Table Of ContentMicroeconomics,
Macroeconomics and
Economic Policy
Essays in Honour of Malcolm Sawyer
Edited by
Philip Arestis
Microeconomics, Macroeconomics and Economic Policy
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Microeconomics,
Macroeconomics and
Economic Policy
Essays in Honour of Malcolm Sawyer
Edited by
Philip Arestis
University of Cambridge and University of the Basque Country
Palgrave
macmillan
Selection and editorial matter © Philip Arestis 2011
Individual chapters © Contributors 2011
Softcover reprint of the hardcover 1st edition 2011 978-0-230-29019-8
All rights reserved. No reproduction, copy or transmission of this
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Any person who does any unauthorized act in relation to this publication
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work in accordance with the Copyright, Designs and Patents Act 1988.
First published 2011 by
PALGRAVE MACMILLAN
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Palgrave® and Macmillan® are registered trademarks in the United States,
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ISBN 978-1-349-33137-6 ISBN 978-0-230-31375-0 (eBook)
DOI 10.1057/9780230313750
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A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Microeconomics, macroeconomics and economic policy: essays in honour
of Malcolm Sawyer/edited by Philip Arestis.
p. cm.
Includes index.
1. Microeconomics. 2. Macroeconomics. 3. Economic policy.
I. Sawyer, Malcolm C. II. Arestis, Philip, 1941–
HB172.M5985 2011
330—dc22 2011011740
Contents
List of Tables vii
List of Figures viii
Notes on the Contributors ix
Malcolm Sawyer: An Appreciation xvii
Philip Arestis
Part I Microeconomics
1 The Function of Firms: Alternative Views 3
Nina Shapiro
2 Industrial Structure and the Macro Economy 20
Keith Cowling and Philip R. Tomlinson
3 Unemployment, Power Relations, and the Quality of Work 38
David A. Spencer
4 The Problem of Young People Not in Employment,
Education or Training: Is there a ‘Neet’ Solution? 54
John McCombie and Maureen Pike
5 The Business of Macro Imbalances: Comparing ‘Gluts’ in
Savings, Money and Profits 72
William Milberg and Lauren Schmitz
Part II Macroeconomics
6 A Critical Appraisal of the New Consensus Macroeconomics 99
Philip Arestis
7 Bringing Together the Horizontalist and the Structuralist
Analyses of Endogenous Money 116
Giuseppe Fontana
8 Economic Growth and Income Distribution: Kalecki,
the Kaleckians and Their Critics 134
Amitava Krishna Dutt
9 The Influence of Michał Kalecki on Joan Robinson’s
Approach to Economics 153
G.C. Harcourt and Peter Kriesler
v
vi Contents
10 Shared Ideas Amid Mutual Incomprehension: Kalecki
and Cambridge 170
Jan Toporowski
Part III Economic Policy
11 Is There a Role for Active Fiscal Policies? Supply-Side
and Demand-Side Effects of Fiscal Policies 191
Jesus Ferreiro, Teresa Garcia del Valle, Carmen Gomez
and Felipe Serrano
12 Fiscal Policy and Private Investment in Mexico 208
Emilio Caballero U. and Julio López G.
13 A Keynes–Kalecki Model of Cyclical Growth with
Agent-Based Features 228
Mark Setterfield and Andrew Budd
14 Unsurprising to Keynes, Shocking to Economists:
The Normalisation of Capital Controls in the Global
Financial Crisis 251
Ilene Grabel
15 Regulating Wall Street: Exploring the Political Economy
of the Possible 268
Gerald Epstein and Robert Pollin
Index 286
List of Tables
5.1 USA–China average annual industry import share and profit
share growth rates by NAICS commodities, 2002–2008 87
5.2 Kendall tau-b rank-correlation coefficients for the
NAICS industry profit share and the US–China NAICS
commodity import share, 2002–2008 90
12.1 Single-equation VAR misspecification tests 221
12.2 Trace test 222
12.3 Equilibrium correction mechanism 223
13.1 Revisions to the state of long-run expectations 231
13.2 Agent-based revisions to the state of long-run expectations 234
15.1 Futures and options market long positions by trader
group, January 2006–December 2008 280
vii
List of Figures
5.1 Trade balances as share of GDP for USA–World, USA–China,
and China–World, 1995–2010 I–III 74
5.2 Gross savings, gross capital formation, and the current
account balance as share of GDP in China and the United
States, 1995–2008 76
5.3 The ‘money glut’ with interest-sensitive saving and
investment 78
5.4 US corporate profits with inventory valuation and capital
consumption adjustments, 1995–2009 83
5.5 US import, profit and investment shares, 1970–2006/07 84
5.6 The ‘profits glut’ 85
7.1 A general endogenous money analysis of the reserve market 119
7.2 A general endogenous money analysis of the credit market 123
7.3 A general endogenous money analysis of the financial
markets 125
12.1 Private investment and selected fiscal and external variables
in Mexico 215
13.1 Aggregate growth 240
13.2 Aggregate capacity utilisation 241
13.3 Number of idle firms 242
13.4 Size distribution of firms in Period 150 243
13.5 Goodness of fit of estimated power laws 244
viii
Notes on the Contributors
Philip Arestis is Honorary Senior Departmental Fellow, Cambridge
Centre for Economics and Public Policy, Department of Land Economy,
University of Cambridge, UK; Professor of Economics, Department of
Applied Economics V, University of the Basque Country, Spain; Distin-
guished Adjunct Professor of Economics, Department of Economics,
University of Utah, US; Senior Scholar, Levy Economics Institute,
New York, US; Visiting Professor, Leeds Business School, University of
Leeds, UK; Professorial Research Associate, Department of Finance and
Management Studies, School of Oriental and African Studies (SOAS),
University of London, UK; and holder of the British Hispanic Foundation
‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies. He is
Chief Academic Adviser to the UK Government Economic Service (GES)
on Professional Developments in Economics. He has published as sole
author or editor, as well as co-author and co-editor, a number of books,
contributed in the form of invited chapters to numerous books, produced
research reports for research institutes, and has published widely in
academic journals.
Andrew Budd received a BS in Economics and Computer Science
from Trinity College (Hartford) in 2008, and a Masters of Business
Administration from the Sloan School of Management at MIT in 2010.
His research interests include Post Keynesian economics, agent-based
simulation, data mining and visualisation. He is now employed as a
Senior Project Manager in the Technology Innovation group at ESPN,
where he oversees the development of novel statistical analysis systems.
Keith Cowling is Professor of Economics at the University of Warwick
where he has spent most of his professional life. He has published over
a wide area of industrial economics and political economy. His pub-
lications include a considerable number of books including Monopoly
Capitalism, his most important central publication. His papers include
contributions to the Journal of Political Economy, the European Economic
Review, the Economic Journal, Kyklos, Economica, and the International
Journal of Industrial Organisation. He was previously President of the
European Association for Research in Industrial Economics (EARIE)
and editor of the International Journal of Industrial Organization (IJIO).
ix
