theoretical approaches to monetary disinflation abstract during the 1980s many countries adopted tight monetary policies to reduce high inflation rates which were the legacy of the 1970s as inflation threatens to rise at the beginning of this decade this paper provides a survey of the 1980s literature which sought to provide theoretical understandings of how monetary disinflation is achieved four models are presented monetarist neo keynesian new classical and post keynesian each model s explanation of the recession which accompanies the monetary disinflation is outlined as well as possible policy measures to reduce the extent of the recession and to hasten the return to full employment

a note on the kyoto protocol tradeable quotas and firm survival there is a concern in many countries thatintroducing a tradeable greenhouse gas quotasystem may lead to closures ofemission intensive industrial companies jebjerg and lando argue in an article publishedpreviously by this journal that shutdowns canbe prevented by a generous distribution of freequotas however this is only true if thequotas are distributed contingent on continuedproduction some of the practical problems withconditional allocation of free tradeable quotascan be avoided by letting all free quotas benon tradeable

agriculture in recent development theory abstract this paper is a critical review of recent contributions to the literature on agriculture in development theory it considers and compares the main lines of advance made within neoclassical neo marxian and structuralist approaches recent neo marxian and structuralist studies of agrarian development reveal that traditional agriculture is neither stationary nor efficient that resource allocation cannot be separated from wealth distribution or production organization that forms of surplus appropriation do not necessarily follow the dictates of efficiency that the social relations of production may inhibit accumulation and determine the forms of technological change that the state s role in primitive accumulation is more economic than explicitly coercive political and that political and macroeconomic constraints preclude a simple get the prices right view of the intersectoral terms of trade the thrust of these developments is to challenge both neoclassical and some orthodox marxian formulations of agrarian development issues and add to the insights to be gleaned from a political economy of development

international competition income distribution and economic growth this paper shows that the neo keynesian case for wage led growth does not generally hold in an open economy model wage increases cause a loss of competitiveness that reduces the trade balance if the economy is relatively open to trade and price elasticities satisfy certain restrictions the worsening of the trade balance more than outweighs the increase in workers consumption thus reducing the growth rate the main theoretical innovation is a flexible markup pricing rule that allows changes in unit labor costs and exchange rates to affect profit margins implications for international relations and class conflict are discussed copyright 1989 by oxford university press

regulating a polluting firm under asymmetric information this paper reinterprets the laffont tirole model of regulation under asymmetric information to cover the case of pollution control the asymmetry of information concerns the firm s cost of lowering its pollution the regulator has three objectives ensuring an efficient abatement level generating green taxes and securing the survival of the firm we show that when optimal abatement is important relative to tax generation the regulator cannot use the policy of offering the firm a set of linear tax schemes from which to choose by contrast this policy is optimal in the laffont tirole model under certain not very restrictive assumptions we proceed to establish a simple rule for when to shut down inefficient types in an example with specific functional forms we derive the optimal tax function both analytically and graphically we show the effect on the optimal tax system of a change in a technological parameter

north south growth and the terms of trade a model on kaldorian lines this paper examines equilibrium growth and stability in the world economy using a north south model in which there is assumed to be surplus labor in both the north and south at an exogenously determined level of real wages the model allows for substitution in consumption between primary commodities and industrial goods in the north and treats the cases of both surplus and scarce land in the south in the case of an exogenous shock to the model the north south terms of trade may overshoot its equilibrium value and or converge to this value along a cyclical path there is no guarantee that the adjustment path is stable

the grecian horse does immigration lead to the deterioration of american institutions concerns about the institutional impact of immigration particularly in the united states are not new we can trace them back to benjamin franklin thomas jefferson and alexander hamilton more recently in response to a literature that questions the desirability of current immigration restrictions borjas j econ lit 53 961 974 2015 speculates that immigrants coming from countries with poor institutions could reduce substantially the institutional quality in the united states to a point where it could negate all economic gains associated with immigration in terms of gdp and income using the economic freedom of north america index since 1980 we find no evidence to corroborate borjas s concerns however we find mixed evidence that immigration increases minimum wages and union density

growth distribution and inflation a centennial synthesis microeconomics at harvard a little more than a decade ago having become disenchanted with neoclassical economics i suggested to my students that the very neoclassical course i had just taught provided one way of characterising the workings of a capitalist economy but hardly the only way after a year of utility maximisation partial and general equili brium pareto optimality and the associated agonies of lagrangians hessians jacobians and fixed point theorems my students were able to contain their enthusiasm for this news they had expected not one way of looking at the world but at the very least a magical key to knowledge and wisdom it is probably accurate to say that my message was not received at all i shall always remember the incomprehension etched on their faces the next year the last i was to teach theory in that incarnation i decided to present at least a sketch of an alternative to the neoclassical orthodoxy i soon discovered there were at least two foundations on which to build one going back to marx who died one hundred years ago the other deriving from keynes whose birth centenary we celebrate this year these two approaches it was clear were as different from each other as from the neoclassical approach the analysis of neo keynesian neo marxian and neoclassical theories has been a major focus of my research ever since and provides the framework for these lectures 1

inflation deflation expectations and economic stability in a kaleckian system abstract in this paper we analyze the impact of inflation deflation expectations and the effect of the monetary authority s inflation targeting policy in a kaleckian system on the basis of macro foundation approaches for this purpose we build a dynamical system composed of four variables the rate of utilization the wage share the nominal rate of interest and the expected rate of inflation and examine the properties especially stability of this dynamical system we then find that the existence of adaptive inflation deflation expectations always destabilizes our kaleckian system irrespective of the revision speed of expectations while that the monetary authority s intensive inflation targeting policy can make the system stable but the effect of this policy depends heavily upon the public credibility of it we also perform numerical simulations to check that our analysis is valid

aggregate demand conflict and capacity in the inflationary process this paper focuses on an alternative perspective on inflation to that of the non accelerating inflation rate of unemployment nairu it indicates that there are no automatic forces leading to a level of aggregate demand consistent with constant inflation inflationary pressures arise from conflict over income shares and from cost elements with the price of raw materials especially oil being the most important there are supply side factors impinging on the inflationary process which arise from the level of productive capacity relative to aggregate demand the supply side constraints are viewed as arising from capacity constraints rather than from the operation of the labour market copyright 2005 oxford university press

the kaleckian model of growth and distribution and its neo ricardian and neo marxian critiques this paper analyzes the newer kaleckian models of growth and distribution and the criticisms that have been addressed to them by neo marxian and neo ricardian authors the models discussed assume overhead labor costs and target return pricing the main issues are the form of the investment function and the notions of normal rates of profit and of normal rates of capacity utilization despite the relevance of and often the similarity between the neo marxian and neo ricardian critiques it is shown that the main features of the kaleckian growth model may still be preserved c 1995 academic press limited copyright 1995 by oxford university press

the long run determinants of north south terms of trade and some recent empirical evidence abstract this paper reviews some recent evidence of the long run decline in the terms of trade of primary commodities versus manufactures in the context of north south trade this evidence is evaluated in the light of competing explanations of the sources of the observed long run trends in the context of a model of north south trade which includes a general resource labor and capital in the north and specific factors in a dual economy model of the south changes in factor supply sectoral and factoral bias in technical change biased demand conditions changes in the pattern of protection and institutional elements all play a role in determining the evolution of commodity and factor prices the lewis hypothesis of sectoral bias in the pattern of technical change towards temperate agriculture in the north and against tropical agriculture in the south is then reexamined in the light of the recent empirical evidence on terms of trade movements and some sketchy evidence presented on the patterns of bias in technical change in the north and the south the evidence is not consistent with an absolute technical change bias towards temperate agriculture in the north rather the rate of technical change in temperate agriculture is now comparable to that experienced in manufactures so that engel curve effects now assert the major downward pressure on the long run terms of trade between temperate agriculture commodities and manufactures overriding the effects of diminishing returns to natural resources as northern population expands the empirical evidence onbiased technical change in the south is much more sketchy and the evidence on various components of north south terms of trade is more varied

a stagnationist model of economic growth in an economy subject to persistent excess capacity demand related factors will play a key role in determining patterns of secular change this thesis has a long history in econ omics sometimes in the underworld and occasionally at the height of fashion as recounted by rowthorn 1982 recent manifestations in the first world are the theories of monopoly capitalism of baran and sweezy 1966 and steindl 1952 who in turn follow kalecki 1971 hobson 1902 luxemburg 1951 and the marx of realisation crises and reproduction schemes in volume ii of capital other radicals such as boddy and crotty 1975 add a profit squeeze explanation of the cycle which underlays the dynamics of the growth model specified here in developing countries difficulties in both realisation and sectoral proportions are emphasised as obstacles to growth witness lustig s 1980 review of latin american structuralist theory and dutt s 1984 model which formalises an ongoing controversy in india about how income redistribution might affect prospects for industrialisation all these authors are stagnationist in assuming that both the growth rate and the level of capacity utilisation can be different under different conditions of income distribution and or macroeconomic policy their preferred policies will presumably lead to greater equality increase utilisation or step up growth they typically ask two analytical ques tions how does output respond in the short run to shifts in the income distribution how do output adjustments feed back into distributional dynamics especially under conditions when price and wage inflation rates may be influenced by employment levels productivity changes and conflicting income claims in what follows we set out a simple model to address these questions and explore the implications for macroeconomic policy of the answers that arise since the approach is not familiar to economists with a standard training a verbal description of the growth model is given first those who wish to jump directly into a formal presentation can proceed to section 1 output x is assumed to meet demand in an instantaneous short run we measure activity as the ratio of firms net cash inflow to the value of capital stock i e the rate of profit r during the short run the price level p is fixed by a mark up rule p 1 x wb where r is the mark up rate w the money wage and b the labor output ratio with this rule the share of profits or mark up income in the value of output is r l t let u stand for the output capital ratio or capacity utilization xik by simple identity

inflation unemployment and distributional conflict in argentina 1984 90 the cycle of various economic stabilisation efforts in argentina during the 1980s has often been characterised as reflecting either policy confusion on the part of officials or their unwillingness to depart from an obsolete model of economic development hence according to some the alternation between orthodox and heterodox policy approaches has revealed an absence of either economic policy wisdom or political conviction less attention has been paid to the underlying real class based conflict for income that has manifested itself in terms of high rates of inflation and at times hyperinflation interpreting the issue from this perspective allows us to appreciate the essential continuity of the process of neo liberal reform of the argentine political economy that commenced with the post peronist military coup in 1976 and has more recently culminated with the rise of the nominally peronist regime of carlos menem

bargaining power effective demand and technical progress a kaleckian model of growth following the kaleckian tradition this paper presents a demand led growth model in which the distribution of income is fully endogenised this is done by introducing claims on income by workers and firms the bargaining power of these two groups affects through distribution the patterns of accumulation and inflation in turn the bargaining power of workers is affected by the rate of change of employment the paper discusses the model s static and dynamic implications including the effects of exogenous and induced technical progress the model confirms all the typical kaleckian results including the fact that increases in real wages may lead to accelerating accumulation as well as inflation it also produces a new result it is possible that an increase in the rate of change of labour productivity may not lead to an increase in the rate of change of employment

comparative evaluation of post keynesian interest rate rules income distribution and firms debts for macroeconomic performance this article investigates the macroeconomic effects of firms debts and income distribution on economic growth and inflation under three different post keynesian interest rate rules the kansas city rule the smithin rule and the pasinetti rule by setting up a dynamic post keynesian model after reviewing debates on the post keynesian interest rate policies this article evaluates the relative merits of the three rules in their relationship with economic growth regimes and inflation dynamics accordingly this article explicitly shows that i a policy rule works effectively under some economic growth and inflation patterns but not necessarily under other patterns ii a policy rule contributing to high economic growth may not always be compatible with stabilisation of economic growth and iii the macroeconomic effects of debt and income distribution on economic growth and inflation are closely related to the choice of interest rate rule

theories of monopoly capitalism abstract this article presents a survey of theories of monopoly capitalism the defining characteristic of monopoly capitalism is that developed capitalist economies are seen as essentially dominated by firms which operate in oligopolistic industries it discusses in chronological order the contributions of hilferding lenin kalecki steindl baran and sweezy and cowling to the monopoly capitalism approach by drawing out some common features of the authors discussed we arrive at an implicit view of the nature of theories of monopoly capitalism the macroeconomic aspects of monopoly capitalism are discussed with emphasis on the implications for the level of economic activity a further section discusses the international aspects of the monopoly capital approach the final section of the paper reviews criticisms of the theories of monopoly capitalism with concentration on those advanced from a marxist perspective

profits investment and causality an examination of alternative paradigms determinants of the level of profits and the share of these profits in national income in the short run have received only limited attention from economists most paradigms such as the neo classical neo keynesian and neo marxian theories have in general attempted to explain distributive shares in long run equilibrium disequilibrium or steady state growth frameworks further there is little discussion of the behavioral relationships of various economic agents who affect and are affected by changes in distributive shares kalecki 19 argued for determination of profits and wages by the expenditure behavior of capitalists and by the distribution factors such as the degree of monopoly in output and input markets particularly the labor market 2 capitalists expenditure together with the distribution factors determine workers consumption and consequently national output and employment the national output will be pushed to the point where profits carved out of it in accordance with the distribution factors are equal to the sum of capitalists consumption and investment 19 81 further kalecki argued at length that given the distribution factors in the short run it is their capitalists consumption and investment that determine profits and not vice versa 19 79 similar behavioral roles of different economic classes are emphasized in the works of keynes 20 kaldor 18 and pasinetti 25 keynesians neo keynesians also ascribe a leading role to investment however there are differences in detail between the popular keynesian paradigm and that of keynes s own work 10 23 neo classical theory on the other hand seems to reverse this direction of causation between investment and profits due to the absence of an independent investment function

macroeconomics without the lm curve an alternative view this paper develops a fully articulated post keynesian alternative to the new consensus macroeconomic model based on explicitly post keynesian hypotheses about the inflation process the income generating process and the appropriate conduct of monetary policy the paper demonstrates how the equilibrium configuration of this model can be manipulated by non monetary policy interventions including fiscal policy and incomes policy one perhaps surprising result that emerges from the analysis is that in the context of the proper policy environment inflation targeting can have a positive impact on real economic performance

some instability puzzles in kaleckian models of growth and distribution a critical survey we tackle the issue of the possible instability of the kaleckian distribution and growth model distinguishing between keynesian and harrodian instability we review various mechanisms that have been proposed by critics of the kaleckian model to tame harrodian instability while bringing back the rate of utilisation to its normal rate we find that the mechanisms that have been suggested are far from convincing therefore we conclude that it may be premature for the critics of the kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long run growth equilibrium copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press