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Certain post-Keynesian (PK) authors consider Means as one of the founding figures of PK theory and a notable contributor to heterodox economic thought in general. Paradoxically, many surveys of PK economics do not mention his name at all. It is the purpose of the current study to scrutinize the possible reasons behind the contradictory evaluations of Means’ contributions among PK authors. Based on a critical analysis of his stance on Keynesian and political economics traditions as well as his labor analysis, I argue that Means’ ideas and PK theory remain in harmony on the surface but conflict at a more fundamental level. [ABSTRACT FROM AUTHOR]

This article examines Chapter 5 'Effective Demand and Employment' in Post-Keynesian Economics: New Foundations by Marc Lavoie. This chapter covers one of the most distinctive contributions of the post-Keynesians, and one of its most profound insights. Analysis of effective demand and employment is a crucial and distinct foundation of post-Keynesian economics. Identifying the determinants of the level of employment and output represent one of the most significant contributions of post-Keynesian analysis. This is in total contrast to mainstream theory, according to which the level of output and employment are determined in the labour market, with labour seen as just another commodity, and the wage rate playing the role of the price equating supply and demand for labour. For post-Keynesians, the main determinant of the level of output and employment is the level of effective demand rather than the wage rate. Their views on the labour markets, taking into account segmented labour markets and efficiency wages, are considered. The determinants of profits and the profit share play important roles in the determination of employment and output. It is argued that fiscal policy plays a vital role in economic stabilisation, and that the typical arguments regarding its limitations are incorrect. [ABSTRACT FROM AUTHOR]

This article represents a systematic presentation of the post-Keynesian alternative to mainstream economic theory. It places observation of reality at the centre of the investigation and derives — through an in-depth examination of post-Keynesian literature — an analytical model capable of interpreting the behaviour of firms in a capitalistic market economy. The chapter on which this article focuses is in a book covering the core elements of this heterodox model, which creates a coherent framework for investigating and interpreting the workings of an economic system that approximates reality. [ABSTRACT FROM AUTHOR]

In this paper, I present a bird’s-eye view of Robinson’s intellectual journey and I follow Harcourt in his assessment of her contributions and intellectual personality. From his many articles and books, in all his unconditional support and admiration of her, there were also some theoretical disagreements. These particularly revolve around her interpretation of Marx, and in some respects also of Sraffa. This bears witness to Harcourt’s integrity and intellectual honesty, a scholar who could be at the same time both critical and sympathetic in intellectual confrontations, whilst also being a very close friend. [ABSTRACT FROM AUTHOR]

This article is a post-Keynesian stock flow consistent (PK-SFC) model that analyses the dynamics of an economy characterised by several — often individually studied — features of PK-SFC studies together with some innovative aspects. In particular, we investigate the income and wealth distribution between two social classes, capitalists and workers, after a period of a crisis subject to different policy scenarios. Non-financial firms but also government can undertake investments decisions and both accumulate capital. Finally, we consider the workers' and capitalists' consumption behaviour that contributes to produce (un)sustainable paths. Our model is built upon Bibi (2020, 2021) within an endogenous money framework and is calibrated using available data for major advanced economies. Simulations are conducted to question the different government fiscal policies to reduce unemployment boosting the economic activity, to obtain a more equitable distribution between social classes while obtaining those goals in a sustainable way. [ABSTRACT FROM AUTHOR]

This article formally examines the economic impact of Israeli movement restrictions on the Palestinian economy, taking into account the distribution of economic burden among Palestinian workers and capitalists. It utilizes a model that postulates restrictions as an external third claimant on income (together with wages and profits). It highlights the importance of a political economy lens that takes social classes into consideration, both in the presented stylized facts and in the formal model. Formally, instead of assuming that capitalists passively bear the full burden of the restrictions on their profitability, the new model assumes that capitalists channel the burden to workers via the nominal wage. It also adjusts the assumption that the savings rate is homogeneous between Palestinian workers and capitalists. The article derives the new specifications for the profit rate, capacity utilization and capital accumulation, and finds that shifting the distributional impact of movement restrictions has a clear impact on the short-run equilibrium levels of capacity utilization and capital accumulation. [ABSTRACT FROM AUTHOR]

This article implies that the time is ripe for a new paradigm in economic theory comprising classical (Ricardian) and Keynesian elements of analysis. The central Section Five presents the basic equations of classical-Keynesian political economy, the price and the quantity equation, based on three constitutive principles: the classical labour value and surplus principles and the Keynesian principle of effective demand. Subsequently, two employment mechanisms implied in the super-multiplier relation, the classical-Keynesian quantity equation, are mentioned, the internal and the external employment mechanism. Section Seven provides an analysis of the actual situation on the basis of the external employment mechanism, associated with cumulative processes of increasing disequilibria and inequalities. Given this, it ought to be replaced by the internal employment mechanism, allowing for Keynesian employment and distribution policies (Section Eight). However, the internal mechanism can only be implemented if a new world economic order is brought about, based upon a supranational currency, that is, Keynes's bancor, to ensure balance of current account equilibria worldwide. Section Ten sets forth Keynes's social liberalism, the social philosophy underlying classical-Keynesian political economy, the fundamental social ethical value of which is the Common Good. Social Liberalism thus emerges as the alternative to Capitalism and Socialism. [ABSTRACT FROM AUTHOR]

This paper is an answer to the question: What is new, what is good and what is relevant for Eurozone countries in Modern Monetary Theory (MMT)? The answer is organized under six questions: (1) What is MMT? (2) What is the definition of a sovereign currency — an important concept for MMT authors? (3) Does the institutional setup play any role in assessing monetary sovereignty? (4) Is the euro a foreign currency for eurozone countries, that is, are eurozone countries currency users or currency issuers? (5) Why could there be a eurozone financial crisis and was it a balance-of-payment crisis, as a number of authors have claimed? (6) And as a conclusion, what is the future of the Eurozone? It is argued that MMT is part of the Institutionalist branch of post-Keynesian economics; that the current definition of a sovereign currency is insufficient; that the Eurozone crisis arose from the combination of Maastricht-like rules and the convention that the European Central Bank would not act as a purchaser of last resort; and that this crisis can only be taken to be a balance-of-payment crisis when considering that bond investors thought some countries would leave the Eurozone and face currency depreciation. [ABSTRACT FROM AUTHOR]

The supermultiplier model is gaining momentum. To become a cornerstone of modern macroeconomics, it should explain the dynamics of advanced market economies in a coherent, complete, and simple way. In particular, it is supposed to clarify the possibilities and limits of credit-driven economies, like the one observed in most advanced countries after 1995. This paper contributes to these goals by integrating the Sraffian supermultiplier with the post-Keynesian hypothesis of credit money endogeneity. This hypothesis is somehow modified when autonomous banks are able to accelerate credit above output growth, as happened after 2002. The gap between credit and output growth implies that a part of the loans is financing non-output transactions (land, old houses, shares), usually with a speculative bias. The consequences of a persistent gap are demand depression and asset inflation, as we observed after 2008. [ABSTRACT FROM AUTHOR]

Only twelve years after the global financial crisis, in 2020 the world was again in economic crisis. This time around, the source of the crisis was the COVID-19 global pandemic, which has affected the economy differently than the global financial crisis. However, as they were in 2008–2009, conventional macroeconomic theory and models have once again been found wanting, and economists have again turned for insights to the work of Keynes and more recent post-Keynesian scholars. This paper explores a simulation of the macroeconomic impacts of COVID-19 using the E3ME macro-econometric model. It describes two potential recovery packages, one of which could be described as 'green'. The modelling shows that the green recovery package could support the global economy and national labour markets through the recovery period, outperforming an equivalent conventional stimulus package while simultaneously reducing global CO2 emissions by 12%. A green recovery plan is assessed against a reference scenario with COVID-19. It outperforms a non-green recovery plan of comparable value, while also reducing CO2 emissions by up to 12% below the reference scenario (15% below no-COVID baseline). The policies in the green recovery plan provide different relative impacts. Car scrappage schemes that promote the uptake of electric vehicles have the largest impact on GDP and jobs. Renewables, energy efficiency and electric vehicle promotion all have large impacts on emissions. The green recovery plan boosts production levels in all sectors of the economy except for energy and utilities. It boosts the consumer services sector that has been most affected initially by the pandemic but also the investment sectors that could suffer longer-term damage. [ABSTRACT FROM AUTHOR]

Connecting comparative political economy (CPE) approaches, as the Varieties of Capitalism (VoC) theory, with post-Keynesian (PK) research on different demand and growth regimes in modern capitalism has recently given rise to some interesting claims regarding differentiation and shifts of demand and growth regimes. However, we find some difficulties in the way PK approaches have been interpreted and integrated in modern CPE approaches. Therefore, we first provide a theoretically consistent and empirically applicable classification of demand and growth regimes under the conditions of finance-dominated capitalism, as it recently has been proposed by PK authors. Second, instead of using the traditional VoC dual classification, we focus on a more differentiated welfare model classification, which can be seen as different socio-institutional responses towards the challenges of globalisation and financialisation. For the period before the 2007-9 crisis, we link the PK demand and growth regimes with five socio-economic models identified by Hay and Wincott (2012), and thus provide an alternative approach. Third, going beyond the current debate, we examine the regime shifts after the 2007-9 global crisis with respect to the demand and growth regimes, and we also examine the changes within the welfare models. Whereas we find a clear pattern for the shift of demand and growth regimes, the changes in the welfare models are not as clear-cut. [ABSTRACT FROM AUTHOR]

This paper celebrates the contributions to Keynesian theory of the late Brazilian economist Fernando Cardim de Carvalho (1953–2018). We use Carvalho's 12 refereed English-language papers on Keynesian theory — the first published in 1983, the last in 2016 — as a point of departure for reflecting on two questions confronting macroeconomists today. First, what is the work of the economist — in what does economic analysis consist? Second, in this post-crisis era, how might macroeconomics — and specifically Keynesian macroeconomics — be rebuilt? Carvalho's writings show that the work of the economist can be as much about understanding the raw elements of human behavior in the real world — what we will call the foundational level of analysis — as about constructing models depicting the momentum of economic systems incorporating these behaviors. Adopting this approach to the practice of theory leads to insights and frameworks that would be lost if macroeconomic theorizing were equated with formal model building: it will enrich exchanges among economists, deepen the conceptual roots of Post Keynesian macroeconomics, and facilitate interdisciplinary exchange. [ABSTRACT FROM AUTHOR]

The apparently never-ending phase of economic slowdown that advanced economies have been experiencing in recent decades has recently contributed to the resurrection of the hoary old argument of 'secular stagnation'. In this paper, situated intellectually within the strand of research documenting the negative impact on growth of inequality and financialization, we elaborate on the idea that such a prolonged period of stagnation is associated with a new paradigm of socio-economic policy, known as 'finance-dominated capitalism'. In this way, we distance ourselves from the mainstream 'secular stagnation' narrative, adopting instead a post-Keynesian perspective that allows us to discuss the links between financialization and inequality, on one hand, and economic performance, on the other. Then, we submit our arguments to empirical scrutiny by undertaking an econometric analysis of 21 OECD countries between 1990 and 2016. The evidence indicates that excessive levels of financialization, along with high inequality and weak labor market institutions, have a negative impact on real growth. Based on our findings, we propose possible demand-side policies, to be implemented through expansionary fiscal measures, which could help sustain GDP growth and employment in the current context of stagnation, mitigating income inequality and sustaining an inclusive recovery at the same time. [ABSTRACT FROM AUTHOR]

While modeling macroeconomic interactions, post-Keynesians propose rationales to verbally motivate the choice of behavioral equations. This informal approach to microfoundation results in inconsistencies and fuzzy arguments. The rationales for different behavioral rules are mutually inconsistent, require strong and nontransparent assumptions, or refer to highly endogenous variables that are not part of the model. The postulated behavioral rules are invariant to endogenous changes in the microenvironment, whereas the rationales imply that they adjust endogenously. The prevailing assumption of purely backward-looking expectations is neither theoretically nor empirically satisfying. The article concludes that revisiting the issue of microfoundation within the post-Keynesian framework may be a rewarding line of research. Furthermore, post-Keynesians should be open to various microfoundations as long as models feature the core of post-Keynesian theory—the principle of effective demand. [ABSTRACT FROM PUBLISHER]

Frederic Lee has been a major contributor to post-Keynesian economics, mainly to its theory of pricing. This article summarizes his objections to the neoclassical view of the firm and pricing, as well as his view that changes in quantities, rather than in prices, provide the important information to firms. It also outlines Lee's views on competition, and examines the three pricing doctrines Lee carefully analyzed—markup pricing (associated with Kalecki), normal-cost pricing or full-cost pricing (associated with Andrews), and target-return or administered pricing (associated with Means). The article then discusses the relationship between Lee and three strands of post-Keynesianism: Kaleckian, Sraffian and Eichnerian pricing theories. It explains why Lee objected to some features of each of these. The article concludes by discussing why, towards the end of his life, Lee felt (mistakenly) that his ideas had been dismissed by heterodox economists. [ABSTRACT FROM PUBLISHER]

Here I explore the possibility that capitalism is today undergoing the systemic equivalent to Marx's notion of primitive accumulation, only now as a deepening of advanced capitalism predicated on the destruction of more traditional forms of capitalism. I focus on two diverse instances which share a common systemic logic: expulsing people from more traditional capitalist encasements. One instance is that of countries devastated by an imposed debt and debt-servicing regime which took priority over all other state expenditures; at its most extreme, the ensuing devastation of traditional economies and traditional states has made the land more valuable to the global market than the people on it. The other instance, which I see as a systemic equivalent to the first, is the potential for global replication of the financial innovation that destroyed 15 million plus households in the US in two years, with many more to come; household destruction at this scale devastates whole areas of cities, and leaves vacant land. How this rapidly growing expanse of vacant land will be reincorporated into global capital circuits is not yet clear. I examine these two cases through a specific lens: the transformative processes that expand the base of current advanced capitalism, with particular attention to the assemblages of specific processes, institutions, and logics that enabled this systemic transformation. En este articulo exploro la posibilidad de que el capitalismo esta pasando actualmente por el equivalente sistemico a la nocion de Marx sobre la acumulacion primitiva, solo que ahora como un aumento al capitalismo avanzado predicado en la destruccion de mas formas tradicionales de capitalismo. Me enfoco en dos casos diversos que comparten una logica sistemica comun: la expulsion de personas de un encajonamiento capitalista mas tradicionalista. Una muestra es la de los paises devastados por una deuda impuesta y un regimen de servicio de deuda que tomo prioridad sobre todos los demas gastos del estado; y en su maximo extremo, la consecuente devastacion de las economias y de los estados tradicionales hizo que la tierra tuviera mayor valor en el mercado global, que la gente que vive en la misma. Otro problema, que yo veo como un equivalente sistemico al primero, es el potencial de una replica de la innovacion financiera que destruyo a mas de 15 millones de hogares en E.E.U.U. en dos anos y que seguira afectando en el futuro; la destruccion de hogares a esta escala devasta areas completas de ciudades y deja terrenos sin construir. No esta claro que tanto tomara la reincorporacion de esta rapida expansion de terrenos sin construir, a los circuitos capitales globales. Examino estos dos casos a traves de una lente especifica: los procesos transformadores que expanden la base del capitalismo avanzado actual, con una atencion particular al ensamble especifico de procesos, instituciones y logica que habilita esta transformacion sistemica. [image omitted] [ABSTRACT FROM AUTHOR]

Starting from Schumpeter's important distinction between ‘real analysis’ and ‘monetary analysis’, in this paper it is shown that major elements of Marx's economic theory fall in the camp of ‘monetary analysis’. This is true for Marx's theory of value, his rejection of Ricardo's interpretation of Say's Law, his treatment of the realization problem in the schemes of reproduction and his theories of credit and the rate of interest. The implications of this monetary interpretation for Marx's theory of distribution and growth display broad similarities to a monetary extension of a Kaleckian version of the post-Keynesian model, in which the equilibrium growth path is determined by the interaction between monetary and real variables. [ABSTRACT FROM AUTHOR]

Boulding's reconstruction of macroeconomics provides a ‘micro-foundation’ based on liquidity preference theory, a balance sheet approach, and a process of homeostasis. These microfoundations are consistent with his aggregate theory and avoid fallacies of composition—such as the paradox of thrift—as well as the ‘adding up’ problems of marginal productivity theory. His distribution theory links income shares to the determinants of employment and output and the conditions of equilibrium of saving and investment. His definitions provide clear alternatives to the NIPA definitions adopted in ‘Keynesian’ theory. He provides an alternative view of fiscal and monetary policies that will not prove to be impotent in the face of the ongoing conservative counterrevolution. Indeed, his theories are quite close to the modern Post-Keynesian understanding of ‘endogenous money,’ the deficit-growth relation, and the investment-saving connection, while his policy recommendations are often consistent with those of Post-Keynesians. [ABSTRACT FROM AUTHOR]