Pub Date : 2021-11-30DOI: 10.1080/01603477.2021.1999829
George Pantelopoulos
Abstract Investigations into the process by which cross-border payments are completed within the international monetary system remain largely unresolved. By exploring how these payments are executed through a flow of funds representation as per Institutional Practice—the operations of both the Central Bank and commercial banks within the payment and settlement system—this paper will (1) demonstrate that domestic monetary policy implementation entails the Central Bank offsetting all autonomous reserve flows to maintain an overnight policy rate; (2) show why global imbalances occur and persist across the international monetary system; and (3) outline the impact of involuntary constraints on policymaking.
{"title":"Cross-border payments, global imbalances and involuntary constraints","authors":"George Pantelopoulos","doi":"10.1080/01603477.2021.1999829","DOIUrl":"https://doi.org/10.1080/01603477.2021.1999829","url":null,"abstract":"Abstract Investigations into the process by which cross-border payments are completed within the international monetary system remain largely unresolved. By exploring how these payments are executed through a flow of funds representation as per Institutional Practice—the operations of both the Central Bank and commercial banks within the payment and settlement system—this paper will (1) demonstrate that domestic monetary policy implementation entails the Central Bank offsetting all autonomous reserve flows to maintain an overnight policy rate; (2) show why global imbalances occur and persist across the international monetary system; and (3) outline the impact of involuntary constraints on policymaking.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"301 - 328"},"PeriodicalIF":1.0,"publicationDate":"2021-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46863856","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 : 2021-11-30DOI: 10.1080/01603477.2021.2000336
Cláudio Castelo Branco Puty
Abstract This study investigates the shape of cost curves and cost components of twenty industries in the U.S. manufacturing sector in the 1958–2010 period. After aggregating data for the 459 industries of the U.S. Standard Industrial Classification (SIC), I analyzed, at both sectoral and two-digit levels, the behavior of unit variable costs for different levels of output, as represented by a proxy for capacity utilization. In addition, I decomposed the cost structure into payroll, wages, and material costs. Results show that the unit variable costs of the large majority of industries present constancy around the trend of the output series, giving support therefore to the hypothesis of a post-Keynesian inverted L-shaped cost curve that, at the aggregate level, shows a considerable range of constancy in unit direct cost curves around normal capacity utilization. In addition, decomposition in material and labor costs shows that labor hoarding is a generalized phenomenon in the manufacturing sector, shown by the steeper slopes of the local regression fits for payroll and wage costs in relation to material costs.
{"title":"Shape matters: cost curves and capacity utilization in U.S. manufacturing","authors":"Cláudio Castelo Branco Puty","doi":"10.1080/01603477.2021.2000336","DOIUrl":"https://doi.org/10.1080/01603477.2021.2000336","url":null,"abstract":"Abstract This study investigates the shape of cost curves and cost components of twenty industries in the U.S. manufacturing sector in the 1958–2010 period. After aggregating data for the 459 industries of the U.S. Standard Industrial Classification (SIC), I analyzed, at both sectoral and two-digit levels, the behavior of unit variable costs for different levels of output, as represented by a proxy for capacity utilization. In addition, I decomposed the cost structure into payroll, wages, and material costs. Results show that the unit variable costs of the large majority of industries present constancy around the trend of the output series, giving support therefore to the hypothesis of a post-Keynesian inverted L-shaped cost curve that, at the aggregate level, shows a considerable range of constancy in unit direct cost curves around normal capacity utilization. In addition, decomposition in material and labor costs shows that labor hoarding is a generalized phenomenon in the manufacturing sector, shown by the steeper slopes of the local regression fits for payroll and wage costs in relation to material costs.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"386 - 407"},"PeriodicalIF":1.0,"publicationDate":"2021-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48254519","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 : 2021-11-05DOI: 10.1080/01603477.2021.1993072
I. Rozmainsky, Yuliana Kovezina, Anna N. Klimenko
Abstract This paper conducts an empirical analysis of the financial instability hypothesis on Dutch data. The main literature on this topic has been reviewed, and various financial fragility indexes to determine whether Dutch firms are in a hedge, speculative, or Ponzi regime are discussed. To do empirical analysis, 340 publicly-listed private Dutch firms from various industries were selected, and these panel data include observations from 2005 to 2019. This period includes three cases of falling GDP of the Netherlands: 2008–2009, 2011, and 2014. We use for our empirical analysis three financial fragility indexes. After identifying the regime of firms according to these criteria, we chose an index developed by Nishi to make a logistic regression. We use the Nishi approach to determine what affects a firm’s probabilities of becoming a Ponzi and thereby confirm Minsky’s hypothesis on Dutch data. According to our analysis, significant factors of the probability that Dutch private non-financial companies will be a Ponzi firm are profitability, interest rate, industry output, and crisis. Both accumulation of financial fragility due to “destabilizing stability” and austerity policy were reasons for economic crises in the Netherlands in the last decades.
{"title":"An empirical application of the financial instability hypothesis based on data from the Dutch non-financial private sector","authors":"I. Rozmainsky, Yuliana Kovezina, Anna N. Klimenko","doi":"10.1080/01603477.2021.1993072","DOIUrl":"https://doi.org/10.1080/01603477.2021.1993072","url":null,"abstract":"Abstract This paper conducts an empirical analysis of the financial instability hypothesis on Dutch data. The main literature on this topic has been reviewed, and various financial fragility indexes to determine whether Dutch firms are in a hedge, speculative, or Ponzi regime are discussed. To do empirical analysis, 340 publicly-listed private Dutch firms from various industries were selected, and these panel data include observations from 2005 to 2019. This period includes three cases of falling GDP of the Netherlands: 2008–2009, 2011, and 2014. We use for our empirical analysis three financial fragility indexes. After identifying the regime of firms according to these criteria, we chose an index developed by Nishi to make a logistic regression. We use the Nishi approach to determine what affects a firm’s probabilities of becoming a Ponzi and thereby confirm Minsky’s hypothesis on Dutch data. According to our analysis, significant factors of the probability that Dutch private non-financial companies will be a Ponzi firm are profitability, interest rate, industry output, and crisis. Both accumulation of financial fragility due to “destabilizing stability” and austerity policy were reasons for economic crises in the Netherlands in the last decades.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"281 - 300"},"PeriodicalIF":1.0,"publicationDate":"2021-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44100049","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 : 2021-11-02DOI: 10.1080/01603477.2021.1993071
Stefano Sgambati
Abstract “In Defence of the Nominalist Ontology of Money” by Geoffrey Ingham (published by the Journal of Post Keynesian Economics in 2021) contends that “Historicising the Money of Account: A Critique of the Nominalist Ontology of Money” (published by the same journal in 2020) is based on misunderstanding, misrepresentation, and imprecisions. The core proposition in “Historicising the Money of Account” is that the money of account, which is generally understood to be a universal attribute of money, is in fact an institution of late medieval and early modern times that has no significant equivalent in today’s world (or in the ancient world, for that matter). This reply is intended to provide further clarification on the historical and ontological specificity of the late medieval institution of the money of account.
{"title":"Historicizing the money of account—a rejoinder","authors":"Stefano Sgambati","doi":"10.1080/01603477.2021.1993071","DOIUrl":"https://doi.org/10.1080/01603477.2021.1993071","url":null,"abstract":"Abstract “In Defence of the Nominalist Ontology of Money” by Geoffrey Ingham (published by the Journal of Post Keynesian Economics in 2021) contends that “Historicising the Money of Account: A Critique of the Nominalist Ontology of Money” (published by the same journal in 2020) is based on misunderstanding, misrepresentation, and imprecisions. The core proposition in “Historicising the Money of Account” is that the money of account, which is generally understood to be a universal attribute of money, is in fact an institution of late medieval and early modern times that has no significant equivalent in today’s world (or in the ancient world, for that matter). This reply is intended to provide further clarification on the historical and ontological specificity of the late medieval institution of the money of account.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"329 - 337"},"PeriodicalIF":1.0,"publicationDate":"2021-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44318142","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 : 2021-09-08DOI: 10.1080/01603477.2021.1969951
H. Szymborska
Abstract This paper analyses the impact of household wealth heterogeneity on inequality and macroeconomic stability in financialized economies. Based on the case of the USA since the 1980s it argues that transformation of financial sector operations has generated inequality by influencing gains from wealth ownership and leverage levels across the income distribution. Securitization and the subprime lending expansion have led to the emergence of a new class of leveraged homeowners, experiencing large increases in wealth prior to the Great Recession, followed by substantial losses after the crisis. Simultaneously, capitalists have diversified their asset portfolios while earning the highest and fastest-growing wages in the economy when employed as financial sector executives. In this light, the paper proposes a new conceptualization of households in macroeconomic models, defined by balance sheet composition rather than income sources alone. To inform this taxonomy, inequality and leverage indicators are simulated in a stock-flow consistent model calibrated to US data with three classes of households distinguished by their wealth composition, and a securitized financial sector. The proposed framework is found to produce more empirically accurate levels of income inequality and greater macroeconomic instability than the two-class division and establishes an equalizing effect of housing for wealth distribution.
{"title":"Rethinking inequality in the 21st century – inequality and household balance sheet composition in financialized economies","authors":"H. Szymborska","doi":"10.1080/01603477.2021.1969951","DOIUrl":"https://doi.org/10.1080/01603477.2021.1969951","url":null,"abstract":"Abstract This paper analyses the impact of household wealth heterogeneity on inequality and macroeconomic stability in financialized economies. Based on the case of the USA since the 1980s it argues that transformation of financial sector operations has generated inequality by influencing gains from wealth ownership and leverage levels across the income distribution. Securitization and the subprime lending expansion have led to the emergence of a new class of leveraged homeowners, experiencing large increases in wealth prior to the Great Recession, followed by substantial losses after the crisis. Simultaneously, capitalists have diversified their asset portfolios while earning the highest and fastest-growing wages in the economy when employed as financial sector executives. In this light, the paper proposes a new conceptualization of households in macroeconomic models, defined by balance sheet composition rather than income sources alone. To inform this taxonomy, inequality and leverage indicators are simulated in a stock-flow consistent model calibrated to US data with three classes of households distinguished by their wealth composition, and a securitized financial sector. The proposed framework is found to produce more empirically accurate levels of income inequality and greater macroeconomic instability than the two-class division and establishes an equalizing effect of housing for wealth distribution.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"24 - 72"},"PeriodicalIF":1.0,"publicationDate":"2021-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41367314","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 : 2021-09-01DOI: 10.1080/01603477.2021.1969952
Fiona C. Maclachlan
Abstract This paper makes the case for allowing citizens and organizations the option of opening deposit accounts at the central bank that would receive the policy rate of interest. Unlike proposals to nationalize banks, this proposal would leave the function of allocating credit to the private sector. I contend that opening up the privilege of transactions accounts at the central bank to non-banks would result in the public provisioning of the payments systems (PPPS). I discuss the feasibility of the reform by framing it within the context of the evolution of the payments system. Specifically, I argue that the PPPS could reduce the financial fragility and the unnecessary expansion of the financial sector that has evolved out of the current arrangements. Furthermore, I address three criticisms that can be made of the PPPS: the inefficiency of government provisioning relative to the private sector, the necessity of private sector bank deposits for the capital development of a country and, finally, the possibility that the problems created by private sector depository institutions might reemerge in the shadow banking sector.
{"title":"The case for the public provisioning of the payments system","authors":"Fiona C. Maclachlan","doi":"10.1080/01603477.2021.1969952","DOIUrl":"https://doi.org/10.1080/01603477.2021.1969952","url":null,"abstract":"Abstract This paper makes the case for allowing citizens and organizations the option of opening deposit accounts at the central bank that would receive the policy rate of interest. Unlike proposals to nationalize banks, this proposal would leave the function of allocating credit to the private sector. I contend that opening up the privilege of transactions accounts at the central bank to non-banks would result in the public provisioning of the payments systems (PPPS). I discuss the feasibility of the reform by framing it within the context of the evolution of the payments system. Specifically, I argue that the PPPS could reduce the financial fragility and the unnecessary expansion of the financial sector that has evolved out of the current arrangements. Furthermore, I address three criticisms that can be made of the PPPS: the inefficiency of government provisioning relative to the private sector, the necessity of private sector bank deposits for the capital development of a country and, finally, the possibility that the problems created by private sector depository institutions might reemerge in the shadow banking sector.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"263 - 280"},"PeriodicalIF":1.0,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47851116","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}
Abstract Investment in capital, new technology, and agricultural techniques has not been considered an endeavor worthwhile in a medieval economy because of a lack of strong property rights and no incentive on the part of lords and barons to lend money to or grant rights to peasant farmers. Therefore, the medieval economy and standards of living at that time often have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. Paul Baran’s concept of the economic surplus is applied to investment patterns during the late medieval, mercantile, and early capitalist stages of economic growth in England and the UK. This paper uses Zhun Xu’s Baran Ratio concept to try to develop general trends to demonstrate and reinforce other historical accounts of these times that a productive and sufficient level of public and private investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until around the 1600 s in Britain. This would also be about the time of capitalism’s ascent as the dominant economic system in England. Even then, dramatic increases in investment and economic growth do not appear until the late 18th Century when investment more consistently becomes more than one hundred percent of the level of the domestic economic surplus and takes in government spending. The types of investment, threshold amounts of investment out of profits and rents along with government spending seem to matter when it comes to a growth path raising GDP per capita and national income per capita to higher levels. Although much of this knowledge perhaps is embodied in current historical accounts, the Baran Ratio nicely summarizes and illustrates the importance of levels of investment to economic growth.
{"title":"The Baran Ratio, investment, and British economic growth and development","authors":"T. Lambert","doi":"10.2139/ssrn.3915734","DOIUrl":"https://doi.org/10.2139/ssrn.3915734","url":null,"abstract":"Abstract Investment in capital, new technology, and agricultural techniques has not been considered an endeavor worthwhile in a medieval economy because of a lack of strong property rights and no incentive on the part of lords and barons to lend money to or grant rights to peasant farmers. Therefore, the medieval economy and standards of living at that time often have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. Paul Baran’s concept of the economic surplus is applied to investment patterns during the late medieval, mercantile, and early capitalist stages of economic growth in England and the UK. This paper uses Zhun Xu’s Baran Ratio concept to try to develop general trends to demonstrate and reinforce other historical accounts of these times that a productive and sufficient level of public and private investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until around the 1600 s in Britain. This would also be about the time of capitalism’s ascent as the dominant economic system in England. Even then, dramatic increases in investment and economic growth do not appear until the late 18th Century when investment more consistently becomes more than one hundred percent of the level of the domestic economic surplus and takes in government spending. The types of investment, threshold amounts of investment out of profits and rents along with government spending seem to matter when it comes to a growth path raising GDP per capita and national income per capita to higher levels. Although much of this knowledge perhaps is embodied in current historical accounts, the Baran Ratio nicely summarizes and illustrates the importance of levels of investment to economic growth.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"46 1","pages":"142 - 172"},"PeriodicalIF":1.0,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46877253","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 : 2021-08-25DOI: 10.1080/01603477.2021.1913754
A. Sindzingre, Fabrice Tricou
Abstract The paper develops a conceptual analysis, which aims at refining the general concept of capitalism through an inquiry about the forms of hierarchy it involves. It is argued that the capitalist regime exhibits a series of specific attributes that have been so far underinvestigated together and are here comprehensively elucidated via the deepening of the concept of hierarchy. Qualitatively, the capitalist social structure is ambivalent, as it is neither the strict arborescent hierarchy exhibited by the feudal society, nor the flat partition displayed by the pure market economy; and the complex structure of the capitalist firm is an encompassing hierarchy, capital and labor being associated in a production process ruled by capital. Quantitatively, the capitalist pyramidal hierarchies of income and of wealth are essentially mobile, through the dynamics of market sanction and asset evaluation; and the relationship between capital bets and profit gains draws a tangled hierarchy as these returns are reinvested. All these capitalist hierarchies are typically economic, situational hierarchies arising when capitalists do not dominate the political order of power or in the social order of prestige. Finally, echoing post Keynesian perspectives, the conception of capitalism as a hierarchical phenomenon underlines its monetary structure and its self-transforming nature.
{"title":"Six forms of hierarchy for a theoretical analysis of capitalism","authors":"A. Sindzingre, Fabrice Tricou","doi":"10.1080/01603477.2021.1913754","DOIUrl":"https://doi.org/10.1080/01603477.2021.1913754","url":null,"abstract":"Abstract The paper develops a conceptual analysis, which aims at refining the general concept of capitalism through an inquiry about the forms of hierarchy it involves. It is argued that the capitalist regime exhibits a series of specific attributes that have been so far underinvestigated together and are here comprehensively elucidated via the deepening of the concept of hierarchy. Qualitatively, the capitalist social structure is ambivalent, as it is neither the strict arborescent hierarchy exhibited by the feudal society, nor the flat partition displayed by the pure market economy; and the complex structure of the capitalist firm is an encompassing hierarchy, capital and labor being associated in a production process ruled by capital. Quantitatively, the capitalist pyramidal hierarchies of income and of wealth are essentially mobile, through the dynamics of market sanction and asset evaluation; and the relationship between capital bets and profit gains draws a tangled hierarchy as these returns are reinvested. All these capitalist hierarchies are typically economic, situational hierarchies arising when capitalists do not dominate the political order of power or in the social order of prestige. Finally, echoing post Keynesian perspectives, the conception of capitalism as a hierarchical phenomenon underlines its monetary structure and its self-transforming nature.","PeriodicalId":47197,"journal":{"name":"Journal of Post Keynesian Economics","volume":"45 1","pages":"210 - 245"},"PeriodicalIF":1.0,"publicationDate":"2021-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47272972","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 : 2021-07-03DOI: 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":"44 1","pages":"508 - 508"},"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":"45 1","pages":"145 - 167"},"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}
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