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The Political Economy of Peace
No full textIsrael and South Africa are currently undergoing a fundamental structural transformation. Until the early 1980s, the military economy in Israel and the apartheid economy in South Africa were good for business. The situation has changed, however, and the leading corporate groups now support a transition to an open economy
Political Power Shifts in Israel, 1977 and 1992: Unsuccessful Electoral Economics or Long Range Realignment?
Get PDFIsraeli politics saw major realignments in 1977 and 1992. The effect of long range economic cycles on the nature and outcome of Israeli electoral politics is examined in these two elections
From Flywheel to Fanbelt: The Growing Importance of Emerging Markets
No full textEmerging markets are no longer acting as the flywheel of industrialized country growth. They are playing an increasingly powerful role in world trade, and their burgeoning demand has softened the impact of the last recession in industrialized countries. Emerging markets now account for a significant portion of US multinationals’ profitability
רקוויאם ל"משטר הישן" בישראל (Requiem to Israel’s Ancient Régime)
Get PDFצעדי ה"הכרה ההדדית" בין הפת"ח לבין ממשלת ישראל מאיצים תהליך עמוק יותר, העובר זה כמה שנים על החברה הישראלית: תהליך פירוקו של המישטר הישן על רקע ה"סדר החדש" העולמי ובמיזרח-התיכון. המישטר הישן הוא אותו מיכלול – מיבנה משק, הסדרים מוסדיים ויחסי סמכות – שנוצק על גרעין "המשק המעורב" המנדאטורי שהצמיח את המשק המילחמתי שהתרחב מאז שנותה-70. מיכלול זה החל לחשוף את בקיעיו בשנים האחרונות, וכנראה מתקרב לסוף דרכו. ה"עידן החדש" בכלכלה ובחברה, שמדברים בו כה הרבה, כבר התחיל – וראוי לסכם אותו כעת, בזמן שצלילי תרועת-הניצחון מתמזגים בצליליה של תרועת האשכב
From Olson to Veblen: The Stagflationary Rise of Distributional Coalitions
Get PDFThis essay deals with the relationship between stagflation and the process of restructuring. The literature dealing with the interaction of stagnation and inflation is invariably based on some explicit or implicit assumptions about economic structure, but there are very few writings which concentrate specifically on the link between the macroeconomic phenomenon of stagflation and the process of structural change. Of the few who dealt with this issue, we have chosen to focus mainly on two important contributors – Mancur Olson and Thorstein Veblen. The first based his theory on neoclassical principles, attempting to demonstrate their universality across time and place. The second was influenced by the historical school and concentrated specifically on the institutional features of modern capitalism. Despite the fundamental differences in their respective frameworks, both writers arrive at a similar conclusion, namely, that the phenomenon of stagflation is inherent in the dynamic evolution of collective economic action, particularly in the rise and consolidation of 'distributional coalitions.
Inflation As Restructuring. A Theoretical and Empirical Account of the U.S. Experience
Get PDFThe thesis offers a new framework for inflation as a process of restructuring. Contrary to existing theories of inflation, which tend to take structure and institutions as given for the purpose of analysis, we argue that inflation could be understood only in terms of ongoing structural and institutional change. In the modern context of large-scale business enterprise, inflationary restructuring arises as an integral part of capital accumulation. On the aggregate level, inflation appears as stagflation, with the expansion of pecuniary values in the 'business' sphere depending on the strategic limitation of productive activity in the 'industrial' realm. This stagflationary interaction between 'business' and 'industry' is, in turn, linked (on the disaggregate level) to the dynamic formation and reformation of 'distributional coalitions' and the process of aggregate concentration. An empirical analysis of the U.S. experience between the early 1950s and the late 1980s reveals two regimes of inflationary restructuring: the first, which lasted until 1970, involved rapid increases in aggregate concentration with relatively modest stagflation, whereas the second, post-1970 regime consisted of stable (or even declining) concentration amidst severe stagflation
Price Behaviour and Business Behaviour
Get PDFThe present essay is the second in a series of three papers which examine alternative approaches to inflation. Here we identify some of the principal criticisms expressed against neoclassical views on price behaviour and business behaviour. These challenges grew from the early discovery of ‘administered prices’ by Means and the subsequent findings by Hall and Hitch regarding ‘full cost’ pricing. The notions that industrial prices were relatively inflexible and that businessmen set those prices by imprecise rules of thumb stood in sharp contrast to the pristine simplicity of neoclassical models. Yet these attempts for greater realism seemed to undermine the prospects of constructing a coherent theory for prices
Inflation and Market Structure
Get PDFThis is the third in a series of three essays which explore modern theories for inflation. Here we examine theories that reject the universal validity of perfect competition and link inflation with alternative, more realistic structures and institutions. In contrast to macroeconomic theories which emphasize ‘excess demand’ and growth inflation, structural theories relate primarily to stagflation. While most macroeconomists share a common belief in the ideal type of ‘profit maximization,’ structural theorists differ widely in their views on what motivates economic actors. The multiplicity of motivational assumptions lead different theorists toward distinct explanations for inflation. With their greater sensitivity toward real institutions, these theories offers important insights into the process of modern inflation. The structural literature, is, nevertheless limited by some of its methodological foundations
Macroeconomic Perspectives on Inflation and Unemployment
Get PDFThe present paper is the first in a series of three essays in which we examine the macroeconomic and structural approaches to inflation. In this paper we explore some of the key contributions to the macroeconomic literature which appeared since the late 1950s. Much of this literature evolved in a dual love hate relationship with the Phillips Curve. Scholars who endorsed the Phillips Curve on the basis of historical evidence were surprised when it started to crumble as soon as they assimilated it into their macroeconomic models. The gradual emergence of stagflation and the progressive breakdown of the Phillips Curve presented mainstream macroeconomics with the most serious challenge since the Second World War. Macroeconomists attacked the Phillips Curve but their criticisms sought to modify, not nullify. The idea that inflation and unemployment were inversely related was apparently too significant to discard so the notional relationship was simply ‘augmented’ by auxiliary factors. The cost of saving the Phillips Curve was substantial. To explain stagflation, macroeconomists resorted to 'disequilibria,' ‘rigidities’ and ‘exogenous shocks’ and they abandoned, at least temporarily, the ideal formulation of the neoclassical synthesis
Theories of Inflation - A Series of Three Articles
Get PDF1. Macroeconomic Perspectives on Inflation and Unemployment (46 pages)
The present paper is the first in a series of three essays in which we examine the macroeconomic and structural approaches to inflation. In this paper we explore some of the key contributions to the macroeconomic literature which appeared since the late 1950s. Much of this literature evolved in a dual love hate relationship with the Phillips Curve. Scholars who endorsed the Phillips Curve on the basis of historical evidence were surprised when it started to crumble as soon as they assimilated it into their macroeconomic models. The gradual emergence of stagflation and the progressive breakdown of the Phillips Curve presented mainstream macroeconomics with the most serious challenge since the Second World War. Macroeconomists attacked the Phillips Curve but their criticisms sought to modify, not nullify. The idea that inflation and unemployment were inversely related was apparently too significant to discard so the notional relationship was simply ‘augmented’ by auxiliary factors. The cost of saving the Phillips Curve was substantial. To explain stagflation, macroeconomists resorted to 'disequilibria,' ‘rigidities’ and ‘exogenous shocks’ and they abandoned, at least temporarily, the ideal formulation of the neoclassical synthesis.
2. Price Behaviour and Business Behaviour (33 pages)
The present essay is the second in a series of three papers which examine alternative approaches to inflation. Here we identify some of the principal criticisms expressed against neoclassical views on price behaviour and business behaviour. These challenges grew from the early discovery of ‘administered prices’ by Means and the subsequent findings by Hall and Hitch regarding ‘full cost’ pricing. The notions that industrial prices were relatively inflexible and that businessmen set those prices by imprecise rules of thumb stood in sharp contrast to the pristine simplicity of neoclassical models. Yet these attempts for greater realism seemed to undermine the prospects of constructing a coherent theory for prices.
3. Inflation and Market Structure (59 pages)
This is the third in a series of three essays which explore modern theories for inflation. Here we examine theories that reject the universal validity of perfect competition and link inflation with alternative, more realistic structures and institutions. In contrast to macroeconomic theories which emphasize ‘excess demand’ and growth inflation, structural theories relate primarily to stagflation. While most macroeconomists share a common belief in the ideal type of ‘profit maximization,’ structural theorists differ widely in their views on what motivates economic actors. The multiplicity of motivational assumptions lead different theorists toward distinct explanations for inflation. With their greater sensitivity toward real institutions, these theories offers important insights into the process of modern inflation. The structural literature, is, nevertheless limited by some of its methodological foundations