Academic literature on the topic 'Post-Keynesian and Classical Economics'

A principal purpose of this thesis is to present an economic evaluation of ecosystems. The concept of ecosystem health is adopted to ascertain the status of ecosystems. Ecosystem health is considered in part an economic concept and defined as a function of utility through the ecosystem services that satisfy various needs, subject to preserving the integrity of the adaptive cycle. In order to quantify the utility supplied by ecosystem services the novel utility index Ecosystem Outcome Protection Year (ECOPY) is developed. By forming this index, an evaluation can be performed using cost utility analysis, which avoids monetizing these benefits. An attempt is made to ascertain an appropriate approach for ecosystem management. It is reasoned that expert intuition can determine some kind of macro-regularities in ecosystems despite their complex dynamics. Hence, these inferences could be used for ecosystem management. Adaptive co-management is introduced as a means to bring about the collaboration of experts as resource co-managers. The concept of informed intuition is developed to bring about a systematic approach to learning and evaluation where the mental models of experts are transcribed using fuzzy cognitive mapping. However, it is argued that ecosystems as complex adaptive systems are non-ergodic and full of surprises. Accordingly, abduction, the logic of creative conjecture is systematically developed, for the purposes of maintaining mental model flexibility. This systematic application of abduction with an informed intuition forms the proposed abductive process of research, which is grounded in Shacklean potential surprise, a non-probabilistic function. To demonstrate this novel research process, a post-classical economic evaluation of Te Waihora lake ecosystem is undertaken, which employs the ECOPY index and potential surprise method. This empirical case study reveals various cost-effective management actions for improving lake health, which went beyond the intuitions of resource co-managers. This indicated the potential of the approach, which is considered a significant contribution for the methodological development of ecosystem management.

The choice of exogenous variables is a fundamental element for the logical structure of economic models, leading to different positive and normative implications about growth, distribution and economic policies. In this dissertation a comparative approach is used both to study different models from a theoretical point of view and to analyze the link between the financial and the real sector of the economy. In the first chapter we present a comparison between the neoclassical model and the alternative approach, drawn from the classical and post-keynesian literature, within a common mathematical framework based on the Solow growth model. Several variations in the canonical models are considered. We shall show in a convenient analytical framework how the fundamental differences between the two paradigms ultimately lie in the choice of the exogenous variables: factors endowments in the neoclassical approach or effective demand and, in some cases, income distribution in the alternative approach. In the second chapter, we adopt a comparative approach to interpret stock market dynamics, pursuing two objectives. First, we shall show how the prevailing interpretation of Shiller tests on stock price volatility can all be traced back to the neoclassical model, which makes them exposed to several criticisms. Second, we shall present an alternative macroeconomic model drawn from Sraffian and Keynesian literature which suggests a different interpretation of the empirical evidence on stock market volatility. In the third chapter we propose an integration between the classical-Keynesian model and the monetary circuit framework, evaluating its consistency and its policy implications. In particular, we shall verify whether the Keynesian multiplier can be consistently introduced in the monetary circuit framework, how monetary authorities can affect economic dynamics, how monetary circuits are intertemporally linked to each other and how the problem of interest repayments can be solved.

Post Keynesian Economics (PKE) is at a cross road. The academic climate at universities has become more hostile to survival and the mainstream has become more diverse internally. Moreover, a heterodox camp of diverse groups of non-mainstream economists is forming. The debate on the future of PKE has so far focussed on the relation to the mainstream. This paper argues that this is not an important issue for the future of PKE. The debate has overlooked the dialectics between academic hegemony and economic (and social) stability. The important question is, whether PKE offers useful explanations of the ongoing socio-economic transformation. PKE has generated valuable insights but it offers little on important real world phenomena such as supply-side phenomena like the increasing use of ICT and the globalisation of production, social issues like precarisation and the polarization of income distribution or ecological challenges like climate change. It is these issues that will decide the future of PKE. (author´s abstract)<br>Series: Department of Economics Working Paper Series

The NAIRU theory has become the mainstream theory in explaining unemployment in Europe and is often used to justify demands for a cutback of the welfare state, reducing unemployment benefits, reducing minimum wages, decentralizing collective bargaining etc. Close inspection reveals that it nonetheless shares some arguments with Post Keynesian and even Marxist theory. The paper proposes an underdetermined, encompassing NAIRU model, which is consistent with several theoretical tradtions. Depending on the closure with respect to demand formation and determination of the NAIRU itself, the model allows for New Keynesian, Post Keynesian and Marxist results. (author's abstract)<br>Series: Department of Economics Working Paper Series

The history of dissent in economics has thus far been subject to scant interest. The existing scholarship, authored by dissenters probing their own past, has failed to address the crucial questions of how dissent emerged and rooted itself. This study is about two dissenting communities, Radical Political Economics and Post Keynesian Economics. I review the circumstances that led to their emergence in the late 1960s and early 1970s. I draw from the histories of religious and scientific dissent to explore the making of the dissenters' challenge to the economics orthodoxy. Notably, I use the concept of boundary work to analyse the debates between dissenters and mainstream. The history of Radical Political Economics begins with the founding in 1968 of the Union for Radical Political Economics. Onto this Union converged a generation of young radicalised academics that sought to unite their political interests and their scholarly pursuits. After a period devoted to the design of a "paradigm of conflict," radicals turned to outreach work with popular movements. The new commitment brought divisive political identities into their Union that barred any agreement on a programme to transform economics. Post Keynesian Economics emerged in the aftermath of debates on capital theory between Cambridge left Keynesians and neoclassical economists. With the conviction that the debates signalled the emergence of a new theory in economics, American dissenters decided to ally with the Cambridge critics. The content of the alliance was redefined many times in the 1970s by a succession of spokespersons for the group. Of this period resulted a weakly bound community joined by a sense of shared ancestry. The two case studies reveal the diverse resources and allies that dissenters mustered for their battle with the economics orthodoxy. They show how the dissenters' challenge shaped the boundaries of their communities and the content of their identity.

This paper presents a post-Keynesian ecological macro model that combines three strands of literature: the directed technological change mechanism developed in mainstream endogenous growth theory models, the ecological economic literature which highlights the role of green innovation and material flows, and the post-Keynesian school which provides a framework to deal with the demand side of the economy, financial flows, and inter- and intra-sectoral behavioral interactions. The model is stock-flow consistent and introduces research and development (R&D) as a component of GDP funded by private firm investment and public expenditure. The economy uses three complimentary inputs - Labor, Capital, and (non-renewable) Resources. Input productivities depend on R&D expenditures, which are determined by relative changes in their respective prices. Two policy experiments are tested; a Resource tax increase, and an increase in the share of public R&D on Resources. Model results show that policy instruments that are continually increased over a long-time horizon have better chances of achieving a "green" transition than one-of climate policy shocks to the system, that primarily have a short-run affect.<br>Series: Ecological Economic Papers

This thesis analyzes the transmission process that generates and links credit, money and economic activity as proposed by Post-Keynesian authors. These authors include mainly Chick, Davidson, Minsky and Wojnilower, who base their hypotheses on the collected works of Keynes and Kalecki. Their key contribution is to identify the cause of the transmission mechanism with the deficit spending of private economic units that is financed by credit that is created by financial intermediaries. The framework used by these authors assumes uncertainty, speculation and instability that have resulted in the formation of institutions such as money, contracts and intermediaries. It is shown that a consistent framework integrates the processes, channels, order and vehicles of the Post-Keynesian mechanism.

This thesis presents a theoretical framework for understanding the long-term behaviour of equity markets. The framework is informed by post-Keynesian theory. It highlights the importance of effective demand for equity valuation - alongside other post-Keynesian features such as a realistic institutional setup, the (in)efficiency of financial markets in pricing assets and the importance of income and wealth distribution for macroeconomic theory. In contrast to mainstream approaches dominated and constrained only by the logic of rational agents, a Stock-Flow Consistent (SFC) methodology is followed here. The strict accounting rules of SFC models guarantee that all assets, flows and price revaluations that happen in an economic system are booked accordingly, with no accounting 'black holes' in the logical structure. The SFC approach also permits an outcome in which the market value of assets differs from their book value, a crucial distinction that should be at the core of any theory for equity returns. This thesis makes a contribution to the post-Keynesian literature on the Cambridge corporate growth models. It is shown that this literature can be used as a starting point for developing a theory of equity markets with a more realistic institutional setup. The main features of the post-Keynesian theory for equity markets developed here can be summarised as follows. First, aggregate demand determines the return on shares and their valuation in the market. Second, Tobin's q is inversely related to the growth rate of the economy in the long-run and inversely related to the marginal propensities to consume. Third, Tobin's q can be different from 1 even in the long-run. And fourth, wealth holders' consumption decisions are a major driver of the equity yield in the long-run, a feature very similar in spirit to the Levy-Kalecki profit equation, but now applied to financial markets. I conclude that post-Keynesian theory can offer an alternative to mainstream finance and fill a gap in current financial macroeconomic theory.