Microeconomics, Macroeconomics and Economic Policy: Essays in Honour of Malcolm Sawyer PDF
Preview Microeconomics, Macroeconomics and Economic Policy: Essays in Honour of Malcolm Sawyer
Microeconomics, Macroeconomics and Economic Policy Essays in Honour of Malcolm Sawyer Edited by Philip Arestis Microeconomics, Macroeconomics and Economic Policy This page intentionally left blank Microeconomics, Macroeconomics and Economic Policy Essays in Honour of Malcolm Sawyer Edited by Philip Arestis University of Cambridge and University of the Basque Country Palgrave macmillan Selection and editorial matter © Philip Arestis 2011 Individual chapters © Contributors 2011 Softcover reprint of the hardcover 1st edition 2011 978-0-230-29019-8 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2011 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-33137-6 ISBN 978-0-230-31375-0 (eBook) DOI 10.1057/9780230313750 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Microeconomics, macroeconomics and economic policy: essays in honour of Malcolm Sawyer/edited by Philip Arestis. p. cm. Includes index. 1. Microeconomics. 2. Macroeconomics. 3. Economic policy. I. Sawyer, Malcolm C. II. Arestis, Philip, 1941– HB172.M5985 2011 330—dc22 2011011740 Contents List of Tables vii List of Figures viii Notes on the Contributors ix Malcolm Sawyer: An Appreciation xvii Philip Arestis Part I Microeconomics 1 The Function of Firms: Alternative Views 3 Nina Shapiro 2 Industrial Structure and the Macro Economy 20 Keith Cowling and Philip R. Tomlinson 3 Unemployment, Power Relations, and the Quality of Work 38 David A. Spencer 4 The Problem of Young People Not in Employment, Education or Training: Is there a ‘Neet’ Solution? 54 John McCombie and Maureen Pike 5 The Business of Macro Imbalances: Comparing ‘Gluts’ in Savings, Money and Profits 72 William Milberg and Lauren Schmitz Part II Macroeconomics 6 A Critical Appraisal of the New Consensus Macroeconomics 99 Philip Arestis 7 Bringing Together the Horizontalist and the Structuralist Analyses of Endogenous Money 116 Giuseppe Fontana 8 Economic Growth and Income Distribution: Kalecki, the Kaleckians and Their Critics 134 Amitava Krishna Dutt 9 The Influence of Michał Kalecki on Joan Robinson’s Approach to Economics 153 G.C. Harcourt and Peter Kriesler v vi Contents 10 Shared Ideas Amid Mutual Incomprehension: Kalecki and Cambridge 170 Jan Toporowski Part III Economic Policy 11 Is There a Role for Active Fiscal Policies? Supply-Side and Demand-Side Effects of Fiscal Policies 191 Jesus Ferreiro, Teresa Garcia del Valle, Carmen Gomez and Felipe Serrano 12 Fiscal Policy and Private Investment in Mexico 208 Emilio Caballero U. and Julio López G. 13 A Keynes–Kalecki Model of Cyclical Growth with Agent-Based Features 228 Mark Setterfield and Andrew Budd 14 Unsurprising to Keynes, Shocking to Economists: The Normalisation of Capital Controls in the Global Financial Crisis 251 Ilene Grabel 15 Regulating Wall Street: Exploring the Political Economy of the Possible 268 Gerald Epstein and Robert Pollin Index 286 List of Tables 5.1 USA–China average annual industry import share and profit share growth rates by NAICS commodities, 2002–2008 87 5.2 Kendall tau-b rank-correlation coefficients for the NAICS industry profit share and the US–China NAICS commodity import share, 2002–2008 90 12.1 Single-equation VAR misspecification tests 221 12.2 Trace test 222 12.3 Equilibrium correction mechanism 223 13.1 Revisions to the state of long-run expectations 231 13.2 Agent-based revisions to the state of long-run expectations 234 15.1 Futures and options market long positions by trader group, January 2006–December 2008 280 vii List of Figures 5.1 Trade balances as share of GDP for USA–World, USA–China, and China–World, 1995–2010 I–III 74 5.2 Gross savings, gross capital formation, and the current account balance as share of GDP in China and the United States, 1995–2008 76 5.3 The ‘money glut’ with interest-sensitive saving and investment 78 5.4 US corporate profits with inventory valuation and capital consumption adjustments, 1995–2009 83 5.5 US import, profit and investment shares, 1970–2006/07 84 5.6 The ‘profits glut’ 85 7.1 A general endogenous money analysis of the reserve market 119 7.2 A general endogenous money analysis of the credit market 123 7.3 A general endogenous money analysis of the financial markets 125 12.1 Private investment and selected fiscal and external variables in Mexico 215 13.1 Aggregate growth 240 13.2 Aggregate capacity utilisation 241 13.3 Number of idle firms 242 13.4 Size distribution of firms in Period 150 243 13.5 Goodness of fit of estimated power laws 244 viii Notes on the Contributors Philip Arestis is Honorary Senior Departmental Fellow, Cambridge Centre for Economics and Public Policy, Department of Land Economy, University of Cambridge, UK; Professor of Economics, Department of Applied Economics V, University of the Basque Country, Spain; Distin- guished Adjunct Professor of Economics, Department of Economics, University of Utah, US; Senior Scholar, Levy Economics Institute, New York, US; Visiting Professor, Leeds Business School, University of Leeds, UK; Professorial Research Associate, Department of Finance and Management Studies, School of Oriental and African Studies (SOAS), University of London, UK; and holder of the British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies. He is Chief Academic Adviser to the UK Government Economic Service (GES) on Professional Developments in Economics. He has published as sole author or editor, as well as co-author and co-editor, a number of books, contributed in the form of invited chapters to numerous books, produced research reports for research institutes, and has published widely in academic journals. Andrew Budd received a BS in Economics and Computer Science from Trinity College (Hartford) in 2008, and a Masters of Business Administration from the Sloan School of Management at MIT in 2010. His research interests include Post Keynesian economics, agent-based simulation, data mining and visualisation. He is now employed as a Senior Project Manager in the Technology Innovation group at ESPN, where he oversees the development of novel statistical analysis systems. Keith Cowling is Professor of Economics at the University of Warwick where he has spent most of his professional life. He has published over a wide area of industrial economics and political economy. His pub- lications include a considerable number of books including Monopoly Capitalism, his most important central publication. His papers include contributions to the Journal of Political Economy, the European Economic Review, the Economic Journal, Kyklos, Economica, and the International Journal of Industrial Organisation. He was previously President of the European Association for Research in Industrial Economics (EARIE) and editor of the International Journal of Industrial Organization (IJIO). ix
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