Contemporary Post Keynesian Analysis: Keyensian Analysis (Contemporary Post Keynesian Analysis)

367 Pages·2005·1.44 MB·English

by  L. Randall Wray

Contemporary Post Keynesian Analysis
CONTEMPORARY POST KEYNESIAN ANALYSIS
Edited by L. Randall Wray and Mathew Forstater
This volume collects a number of papers presented at the 7th International
Post Keynesian Summer School and Workshop during the summer of 2002 at
the University of Missouri–Kansas City. Major topics covered include: per-
spectives on current economic policy; Post Keynesian approaches to monetary
theory and policy; economic development, growth and inflation; Kaleckian
perspectives on distribution; economic methodology; and history of heterdox
economic theory. Contributors include: Eckhard Hein, Hassan Bougrine,
Robert Parenteau, Stephanie Bell, Claudio Sardoni, Thomas Swanke, Etelberto
Ortiz, Arturo Huerta, Rumen Gechev, Alcino Camara and Matias Vernengo,
Harry Bloch and David Sapsford, Jerry Courvisanos and Bart Verspagen, A.
Laramie, D. Mair, and P.J. Reynolds, Richard Arena, James Juniper, Paul
Downward and Andrew Mearman, Claude Gnos, Antonio Macedo e Silva,
and Dimitri Uzunidis and Blandine Laperche.
Contemporary Post
Keynesian Analysis
Edited by
L. Randall Wray
University of Missouri–Kansas City, USA
Mathew Forstater
University of Missouri–Kansas City, USA
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
© L. Randall Wray and Mathew Forstater, 2004
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic, mechanical
or photocopying, recording, or otherwise without the prior permission of the
publisher.
Publishing by
Edward Elgar Publishing Limited
Glensanda House
Montpellier Parade
Cheltenham
Glos GL50 1UA
UK
Edward Elgar Publishing, Inc.
136 West Street
Suite 202
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Cataloguing in Publication Data
International Post Keynesian Workshop (7th : 2002 : University of Missouri, Kansas
City)
Contemporary post Keynesian analysis / edited by L. Randall Wray, Mathew
Forstater.
p. cm.
“This volume collects a number of papers presented at the 7th International
Post Keynesian Summer School and Workshop during the summer of 2002 at the
University of Missouri, Kansas City.”
Includes bibliographical references.
1. Monetary policy. 2. Inflation (Finance). 3. Economic development. 4.
Keynesian economics. 5. Economics. I. Wray, L. Randall, 1953- II. Forstater,
Mathew, 1961- III. Title.
HG230.3.I58 2002
330.I5'6--dc22
2004050637
ISBN 1 84376 460 1
Typeset by Manton Typesetters, Louth, Lincolnshire, UK
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Contents
List of contributors vii
Preface ix
PART I POST KEYNESIAN PERSPECTIVES ON CURRENT
ECONOMIC POLICY
1 Wage bargaining and monetary policy in the EMU: a post
Keynesian perspective 3
Eckhard Hein
2 Public debt and private wealth 24
Hassan Bougrine
3 Exploring the economics of euphoria: using post Keynesian
tools to understand the US bubble and its aftermath 44
Robert W. Parenteau
PART II POST KEYNESIAN APPROACHES TO MONETARY
THEORY AND POLICY
4 Money in the time of the Internet: electronic money and its
effects 69
Claudio Sardoni
5 Understanding the implications of money being a social
convention 84
Thomas A. Swanke
6 Demand management and the monetary system: do currency
boards and currency unions spell the end for Keynesian policy? 100
Stephanie A. Bell
PART III POST KEYNESIAN CONTRIBUTIONS ON
DEVELOPMENT, GROWTH AND INFLATION
7 Stability conditions for a small open economy 121
Etelberto Ortiz
8 Mexico: strong currency and weak economy 139
Arturo Huerta
v
vi Contents
9 Economic policy of sustainable development in the countries of
transition towards a market economy 157
Rumen V. Gechev
10 Allied, German and Latin perspectives on inflation 172
Alcino Câmara and Matias Vernengo
PART IV KALECKIAN PERSPECTIVES ON GROWTH,
INFLATION AND DISTRIBUTION
11 Commodity prices and the dynamics of inflation in Australia 187
Harry Bloch and David Sapsford
12 Innovation and investment in capitalist economies, 1870–2000:
Kaleckian dynamics and evolutionary life cycles 205
Jerry Courvisanos and Bart Verspagen
13 Kalecki’s theory of income distribution: the answer to a
maiden’s prayer? 227
Anthony J. Laramie, Douglas Mair and Peter J. Reynolds
PART V METHODOLOGY
14 On the relation between individual and collective beliefs: a
comparison between Keynes’s and Hayek’s economic theories 249
Richard Arena
15 A Keynesian critique of recent applications of risk-sensitive
control theory in macroeconomics 267
James Juniper
16 Presenting ‘demi-regularities’ of pricing behaviour: the need
for triangulation 285
Paul Downward and Andrew Mearman
PART VI ISSUES IN THE HISTORY OF THOUGHT
17 Analysing and fighting recession with reference to Keynes 301
Claude Gnos
18 From Say’s law to Keynes, from Keynes to Walras’s law: some
ironies in the history of economic thought 310
Antonio Carlos Macedo e Silva
19 Power of the firm and new mercantilism: an analysis based
on Joan Robinson’s thought 333
Dimitri Uzunidis and Blandine Laperche
Index 349
Contributors
Richard Arena is Professor at LATAPSES in Universite de Nice, Sophia-
Antipolis, Valbonne, France.
Stephanie A. Bell is Assistant Professor of Economics at University of
Missouri–Kansas City, Kansas City, Missouri, USA.
Harry Bloch is Professor of Economics at Curtin University of Technology,
Perth, Australia.
Hassan Bougrine is Associate Professor at the School of Business Adminis-
tration of Al Akhawayn University, Ifrane, Morocco and Associate Professor
of Economics at Laurentian University, Sudbury, Canada.
Alcino Câmara is Dean of the Law and Economics Center in Federal Uni-
versity of Rio de Janeiro, Rio de Janeiro, Brazil.
Jerry Courvisanos is Senior Lecturer in Innovation and Entrepreneurship at
the School of Business in University of Ballarat, Ballarat, Australia.
Paul Downward is Professor of Economics at Staffordshire University, Stoke
on Trent, United Kingdom.
Mathew B. Forstater is Associate Professor of Economics at University of
Missouri–Kansas City, Kansas City, Missouri, USA
Rumen V. Gechev is Professor of Economics and Business at Galen Univer-
sity, San Ignacio, Belize.
Claude Gnos is Professor at the Centre d’Etudes Monétaires et Financières –
LATEC-CNRS in Université de Bourgogne Pôle d’Economie et de Gestion,
Dijon, France.
Eckhard Hein is Senior Researcher in Macroeconomics at WSI in der Hans
Böeckler Stiftung, Düsseldorf, Germany.
Arturo Huerta is Professor at the Economic Faculty of National University
of Mexico in Mexico City, México.
James Juniper is Lecturer at the School of Policy in University of New-
castle, Callaghan, Australia.
vii
viii Contributors
Blandine Laperche is Assistant Professor in Economics and Director of the
team ‘Firms and Innovation’ (Lab.RII) at the Université du Littoral Côte
d’Opale, Dunkerque, France.
Anthony J. Laramie is Professor of Economics at Merrimack College, North
Andover, Massachusetts, USA.
Antonio Carlos Macedo e Silva is Assistant Professor at the Institute of
Economics of University of Campinas, São Paulo, Brazil.
Douglas Mair is Professor at the School of Management and Languages in
Heriot-Watt University, Edinburgh, UK.
Andrew Mearman is Senior Lecturer in Economics at University of the
West of England, Bristol, UK.
Etelberto Ortiz is Professor of Economics at Universidad Autónoma
Metropolitana – Xochimilco, Mexico City, México.
Robert W. Parenteau, CFA is Economic Strategist at Dresdner RCM Global
Investors, San Francisco, California, USA.
Peter J. Reynolds is Professor of Economics at the Staffordshire Business
School of University of Staffordshire, Stoke on Trent, UK.
David Sapsford is Edward Gonner Professor of Applied Economics and
Chairman of the Economics Division at University of Liverpool Management
School, Liverpool, UK.
Claudio Sardoni is Professor of Economics at University of Rome ‘La
Sapienza’, Rome, Italy.
Thomas A. Swanke is Assistant Professor of Economics at Chadron State
College, Chadron, Nebraska, USA.
Dimitri Uzunidis is Professor of Economics and Director of the research
unit ‘Redéploiement Industriel et Innovation’ (Lab.RII) at Université du Lit-
toral Côte d’Opale, Dunkerque, France.
Matias Vernengo is Assistant Professor of Economics at University of Utah,
Salt Lake City, Utah, USA.
Bart Verspagen is Professor at the Eindhoven Centre for Innovation Studies
in Eindhoven University of Technology, Eindhoven, The Netherlands.
L. Randall Wray is Professor of Economics at University of Missouri–
Kansas City, Kansas City, Missouri, USA.
Preface
In the 1970s it became obvious to many non-mainstream economists that
graduate students at universities around the world were rarely, if ever, ex-
posed to Keynes’s ‘general theory’ macro analysis, the underlying Marshallian
micro-theory and its Sraffian critique and the developments that had taken
place since Keynes’s and Sraffa’s major works, or even to an analysis of the
logical difficulties of applying the mainstream models of classical or neoclas-
sical synthesis Keynesianism to real world problems.
Three economists – two Italian and one American living in Italy – decided
something had to be done to expose graduate students and young assistant
professors of economics to these important, but neglected by most university
economics departments, aspects of economic analysis. Otherwise, the areas
of knowledge that had been created and developed in Cambridge would be
lost to the profession – to the detriment of the entire free world.
The three – Sergio Parrinello, Pierangelo Garagnani and Jan Kregel –
obtained funding to start a summer school and conference to occur each year
for 10 to 14 days in Italy at the end of August. The Students in this ‘school’
would be assistant professors and graduate students from around the world.
Their travel expenses, hotel accommodation and meals would be subsidized.
The attraction for the students would be exposure to challenging new and
different ideas, and to obtain a subsidized two-week holiday in Italy. The
faculty was composed of professors from various universities in Europe, the
USA, Canada and so on, linked to the Cambridge tradition.
A preparatory conference organized by the trio was held in Udine in Italy
in the late 1970s. In the following years till the mid-1980s the Europa Hotel
with its own private ‘beach’ on the Adriatic (just outside Trieste, Italy) served
as the location for what became known as the ‘Trieste Summer School’.
Since the Europa Hotel was also a training hotel for chefs, sumptuous and
delicious meals (and wine) were added delights for those attending. A tre-
mendous esprit de corps was established among the students and between
students and faculty at the school.
Unfortunately, by the mid-1980s the organizing trio were having problems
obtaining financing and agreeing on the content for the annual meetings.
Accordingly, a second phase of this institution was started in 1988 in Knoxville,
Tennessee. In 1986 I had received an appointment as the Holly Chair of
ix