67 research outputs found
Political Economy Perspectives on the Greek Crisis (Ed. C Tsoukis)
No full textOffers an economic explanation to the failures of both the Greek economy as well as systemic failures of the euro architecture and the operations of EU authoritiesBrings together contributions from economists with a wide range of expertiseContributes to the on-going public debate about the sources of failure of other peripheral EU countries in providing economic prosperity since 2008Provides a balance of theoretical argument, empirical evidence, and a range of perspectives on the Greek cas
Social and Behavioural Macroeconomics: Theoretical and Policy Perspectives
No full textDespite significant theoretical advances in social and behavioural macroeconomics, little has been done to synthesise the disparate developments in these fields and point the way forward to future research directions and policy implications. This book reviews, unifies and extends diverse strands of thinking and shows how these theories can be used to improve macroeconomic modelling for policy development in a range of spheres.The book explores how the most empirically relevant socio-behavioural traits can widen the scope of macroeconomics to fruitfully address new issues and challenges, such as rising inequality, the change in the functional distribution of income (labour and capital shares), and a further understanding of the government spending multiplier. Chapters also address more traditional topics such as macroeconomic policy effectiveness, growth, saving and labour supply. Other, more open-ended themes of the book include whether the concept of individual rationality should be complemented by collective rationality; whether socio-behavioural traits underlie socially inefficient outcomes such as tragedies-of-the-commons, rat races, financial crises and global warming; and whether such traits can provide new foundations for (New) Keynesian macroeconomics.This book will be essential reading for advanced researchers and students working in macroeconomics and other social sciences, including psychology and politics, as well as those working on the theoretical end of public policy
Social conflict, growth and factor shares
No full textStandard growth theory is based on atomistic agents with no strategic interactions among them. In contrast, we model growth as resulting from a one-off, strategic game between workers and owners of capital (capitalists) on factor shares, in an otherwise standard AK growth model. The resulting distribution of income between factors further determines the marginal revenue product of capital and the rate of growth. We analyse the properties of four equilibria: competitive, Stackelberg equilibrium, a hybrid non-cooperative regime, and cooperative (Nash) solution. We show that our model provides a potentially richer view of the growth process than comparable models, and endogenises a key aspect of the social contract.social conflict; factor shares; growth; catching up with the Joneses
Gain versus pain from status and ambition: Effects on growth and inequality
No full textTo shed lights on growth, distribution and the relationships between the two, we develop a growth model with heterogeneous individuals who care about social status. Individuals' heterogeneity stems from two sources: their innate skills and their degree of ambition. While the willingness of individuals to accumulate wealth depends whether they experience gain or pain from loss of status, we show that ambition of individuals plays an important role regarding growth and distribution: ambition can inhibit or foster accumulation of wealth, then in turn growth. In such a context, we show that growth can be positively or negatively correlated with inequalities.social aspirations, ambition, inequality, growth
Status, fertility, growth and the great transition
No full textWe develop an overlapping generation model to examine how the relationship between status concerns, fertility and education affect growth performances. Results are threefold. First, we show that stronger status motives heighten the desire of parents to have fewer but better educated children, which may foster economic development. Second, government should sometimes postpone the introduction of an economic policy in order to maintain the process of economic development, although such a policy aims to implement the social optimum. Third, status can alter the dynamic path of the economy and help to explain the facts about fertility during the "great transition".social status, fertility, education, economic policy
Industrial Production and the Current Account: Theory and Panel Data Evidence from the OECD
No full textBook Reviews
No full text'Searching for a Better Society: The Peruvian Economy from 1950'; Author: by John Sheahan; Reviewer:Raul Hopkins; 'Democratisation in Africa'; Editors: Larry Diamond and Marc F. Plattner; Reviewer: Jan Kees van Donge; 'Exchange Rate Misalignment: Concepts and Measurement for Developing Countries'; Editors: Lawrence E. Hinkle and Peter J. Montiel; Reviewer: Christopher Tsoukis; 'Orangi Pilot Project, Reminiscences and Reflections'; Author: Akhtar Hameed Khan; Reviewer: Jo Beall; 'Whey Governments Waste Natural Resources: Policy Failures in Developing Countries'; Author: William Ascher; Reviewer: Julio Pena-Torres; 'Evaluating Development Aid - Issues, Problems and Solutions'; Author: Basil Cracknell; Reviewer: Mike Faber; 'Development Microeconomics'; Authors: Pranab Bardhan and Christopher Udry; Reviewer: Scott McDonald; 'Economic and Social Changes in Czech Society After 1989: An Alternative View'; Authors: Lubomir Mlcoch, Pavel Machonin and Milan Sojka; Reviewer: Alasdair MacBean; 'Resistance to the Shah: Landowners and Ulama in Iran'; Author: Mohammad Gholi Majd; Reviewer: Rodney Wilson; 'Corruption and Democratisation'; Editors: Alan Doig and Robin Theobald; Reviewer: Heather A. Marquette;Review Books,
Essays on fiscal sustainability in the Caribbean
No full textThe PhD thesis sets out to improve fiscal sustainability assessment in the Englishspeaking Caribbean and to provide the tools for more robust dialogue on the topic. It also seeks to influence Caribbean governments’ fiscal policy actions by providing evidence on debt sustainability issues, and appropriate fiscal responses. The guiding questions of the thesis are whether Caribbean fiscal policy is conducive to debt sustainability now and into the future, and what is the region’s debt limit, important enquiries considering the islands’ comparatively high vulnerability and prolonged debt challenges. The thesis makes several original contributions, including bridging the wide gap in Caribbean research; original empirical testing; some new recommendations for policy action; methodological innovation; and lays new foundations for future research. The literature on fiscal sustainability, particularly from the perspective of the Caribbean, is extremely shallow in comparison to that of other indebted regions, including Latin America and Europe. This paucity of research on the region is startling owing to the region’s high and established rank within the halls of the globally indebted, crystallised by the region’s omission in the most recent and prominent survey on global debt issues. The lack of focus on the region and accompanying implications is the primary gap which the thesis aims to fill, as is unearthed in a critical literature review that also helps to determine the most appropriate methods for responding to the thesis’ research questions, as well as assists with establishing the status quo as pertains the state of fiscal sustainability in the Caribbean. Moreover, from the perspective of fiscal policy limits, to establish the current perspectives on the Caribbean’s debt threshold, which is important for guiding the region’s debt reduction. In search of answers on the region’s fiscal sustainability, an innovative empirical test for cointegration between the Caribbean’s revenue and expenditure outlays is undertaken using an adapted sustainability cointegration approach. From this the thesis confirms the presence of sustainable fiscal policy in 6 of the 9 Caribbean countries tested, but with a debt ratio that is seemingly unbounded. In this regard, it is recommended that governments consider implementation of expenditure rules, enshrined in the constitution, to strengthen the region’s sustainability position. Further, motivated by two recent empirical studies on debt sustainability in the region, with the use of panel data, the thesis employs fiscal reaction functions but with an estimator selected by way of Monte-Carlo simulations to determine the least biased approach for assessing fiscal sustainability in the Caribbean, noting an incongruence between recent methods employed and the Caribbean’s data structure. Through this novel approach, and with the addition of institutional variables as controls to the Caribbean fiscal response function – another original contribution, the thesis again confirms the region’s weak fiscal sustainability and finds that diversifying trade in services, reducing election spending, and improving on the perception of corruption in the region are key policy initiatives for improving the primary balance and the region’s fiscal sustainability going forward. On the question of the region’s debt capacity, the rise in Caribbean debt post COVID-19 stemming from large fiscal stimulus and positive interest-growth rate differentials, evidences the thesis’ concern on the matter. A debt threshold is an important anchor for fiscal policy generally, and more so in the Caribbean where fiscal policy is the primary policy tool. A clearly established debt threshold provides the basis for debt reduction targeting and for assessing risks around the debt trajectory. A very wide margin of thresholds has been the feature of research in this area in the Caribbean, leaving much at bay as regards the region’s debt limit. In a fresh bid to answer the related question, the thesis employs Gosh et al. (2013) fiscal fatigue theory, which postulates a positive response of fiscal policy to debt as debt rises, but a negative fiscal response at ever higher levels of debt owing to a government’s eventual fiscal fatigue. Despite this theory’s intuitive appeal and in contrast to the findings of Cevik and Nanda (2020), the thesis concludes that there is no evidence of a cubic fiscal reaction function for the Caribbean, and therefore it does not appear that a debt threshold for the region exists as defined by the theory. Instead, the thesis finds that the Caribbean’s debt threshold is defined by way of a dynamic threshold model at 106.2 percent, nearly double the IMF rule of thumb and the thresholds estimated via the debt-growth nexus. Several policy approaches are proposed to enhance and strengthen Caribbean governments’ fiscal sustainability based on the results unearthed in the thesis. These include: the introduction of fiscal rules for better expenditure management; establishing a debt threshold assessment method and undertaking regular assessments; strategic fiscal adjustment to avoid default; diversification of trade in services; containment of election spending; and improving the Caribbean’s ranking in the perception of corruption index. Collectively, the thesis’ findings imply a renewed relevance of cointegration approaches to fiscal sustainability and the applicability of the revenue-expenditure method for fiscal sustainability assessment to the Caribbean, where data is severely limited. It raises questions on the suitability of the fiscal fatigue theory for assessing debt thresholds in developing countries, given the theory’s developed country origins and due to the contrasting composition of developed countries versus Caribbean countries’ debt portfolios. The thesis warns of making policy decisions based on regional assessments that could mislead owing to the heterogeneity at country level, which could readily be missed due to the necessity of panel data to overcome serious data issues, especially as regards fiscal data. The thesis provides an excellent foundation for future research, much of which surrounds old theoretical questions on the long run, and on the limits to fiscal sustainability
Distributive justice and social conflict in an AK model
No full textWe introduce distributive justice into a standard macroeconomic model with agent heterogeneity in terms of capital endowments. The labour share is the primitive in the distributive justice game. We provide a clear definition of distributive social conflict. This conflict is resolved by two positive and three normative methods. The two positive ones are ‘average voter’ in the probalistic voting model and Nash bargaining, encapsulating electoral politics and socio-political bargaining; two normative (justice) criteria are the Utilitarian and the Rawlsian. We also propose a novel criterion of ‘justice as minimal social friction’. The labour share in turn affects growth in the ‘AK’ production economy. Thus, in socio-economic equilibrium, growth and the labour share are jointly determined. Greater impatience, status comparisons, wealth inequality or a decline in productivity exacerbate social conflict. Status comparisons and wealth inequality raise the labour share under all positive and normative criteria. At least if the capital-rich individuals’ overall socio-political strength is higher than that of workers, both positive methods imply a smaller labour share and more inequality than do all our three criteria of distributive justice.JEL Classification numbers: O41, O43, E25, P16, Z1
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Theory of macroeconomic policy /
No full textTheory of Macroeconomic Policy offers a panoramic view of macroeconomic theory as a foundation for understanding macroeconomic, fiscal and monetary, policy
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