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This paper examines the emergence of private debt-led growth in Canada since the Global Financial Crisis (GFC) by means of a growth regimes and macroeconomic policy regime assessment. Examining each of the four business cycles in the 1983-2020 period, roughly encompassing the entirety of the neoliberal period, results demonstrate the emergence of a 'rising' weakly export-led growth regime in the early 1990s, a shift to a 'falling' weakly export-led regime by 2001, and a turn to a debt-led private demand regime since the GFC. The macroeconomic policy regime then identifies the structural changes and policy factors which have contributed to Canada's shifting growth regime. While price competitiveness played an important role in the first three cycles, it failed to re-establish an export-led regime in the postGFC period due to decreased non-price competitiveness. Instead, the post-GFC combination of negative real interest interests which encouraged the accumulation of private debt and fiscal policy which ex post did not address the negative financial balances of the household sector supported the turn to private debt-led growth.

We review post-Keynesian contributions to demand and growth regime analysis. First, we distinguish the Kalecki-Steindl approach and the Sraffian supermultiplier approach as relevant theoretical foundations for demand and growth regime research, with investment-driven and distribution-led growth in the focus of the former and autonomous demand-led growth in the latter. Based on this, we review different ways of analysing the co-existence of demand and growth regimes in the current period of neoliberal and finance-dominated capitalism. We distinguish, first, a basic national income and financial accounting decomposition approach, second, a Sraffian supermultiplier inspired growth decomposition approach, and, third, several lenses looking at growth drivers. We argue that these three levels of analysis are, in principle, not mutually exclusive nor even contradictory, but that they rather complement each other. We conclude that, in particular the PK analysis of growth drivers provides several systematic links with comparative and international political economy approaches, when it comes to the introduction of the political economy dimension (social blocs, growth coalitions, changes in institutions favouring certain type of re-distribution and economic policies, etc.), while the national income and financial accounting, as well as the Sraffian supermultiplier growth accounting decomposition approaches provide the consistent macroeconomic foundations for such syntheses.

This paper contributes to the ongoing growth models (GMs) debate by investigating the growth drivers of emerging capitalist economies (ECEs) in the periods before (2000-2008) and after (2009-2019) the Global Financial Crisis (GFC). By drawing mostly on post-Keynesian economics, six growth drivers are considered: Finance, i.e., household debt; changes in income distribution; price and non-price competitiveness, as well as commodity prices; and finally, fiscal policy. By conducting crosscountry simple and multiple linear regressions to explain the growth of 19 ECEs in both periods, we find that post-GFC growth was driven by non-price factors while price competitiveness played a role in neither period. Likewise, commodity prices did not drive growth either. In terms of distribution, our results indicate that cross-country growth was driven by rising income inequality in both periods; however, this relation lacks significance. In the post-crisis period, growth was associated with rising profit shares. While this relation also lacks significance, it has to be assessed against various possibilities for seemingly profit-led growth. Finally, with household debt accelerating and fiscal policy becoming more expansionary after the crisis, our results indicate a potentially more prominent role for these factors in driving post-crisis growth, however, this finding lacks robustness. We argue that the sparse robust findings result from ECEs' heterogeneity, particularly in terms of their growth models and subordinated financialization.

Modern Money Theory (MMT) has generated considerable scrutiny and discussions over the past decade. While it has gained some acceptance in the financial sector and among some politicians, it has come under strong criticisms from all sides of the academic spectrum and from conservative political circles. MMT has been argued to be both fascist and communist, orthodox and heterodox, dangerous and benign, unworkable and obvious, and unrealistic and clearly nothing new. The contradictory aspects of the range of criticisms suggest that there is at best a superficial understanding of the MMT framework. MMT relies on a well-established theoretical framework and is not inherently about changing the economic system; it is about changing the policymaking praxis to implement a given public purpose. That public purpose can be small or large and can be conservative or progressive; it ought not to be narrowly determined but rather should be set as democratically as possible. While MMT proponents tend to favor a public purpose that deals with what they see as major drawbacks of capitalist economies (persistent nonfrictional unemployment, unfair inequalities, and financial instability), their policy proposals do not lead to a major shift of domestic resources to the public purpose. If a major increase in government spending is implemented, MMT provides some guidance on how to do that in the least disruptive manner by drawing on past economic experiences. The point is to implement the public purpose at a pace that recognizes the potential constraint that comes from domestic resource availability and potential inflationary pressures from bottlenecks, rising import prices, and exchange rate depreciation, among others. In most cases, economies have more flexibility than what is admitted. In all cases, when monetary sovereignty prevails, the fiscal position and the public debt are poor metrics for judging the viability of a public purpose and its pace of implementation. As such, applying MMT to policymaking does not mean that a government ought to be encouraged to record fiscal deficits or that the relation between the central bank and the treasury ought to be radically changed to allow direct financing. The fiscal balance is not a proper policy goal because it leads to irrelevant or incorrect policymaking and because it is largely outside the control of policymakers. The financial praxis of monetarily sovereign governments already conforms to MMT. Central banks and treasuries routinely coordinate their financial operations. Some governments have allowed direct financing of the treasury by the central bank; others have not but have developed equivalent ways to coordinate their fiscal and monetary operations that work around existing political constraints. Such routine coordination ensures an elastic financing of government operations that at least deals with domestic resources and is not intrinsically inflationary.

In recent years, diverging demand and growth regimes have received greater scholarly attention. In particular, the intersection between different variants of Comparative Political Economy and the post-Keynesian macroeconomic analysis provides a promising avenue for understanding the main dynamics of various growth regimes. Yet, the majority of these studies has focused on the global North. In this contribution, we expand this analysis to the global South by examining eight large emerging capitalist economies (ECEs) - Argentina, Brazil, China, India, Mexico, Russia, South Africa, and Turkey - during the periods 2000-2008 and 2009-2019. In so doing, we not only uncover the main demand and growth regimes of ECEs for the two periods, but also link these results to the main trends in the demand and growth regimes of developed capitalist economies (DCEs) for both periods. One of the main findings of our research is that ECEs did not follow the same path as DCEs after the Great Recession. While there was a clear shift in the demand and growth regimes of DCEs towards an export orientation, the main pattern in the ECEs remained the continuation of a trend that had already emerged before the 2007-09 crisis, i.e. domestic demand-led models. Finally, we provide some observations on the puzzle of resilient domestic demand-led models in ECEs.

We study endogenous employment and distribution dynamics in a Post-Keynesian model of Kalecki-Steindl tradition. Productivity adjustments stabilize employment and the labour share in the long run: technological change allows firms to replenish the reserve army of workers in struggle over income shares and thereby keep wage demands in check. We discuss stability conditions and the equilibrium dynamics. This allows us to study how legal working time and its reduction affect the equilibrium. We find that a demand shock is likely to lower the profit share and increase the employment rate. A supply shock in contrast tends to have detrimental effects on employment and income distribution. Labour market institutions and a working time reduction have no long-term effect on growth, distribution and inflation in the model. The effects on the level of capital stock and output however are positive in a wage-led demand regime. Furthermore, an erosion of labour market institutions dampens inflation temporarily. The model provides possible explanations as to the causes of several current economic phenomena such as secular stagnation, digitalisation, and the break-down of the Philips curve., Series: Ecological Economic Papers

Fiscal policy has a strong role to play in the transition to an ecologically sustainable economy. This paper critically discusses the way that green fiscal policy has been analysed in both conventional and post-Keynesian approaches. It then uses a recently developed post-Keynesian ecological macroeconomic model in order to provide a comparative evaluation of three different types of green fiscal policy: carbon taxes, green subsidies and green public investment. We show that (i) carbon taxes reduce global warming but increase financial risks due to their adverse effects on the profitability of firms and credit availability; (ii) green subsidies and green public investment improve ecological efficiency, but their positive environmental impact is partially offset by their macroeconomic rebound effects; and (iii) a green fiscal policy mix derives better outcomes than isolated policies. Directions for future heterodox macroeconomic research on the links between fiscal policy and ecological sustainability are suggested.

An empirical approach to model estimation and evaluation based on Bayesian Maximum Likelihood is introduced to the post-Keynesian literature. To illustrate the method, it is applied to a neo-Kaleckian type of model of Euro Area business cycle fluctuations including endogenous fiscal and monetary policy as well as endogenous wage formation. To evaluate its empirical performance, the marginal likelihood and impulse-responses conditional on the proposed model are contrasted to those conditional on the corresponding Bayesian vector auto-regression models after relaxing the theory-implied cross-coefficient restrictions. The estimated parameter distributions are broadly in line with the empirical literature. Yet, a Bayesian vector auto-regression with loose theory-implied restrictions on the prior outperforms the neo-Kaleckian model considerably indicating misspecification. Further, a baseline Dynamic Stochastic General Equilibrium model is superior in terms of the marginal likelihood. Comparative impulse-response analysis indicates a failure of the neo-Kaleckian model to satisfyingly capture the fiscal and monetary policy transmission mechanisms. Ein bayesianischer Maximum-Likelihood-Ansatz zur Modellschätzung und -evaluierung wird in die postkeynesianische Literatur eingeführt. Um die Methode zu illustrieren, wird sie an einem neokaleckianischen Konjunkturzyklusmodell für die Eurozone inklusive Fiskalpolitik, Geldpolitik sowie einer endogenen Lohnbestimmung angewandt. Um die empirische Leistungsfähigkeit des Modells zu evaluieren, werden die marginale Verteilung und Impuls-Reaktionen bedingt auf das vorgeschlagene Model jenen gegenübergestellt, die auf die entsprechenden bayesianischen Vektor-Autoregressionen nach Lockerung der theorie-induzierten Parameterrestriktionen bedingt sind. Die geschätzten Parameterverteilungen stehen weitgehend im Einklang mit der empirischen Literatur. Dennoch übertreffen die bayesianischen Vektor-Autoregressionen mit nur losen theorie-induzierten Parameterrestriktionen der a-priori Wahrscheinlichkeiten das neokaleckianische Model erheblich, was eine Fehlspezifikation des letzteren anzeigt. Darüber hinaus ist ein einfaches Allgemeines Gleichgewichtsmodell überlegen, gemessen an der marginalen Verteilung. Eine vergleichende Analyse der Impuls-Reaktionen suggeriert, dass ein großer Teil der Fehlspezifikation des neokaleckianischen Modells darin begründet liegt, dass es die fiskal- und geldpolitischen Transmissionsmechanismen nicht zufriedenstellend erfassen kann.

A Dynamic Stochastic Labor-Market Disequilibrium (DSLMD) model is proposed for Keynesian business cycle analysis. It shares the type of micro-foundation known from neoclassical Dynamic Stochastic General Equilibrium (DSGE) models but characterizes economic mechanisms consistent with Traditional Post-Keynesian (TPK) models. Wage inflation is perceived as a non-market-clearing policy variable which may be subject to a collective Nash bargaining process with the state of the labor market affecting the relative bargaining power. The core insights are twofold: First, apart from assumptions regarding expectation formation, the DSGE-type of micro-foundation is, to a considerable extent, consistent with the behavioral hypotheses underlying TPK models. Second, the economy characterized by the DSLMD model is post-Keynesian rather than neoclassical. Wir präsentieren ein dynamisches, stochastisches Arbeitsmarktungleichgewichtsmodel (DSLMD), welches sich für eine keynesianische Analyse des Konjunkturzyklus eignet. Mit neoklassischen dynamischen, stochastischen allgemeinen Gleichgewichtsmodellen (DSGE) verbindet es die Art der Mikrofundierung. Dennoch beschreibt es ökonomische Mechanismen, die mit traditionellen postkeynesianischen (TPK) Modellen konsistent sind. Die Lohninflation wird nicht als den Arbeitsmarkt räumende Gleichgewichtsvariable aufgefasst, sondern als Politikvariable, die entweder konstant ist oder durch einen kollektiven Nash-Lohnverhandlungsprozess bestimmt wird. Dabei beeinflusst die Arbeitslosigkeit die relative Macht der Verhandlungsparteien. Zwei Ergebnisse sind zentral: Erstens, mit Ausnahme der Annahme rationaler Erwartungen ist die Mikrofundierung basierend auf intertemporaler Optimierung größtenteils konsistent mit den Verhaltenshypothesen, die TPK Modellen zu Grunde liegen. Zweitens, die von dem DSLMD Modell beschriebene Ökonomie ist postkeynesianisch und nicht neoklassisch.