Social Conflict and Macroeconomics: What Determines the Effectiveness of Aggregate Demand Policies?

This paper examines the role of social conflict in explaining macroeconomic phenomena and, especially, the effectiveness of aggregate demand policies as a means of raising real output. The social conflict approach to macroeconomic phenomena is compared with a Keynesian view along with Ball, Mankiw and Romer’s (1988) and Lucas’ (1973) models of the determinants of the effectiveness of aggregate demand policies (or the slope of the Phillips curve). Empirical analysis over the period from the 1950s to the 1990s for 15 OECD countries provides significant evidence that the social conflict view of inflation has much to offer in explaining differences in the effectiveness of aggregate demand policies both across countries and through time.social conflict, aggregate demand policies, political economy

Capital Flows and Speculative Attacks in Prospective EU Member States

This paper examines the capital flow experience of transition economies who are also prospective EU members with a view to shedding light on the likely problems they might encounter with exchange rate policy in the run up to euro area membership. We show that they have been experiencing fairly sizeable capital flows since the early 1990s. We explain these flows using two separate models. The first explains the level of capital flows using panel data from the prospective EU members. The second concentrates specifically on estimating the probability of a country experiencing downward speculative pressure. In both cases, the contribution of domestic factors and contagion is explored. The results suggest that while domestic factors have some role to play, it is rather limited. Moreover there is clear evidence of contagion effects, suggesting that macroeconomic policy in the prospective EU members will be complicated by capital flows in the run up to euro area membership.capital flows, transition economies, accession countries and EU membership

Social Conflict and Macroeconomics: what determines the effectiveness of aggregate demand policies?

This paper examines the role of social conflict in explaining macroeconomic phenomena and, especially, the effectiveness of aggregate demand policies as a means of raising real output. The social conflict approach to macroeconomic phenomena is compared with a Keynesian view along with Ball, Mankiw and Romer’s (1988) and Lucas’ (1973) models of the determinants of the effectiveness of aggregate demand policies (or the slope of the Phillips curve). Empirical analysis over the period from the 1950s to the 1990s for 15 OECD countries provides significant evidence that the social conflict view of inflation has much to offer in explaining differences in the effectiveness of aggregate demand policies both across countries and through time

Modernization and Centre-Left Dilemmas in Greece: the Revenge of the Underdogs.

This paper argues that the recent decline in the hegemony of the centre-left in Greece is related to the ideas of modernization that have dominated that tradition over the past few years. The tendency to conceptualize development in terms of a clash between the “new” and the “old”, to ignore the extent to which neoliberalism involves a strategy for the restoration of power for dominant groups, and to see marginalized groups merely as a problem to be overcome, rather than part of any solution, has impaired the centre-left’s ability to understand its own decline and to think constructively about alternatives.social democracy, neoliberalism.

Homo economicus and the reconstruction of political economy: six theses on the role of values in economics

This paper argues for an explicit engagement of political economy with values, and presents a number of criticisms of the ethical limitations of both markets and neoclassical economics. Neoclassical theory is unlikely to be able to take on board this critique because of its commitment to Homo economicus and the ideal of the market. But this is not the case for political economy in the tradition of post-Keynesianism, Marxism and institutionalism. The reason why political economy has not exploited this advantage to any great extent has to do with the fear of many political economists that an engagement with values necessarily diminishes the scientific status of their approach. The paper presents six theses in order to convince them that this fear is fundamentally misconceived. Copyright 2005, Oxford University Press.