37 research outputs found
On Concurrent Solutions in Differential Games
We examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesian variants might represent one category. The economy is the neighborhood of a market-clearing equilibrium with Pareto-optimal properties modulo frictions. Our interest lies in the âoldâ Keynesian genus where the representative state is one of involuntary unemployment. Two information sets are relevant. In the first case, agents look to the past and the present. In the second, they are bound by the information provided in the present. The standard analysis pertains to DSGE models under full information. We show, in contrast, that in a situation of structural disequilibrium and feedback information, all parties are better off reneging on the social compact to achieve a superior class of solutions.information structures, time consistency, credibility and reputation
On Concurrent Solutions in Differential Games
We examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesian variants might represent one category. The economy is the neighborhood of a market-clearing equilibrium with Pareto-optimal properties modulo frictions. Our interest lies in the âoldâ Keynesian genus where the representative state is one of involuntary unemployment. Two information sets are relevant. In the first case, agents look to the past and the present. In the second, they are bound by the information provided in the present. The standard analysis pertains to DSGE models under full information. We show, in contrast, that in a situation of structural disequilibrium and feedback information, all parties are better off reneging on the social compact to achieve a superior class of solutions
Regime-Changes in a Stock-Flow-Consistent Model
We explore the dynamical properties of the Godley-Lavoie model with a focus on Central Bank horizons. The stability properties of modes of regulation are traced from a regime of private bank money to the current crisis with the Central Bank levers of short-term bonds issue to the emerging policy regime of long-term bonds as built-in stabilizers
Subtleties in the Standoff
We reflect on the issues raised by the recent faceoff between the Reserve Bank of India (RBI) and the Indian government over the short-term interest rate. Our conclusion is that the policy space must be enlarged and the set of outcomes specified in order for meaningful dialogue to be conducted between the two entities
The Value Theory of Labor Based on Marginalist Principles
Our treatment of the theme is inspired by the formulation of Hiroshi Onishi. Professor
Onishi establishes the labor theory of value by deriving a proportionality between
labor power and output. We engage with the Professor's marginalist treatment and proceed
to the dialectical approach to Marx's theory of value. Accordingly, money is an integral
part of the subject.
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Accounting for Financialization: Stock-Flow-Consistent Political Economy
We adopt the Post Keynesian input-output framework pioneered by Wynne Godley to delve into both the causes and consequences of financialization. The distinction between National Income accounting and stock-flow-consistent modelling is showcased. Also, the political economy foundations of financial economics are unearthed. Constructively, the elements of a planned strategy to reinvent the accumulation of capital are sketched. Also, we show how âasset-based reserve requirementsâ and the issue of government bills and bonds can be âcreatively manipulatedâ by the state to deliver superior and stable social outcomes
Chapter 3 once more
We revisit the famous chapter in Keynesâ General Theory (GT) with the tools of modern microeconomics to 1. derive expressions for the elasticity of the supply curve, 2. define effective demand, 3. draw out Keynesâ comparative statics. The reconstruction is inspired by the inhouse to and fro preceding and following the publication of the classic, collated in The Collected Writings (CW)