies aimed at obtaining such goals.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2021-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/01603477.2020.1835495","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44754374","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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