1,720,994 research outputs found
Investment, Autonomous Demand and Long Run Capacity Utilization: An Empirical Test for the Euro Area
No full textIn recent years, the role attached to the autonomous components of aggregate demand has attracted rising attention, as testified by the development of the Sraffian Supermultiplier model (SSM) and the attempts to include autonomous demand in the Neo-Kaleckian model. This paper reviews and empirically tests the validity and the policy conclusions of the two models in the Euro Area. First, we theoretically assess whether the SSM may constitute a complex variant of the Neo-Kaleckian model. In this sense, it is shown that results compatible with the SSM can be obtained by implementing a set of mechanisms in a modified Neo-Kaleckian model, leading to the convergence towards a desired rate of utilization. Furthermore, the chief difference between the models is recognized to be the role attached to the rate of capacity utilization in the long run. Second, the paper empirically tests the main implications of the models in the Euro Area, based on Eurostat data. In particular, the discussion outlines the short and long-run relation between autonomous demand and output, by testing both the cointegration and the direction of causality between the two with a VECM model. Moreover, the role accounted by both theories to the actual rate of capacity utilization and its discrepancies from the normal rate is empirically assessed, through a time-series estimation of the Sraffian and Neo-Kaleckian investment functions. While confirming the theoretical relation between autonomous demand and output in the long run, the results show that the dynamics of the rate of capacity utilization still plays a key role in the short-run adjustment mechanism - despite its stationary behaviour in the long term. Therefore, admitting that Keynesian results may hold even after the traverse, our work suggests to be Kaleckian in the short run and Sraffian in the long run
Historical Time and the Current State of Post-Keynesian Growth Theory
No full textThis paper discusses Joan Robinson’s remarks on the importance of historical time in economic analysis. On the one hand, Joan Robinson expressed skepticism with equilibrium analysis as such, arguing that as soon as economists take into account the uncertainty of expectations, history needs to replace equilibrium. On the other, Robinson stressed that, while building economic models, one must be aware that it is historical time rather than logical time that rules reality, warning against the methodological mistake of confusing comparisons of equilibrium positions with a movement between them. We argue that these criticisms point to the possibility of thinking in terms of two different ‘levels’ of historical time – a higher (fundamentalist) level, and a practical (and more analytically tractable) lower level. Using this distinction, we provide a taxonomy of existing strands of post-Keynesian growth theory that are consistent with the concept of low-level historical time. It is shown that despite appearances to the contrary, much post-Keynesian growth theory displays fidelity to Joan Robinson’s concern with the importance of historical time
When is the long run? Historical time and adjustment periods in demand‐led growth models
Full text linkIn 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
Historical Time and the Current State of Post-Keynesian Growth Theory
Full text linkThis paper discusses Joan Robinson’s remarks on the importance of historical time in economic analysis. On the one hand, Joan Robinson expressed skepticism with equilibrium analysis as such, arguing that as soon as economists take into account the uncertainty of expectations, history needs to replace equilibrium. On the other, Robinson stressed that, while building economic models, one must be aware that it is historical time rather than logical time that rules reality, warning against the methodological mistake of confusing comparisons of equilibrium positions with a movement between them. We argue that these criticisms point to the possibility of thinking in terms of two different ‘levels’ of historical time – a higher (fundamentalist) level, and a practical (and more analytically tractable) lower level. Using this distinction, we provide a taxonomy of existing strands of post-Keynesian growth theory that are consistent with the concept of low-level historical time. It is shown that despite appearances to the contrary, much post-Keynesian growth theory displays fidelity to Joan Robinson’s concern with the importance of historical time
Sacrificare vite sull’altare della ripartenza economica è una strategia perdente
Full text linkEttore Gallo e Riccardo Zolea valutano criticamente la scelta dei governi occidentali – incluso quello italiano – di fare fronte all’esplosione di contagi causata dalla diffusione della variante Omicron del virus senza adottare misure severe di contenimento. I due autori presentano alcuni dati dai quali desumono che scelte di questo tipo, adottate peraltro al di fuori di una strategia di più lungo periodo, sono perdenti nei confronti della pandemia ed hanno anche effetti negativi sulla ripresa economica
Green Investment and Productivity Dynamics
Full text linkThis paper reviews existing definitions and measurement efforts to capture the extent of green technological investment, and it provides a measurable definition of green capital asset for a sample of 18 OECD countries from 2004 to 2020. A main goal of this paper is to assess the contribution of green technological capital to productivity growth also taking into account the effects of tightening environmental regulations. The econometric results suggest that: (1) an increase in green technological capital stock generates medium-term productivity gains; (2) stricter environmental regulations boost, rather than hinder, productivity growth. Furthermore, the empirical findings corroborate previous evidence that more stringent nonmarket policies, such as emission limits, can stimulate innovation, thereby contributing to positive productivity returns. The paper provides also some policy insights highlighting the critical role of green technological investment in promoting sustainable growth while mitigating climate change
‘Original Sin’ in Latin America (2000-2015): Theory, Empirical Assessment and Alternatives
No full textThe matter of the ‘original sin’, the inability to borrow abroad in domestic currency, came to the centre of the academic discussion after the dramatic episodes in Asia, Russia and Latin America. According to this international framework, this paper is an empirical analysis of ‘original sin’ for six Latin American countries based on the index (OSIN3) developed by Haussmann and Panizza (2003). This paper finds that the situation for some countries have been improving reflecting a reduction of the index. This fact could be related to recent economic policies related to an ‘abstinence’ rather than ‘redemption’, an attitude seen as a response to the debt crisis. Finally, the paper focuses on possible policy alternatives that could be adopted to overcome the ‘original sin’ phenomenon it includes North-South and South-South cooperation and a multilateral arrangement. However, such alternatives are limited to feasibility mainly due to the turbulent political and economic scenario in the region
Debt-credit flows and stocks in a Supermultiplier model with two autonomous demand components: Consequences for growth
No full textAllain (2022) raised the question of how two or more non-capacity-generating autonomous demand components growing at different rates may coexist in the supermultiplier, avoiding that one component absorbs all the others in the long-run steady-state. To date, the theoretical shortcut adopted in the literature has been to assume that, at least as long-term averages, the different components grow at the same rate or that institutional elements kick in to tackle this issue. Differently, we propose a solution that resorts to endogenous feedback effects and stock-flow consistent relations to solve such issue. More specifically, we build a simple supermultiplier model in which growth is driven by workers’ debt accumulation as well as rentiers’ consumption out of interest. We show that, according to specific conditions, there is a steady-state solution in which growth ultimately converges towards that of the fastest growing component, but the other does not disappear due to the presence of the mentioned endogenous stock-flow relations. This provides a way out to the two-component issue, with endogenous money creation surrounding this process of growth driven by credit provided to households
‘Original sin’ in Latin America (2000-2015). Theory, empirical assessment and alternatives
Full text linkThe matter of the ‘original sin’, the inability to borrow abroad in domestic currency, came to the centre of the academic discussion after the dramatic episodes in Asia, Russia and Latin America. According to this international framework, this paper is an empirical analysis of ‘original sin’ for six Latin American countries based on the index (OSIN3) developed by Haussmann and Panizza (2003). This paper finds that the situation for some countries have been improving reflecting a reduction of the index. This fact could be related to recent economic policies policies related to an ‘abstinence’ rather than ‘redemption’, an attitude seen as a response to the debt crisis. Finally, the paper focuses on possible policy alternatives that could be adopted to overcome the ‘original sin’ phenomenon, it includes North-South and South-South cooperation and a multilateral arrangement. However, such alternatives are limited to feasibility mainly due to the turbulent political and economic scenario in the region
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