A Study of the Effects of Foreign Direct Investment on the Economy of the State of New Hampshire Since 1973

The purpose of the thesis is to determine the impact that foreign direct investment has had on New Hampshire. New Hampshire as a state was impacted far less severely than much of the rest of the country, which could be considered surprising given the relatively high cost of housing in the state. I believe that part of what made New Hampshire more recession resistant is having the right foreign companies providing employment. To do this, I will be looking at FDI as a percentage of GDP over the previous 40 years and looking for a correlation between a higher percentage and national recession. I will also look at specific foreign corporations that lend the most to the New Hampshire economy to obtain a more specific view of the impact such companies have on both their communities and the state as a whole. This data could prove useful to New Hampshire as well as other states looking to protect against recession, as well as corporations looking to justify FDI to various governments

Effective Demand: Securing the Foundations

A panel session was organised at the 5th "Dijon" Post-Keynesian Conference (Roskilde University - 13th-14th May 2011) in order to confront three recent interpretations of Keynes's principle of effective demand: that of Hartwig (2007), Hayes (2007) and Allain (2009). Allain's comments on Hartwig and Hayes articles are developed in the present contribution.Keynesian economics; General Theory; macroeconomics; effective demand; short-term expectations

Effective demand and short-term adjustments in the General Theory

Keynes' principle of effective demand constitutes a pillar for Post Keynesians theories. But Keynes' presentation remains difficult to interpret, mainly because the aggregate demand function is based on entrepreneurs' expectations. The problem is then to demonstrate how these entrepreneurs (whose only concern is making profits) are led to produce the effective demand (which partially results from the consumers' and investors' behaviour). Previous studies by authors like Weintraub or Davidson highlight the trial and error procedure here at stake. However, since their analyses are not built on a precise accounting of monetary flows, they fail to formally demonstrate the coherence of the whole adjustment process. The aim of this article is to provide such a formal demonstration. We thus concentrate on the General Theory to verify how it constitutes a coherent framework to analyse temporary equilibriums (at the end of every elementary period) and short-term dynamics which bring the economy towards the stationary equilibrium.Keynesian economics, General Theory, macroeconomics, effective demand, short-term expectations.

Monetary circulation, the paradox of profits, and the velocity of money

Recent papers have reconsidered the paradox of profits, that is the difficulty to explain how monetary profits can be generated when firms borrow only the wage bill to finance their production. In this article, we use a stock-flow consistent approach give a solution to this paradox assuming that, when firms sell goods at prices which exceed their unit costs, the realised monetary profits are not used to pay back banks. These profits then remain in the circuit, allowing additional transactions. In a sense, profits result from their own expenditure. According to this interpretation, the velocity of money is higher than one because some monetary units are used in several transactions of goods.paradox of profits; circulation; endogenous money;velocity of money; stock-flow consistent approach

Slavery and its definition

Had the abolitionists of the past, the likes of Abraham Lincoln or William Wilberforce, been able to see into the twenty-first century, what might have struck them as very strange was that while they had come far in ending slavery and suppressing human exploitation, they seemed to have lost sight of what the term "slavery" means. This, despite the fact that for more than eighty-five years there has been a consensus in international law as to the legal definition of slavery. In the case of slavery the element of possession is fundamental. It allows people to drain the swamp and leave the definitional quagmire which has marginalised the legal definition of slavery. With the legal definition of slavery marginalised, people looked elsewhere to define slavery. A survey of the academic literature on contemporary slavery -- including much of the legal literature on the subject -- would show that, in the main, it has turned to the work of Kevin Bales and his sociological reading of what constitutes slavery

The balance of power between producers and retailers : a differentiation model

This paper argues that the balance of power between producers and retailers depends on the relative degrees of differentiation at the two levels of the vertical structure. We propose an extension of Hotelling's model in which two producers, competing in prices with horizontally differentiated products, face two horizontally differentiated retailers also competing in prices. We study the setting of producers' and retailers' margins. We show that when retailers are more differentiated than producers, they dominate the relationship and their margin is higher than producers'.Vertical relationships, differentiation

Distribution and Growth in France (1982-2006): A Cointegrated VAR Approach

In this article, we propose a simple Post Keynesian model so as to test whether French economy is wage or profit-led i.e. whether a wage share increase has a negative or positive impact on economic growth. In that perspective, we estimate econometrically the three behaviour equations of our model (consumption, investment and net exports equations) by using a VECM. Once these equations estimated, we solve our model by using the estimated coefficients and can then conclude on the nature of the French economic regime. Our main conclusion is that French economy would be profit-led. However, although an increase of wage share would have a negative impact on economic growth, this negative impact is very weak, as a one point increase of profit share increases economic growth of only 0.1 %. According to our econometric analysis, wage share increase has a positive impact on consumption and no significant direct effect on the balance of trade. Nevertheless, imports are very sensitive to any output increase, which implies a strong negative impact on the multiplier. Moreover, as the accelerator coefficient (in the investment equation) is not very important, the positive effect of a wage share increase on capital accumulation through consumption is not strong enough to outweigh the negative impact of a wage share increase on investment, consecutive to the decline of profitability. Finally, these two elements –weak accelerator and multiplier effects– well explain why any support of consumption through a wage increase would not have a positive and important impact on French economic growth nowadays. Symmetrically, no positive effect of a wage austerity policy on growth must be expected.Income distribution; Wage moderation; Economic growth; VECM

Growth, Capital Scrapping, and the Rate of Capacity Utilisation

The aim of this short article is to build a model in order to take into account capital scrapping (or bankruptcies) in an income distribution and growth model. The reason to introduce capital scrapping results from the intuition of some inconsistencies between theoretical predictions and empirical facts: the rate of capacity utilisation data often exhibit a greater stability than it is expected after reading theoretical models. We think that capital scrapping might contribute to stabilise the utilisation rate. The idea is as follows: an increase of the profit share implies a decrease of the rate of capacity utilisation which then involves a rise in capital scrapping (or in the rate of bankruptcies).Income distribution ; Capital scrapping ; Rate of Capacity Utilisation ; Imperfect Competition ; Growth