DOCSLIB.ORG

February 75 Vol. TY 1 ISSN 0305 - 8247

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
February 75 Vol. TY 1 ISSN 0305 - 8247 Bulletin of the Conference of • Socialist • Economists February 75 Vol. TY 1 ISSN 0305 - 8247 For contents see back cover A Itoh 1 THE FORMATION OF MARX'S THEORY OF CRISIS Makoto Itoh I TWO TYPES OF CRISIS THEORY Marx's theory of crisis in "Capital" forms a focus of his systematic critique of Classical economics in which capitalist economy is regarded as the ultimate natural order of human society. Unlike the Classical school, Marx's theory treats the law of motion of capitalistic production scientifically with its historical forms and mechanisms. Without such a systematic theory, we cannot clarify the logical necessity of cyclical crises which reveal the contradictory nature of capitalist economy in all its complex interrelations. In dealing with such complex phenomena, the level and the empirical basis of abstraction is particularly important. The crisis theory in "Capital" was dev- eloped in order to prove the inevitability of cyclical crises at the level of basic principle. And it was formed on the empirical basis of the most typical cyclical crises at the middle of the 19th century, the most suitable historical basis of abstracting the principle of crisis.. If we take as the basis of abstraction the whole history of crises, including the immature crises in the mercantilistic age, we will only recognize either too diverse concrete factors (often not exclusively economic factors, such as wars) affecting the courses and phases of crises, or too abstract formal common factors, in order to prove not the mere possibility but the logical necessity of cyclical crises. Professor Uno's systematic division of levels of research in Marxian Economics into Principle, Stages Theory, and Analysis is essential here. Studies in the historical changes of the phases and roles of economic crisis through the world history of capitalism, comprising three stages of mer- cantilism, liberalism, and imperialism, should belong to another, upper level of research as Stages Theory rather than to the basic Principle of political economy as we see in the theoretical system of "Capital". The surer the prin- ciple of crises becomes, the surer the stages theory of crises or further, the analysis of the critical situation of the recent capitalism, can be made. We must recognize even in our age the importance of Marx's crisis theory, abstract- ed from the typical cyclical crises at the middle of the 19th century, as the principle of capitalistic crisis. However, Marx's crisis theory is not fully complete. In particular, it con- tains two different types of theories which are not easily made consistent with each other. Let us call them in short 'the excess capital theory' and 'the excess commodity theory'. For instance, in the section III of Chapter XV of the third volume of "Capital", Marx tries to show that "a steep and sudden fall in the general rate of profit" due to "absolute over-production of capital" "in a ratio to the labouring pop- ulation" (K.III.S.262,p.251) 1 brings forth cyclical crises. In this context ' In this essay, I will cite pages of Marx's "Capital" in the following way, using both the German edition in Marx-Engels Werke 23-25 (1962-4) and the English edition by Progress Publishers (1965-71). K.III means the third vol. of "Cap- ital", S indicates pages in the German edition and p those in the English edition Itoh 2 excess of commodities in the market and difficulties of the realization of surplus-value are regarded as a result of the falling rate of profit caused by the excess accumulation of capita1.1 Marx's attempt in "Capital" to dev- elop a business cycle theory along this line can be observed also in his theory of capital accumulation of the first volume (K.I,S641-9,661, pp612-2, 632-3), and in his credit theory of the third volume (K.III,S529-30, pp513-14; also K.II,p415). "The conditions of direct exploitation, and those of realiz- ing it, are not identical,. .The first are only limited by the productive power of society, the latter by the proportional relation of the various branches of production and the consumer power of society". Along with the increase of production of surplus-value, "the contradiction between the,conditions under which this surplus value is produced and those under which it is realized" (K0III,S254-5, pp244-5). Also in Chapter XXX of the third volume, Marx points out that the "dispropor- tion of production in various branches" and the "restricted consumption of the masses" as opposed to development of productive power are the ultimate reason • or cause of crises (K.III,S501, p484). In these places, he considers that crises occur from the over-production of commodities beyond demand, due to either the disproportion among production branches or the restricted consump- tion of the masses. Excess Capital and the falling down of profit rate are seen as resulting from this process. Needless to say, both capital and.commodities have become generally excess in crisis periods. But it is important to discern which of them is the fundamen- tal cause of economic crises. The excess capital theory and the excess commod- ity theory are logically opposed to each other at this point. We cannot keep both theories if we seek to prove the logical necessity of economic crisis in the principle of political economy. Why do these two different types of crisis theory co-exist so uneasily in "Capital"? In which direction, and how, should Marx's crisis theory be complet- ed? I will try to give an answer to these questions by reviewing the formation of Marx's crisis theory from "Grundrisse" to "Capital". II CRISIS THEORY IN "GRUNDRISSE" In "The Chapter on Capital" in "Grundrisse" which is the first manuscript for "Capital" in 1857-58, Marx shows his theoretical studies of crisis, mainly at the beginning of Section II "The Circulation Process of Capital" and in the profit theory of Section III, "Capital as Fructiferous". At the beginning of Section II of "Grundrisse", in contrast to the second vol- ume of "Capital", Marx treats the selling process of commodity products by capital i.e. C'- M' as an important restriction on the motion of capital, say- ing for instance:- 1 P.M.Sweezy calls this type of theory 'Crises Associated with the Falling Tend- ency of the Rate of Profit' in - his Theory of Capitalist Development (1942). As I discuss below, this theory should be developed rather independently from "the law of the tendency of the rate of profit to fall". Sweezy's designation seems to be misleading on this point. However, his treatment of this theory remains one of the rare cases (in addition to Prof. Kouzo Uno and his followers' studies in Japan) in the history of Marxian crisis theory. I would also like to suggest that the name Sweezy gives to the other type of theory - "Realization Crisis" - should be changed in order to sharpen the contrast with this theory. Itoh 3 "It is forgotten, as Malthus says, 'the very existence of a profit upon any commodity pre-supposes a demand exterior to that of the labourer who has pro- duced it', and hence the demand of the labourer himself can never be an adequate demand. Since one production sets the other into motion and hence creates con- sumers for itself in the other capital's workers, it seems to each individual capital that the demand of the working class set by production itself is an 'adequate demand'. This demand which production itself sets drives production forward beyond the proportion in which it would have to produce in relation to workers; on the one hand, the production must overdrive beyond that proportion; on the other, the demand exterior to the demand of the labourer himself dis- appears or shrinks up, thus the collapse occurs." (Gr.S323,p420) 1 Marx supposes here that commodity production by capital as a whole must exceed proper proportion for consumers' demand, and emphasizes that "the final product finds its limit in direct and final consumption" (Gr.S323, p421). It must be noticed that Marx does not yet discuss clearly the logical necessity of econ- omic crises in cyclical form. He tends rather to maintain in "Grundrisse" that economic crisis is almost equivalent or leads directly to the final collapse of capitalistic production, basing it on the excess commodity theory of an under- consumption type. Marx is apparently trying here to follow and develop the crisis theory of Sis- mondi and Malthus who opposed Ricardo's classical theory. Marx contrasts Sis- mondi with Ricardo as follows:- "Those economists who, like Ricardo, conceived production as directly identical with the self-increasing of capital.. .have grasped the positive essence of capital more correctly and deeply than those who, like Sismondi, emphasized the limitation of consumption and of the existing circle of counter-values. However, the latter has better grasped the limited nature of production based on capital, its negative one-sidedness. The former more its universal tendency, the latter its particular restrictedness". (Gr. S314, p410) Surely, Sismondi or Malthus tried to show the inevitability of general over- production, and therefore the particular restrictedness of capitalist produc- tion, whereas economists like Ricardo emphasized one-sidedly the adjustment working of demand and supply on the basis of the law of value, denying the possibility of general overproduction of commodities. According to the labour theory of value of Classical economics, the value of yearly commodity products° and the revenues, such as wage, profit and rent necessary. to buy them become always equal in total, for both are determined by the total quantities of yearly social labour.
Load more

Recommended publications
  • Part 1. During Inflation: Preferences, Investment, Risk*
    Part 1. During Inflation: Preferences, Investment, Risk* Leonid A. Shapiro Abstract. Producers cannot avoid being misled in their decisions even when they know inflation is taking place; effects of inflation are neither proportional to its extent nor to its magnitude — they resemble an infinite sum of disorienting impulses from perspective of entrepreneurs — and so slight inflation can, too, like greater inflation, force relations of market prices and profits to deviate significantly from such relations which would exist if intervention was indeed absent. This causes manufacture of products contrary to actual preferences of consumers and, too, real availability of capital goods. Harmful effects of intervention are themselves not linear and so minimizing it without eliminating it does not guarantee that harm arising from this intervention is minimal and thus analysis suggests that during every burst of inflation — slight or great — possibility of significant decrease of welfare cannot itself be rejected a priori. §1 Introduction Is increase of roundaboutness of production or lengthening of investment chains — and corresponding necessary decrease of quantity of first-order goods produced or manufacture of different first-order goods — proportional to increase of quantity of money or its substitutes, and supply of loanable funds, by way of credit expansion or coercive intervention, namely, inflation? Following Cantillon (1755), Craig (1821), Say (1821), Gossen (1854), Menger (1871; 1888), Hayek (1931; 1932), Hulsmann (1998), Hutt (1939; 1956), Mises (1912; 1949), Rothbard (1962a; 1962b), Garrison (2001): 1. Producers cannot avoid involvement in business cycles when inflation occurs. This remains true when they know that inflation is taking place and what it causes.
    [Show full text]
  • No More Credit Excesses
    naslovnica 11/14_naslovnica 11-2013 23/10/14 11:13 Page 1 THE JOURNAL FOR MONEY AND BANKING LJUBLJANA, VOLUME 63, No. 11, NOVEMBER 2014 SPECIAL ISSUE Bančni LEARNING FROM HISTORY – NO MORE vestnik CREDIT EXCESSES VSEBINA/CONTENT EDITORIAL Boštjan Jazbec: Banking sector recapitalisation, corporate sector leverage and ways out in Slovenia 1 ECONOMIC ACTIVITY, BUSINESS CYCLES AND CREDIT GROWTH Bernhard Winkler: Flow-of-funds perspective on unconventional monetary policy 2 Daria Zakharova and co-authors: Reviving credit growth for strong and sustainable recovery 11 Marko Simoneti: Quantitative easing and non-bank debt financing in Slovenia 22 REHABILITATION OF BANKS AND COMPANIES IN CREDIT STAGNATION CONDITIONS Robert Priester: Structural changes in European banking and influence on banking business models 31 Tina Žumer: Sectoral indebtedness and balance sheet repair in euro area 35 Marko Košak: In search for sustainable funding structure of commercial banks 43 Ivan Ribnikar: Banks’ capital and their funding 52 Timotej Jagrič and Rasto Ovin: Positioning Slovenian banking sector in EU 59 Božo Jašovič and Matej Tomec: Financial instability, government intervention and credit growth 64 Bojan Ivanc: Concept of business restructuring and sustainable funding of Slovenian companies 74 BEST PRACTICE CASES Carmelina Carluzzo and Milen Kassabov: CEE banking: Switching to sustainable track 78 Gvido Jemenšek: Potential for restructuring and new business models for banks 83 Janko Medja and co-authors: Transforming NLB, Slovenian market leader 91 Lars Nyberg: Bank Assets Management Company – Experiences so far 101 CONCLUDING REMARKS Emil Lah: Monetary policy paradoxes and banking crisis 113 STATISTICAL APPENDIX 120 kolofon 2014_Layout 1 23/10/14 11:38 Page 1 Uredniški odbor: mag.
    [Show full text]
  • From Say's Law to Keynes, from Keynes to Walras'
    From Say’s law to Keynes, from Keynes to Walras’ law: some ironies in the history of economic thought Antonio Carlos Macedo e Silva 1 Produce, supply, sell, buy: the inflection of a few verbs is sufficient to express the essential phenomena of a mercantile economy. This simplicity is, however, illusory. Even though these actions are carried out self-confidently by individuals, the conjugation of the verbs, in the discourse of economists, is far from being a trivial task. Impasses and controversies surround issues which can only be deemed basic. There is, for instance, an insuperable disagreement regarding the definition of the essential properties of a mercantile economy. Mercantile, and therefore monetary, according to Marxists, Institutionalists, and Post-Keynesians (monetary and therefore non-ergodic, the latter would add; see Davidson, 1982). Nevertheless, the hegemonic tradition intrepidly proceeds, clinging to the conception of the mercantile economy as being essentially an economy of direct exchanges (see, for instance, the assessment by Hahn, 1982). The law of markets is one of the recurrent themes in economic debate. Over the last decades, a large number of interpreters have sought to establish the ‘final truth’ regarding it. The debate carried out by the mainstream proceeded, essentially, to rehabilitate the law, exempting it from the criticism of Keynes. In Schumpeter (1954), it becomes a precursor of Keynesian Macroeconomics. In Becker and Baumol (1960) it coincides with the notion, essential to the neoclassical synthesis, of the existence of a price level compatible with general equilibrium. It is ‘ the beginning of sound thinking in macroeconomics ’, for Blaug (1962:149) and, in the opinion of Clower and Leijonhufuvd (1973), it is an essential proposition for the elaboration of any economic theory.
    [Show full text]
  • Equilibrium, Instability, Growth and Feedback in Economics
    Equilibrium, instability, growth and feedback in economics Michael Joffe Imperial College London Key words Feedback; systems; system dynamics; causation; emergence; microfoundations; equilibrium; business cycle; crises; trend extrapolation; path dependence; lock-in; economic growth; arms race; complexity. In the “capitalist” economies that have developed since the industrial revolution, many of the most important features are due to feedback processes. These recurring features generate regularities that are indispensable in trying to explain how the economy works. In contrast, human behaviour is highly heterogeneous and unpredictable, making it a poor basis for generating reliable explanations. A focus on the regularities generated by feedback and other system properties provides a reliable basis for systematic study. This is an alternative strategy to the traditional one of imposing regularity on human behaviour by assuming strict rationality and optimization, which has become questionable in view of the findings of behavioural economics. The observed regularities include (i) stability, in the sense that major degrees of excess demand and supply are unusual, which is especially characteristic of product markets; (ii) fluctuations, with periods of underused resources, which occur in particular markets such as real estate, as well as in the economy as a whole (the “business cycle”); (iii) periodic crises, often characterised as the occurrence of bubbles and crashes; (iv) technological lock-in, the adoption of technologies that may be inferior, and other multiple-equilibrium phenomena; (v) growth in per capita GDP of historically unprecedented magnitude, of approximately exponential functional form, in successful economies since the industrial revolution. It is important to recognise that although these features occur regularly, they are typically not predictable in their timing, magnitude, etc.
    [Show full text]
  • Nber Working Papers Series What Is a Business Cycle?
    NBER WORKING PAPERS SERIES WHAT IS A BUSINESS CYCLE? Victor Zarnowitz Working Paper No. 3863 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 October 1991 Prepared for the 16th Annual Policy Conference of the Federal Reserve Bank of St. Louis, October 17 and 18, 1991. This paper is part of NBER's research program in Economic Fluctuations. Any opinions expressed are those of the author and not those of the National Bureau of Economic Research. NBER Working Paper #3863 October 1991 WHAT IS A BUSINESS CYCLE? ABSTRkCT Thispaper considers the question in its title from several angles. Part 1 looks at economic history and the development of thinking about business cycles -thepopular meaning and economists' definitions and ideas. Part 2 reviews the lessons from business cycle chronologies and duration data, the concepts of periodicity of cycles and phases, and the apparent moderation of macroeconomic fluctuations in the second half of the 20th century. Part 3 compares the recent business cycles and growth cycles for several major industrialized, market-oriented countries. Part 4 discusses the role of endogenous cyclical variables, the outside shocks of various types, the systematic timing sequences, and the regularities of cyclical comovements and amplitudes. Understanding business cycles is aided by each of these models of analysis. Business cycles have varied greatly over the past 200 years in length, spread, and size. At the same time, they are distinguished by their recurrence, persistence, and pervasiveness. They make up a class of varied, complex, and evolving phenomena of both history and economic dynamics. Theories or models that try to reduce them to a single causal mechanism or shock are unlikely to succeed.
    [Show full text]
  • "Keynesian Economics" Wikipedia
    Keynesian economics (pronounced /ˈkeɪnziən/ KAYN-zee-ən, also called Keynesianism and Keynesian theory) is a macroeconomic theory based on the ideas of 20th century British economist John Maynard Keynes. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.[1] The theories forming the basis of Keynesian economics were first presented in The General Theory of Employment, Interest and Money, published in 1936; the interpretations of Keynes are contentious, and several schools of thought claim his legacy. Keynesian economics advocates a mixed economy—predominantly private sector, but with a large role of government and public sector—and served as the economic model during the latter part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s. The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. The former British Prime Minister Gordon Brown, former President of the United States George W. Bush[2] ( also alleged heavily being anti-Keynesian by some (The Shock Doctrine)), President of the United States Barack Obama, and other world leaders have used Keynesian economics through government stimulus programs to attempt to assist the economic state of their countries.[3] Overview According to Keynesian theory, some microeconomic-level actions—if taken collectively by a large proportion of individuals and firms—can lead to inefficient aggregate macroeconomic outcomes, where the economy operates below its potential output and growth rate.
    [Show full text]
  • On Say's Law, Keynes's Money, and Post Keynesians
    ON SAY’S LAW, KEYNES’S MONEY, AND POST KEYNESIANS WILLIAM BARNETT II* WALTER BLOCK** Abstract: Say’s Law maintains that there can never be a superabundance of all goods (if any good were available in greater supply than needed, such as water or air, it would no longer be an economic good at all) and that if there is an excess of some items that are still goods, it will be matched with an insufficiency of others. The reputation of Keynes (1936) was made in part on the basis of a supposed refutation of Say’s Law. This paper attempts to probe the irrationality of Keynes’ position by examining his concept of money and its relationship to his theory. Key words: Say’s Law; Keynes; money; economic goods; animal spirits; unemployment. JEL Category: E12. I INTRODUCTION «Men are involuntarily unemployed if, in the event of a small rise in the price of wage-goods relatively to the money-wage, both the aggregate supply of labor willing to work for the current money-wage and the aggregate demand for it [labor] * Bank One Distinguished Professor of International Business and Professor of Economics. Department of Economics. Joseph A. Butt, S.J. College of Business Administration. Loyola University New Orleans. New Orleans, Louisiana 70118. (504) 864-7950. [email protected] ** Harold E. Wirth Endowed Chair in Economics. Department of Economics. Joseph A. Butt, S.J. College of Business Administration. Loyola University New Orleans. New Orleans, Louisiana 70118. (504) 864-7934. [email protected] Procesos de Mercado: Revista Europea de Economía Política Vol.
    [Show full text]
  • Phillips Curve Is a Particular Case That Economists Misinterpret the Correlation Between Two Dependent Variables for Causal Relation
    International Journal of Economics and Finance; Vol. 10, No. 11; 2018 ISSN 1916-971X E-ISSN 1916-9728 Published by Canadian Center of Science and Education Phillips Curve Is a Particular Case that Economists Misinterpret the Correlation between Two Dependent Variables for Causal Relation Chao Chiung Ting1 1 Graduated from Michigan State University, USA Correspondence: Chao Chiung Ting, Graduated from Michigan State University, 63 33 98th Place 1E, Rego Park, NY 11374, USA. E-mail: [email protected] Received: September 5, 2018 Accepted: October 18, 2018 Online Published: October 25, 2018 doi:10.5539/ijef.v10n11p70 URL: https://doi.org/10.5539/ijef.v10n11p70 Abstract Since labor supply and labor demand determines both employment and wage in labor market endogenously, both wage and employment, which we observe, are dependent variable in the sense of ex-post. Since unemployment is equal to labor supply minus labor demand, unemployment is dependent variable in the sense of ex-post, too. There is no causal relation between two dependent variables because independent variable explains dependent variable. Thus, the relationship between ex-post unemployment and ex-post wage in Phillips (1958) is not causal relation but correlation as meaningless as the strong correlation between ice cream sale and drowning rate. Similarly, both price and quantity we observe are determined by supply and demand endogenously in the sense of ex-post. Thus, inflation rate is dependent variable because inflation rate is the change in price level (i.e., change in the average price of all goods in the sense of ex-post). Hence, we are not permitted to explain unemployment rate by inflation rate and vice versa.
    [Show full text]
  • Eco 155 750 Lecture Twenty-Six 1 Okay. Well
    ECO 155 750 LECTURE TWENTY-SIX 1 OKAY. WELL, LET'S GET STARTED FOR THE DAY. WHAT WE WANT TO TALK ABOUT TODAY IS THIS KEYNESIAN MODEL OF THE ECONOMY. YOU'LL REMEMBER LAST TIME I WENT THROUGH THIS SORT OF DEBATE THAT TOOK PLACE BETWEEN THE CLASSICAL ECONOMISTS WHO CAME EARLIER AND I MENTIONED A FEW NAMES TO YOU. LET ME JUST KIND OF MENTION THOSE SAME NAMES AGAIN. ADAM SMITH YOU'D CONSIDER A CLASSICAL ECONOMIST. ADAM SMITH WAS THE FATHER OF MODERN ECONOMICS. WHAT HE DID -- YOU KNOW, THE WORK HE DID REALLY WAS THE SAME TYPE OF WORK THAT ECONOMISTS NOWADAYS DO AND HE WAS THE FIRST ONE TO SORT OF PUT IT ALL TOGETHER. SO ANYWAY, ADAM SMITH, CLASSICAL ECONOMIST. LATER ON I MENTIONED THIS GUY NAMED SAY, J. B. SAY, AND THERE WAS SAY'S LAW, WHICH YOU'LL REMEMBER THAT TERM WAS SUPPLY CREATES ITS OWN DEMAND. I MENTIONED, I THINK, ALFRED MARSHALL WHO WE HAD TALKED ABOUT EARLIER BACK IN THE SUPPLY AND DEMAND CHAPTER. AND BASICALLY WHAT HAPPENED BEFORE KEYNES CAME ALONG WAS ECONOMISTS HAD THIS THEORY OF HOW THE ECONOMY WORKED AND THEY BASICALLY SAID YOU CANNOT HAVE A PROLONGED RECESSION OR A DEPRESSION. THEY USED THE TERM "GLUT" AND USED EVEN A MODIFIER. YOU CANNOT HAVE A GENERAL GLUT. NOW, WHAT'S A GLUT? SURPLUS. AND SO WHEN THEY TALKED ABOUT YOU CANNOT HAVE A GENERAL GLUT -- THIS WOULD'VE BEEN THE CLASSICAL ECONOMISTS -- WHAT THEY'RE SAYING ECO 155 750 LECTURE TWENTY-SIX 2 IS THIS: YOU CANNOT HAVE A SITUATION WHERE THERE'S JUST GOODS AND SERVICES OUT THERE THAT CAN'T BE SOLD, A SURPLUS OF EVERYTHING.
    [Show full text]
  • Economic Impossibilities for Our Grandchildren?
    NBER WORKING PAPER SERIES ECONOMIC IMPOSSIBILITIES FOR OUR GRANDCHILDREN? Kevin Hjortshøj O'Rourke Working Paper 21807 http://www.nber.org/papers/w21807 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 December 2015 This is a revised version of the Keynes Lecture, presented at the British Academy on October 7, 2015. I am extremely grateful to Mary Morgan who chaired that event, and to Roger Backhouse, Patrick O’Brien, Richard Portes, Morten Ravn, Hélène Rey, and Donald Winch, who attended the lecture and made many useful suggestions and comments. I particularly want to thank Morgan Kelly and Alan Taylor for many conversations on the subject of secular stagnation; and to Bob Allen, Charlie Bean, Paul Beaudry, Agustín Bénétrix, Steve Broadberry, Nick Crafts, Brad DeLong, Rui Esteves, Ron Findlay, Mike Gavin, Richard Grossman, Leander Heldring, Svend Hylleberg, Philip Lane, Jacob Madsen, Perry Mehrling, Gian Maria Milesi-Ferretti, Cormac Ó Gráda, Thomas Piketty, Filipa Sa, Claus Vastrup, Karl Whelan, Jeff Williamson, and Nikolaus Wolf, for many useful comments, help with data, and advice. The usual disclaimer applies. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2015 by Kevin Hjortshøj O'Rourke. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
    [Show full text]
  • Abstract David Ricardo's Macroeconomics
    ABSTRACT DAVID RICARDO'S MACROECONOMICS Doctor of Philosophy, 1998 Timothy Sean Davis Graduate Department of Economics University of Toronto This thesis confronts the tendency in the literature of the history of economic thought to criticize Ricardo's macroeconomics, specifically his knowledge of contemporary events, his analysis of postwar crises, and his monetary and fiscal policies. To this end, the historical introduction in Chapters One and Two is critical, for it dispenses with the traditional view that the postwar decade was a period of chronic depression caused by underconsumption and, to a lesser extent, by monetary contraction associated with the 1819 Resumption Act. Chapter Three completes the foundation of our study by showing that Ricardo was well informed regarding Britain's economic and political situation. That he used this knowledge as a basis for his analysis of contemporary events is established in Chapters Four and Five, which chapters also refute the view that his treatment of postwar crises was merely a rationalization of the crude quantity theory and the strict law of markets in the face of overwhelmingly contradictory evidence. Chapter Six argues the merits of his monetary policies, particularly his insistence on the gold standard as a means to curb abuses by the Bank of England and the Government, which together were responsible for gross mismanagement of the currency. The chapter fiuther examines whether Ricardo accepted the "Treasury View" of fiscal policy, and whether his position implies adherence to a doctrinaire version of Say's Law. My conclusions differ from those of authors critical of Ricardo largely because I have adopted a methodological approach to the history of economic thought that differs from theirs.
    [Show full text]
  • 2008 Financial Crisis and the Deviation from the Taylor Rule Uzoma H
    Georgia Southern University Digital Commons@Georgia Southern University Honors Program Theses 2018 2008 Financial Crisis and the Deviation from the Taylor Rule Uzoma H. Okoye Georgia Southern University Follow this and additional works at: https://digitalcommons.georgiasouthern.edu/honors-theses Part of the Economic History Commons, Economic Theory Commons, Labor and Employment Law Commons, and the Macroeconomics Commons Recommended Citation Okoye, Uzoma H., "2008 Financial Crisis and the Deviation from the Taylor Rule" (2018). University Honors Program Theses. 341. https://digitalcommons.georgiasouthern.edu/honors-theses/341 This thesis (open access) is brought to you for free and open access by Digital Commons@Georgia Southern. It has been accepted for inclusion in University Honors Program Theses by an authorized administrator of Digital Commons@Georgia Southern. For more information, please contact [email protected]. 2008 Financial Crisis and the Deviation from the Taylor Rule An Honors Thesis submitted in partial fulfillment of the requirements for Honors in Department of Finance and Economics. By Uzoma Henry Okoye Under the mentorship of Dr. Mark Yanochik ABSTRACT In this paper, we derive possible causes of the 2008 financial crisis, as well as provide evidence of a possible deviation from the Taylor rule by the Federal Reserve. This research draws up mostly primary sources such as published books and speeches by John B. Taylor himself, as well as articles from academic journals related to the topic. Other prior research tends to take a side on the argument as to whether the Federal Reserve deviated or not. This paper serves as a descriptive analysis of different sides of the argument to come up with suggestions regarding the Fed’s actions.
    [Show full text]