labor productivity and the law of decreasing labor content this paper analyzes labor productivity and the law of decreasing labor content ldlc originally formulated by farjoun and machover 1983 first it is shown that the standard measures of labor productivity may be rather misleading owing to their emphasis on monetary aggregates instead the conventional classical marxian labor values provide the theoretically and empirically sound measures of labor productivity the notion of labor content and the ldlc are therefore central in order to understand the dynamics of capitalist economies second some rigorous theoretical relations between different forms of proflt driven technical change and productivity are derived in a general input output framework with flxed capital which provide deterministic foundations to the ldlc third the main theoretical propositions are analyzed empirically based on a new dataset of the german economy

an integrated approach to climate change income distribution employment and economic growth a demand driven growth model involving capital accumulation and the dynamics of greenhouse gas ghg concentration is set up to examine macroeconomic issues raised by global warming e g effects on output and employment of rising levels of ghg offsets by mitigation relationships among energy use and labor productivity income distribution and growth the economic significance of the jevons and other paradoxes sustainable consumption and possible reductions in employment and sources of instability and cyclicality implicit in the two dimensional dynamical system the emphasis is on the combination of biophysical limits and post keynesian growth theory and the qualitative patterns of system adjustment and the dynamics that emerge

education and human capitalists in a classical marxian model of growth and distribution a simple classical marxian model of growth and distribution is developed in which education transforms low skilled workers into high skilled ones and in which high skilled workers save and hold capital therefore receiving both high skilled wages and profit income we analyse the implications for class divisions growth and distribution of the transformation of the modern capitalist economy from one in which the main class division is between capitalists who own capital and workers who only receive wage income into one in which education and human capital play a major role we show that an expansion in education can have a positive effect on growth but by altering the distribution of income rather than by fostering technological change and that it yields some changes in income distribution and the class structure of the capitalist economy but need not alter its fundamental features

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

dematerialization decoupling and productivity change abstract the prospects for long term sustainability depend on whether and how much we can absolutely decouple economic output from total energy and material throughput while relative decoupling has occurred that is resource use has grown less quickly than the economy absolute decoupling has not raising the question whether it is possible this paper proposes a novel explanation for why decoupling has not happened historically drawing on a recent theory of cost share induced productivity change and an extension of post keynesian pricing theory to natural resources cost share induced productivity change and pricing behavior set up two halves of a dynamic which we explore from a post keynesian perspective in this dynamic resource costs as a share of gdp move toward a stable level at which the growth rate of resource productivity is typically less than the growth rate of gdp this provides a parsimonious explanation of the prevalence of relative over absolute decoupling the paper then presents some illustrative applications of the theory

ambiguity aversion and comparative ignorance decisions under uncertainty depend not only on the degree of uncertainty but also on its source as illustrated by ellsberg s observation of ambiguity aversion in this article we propose the comparative ignorance hypothesis according to which ambiguity aversion is produced by a comparison with less ambiguous events or with more knowledgeable individuals this hypothesis is supported in a series of studies showing that ambiguity aversion present in a comparative context in which a person evaluates both clear and vague prospects seems to disappear in a noncomparative context in which a person evaluates only one of these prospects in isolation

government debt income distribution and growth this paper takes up the question of whether government debt worsens the distribution of income as tax revenues from workers are used to pay for the interest on the debt held by the rich in so doing we develop a post keynesian model in which growth is determined by aggregate demand rather than by the supply of resources and income is distributed between workers who earn wages and capitalists who receive profit and interest income our analysis highlights the possible expansionary effect of a rise in government debt which may raise the income of the workers and it shows that its precise effect on income inequality depends on the circumstances under which government debt rises c 1996 academic press limited copyright 1996 by oxford university press

finance saving and accumulation this paper analyzes the interaction between financial and real variables in different time frames and monetary regimes firms finance investment through retained earnings new issues or bank loans and households desired portfolio of financial assets is related to current income flows the average saving propensity becomes an endogenous variable determined jointly by household and firm decisions and it is shown that changes in the basic parameters give rise to both saving and valuation effects contrary to standard keynesian results an increase in a saving parameter may be expansionary if the valuation effect dominates the saving effect copyright 1988 by oxford university press

post keynesian stock flow consistent modelling a survey the aim of the paper is to provide an overview of the current stock ow consistent sfc literature indeed we feel the sfc approach has recently led to a blossoming literature requiring a new summary after the work of dos santos and above all after the publication of the main reference work on the methodology godley and lavoie s monetary economics an integrated approach to credit money income production and wealth the paper is developed along the following lines first a brief historical analysis investigates the roots of this class of models that can be traced as far back as 1949 and the work of copeland second the competing points of view regarding some of its main controversial aspects are underlined and used to classify the different methodological approaches followed in using these models namely we discuss i how the models are solved ii the treatment of time and its implication and ii the need or not for microfoundations these results are then used in the third section of the paper to develop a bifocal perspective which allows us to divide the literature reviewed according to both its subject and the methodology we explore various topics such as financialisation exchange rate modelling policy implication the need for a common framework within the post keynesian literature and the empirical use of sfc models finally the conclusions present some hypotheses and wishes for the possible lines of development of sfc models

the contingent nature of the revolution predicted by marx abstract a formalisation of elster s interpretation of marx s theory of revolution is presented in terms of a one sector model with continuous substitution land as a factor of production and a particular population theory a justification for calling such a model marxian is given then it is shown that the revolution may occur only if the drag caused by the fixed supply of land is greater than the force of technical progress

when risk is weird unexplained transaction features lower valuations we define transactions as weird when they include unexplained features that is features not implicitly explicitly or self evidently justified and propose that people are averse to weird transactions in six experiments we show that risky options used in previous research paradigms often attained uncertainty via adding an unexplained transaction feature e g purchasing a coin flip or lottery and behavior that appears to reflect risk aversion could instead reflect an aversion to weird transactions specifically willingness to pay drops just as much when adding risk to a transaction as when adding unexplained features holding transaction features constant adding additional risk does not further reduce willingness to pay we interpret our work as generalizing ambiguity aversion to riskless choice the online supplement is available at https doi org 10 1287 mnsc 2017 2868 and http osf io fzjuw this paper was accepted by yuval rottenstreich judgment and decision making

the uncertainty effect when a risky prospect is valued less than its worst possible outcome expected utility theory prospect theory and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences these models therefore require that the value of a risky prospect lie between the value of that prospect s highest and lowest outcome although this requirement seems essential for any theory of risky decision making we document a violation of this condition in which individuals value a risky prospect less than its worst possible realization this demonstration which we term the uncertainty effect draws from more than 1000 experimental participants and includes hypothetical and real pricing and choice tasks as well as field experiments in real markets with financial incentives our results suggest that there are choice situations in which decision makers discount lotteries for uncertainty in a manner that cannot be accommodated by standard models of risky choice from the time of bernoulli on it has been common to argue that a individuals tend to display aversion to the taking of risks and b that risk aversion in turn is an explanation for many observed phenomena in the economic world arrow 1971 p 90

heterodox theories of economic growth and income distribution a partial survey heterodox theories of economic growth and income distribution are surveyed focusing on major theories and recent contributions first a general framework for examining growth and distribution is discussed in terms of which classical marxian and post keynesian kaleckian and other theories are presented since this framework examines how variables are determined in equilibrium second dynamics behind equilibria are examined focusing on goods market and labor market changes third the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change money and inflation finance and debt additional distributional considerations multisector issues open economy questions and the environment it is concluded that the literature on heterodox theories of growth and distribution is vibrant large and growing and addresses many issues that are ignored or neglected in orthodox theories including power unemployment and aggregate demand

endogenous technical change with externalities in a classical growth model abstract a growth model with three inputs capital labor and land extends foley and michl s d foley t r michl s growth and distribution harvard university press cambridge ma 1999 classical accumulation model by adding a goodwin r goodwin a growth cycle in c h feinstein ed socialism capitalism and economic growth cambridge university press cambridge 1967 labor market and a model of endogenous technical change that can represent either dumenil and levy s metroeconomica 46 1995 213 j econ behav org this issue or kennedy s econ j 74 295 1964 541 models when land is priced there is a stable steady state growth path with desirable allocational properties when land is not priced no steady state exists and the growth path leads to a catastrophe these results hold when the elasticity of substitution between capital and labor is less than unity

stagnation income distribution and monopoly power the deceleration in the rate of industrial growth in the indian economy since the middlesixties initially interpreted by some as a temporary downward deviation from trend hasnow come to be generally accepted as reflecting long run tendencies towards stagnation several explanations for these tendencies have been offered bhagwati and desai 1970 and bhagwati and srinivasan 1975 have focused on inefficiencies and the misallocationof resources arising from industrial policies pursued by the government others chakravarty 1974 raj 1976 and vaidyanathan 1974 among them have emphasisedthe sluggishness of agricultural growth which is alleged to have retarded industrial growthby limiting markets and the supply of wage goods and raw materials a third view reflectedin srinivasan and narayana 1977 for example has put the blame on a slackening of invest ment demand due to lower public investment but does not explain why public investmentfell or why its fall restrained industrial growth finally there is the explanation put forthin bagchi 1970 1975 1982 in nayyar 1978 and in parts of mitra 1977 that inequali ties in income distribution have resulted in a limited demand for industrial goods reducedincentives for investment and therefore reduced growth this view seems to suggest apositive relation between growth and income equality which is opposed to the generallyaccepted idea derived from cambridge growth models that higher growth requires greaterinequality the purpose of this paper is to examine the last explanation by considering the inter action between growth and income distribution in an underdeveloped economy with thehelp of a simple macroeconomic model the model is a stylisation of the indian economy so that we will be able to use the model to assess the argument that a deceleration in therate of growth of the indian industrial economy could have been caused by an unequaldistribution of income the argument will not be made that this income distributional con straint is the binding constraint on industrial growth the model will merely examine theinternal consistency of the argument that a bad income distribution could explain stagnation in the sense of reduced growth and show that in the indian context as in other similarcontexts this argument can be put forward in explaining stagnation our argument is first presented with a highly simplified schematisation of the indianeconomy which we shall call the basic model the economy modelled produces only one

towards post keynesian ecological macroeconomics the paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output this applies to the traditional keynesian approach which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation down playing aggregate supply constraints this also applies to the neoclassical approach including the current new consensus macroeconomics approach which asserts the dominant role of aggregate supply in the long run and where growth is set by the so called natural rate of growth with no concerns over environmental and ecological issues the paper then proposes a different approach to macroeconomic analysis it explicitly acknowledges that economic growth is a double edged sword growth can help to alleviate persistent levels of high unemployment but it can also lead to potentially catastrophic environmental problems building on the monetary circuit theory and the demand led growth theory the paper offers an analysis of the interconnections and interdependence of the economic biophysical and social worlds and by doing it hopes to provide the building blocks for the establishment of post keynesian ecological macroeconomics

endogenous growth asymmetric trade and resource dependence the aggregate income of oil exporting countries relative to that of oil poor countries has been remarkably constant in recent decades despite the existence of structural gaps in productivity growth rates this stylized fact is rationalized in an endogenous growth model of asymmetric trade where resource poor and resource rich economies display productivity differences but stable income shares due to terms of trade dynamics the model yields two testable predictions that deserve empirical scrutiny i the asymmetric impact between exporters and importers of national taxes on resource use on income shares and ii the inverse relation between terms of trade dynamics and total factor productivity growth

on the malthusian theory of long swings in the essay on population economic growth consists of alternating surges of population during which real wages fall and the rate of profit rises and capital during which the reverse occurs a series of temporary equilibria exists at which wages are maximal the rate of profit minimal and fully employed work force in technically determined relation to fixed capital stock between these equilibria occur episodes of excess labour below maximum wages above minimum profit rate and capital accumulation malthus s ratios presuppose a logarithmic production function that implies first that the full employment real wage will fall to subsistence secondly that the full employment wages fund is constant summary in fre

international status seeking trade and growth leadership we study a two country endogenous growth model where the utility of agents in developing countries is affected by consumption gaps with advanced economies international status seeking tends to revert growth differentials in favour of the developing country preferences with endogenous status desire generate convergence in growth rates in the presence of structural gaps and convergence in income levels if productivity differences disappear this process is driven by declining terms of trade and faster capital accumulation of the status seeker the model predictions are shown to be consistent with the stylized facts that characterized the growth performance of east asian economies

technology and distribution historical trajectories a la marx abstract in capital marx introduces a system of historical tendencies accounting for the trends of the major technological and distributional variables notably the profit rate quite distinct from the usual steady states marx s main insight is that of a difficulty to innovate it is difficult to find new processes allowing for the growth of labor productivity while not considerably reducing the productivity of capital the growth of the wage rate is stimulated by the rise of employment but the stabilization of the share of wages forbids a direct imputation of the decline of the profit rate to the excessive growth of the wage rate

anchoring in payment evaluating a judgmental heuristic in field experimental settings abstractanchoring the biasing of estimates toward a previously considered value is a long standing and oft studied phenomenon in consumer research however most anchoring work has been in the lab and the results from field work have been mixed here the authors use real transactions from an empirically investigated and commercially employed pricing scheme pay what you want to better understand how anchors influence payments sixteen field studies n 21 997 and four hypothetical studies n 3 174 reveal four main points 1 although anchoring replicates both with and without financial consequences studies 1 2 the percentile rank gap between anchors in the distribution of payments is a much stronger predictor of anchoring emerging than merely the absolute gap between the anchors on a number line studies 3 5 2 low anchors influence payments more than high anchors studies 6a b 3 findings from the literature that should enhance anchoring effects anchor precision descriptive and inj

valuing money and things why a 20 item can be worth more and less than 20 the study of risky decision making has long used monetary gambles to study choice but many everyday decisions do not involve the prospect of winning or losing money monetary gambles as it turns out may be processed and evaluated differently than gambles with nonmonetary outcomes whereas monetary gambles involve numeric amounts that can be straightforwardly combined with probabilities to yield at least an approximate expectation of value nonmonetary outcomes are typically not numeric and do not lend themselves to easy combination with the associated probabilities compared with monetary gambles the evaluation of nonmonetary prospects typically proves less sensitive to changes in the probability range inside the extremes of certainty and impossibility which among other things can yield preference reversals generalizing on earlier work that attributed similar findings to the role of affect in the evaluation process rottenstreich y c k hsee 2001 money kisses and electric shocks an affective psychology of risk psych sci 12 3 185 190 we attribute the observed patterns to a fundamental difference in the evaluation of monetary versus nonmonetary outcomes potential pitfalls in the use of monetary gambles to study choice are highlighted and implications and future directions are discussed

resources innovation and growth in the global economy the relative performance of open economies is analyzed in an endogenous growth model with asymmetric trade a resource rich country trades resource based intermediates for final goods produced by a resource poor economy the effects of an increase in the resource endowment depend on the elasticity of substitution between resources and labor in intermediates production under substitution complementarity the resource boom generates higher lower income lower higher employment in the primary sector and faster slower growth in the resource rich economy in the resource poor economy the shock induces a higher lower relative wage and positive negative growth effects that are exclusively due to trade

the economics of the profit rate competition crises and historical tendencies in capitalism part 1 the profit rate the economics of the profit rate a summary definitions and measures of the profit rate part 2 competition and prices of production prices of production long term equilibrium in classical and walrasian models the classical analysis of competition convergence part 3 general disequilibrium a general disequilibrium model development of the basic model proportions and dimension in the short and long terms out of the mainstream part 4 stability and business fluctuations the real and monetary determinants of macro in stability the impact of the profit rate on the macroeconomy business fluctuations in other paradigms part 5 technology and distribution a historical perspective the historical profile of the profit rate historical tendencies accumulation and growth profitability trends part 6 history profitability and management a chronological overview the historical dynamics of capitalism

macroeconomic implications of financialisation a growing literature suggests that financialisation may weaken the performance of non financial corporations and constrain the growth of aggregate demand this paper uses two alternative approaches one derived from skott and one from lavoie and godley and two different settings a labour constrained setting and a dual economy setting to evaluate some of the claims that have been made our analysis which pays explicit attention to financial stock flow relations suggests that the qualitative effects of financialisation are insensitive to the precise specification of household saving behaviour but depend critically on the labour market assumptions labour constrained versus dual and the specification of the investment function harrodian versus kaleckian

land technical progress and the falling rate of profit abstract the paper sets out a one sector growth model with a neoclassical production function in land and a capital labour aggregate if the elasticity of substitution between land and the capital labour aggregate is less than one and if the rate of capital augmenting technical progress is strictly positive then the rate of profit will fall to zero this result holds regardless of the rate of land augmenting technical progress no amount of technical advance in agriculture can stop the fall in the rate of profit the paper also discusses the relation of this result to the classical and marxist literature

challenges for a sustainable resource use uncertainty trade and climate policies we integrate new challenges to thinking about resource markets and sustainable resource use policies in a general framework the challenges emerging from six papers that jeem publishes in a special issue are i demand uncertainty and stockpiling ii international trade and resource dependence iii deforestation and iv intertemporal effects of climate change policies green paradox we discuss new insights and results on these issues by fitting them into the hotelling model of non renewable resource depletion

turgot founder of classical economics a r j turgot s capital theory is rightly famous this paper argues that his contribution to distribution theory should also be recogniz ed as a major achievement the interest rate or profit rate is equa lized between different activities and governed by returns at the agr icultural margin intensive and extensive returns decrease as the m argin moves out with capital accumulation this implies a rent theory and a theory of accumulation substantially equivalent to that of dav id ricardo and makes turgot who wrote before adam smith the origin al inventor of the main lines of classical economics copyright 1987 by the review of economic studies limited

when retailing and las vegas meet probabilistic free price promotions a number of retailers offer gambling or lottery type price promotions with a chance to receive one s entire purchase for free although these retailers seem to share the intuition that probabilistic free price promotions are attractive to consumers it is unclear how they compare to traditional sure price promotions of equal expected monetary value we compared these two risky and sure price promotions for planned purchases across six experiments in the field and in the laboratory together we found that consumers are not only more likely to purchase a product promoted with a probabilistic free discount over the same product promoted with a sure discount but that they are also likely to purchase more of it this preference seems to be primarily due to a diminishing sensitivity to the prices in addition we find that the zero price effect transaction cost and novelty considerations are likely not implicated this paper was accepted by yuval rottenstreich judgment and decision making

rent extracting tariffs and the management of exhaustible resources this paper examines the interaction between a resource exporting and a resource importing country the exporting country must choose the optimal rate of depletion of an exhaustible resource and also must decide on the allocation of the extracted resource between exports and domestic use optimal management from a national point of view entails inefficiency from a global perspective in that too little resource is exported as the supplying country exploits its monopoly power the importing country however has an incentive to extract some of the resource rent by using a tariff although rent extraction is limited by the exporter s ability to use the resource domestically the optimal tariff is positive and induces greater overall inefficiency

on capturing oil rents with a national excise tax this paper argues that since the supply of oil in the ground is inelastic the incidence of a sales tax on oil maintained forever at a fixed rate would fall entirely on the oil suppliers in the world economy however the elasticity of supply of oil to a single country depends on that country s imports as a share of world output and on the elasticity of demand for that country the paper calculates optimal tax rates for a country as a function of these variables and estimates optimal oil tax rates for the u s for some oecd countries separately and for the u s plus the oecd collectively current u s tax rates are shown to be far below optimal values

endogenous growth and property rights over renewable resources abstract we study how different regimes of access rights to renewable natural resources namely open access versus full property rights affect sustainability growth and welfare in the context of modern endogenous growth theory resource exhaustion may occur under both regimes but is more likely to arise under open access moreover under full property rights positive resource rents increase expenditures on manufacturing goods and temporarily accelerate productivity growth but also yield a higher resource price at least in the short to medium run we characterize analytically and quantitatively the model s dynamics to assess the welfare implications of differences in property rights enforcement

institutions and the resource curse countries rich in natural resources constitute both growth losers and growth winners we claim that the main reason for these diverging experiences is differences in the quality of institutions more natural resources push aggregate income down when institutions are grabber friendly while more resources raise income when institutions are producer friendly we test this theory building on sachs and warner s influential works on the resource curse our main hypothesis that institutions are decisive for the resource curse is confirmed our results contrast the claims of sachs and warner that institutions do not play a role

growth cycles with induced technical change this paper concerns itself with two related topics the relative shares of workers and capitalists in the national income and the labour augmenting bias of technical change both have been dealt with in contrasting fashion in two seminal papers on distribution theory kennedy i964 attempts to explain the then observed constancy of relative shares with the help of the now famous invention possibility frontier however the wage and profit rates are exogeneous to his model goodwin i967 on the other hand presents a model of cycles in growth rates in which the share of labour the wage rate and the profit rate are endogenously determined however unlike the kennedy analysis technical change is assumed to be constant and exogeneously given given that these pioneering works have addressed themselves to important questions it seems a worthwhile task to build a model in which the shares of labour and capital the wage rate the profit rate and technical change are all endogenously determined the perspective we have chosen here introduces the key element of kennedy s perception induced technical change into the goodwin scheme and the consequences of so doing are traced out in the following terse account there are two classes in the economy workers and capitalists only one good q t is produced and it can be either consumed or invested capital stock k t is homogeneous and for simplicity also assumed to be non depreciating the capital output ratio at time t is denoted by o t labour i t is also homogeneous and its productivity at time t a t q t l t improves at the rate ac t labour s share in the national income denoted by u t is

a paradox of thrift or keynes s misrepresentation of saving in the classical theory of growth every year thousands of introductory economics students are made to accept as valid one of keynes s lasting inversions of classical economics namely the proposition that saving may be a private virtue but is a public vice according to keynes a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less but the community that increases its consumption at the expense of saving would end up being richer and saving more this proposition frequently stated in macroeconomics textbooks as the paradox of thrift arises mainly from keynes s definition of saving to include the hoarding of cash contrary to the classical definition and language of the marketplace but has received little recognition or criticism as such rather than emphasizing keynes s misrepresentation of the classical theory of income determination and growth in which hoarding constitutes a reduction in saving most critics have pointed out only that saving may take other forms besides hoarding 2 thus several reviewers of the general theory 22 in which keynes fully develops the argument criticized it mainly for having assigned too much importance to the hoarding of cash e g pigou 37 robertson 40 viner 51 and hawtrey 11 some modern textbook writers employ the loanable funds view of savings to show the lim

personal income inequality and aggregate demand this paper presents a theoretical and empirical investigation of how changes in the size distribution of income can aect aggregate demand and the demand regime of an economy after presenting empirical evidence for the us economy that the propensity to save increases signicantly from the bottom to the top quintile of wage earners we demonstrate that more equal distributions always lead to higher output in the traditional neo kaleckian macroeconomic model we also present conditions under which a reduction of income inequality among workers turns demand more wage led this view is supported by the results of an econometric study for the united states 1967 2010 which show that the rise after 1980 in income inequality has made the us economy more prot led

the canonical classical model of political economy adam smith david ricardo thomas robert malthus and john stuart mill shared in common essentially one dynamic model of equilibrium growth and distribution when the limitation of land and natural resources is added to the model of karl marx he also ends up with this same canonical classical model in its present version the model is stripped down to its minimal essentials for brevity i employ modern mathematical tools but only to characterize in modern terms the relations that were actually common to all these writers the reader should of course be warned that any simple codification of the classical economists discursive writings must be an oversimplification in some of their passages they qualify what they have written elsewhere in some they provide negations and contradictions not a few of the stereotypes about the classical writers are to paraphrase voltaire myths agreedupon by later commentators distortions that both improve and libel the originals the relevant object of study for a modern scholar is the corpus of original texts and the commentaries on them the latter not being genuinely of less interest than the former once we have succeeded in telling them apart to the fascinating question of whether classical political economy does or can be made to offer an alternative paradigm in the sense of thomas kuhn 11 1962 to modern mainstream economics the present investigation provides an instructive answer so to speak within every classical economist there is to be discerned a modern economist trying to be born a ricardo or mill did not so much replace supply and demand by quite different mechanisms but rather sought to be able to say something significant and limiting about their properties quite in the same way that we moderns endeavor to do i describe and analyze here the basic classical model in its essential form

ethics politics and nonsatiation in consumption a synthesis in contrast with the production of goods and services by firms where the production costs are minimized under appropriate behavioral assumptions consumer producers in neoclassical theory maximize consumption expenditure i e production costs of their outputs according to kenneth boulding were the impact upon the limited resources available on planet earth taken into account consumption expenditure should be minimized we propose that we keep consumer theory as a reasonable description of reality however we should evaluate the long run consequences of such postulated behavior in a larger context which as a consequence of larger population with increasing per capita consumption comprises the overburdening of natural resources by decomposing the time horizon of cultural evolution into shorter periods of adjustment we may then distinguish several types of institutional determination of how societies take decisions as a group and individually the consumer theory simply reflects the predominant ethical values of which ideologies political platforms and demand patterns are shorter run adjustments

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

framing influences willingness to pay but not willingness to accept the authors show with real and hypothetical payoffs that consumers are willing to pay substantially less for a risky prospect when it is called a lottery ticket raffle coin flip or gamble than when it is labeled a gift certificate or voucher willingness to accept in contrast is not affected by these frames this differential framing effect is the result of an aversion to bad deals which causes buyers to focus on different aspects than sellers buyers willingness to pay is influenced by the extent to which a risky prospect s frame is associated with risk experiment 1 as well as the prospect s lowest but not highest possible outcome experiment 2 sellers willingness to accept in contrast is influenced by a prospect s lowest and highest possible outcomes but not by the risk associated with its frame experiments 2 and 3 the framing effect on willingness to pay is independent of the objective level of uncertainty experiment 4 and can lead to the uncertainty effect the findi

general equilibrium and international trade with exhaustible resources the pricing of raw materials from an exhaustible resource is predominantly analysed within the context of a partial equilibrium it is argued here that there are good reasons for a general equilibrium analysis in this paper we present an international trade model with exhaustible resources and characterize the general equilibrium properties the general perspective adopted leads to new insights compared with a partial equilibrium approach

population growth and natural resource scarcity long run development under seemingly unfavorable conditions in this paper i consider an economy that is constrained by the use of natural resources and driven by knowledge accumulation resources are essential inputs in all sectors i show that population growth and poor input substitution are not detrimental but on the contrary are even necessary to obtain a sustainable consumption level i find a general rule to define the conditions for a constant innovation rate the rule does not apply to capital but to labor growth which is the crucial input in research furthermore the rule relates to the sectoral structure of the economy and to demographic transition the results continue to hold with a backstop technology and are extended for the case of minimum resource constraints

economic growth and the transition from traditional to modern energy in sweden we examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in economic growth in sweden from 1850 to 1950 we use a simple growth model with a nested ces production function and exogenous factor augmenting technological change and carry out a counterfactual simulation based on the econometric results even though the rate of technical change was higher for modern energy innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890 since the cost share of traditional energy was so much larger than that of modern energy in that period however after 1890 we find that modern energy contributed much more to economic growth than traditional energy but increasingly labor augmenting technological change became the most important single driver of growth

realization and accumulation in a marxian model of the circuit of capital abstract a mathematical model of marx s circuit of capital is presented whose elements the composition of capital the rate of surplus value the rate of capitalization of surplus value and production sales and financial time lags are measurable from the accounts of capitalist firms the model is solved for exponential paths a solution with a positive rate of accumulation generally exists on paths with positive rates of accumulation and positive time lags in the recommital of realized value to production an expansion of credit is required to permit the sale of commodities a model of demand pull inflation is incorporated in the framework

the classical classical fallacy a flagrant error dogged james steuart adam smith david ricardo john barton john stuart mill karl marx and classical writers generally modern commentators on classicism are enough tempted by the fallacy to generally overlook it as a vital flaw in the earlier writers this fallay can be called classically classical not in the sense of being the greatest error in the classical paradigm an award that would be hard even to define but in the sense that modern scholars ignorant of pre 1900 literature would be little tempted by it i do not denigrate or patronize a great writer of the past such as david ricardo when i objectively delineate his hits and misses the fallacy can be simply put fixed capitals are prejudicial to wages and the demand for labor circulating capitals wage fund items that represent wage outlays paid to workers at the beginning of a period of production which are not recouped until the end of that period of production and which of course bear an interest or profit rate during the transition are allegedly favorable to the real wage rate and to the demand for labor fixed capitals are durable produced inputs that render their services over a number of different production periods circulating capitals are produced inputs used up within one period of production they are relatable to but distinguishable from wage fund advances paid to workers at the beginning of a period of production to be recouped at its end along with an interest or profit return in the minds of heterodox economists and the lay public generally a technological change that made machinery newly viable was supposedly the kind of invention that could put people out of work temporarily reduce market clearing wage rates and in long run equilibrium at an unchanged subsistence wage rate call for a significantly reduced population by contrast therefore a new invention that displaced machinery in favor of various raw materials as inputs would supposedly raise the short run real wage and increase the demand for labor so powerful was the grip of what i shall dub the classical fallacy that it was being reminded of it in 1819 21 that appears to have enabled ricardo to recant in his famous third edition chapter on machinery his previous boner that every viable invention can be expected to raise every factor s return from today s wisdomor indeed the wisdom of 1900 that previous position of ricardo was nonsense there is no invisible hand that seeks out machines or new techniques only if they benefit everyone i

quantitative empirical research in marxist political economy a selective review this paper surveys quantitative empirical research in some key areas of marxist political economy following an introductory section on the value controversy the paper surveys quantitative empirical research on the following topics a marxist national accounts b classical marxist theory of relative prices c probabilistic political economy d profitability analysis and e classical marxian theories of growth and technical change i end by highlighting two important puzzles in the extant literature

trade accumulation and uneven development abstract this paper develops a two country model of capital accumulation and growth where the industrial sector exhibits increasing returns to scale it shows that uneven development is a necessary outcome in such a model an initial discrepancy in capital labor ratios between the two countries will cumulate over time leading to the division of the world into a capital rich industrial region and capital poor agricultural region which region takes on which role depends on primative accumulation that is on which region starts with more capital if capital is mobile internationally the model can given rise to a two stage pattern of development a first stage where trade is the engine of growth in the leading country and a second in which foreign investment takes on that role which is reminiscent of the hobson lenin theory of imperialism