Causality and Interdependence in Pasinetti's Works and in the Modern
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Estimating the Effects of Fiscal Policy in OECD Countries
Estimating the e®ects of ¯scal policy in OECD countries Roberto Perotti¤ This version: November 2004 Abstract This paper studies the e®ects of ¯scal policy on GDP, in°ation and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows: 1) The e®ects of ¯scal policy on GDP tend to be small: government spending multipliers larger than 1 can be estimated only in the US in the pre-1980 period. 2) There is no evidence that tax cuts work faster or more e®ectively than spending increases. 3) The e®ects of government spending shocks and tax cuts on GDP and its components have become substantially weaker over time; in the post-1980 period these e®ects are mostly negative, particularly on private investment. 4) Only in the post-1980 period is there evidence of positive e®ects of government spending on long interest rates. In fact, when the real interest rate is held constant in the impulse responses, much of the decline in the response of GDP in the post-1980 period in the US and UK disappears. 5) Under plausible values of its price elasticity, government spending typically has small e®ects on in°ation. 6) Both the decline in the variance of the ¯scal shocks and the change in their transmission mechanism contribute to the decline in the variance of GDP after 1980. ¤IGIER - Universitµa Bocconi and Centre for Economic Policy Research. I thank Alberto Alesina, Olivier Blanchard, Fabio Canova, Zvi Eckstein, Jon Faust, Carlo Favero, Jordi Gal¶³, Daniel Gros, Bruce Hansen, Fumio Hayashi, Ilian Mihov, Chris Sims, Jim Stock and Mark Watson for helpful comments and suggestions. -
Introduction to Macroeconomics Lecture Notes
Introduction to Macroeconomics Lecture Notes Robert M. Kunst March 2006 1 Macroeconomics Macroeconomics (Greek makro = ‘big’) describes and explains economic processes that concern aggregates. An aggregate is a multitude of economic subjects that share some common features. By contrast, microeconomics treats economic processes that concern individuals. Example: The decision of a firm to purchase a new office chair from com- pany X is not a macroeconomic problem. The reaction of Austrian house- holds to an increased rate of capital taxation is a macroeconomic problem. Why macroeconomics and not only microeconomics? The whole is more complex than the sum of independent parts. It is not possible to de- scribe an economy by forming models for all firms and persons and all their cross-effects. Macroeconomics investigates aggregate behavior by imposing simplifying assumptions (“assume there are many identical firms that pro- duce the same good”) but without abstracting from the essential features. These assumptions are used in order to build macroeconomic models.Typi- cally, such models have three aspects: the ‘story’, the mathematical model, and a graphical representation. Macroeconomics is ‘non-experimental’: like, e.g., history, macro- economics cannot conduct controlled scientific experiments (people would complain about such experiments, and with a good reason) and focuses on pure observation. Because historical episodes allow diverse interpretations, many conclusions of macroeconomics are not coercive. Classical motivation of macroeconomics: politicians should be ad- vised how to control the economy, such that specified targets can be met optimally. policy targets: traditionally, the ‘magical pentagon’ of good economic growth, stable prices, full employment, external equilibrium, just distribution 1 of income; according to the EMU criteria, focus on inflation (around 2%), public debt, and a balanced budget; according to Blanchard,focusonlow unemployment (around 5%), good economic growth, and inflation (0—3%). -
00 Money and Markets778 Pre-2.Pdf
00_Money and Markets778_pre 25/1/07 10:13 am Page i 00_Money and …arkets778_pre.pdf Routledge Research Money and Markets In the development of the history of economic thought, contrasting views of money and markets have emerged. Whilst some economists have seen money as an instrument created by individuals in an attempt to overcome the difficulties of barter, others have seen it as something created before the market, maintained and promoted by the State. Similarly, whereas some economists have seen the market as a level playing field, others have seen it dominated by specific group interests. This book brings together 14 essays by leading authors in the field of eco- nomics to look at the relationship between money and markets thoughout eco- nomic theory and history, thus providing a key to understanding important issues in monetary theory and other important debates in contemporary eco- nomics. Taking a critical stance of much mainstream economics literature and offer- ing alternative arguments, this title is essential reading for postdoctoral researchers in the field of both the history of economics and current economic theory. Alberto Giacomin is Associate Professor in the History of Economic Thought at the University of Venice. Maria Cristina Marcuzzo is Head of the Depart- ment of Economics at the University of Rome. PROOF ONLY 00_Money and Markets778_pre 25/1/07 10:13 am Page ii 00_Money and …arkets778_pre.pdf Routledge Research 1 Routledge studies in the history of economics 2 3 4 5 6 7 8 9 10 11 12 1 Economics as Literature 8 The History of Game Theory, 13 Willie Henderson Volume 1 14 From the beginnings to 1945 15 2 Socialism and Marginalism in Robert W. -
ANNAMARIA SIMONAZZI Present Position: Professor of Economics
ANNAMARIA SIMONAZZI Present Position: Professor of Economics Faculty of Economics, Sapienza University of Rome Via del Castro Laurenziano, 9 00161 Rome, Italy Tel. +39 06 70451196 +39 06 49766380 Email: [email protected] Education 1968-1973 Degree in Economics, University of Modena 1974 Diploma in Economics and Planning, Advanced School of Statistics and Planning, Warsaw (Poland) 1976-1978 Graduate courses, University of Cambridge (UK) Academic Positions 1975-78 Research Assistant, Faculty of Economics, University of Modena 1978-1989 Associate Professor, Faculty of Economics, University of Modena 1989-2000 Associate Professor, Faculty of Economics, Sapienza University of Rome 2000- Professor of Economics, Faculty of Economics, Sapienza University of Rome. Lecturing in: Economics, Fiscal policy, European economic policy; Industrial economics; International economics; Labour, History of economic analysis. Current Research: European economics and policy; innovation, competitiveness and growth; gender economics; employment, migration and welfare. Professional experiences and visiting fellowships 1985-88 Lecturer (Professore Aggiunto), Militar Academy, Modena. 1989-1990 Professor of Macroeconomics and International Economics, University "Eduardo Mondlane" Maputo, Mozambico 1993 Visiting fellow, Department of Economics, University of Notre Dame, USA 1999-2000 Visiting fellow, Department of Economics, New School for Social Research, USA 2002-2003 Scientific Board and Lecturer in the Master on “State Management and Humanitarian Affairs”, Rome, Sarajevo, Belgrade. 2003-2006 Scientific Board and Lecturer in the Master on “Local development”, Sapienza University of Rome. 2003 Secretary General (2003-2007) and (since 2007) Scientific Director of the Giacomo Brodolini Foundation 2011-2015 President of the Master (Laurea magistrale) in Economics 2012-2015 Local coordinator of the European PhD in Socio-Economic and Statistical Studies (SESS). -
Long-Term Unemployment and the 99Ers
Long-Term Unemployment and the 99ers An Emerging Issues Report from the January 2012 Long-Term Unemployment and the 99ers The Issue Long-term unemployment has been the most stubborn consequence of the Great Recession. In October 2011, more than two years after the Great Recession officially ended, the national unemployment rate stood at 9.0%, with Connecticut’s unemployment rate at 8.7%.1 Americans have been taught to connect the economic condition of the country or their state to the unemployment Millions of Americans— rate, but the national or state unemployment rate does not tell known as 99ers—have the real story. Concealed in those statistics is evidence of a exhausted their UI benefits, substantial and challenging structural change in the labor and their numbers grow market. Nationally, in July 2011, 31.8% of unemployed people every month. had been out of work for at least 52 weeks. In Connecticut, data shows 37% of the unemployed had been jobless for a year or more. By August 2011, the national average length of unemployment was a record 40 weeks.2 Many have been out of work far longer, with serious consequences. Even with federal extensions to Unemployment Insurance (UI), payments are available for a maximum of 99 weeks in some states; other states provide fewer (60-79) weeks. Millions of Americans—known as 99ers— have exhausted their UI benefits, and their numbers grow every month. By October 2011, approximately 2.9 million nationally had done so. Projections show that five million people will be 99ers, exhausting their benefits, by October 2012. -
National Income Per Capita
HOUSEHOLD INCOME AND WEALTH • INCOME AND SAVINGS NATIONALIncome and savings INCOME PER CAPITA While per capita gross domestic product is the indicator residents (and vice versa). In this respect, it is important to most commonly used to compare national income levels, note that retained earnings of foreign enterprises owned by two other measures are preferred by many analysts. These residents do not actually return to the residents concerned. are per capita Gross National Income (GNI) and Net Nevertheless, the retained earnings are recorded as a National Income (NNI). Whereas GDP refers to the income receipt. generated by production activities on the economic territory of the country, GNI measures the income Comparability generated by the residents of a country, whether earned in the domestic territory or abroad. NNI is the aggregate value All countries compile data according to the 2008 SNA of the balances of net primary incomes summed over all “System of National Accounts, 2008” with the exception of sectors. Chile, Japan, and Turkey, where data are compiled according to the 1993 SNA. When changes in international standards are implemented countries often take the Definition opportunity to implement improved compilation methods; GNI is defined as GDP plus receipts from abroad less therefore also implementing various improvements in payments to abroad of wages and salaries and of property sources and estimation methodologies. In some countries income plus net taxes and subsidies receivable from the impact of the ‘statistical benchmark revision’ could be abroad. NNI is equal to GNI net of depreciation. higher than the impact of the changeover in standards. As Wages and salaries from abroad are those that are earned a consequence the GDP level for the OECD total increased by residents who essentially live and consume inside the by 3.8% in 2010 based on the available countries. -
How Does Fiscal Policy Affect the American Worker?
HOW DOES FISCAL POLICY AFFECT THE AMERICAN WORKER? JOHN D. MUELLER* OVERVIEW American policymakers have begun to prepare the public for fiscal policy changes, such as comprehensive reforms of the Federal income tax and Social Security retirement systems, which would profoundly alter the lives of American workers and their families. Projected fiscal imbalances are clearly unsustainable, and Europe’s economic and demographic crisis, characterized by high unemployment and falling fertility rates, illustrates the grave dangers of policy mistakes. But no American consensus has emerged, partly because there is no generally accepted and empirically grounded theory explaining how fiscal policy affects employment and fertility. This paper lays out a simple but com- prehensive framework for analyzing such questions, by proceed- ing from the homey example of a children’s lemonade stand to describe how Augustine’s theory of personal love and Aristotle’s theory of distributive justice were originally integrated within economic analysis. The second section applies the analysis to describe and update “Rueff’s Law,” which explains how employ- ment and unemployment are determined by the cost of labor (measured as workers’ share of total labor and property income after government taxes and benefits). The analysis shows that funding social benefits either by borrowing or with income taxes raises the cost of labor and unemployment, while funding such benefits with payroll taxes does not increase unemployment but may lower labor market participation. The third section extends the analysis to fill a crucial gap in the economic theory of fertility and shows that most variation in the Total Fertility Rate (TFR) among the fifty countries for which data are available (compris- * John D. -
Understanding the Postwar Decline in U.S. Saving: a Cohort Analysis
JAGADEESH GOKHALE Federal Reserve Bank of Cleveland LAURENCE J. KOTLIKOFF Boston University JOHN SABELHAUS Congressional Budget Office Understandingthe Postwar Decline in U.S. Saving: A CohortAnalysis IN 1950 THE RATE of net national saving in the United States was 12.3 percent. In 1994 it was only 3.5 percent. ' The difference in these saving rates is illustrative of a dramatic long-term decline in U.S. saving. The U.S. saving rate averaged 9. 1 percent per year in the 1950s and 1960s, 8.5 percent in the 1970s, 4.7 percent in the 1980s, and just 2.7 percent in the first five years of the 1990s.2 The decline in saving in the United States has been associated with an equally dramatic decline in domestic investment. Since 1990, net We thank the Office of Management and Budget and the Social Security Administra- tion for providing long-term fiscal and population projections, and Jonathan Skinner for providing health expenditure data. We also thank Orazio Attanasio, Barry Bosworth, Robert Haveman, Andrew Samwick, Jonathan Skinner, and numerous seminar partici- pants for helpful comments. The opinions expressed in this paper are those of the authors and are not necessarily shared by the Federal Reserve Bank of Cleveland or the Congres- sional Budget Office. 1. The net national saving rate is defined as net national product less national con- sumption (household consumption plus government purchases), divided by net national product. The National Income and Product Account (NIPA) data used in the body of this paper do not incorporate recently revised NIPA data for the years starting in 1959. -
Ole Jonny Klakegg Governance of Major Public Investment Projects in Pursuit of Relevance and Sustainability
Doctoral theses at NTNU, 2010:15 Ole Jonny Klakegg Ole Jonny Klakegg Governance of Major Public Investment Projects In Pursuit of Relevance and Sustainability ISBN 978-82-471-1985-3 (printed ver.) ISBN 978-82-471-1986-0 (electronic ver.) ISSN 1503-8181 Doctoral theses at NTNU, NTNU philosophiae doctor Thesis for the degree of Norwegian University of Science and Technology 2010: 15 Department of Civil and Transport Engineering Faculty of Engineering Science and Technology Ole Jonny Klakegg Governance of Major Public Investment Projects In Pursuit of Relevance and Sustainability Thesis for the degree of philosophiae doctor Trondheim, February 2010 Norwegian University of Science and Technology Faculty of Engineering Science and Technology Department of Civil and Transport Engineering NTNU Norwegian University of Science and Technology Thesis for the degree of philosophiae doctor Faculty of Engineering Science and Technology Department of Civil and Transport Engineering ©Ole Jonny Klakegg ISBN 978-82-471-1985-3 (printed ver.) ISBN 978-82-471-1986-0 (electronic ver.) ISSN 1503-8181 Doctoral Theses at NTNU, 15 Printed by Tapir Uttrykk Preface and Acknowledgements In the year 2000 the Norwegian Ministry of Finance initiated a new quality assurance scheme under which all major public investment projects financed by the State were to be appraised and analysed by external QA-consultants. In 2002 the Ministry initiated the Concept research programme to support and follow up the QA scheme. The main task of the programme is to perform trailing research, gathering and analysing empirical data from these projects and develop new knowledge that could help to improve the front-end governance of major public projects. -
National Income Per Capita
PRODUCTION AND INCOME • INCOME, SAVINGS AND INVESTMENTS NATIONALPRODUCTIONIncome, savings AND and INCOME investments INCOME PER CAPITA While per capita gross domestic product is the indicator Depreciation, which is deducted from GNI to obtain NNI, is most commonly used to compare living standards across the decline in the market value of fixed capital assets – countries, two other measures are preferred by many dwellings, buildings, machinery, transport equipment such analysts. These are per capita gross national income (GNI) as physical infrastructure, software, etc. – through wear and and net national income (NNI). tear and obsolescence. Definition Comparability GNI is defined as GDP plus net receipts from abroad of Both income measures are compiled according to the wages and salaries and property income. definitions of the 1993 System of National Accounts. There are, Wages and salaries from abroad are those that are earned by however, practical difficulties in measuring international residents, i.e. by persons who essentially live and consume flows of wages and salaries and property income and inside the economic territory of a country but work abroad depreciation. Because of these difficulties, GDP per capita is (this happens in border areas on a regular basis) or by the most widely used indicator of income despite being persons that live and work abroad for only short periods theoretically inferior to either GNI or NNI. (seasonal workers). Guest-workers and other migrant Note that data for Australian and New Zealand refer to fiscal workers who live abroad for one year or more are considered years. to be resident in the country where they are working. -
WP 2015/08 (June) Alternative Interpretation of a Stateless Currency Crisis
WP 2015/08 (June) Alternative Interpretation of a Stateless Currency Crisis Sergio Cesaratto University of Siena Copyright © The author(s), 2015. The Italian Association for the Study of Economic Asymmetries (a/simmetrie) was established in 2013 as an independent, nonprofit think-tank based in Rome (Italy). a/simmetrie undertakes applied research and policy analysis on economic asymmetries, both in their economic nature, and in their political and juridical implications; provides a forum for the advocacy of policies leading to a more equitable and sustainable growth; and promotes the public debate in the field of economic policy-making, by involving researchers, politicians, and other relevant stakeholders. The a/simmetrie working paper series publishes outputs from a/simmetrie research in progress, as well as papers presented at a/simmetrie conferences and seminars, and contributions from visiting fellows. Comments are welcome. Unless otherwise indicated, the views expressed in this publication are those of the author(s). Publication does not imply endorsement by a/simmetrie. Italian Association for the Study of Economic Asymmetries via Filippo Marchetti 19, I-00199 Roma, Italy www.asimmetrie.org [email protected] www.asimmetrie.org Sergio Cesaratto – Alternative Interpretations of a Stateless Currency Crisis a/working papers 2015/08 Alternative Interpretations of a Stateless Currency crisis Sergio CESARATTO Department of Political Economy - University of Siena P.zza S.Francesco, 7-8, 53100 Siena (Italia) – [email protected] Abstract A number of economists holding Keynesian or pragmatic monetarist views warned that political union was a necessary premise for a viable monetary union. Inspired by Goodhart, we name this the Cartalist view. -
Concepts of National Income
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Studies in Income and Wealth, Volume 1 Volume Author/Editor: The Conference on Research in Income and Wealth Volume Publisher: NBER Volume ISBN: 0-870-14156-2 Volume URL: http://www.nber.org/books/unkn37-1 Publication Date: 1937 Chapter Title: Concepts of National Income Chapter Author: M. A. Copeland Chapter URL: http://www.nber.org/chapters/c8136 Chapter pages in book: (p. 3 - 63) Part One CONCEPTS OF NATIONAL INCOME M. A. COPELAND CI<."NTlI.AL STATI STICAL BOARD Discussion SIMON KUZNETS NATIONAL IWREAU OF ECONOMIC RESEA RCH CLARK WARBURTON FEIlEJtAL DEPOSIT INSURANCE (X)RPOR:ATION M. A . COPELAND • CONCEPTS OF NATIONAL INCOME M. A. COPELAND I National Income and Social Income THE PURPOSES of this memorandum are first, to indicate the pres ent status of concepts of national or other social income, and to outline the most useful types of income breakdown; second, to consider some of the questions that are now particularly moot with respect to concepts of national income, and to suggest pos sible answers' It should be fully recognized that this procedure involves taking sides on issues that are necessarily conrroversial and that may well continue to be controversial for some time. In the fOllowing discussion references will be made to social income and social wealth. For the world as a whole and for parts of it either smaller or larger than an entire nation there may be need for measures corresponding to those designated as national wealth and national income.