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Supermultiplier Models, Demand Stagnation, and Monetary Policy: Inevitable March to the Lower Bound for Interest Rates? Review of Political Economy Pub Date : 2024-03-14 Steven Fazzari
This article integrates monetary policy into a very simple dynamic supermultiplier model with an accommodating supply side. Results show that monetary policy guided by a mainstream Taylor rule may ...
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Macroeconomic Aspects of Unemployment Benefits: Evaluating the Danish Policy Review of Political Economy Pub Date : 2024-03-14 Simon Thomsen, Hamid Raza, Mikael Byrialsen
This article provides an assessment of the Danish public policy of lowering unemployment benefits, adopted by the Danish government in the tax reform of 2012. To do so, we employ a stock-flow consi...
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The ECB’s Monetary Policy Review: A Post-Keynesian Twist? Review of Political Economy Pub Date : 2024-03-12 Carlo Klein
In 2021, the European Central Bank (ECB) decided to adjust its monetary policy strategy. Three major changes were initiated: the main objective was reformulated, but also the structure of the insti...
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Potential Output and Cyclically Adjusted Balance: An Application of the Updated Okun Method to Spain (1987–2022) Review of Political Economy Pub Date : 2024-03-12 Luis Cardenas, Paloma Villanueva, Juan Rafael Ruiz
The estimation of potential output is at the heart of the ongoing debate on the reformulation of fiscal rules in the European Union as it is an essential variable for their application. Spain const...
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No Rest for the Weary: Measuring the Changing Distribution of Retirement Wealth in the United States Review of Political Economy Pub Date : 2024-03-12 Teresa Ghilarducci, Siavash Radpour, Jessica Forden
Since 1992 wealth for the bottom 90 percent of households nearing retirement has fallen. The only source of wealth helping the bottom 90 percent is Social Security. Despite pro savings policies and...
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Economic Growth Driven by the Mexican Fourth Transformation Policy Review of Political Economy Pub Date : 2024-03-11 José María González Lara, Laura Policardo, Edgar J. Sanchez Carrera
The economic policy of the fourth transformation (4T) of Mexico - as the actual president Andrés Manuel López Obrador defines his mandate - is characterized by being cautious and responsible for pu...
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Debt and the Politics of Numbers: Hegemonic Numbers, Political Numbers, Ordinary Numbers Review of Political Economy Pub Date : 2024-03-08 Isabelle Guérin, G. Venkatasubramanian
Numbers are both shaped by and constitutive of a certain vision of the world, and household debt is no exception. Financialized capitalism relies on hegemonic numbers that serve the economic and po...
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The Nexus of Public Debt and Private Finance: Forging the International Monetary Order Review of Political Economy Pub Date : 2024-03-08 Ramaa Vasudevan
The contested alliance of state and finance embodied in public debt forms a nexus that has shaped the emergence of capitalism, and has also strengthened and transformed as capitalism developed. The...
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Dealing with Rising Inequality: Is the Fed Up for the Task, or Will Everyone Get Fed Up? Review of Political Economy Pub Date : 2024-03-08 Steven Pressman
Recently, considerable research effort has been devoted to studying the impact of monetary policy on inequality. This paper summarizes the literature on the causes of rising inequality and looks at...
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Kvangraven and Styve, ‘The Hierarchies of Global Finance’ Review of Political Economy Pub Date : 2024-03-08 Caroline E. Schuster
Published in Review of Political Economy (Ahead of Print, 2024)
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The Racial Wealth Gap in South Africa and the United States Review of Political Economy Pub Date : 2024-03-08 Grieve Chelwa, Mashekwa Maboshe, Darrick Hamilton
We present evidence on the Black–White Racial Wealth Gap in South Africa and compare it to the well-known patterns of the same gap in the United States. We find that the patterns in the overall rac...
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Beyond Full Employment: Keynes and Kalecki on our Economic Future Review of Political Economy Pub Date : 2024-02-26 David A. Spencer
This paper addresses the idea of creating an economy beyond full employment — namely one that offers some work for people to do but also more abundant leisure time. It argues that this idea has end...
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Public Development Banks as Essential Infrastructure: Covid, the KfW, and Public Purpose Review of Political Economy Pub Date : 2024-02-13 Thomas Marois
The sudden impact of the Covid-19 global pandemic threw societies into crisis, with their capacity to respond effectively dependent on existing public infrastructure. This article examines the case...
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The Political Economy of Exchange Rates and Export-Led Industrialization in South Korea* Review of Political Economy Pub Date : 2024-02-13 Tanadej Pete Vechsuruck
South Korea’s economic trajectory has been one of the most successful stories of post-war catch-up industrialization. The Korean developmental state has used various tools, including the exchange r...
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Revisiting MMT, Sovereign Currencies and the Eurozone: A Reply to Marc Lavoie Review of Political Economy Pub Date : 2024-02-09 Dirk H. Ehnts, L. Randall Wray
This paper responds to a presentation and paper published by Marc Lavoie that summarizes points of agreement and disagreement between Modern Money Theory (MMT) and Post Keynesians more generally. I...
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Consumption Emulation and Demand Regimes: An Inclusive Modeling Approach Review of Political Economy Pub Date : 2024-01-23 Jan Schulz, Daniel M. Mayerhoffer
Personal income distributions robustly follow a two-class structure, with an exponential bulk of labour income accruing to the lower 95 - 99 % population share and an upper Pareto tail of the 1 - 5...
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Fast and Curious: ‘The Swiss Development Puzzle’. The Institutional Roots of the Success of Industrialization Review of Political Economy Pub Date : 2024-01-18 Léo Charles, Guillaume Vallet
The article investigates the institutional roots of the Swiss organized capitalism that contributed to the success of its industrialization and its subsequent economic growth during the second indu...
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Monetary Policy and the Gender and Racial Employment Dynamics in Brazil Review of Political Economy Pub Date : 2024-01-16 Patricia Couto, Clara Brenck
Monetary policy has been historically concerned with controlling inflation, using the interest rate as its main tool. However, such policies are not gender- or race-neutral. This paper explores eco...
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Foreign Price Shocks and Inflation Targeting: Effects on Income and Inflation Inequality Review of Political Economy Pub Date : 2024-01-15 Lilian Rolim, Nathalie Marins
Foreign price shocks have significant effects on functional income distribution and on inflation inequality. By increasing prices in domestic currency that are linked to foreign prices, they increa...
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A Short Period Sraffa-Keynes Model for the Evaluation of Monetary Policy Review of Political Economy Pub Date : 2024-01-15 Peter Docherty
This paper develops a short period, one sector, Sraffa-Keynes model that can be used for the evaluation of various recommendations outlined in the Post Keynesian monetary policy literature. The mod...
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Conflictual Inflation and the Phillips Curve Review of Political Economy Pub Date : 2024-01-05 Marc Lavoie
This paper presents a pedagogical guide to conflictual inflation, showing the similarities and differences between the post-Keynesian analysis and the alternative mainstream WS-PS model. Among othe...
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The Longer, the Weaker? Considering the Role of Long-Term Unemployment in an ‘Original’ Phillips Curve Review of Political Economy Pub Date : 2023-12-22 Davide Romaniello
A recent explanation of hysteresis suggests that downward wage rigidity may be caused by long-term unemployment as individuals who are detached from the labor market are not good inflation fighters...
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Which Policies Against Inflation After Covid-19 and the War in Ukraine: The Italian Case Review of Political Economy Pub Date : 2023-12-22 Luigi Salvati, Pasquale Tridico
The aftermath of the pandemic crisis and the war in Ukraine have revived the debate on the causes and consequences of inflation, as well as the policies needed to combat its effects. Despite the ob...
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Too-Big-to-Fail Banking in Europe: An Enduring Challenge Review of Political Economy Pub Date : 2023-12-13 Stefanos Ioannou, Panagiotis Iliopoulos, Dariusz Wójcik
Is banking in the European Union still too-big-to-fail (TBTF)? We address this question by providing a critical overview of post-crisis banking regulation and examining whether financial markets co...
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Revisiting ‘Pricing and the Investment Decision’ Review of Political Economy Pub Date : 2023-12-12 Harry Bloch, Peter Kriesler
‘Pricing and the Investment Decision’, written with Peter Kenyon and published in Kyklos in 1976 contributes to post-Keynesian economics by analysing the determination of the mark-up of price over ...
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Monetary Policy and Income Distribution: The Post-Keynesian and Sraffian Perspectives Review of Political Economy Pub Date : 2023-12-12 Antonino Lofaro, Guillermo Matamoros, Louis-Philippe Rochon
This paper examines the post-Keynesian and Sraffian perspectives on the relationship between monetary policy and income distribution, highlighting their endogenous demand-led money approach and rej...
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Are Long Waves 50 Years? Reexamining Economic and Financial Long Wave Periodicities in Kondratieff and Schumpeter Review of Political Economy Pub Date : 2023-12-12 Jason Hecht
In 1925, the Russian economist, Nikolai D. Kondratieff first presented his identification and analysis of a ‘long wave’ cycle of approximately 50 years in twenty-five economic and financial time se...
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The Political Economy of Social Change and Nation-Building During the Progressive Era Review of Political Economy Pub Date : 2023-12-12 Rebeca Gomez Betancourt, Guillaume Vallet
Published in Review of Political Economy (Vol. 36, No. 1, 2024)
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Bernard Schmitt and the Dijon–Fribourg School of Monetary Circuit Analysis Review of Political Economy Pub Date : 2023-12-05 Alvaro Cencini, Sergio Rossi
This paper presents the origin and the history of the so-called Dijon–Fribourg School that Bernard Schmitt created in regard of monetary circuit analysis. The first section provides a short biograp...
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Overcoming Recession and Financial Instability in a Global Financialised Economy? The Contribution of the ‘Crank Heretic’ Robert Eisler Review of Political Economy Pub Date : 2023-11-27 Anne Löscher, Ferdindand Wenzlaff
Recurrent shocks — be it geopolitical instability, pandemics, financial crises or climate change and climate transition effects — pose difficulties to permanently ensure a prosperous economy. The w...
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Augusto Graziani on Italian Economic Development (1950–1970) Review of Political Economy Pub Date : 2023-11-21 Giorgio Colacchio, Guglielmo Forges Davanzati, Andrea Pacella
Italian economic thought between the 1960s and 1990s provided important scientific contributions and one of its most authoritative representatives was certainly Augusto Graziani (1933–2014). On the...
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Multipliers and Supermultipliers in a Multisectoral Framework: Macroeconomic Tools After All? Review of Political Economy Pub Date : 2023-11-07 Fabrício Pitombo Leite
The paper starts showing that the common mistake of considering Keynesian income and/or employment multipliers as sector-specific, in a multisectoral framework, is taking its way back into economic...
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Shadow Money in the History of Monetary Thought Review of Political Economy Pub Date : 2023-11-02 Steffen Murau, Tobias Pforr
Following the 2007–9 Global Financial Crisis, scholars have conceptualized the credit instruments that lay at its center as ‘shadow money’. As this perspective seems to contradict many established ...
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A Note on Capital in a Functional Analysis of the Traditional Banking Industry Review of Political Economy Pub Date : 2023-11-07 Riccardo Zolea
A functional analysis of the traditional banking industry is developed in this paper. Following a reflection on the possibility of conceiving a ‘banking production cycle’, its fundamental output is...
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Components of Autonomous Demand Growth and Financial Feedbacks: Implications for Growth Drivers and Growth Regime Analysis Review of Political Economy Pub Date : 2023-11-02 Ryan Woodgate, Eckhard Hein, Ricardo Summa
This paper presents a simple closed-economy model that is driven by the growth of two autonomous components of demand, namely government spending and rentiers’ consumption out of interest income. U...
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Globalization of Production and Absolute Advantage in a Classical Approach Review of Political Economy Pub Date : 2023-10-24 Pedro S. Machado
Trade in intermediate goods has grown in importance over the past decades. However, there is an apparent inability of trade theory to deal with it. A suitable place to look for an explanation is th...
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Geoff Harcourt and the Central Role of Values in Economics Review of Political Economy Pub Date : 2023-10-05 Sheila Dow
It is impossible to separate Geoff Harcourt’s economics from his moral values, both professed and practiced. His work exemplifies the view within the political economy approach that values are inev...
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Relational Inequality and Economic Outcomes: A Consideration of the Indian Experience Review of Political Economy Pub Date : 2023-10-05 Jayati Ghosh
The study of inequality by economists has largely focussed on distributive inequalities of various kinds. The focus on different dimensions of distributive inequality in access and outcomes is welc...
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Introduction to the Mini-Symposium on Lucas’s 1972 ‘Expectations and the Neutrality of Money’ in Historical Perspective Review of Political Economy Pub Date : 2023-09-19 Mauro Boianovsky
This is the general introduction to a mini-symposium on Lucas’ (1972) ‘Expectations and the neutrality of money’ in historical perspective. Upon discussing some of the main features of Lucas’ semin...
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Economy-Finance-Environment-Society Interconnections In a Stock-Flow Consistent Dynamic Model Review of Political Economy Pub Date : 2023-09-12 Emilio Carnevali, Matteo Deleidi, Riccardo Pariboni, Marco Veronese Passarella
ABSTRACT This work takes inspiration from four theoretical strands: recent developments in ecological macroeconomics; the Schumpeterian framework of evolutionary economics that emphasises the entrepreneurial role of the State; the stock-flow consistent approach to macroeconomic modelling; and the supermultiplier model. Building upon these approaches, we develop a formal model that reproduces key interactions
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Economics Imperialism and Economic Imperialism: Two Sides of the Same Coin Review of Political Economy Pub Date : 2023-09-11 Angela Ambrosino, Mario Cedrini, John B. Davis
ABSTRACT We argue that in a core–periphery economic world economics imperialism as advanced by the postwar Chicago School and economic imperialism led by the economies of the north are two sides of the same coin. We first review the parallelism between postwar capitalism’s core–periphery expansion of the north into the south and the Chicago theory of economics imperialism. We then distinguish four
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Political Aspects of Full Employment: Eight Decades On Review of Political Economy Pub Date : 2023-09-04 Malcolm Sawyer
The contribution and continuing relevance of Kalecki’s paper on ‘Political aspects of full employment’ on the 80th anniversary of its publication is the central topic. There are five sets of import...
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A Historical Review of the Role of Education: From Human Capital to Human Capabilities Review of Political Economy Pub Date : 2023-08-29 Silvia Leoni
ABSTRACT Human capital theory is the dominant theory of education in economics. Earlier writers such as Adam Smith, John Stuart Mill and Alfred Marshall highlighted a variety of roles for education, but human capital theory, which was formalised in the 1960s only examined labour-productivity improving skills. Other dimensions of education, which add complexity to the economic analysis of education
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The Role of Knowledge in Economic Life — From Bacon to Marshall Review of Political Economy Pub Date : 2023-08-22 Renee Prendergast
The paper seeks to uncover a long-submerged tradition that saw knowledge accumulation as the main driver of development. This vision was ubiquitous until the late 18th century when, with the advent...
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Moving Forward When There Are No Dollars: A Guide to Public Investment in Face of the Balance-of-Payments Constraint Review of Political Economy Pub Date : 2023-08-15 Basil Oberholzer
ABSTRACT The dominant approach of international organizations and financial institutions to development finance focuses on incentivizing and mobilizing private capital to achieve the international community's goals in terms of economic, social and environmental development while the public sector's financial capacity is supposedly restricted. Yet, this approach dismisses the nature of money as being
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Bread and Steel: Harcourt on the Economic Surplus, Employment and Distribution in Two-Sector Economies Review of Political Economy Pub Date : 2023-08-15 Mauro Boianovsky
ABSTRACT The present paper is set out to examine the place of Geoff Harcourt’s 1965 ‘Two-sector model of the distribution of income and the level of employment in the short run’ in his research agenda, as well as its original historical context and fate. That pioneer model articulated how the production of the potential economic surplus in the consumption goods sector, and its realization as actual
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Are Firm Markups Boosting Inflation? A Post-Keynesian Institutionalist Approach to Markup Inflation in Select Industrialized Countries Review of Political Economy Pub Date : 2023-08-14 Guillermo Matamoros
ABSTRACT Starting in 2021, the current inflation process has spurred plenty of discussion in academic and policy circles. This paper studies the relationship between firms’ markups and inflation during the 2021–22 inflation surge in several industrialized countries. It begins by explaining markup inflation and its critics in the context of the current debate over the sources of inflation. Then it reviews
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The Hierarchies of Global Finance: An Anti-Disciplinary Research Agenda Review of Political Economy Pub Date : 2023-08-14 Ingrid Harvold Kvangraven, Maria Dyveke Styve
ABSTRACT This article critically assesses the economics discipline’s capacity to capture the structural features and political economy implications of contemporary financial processes in the global South, with a particular focus on South Africa. Delving into the complexities of financial processes in South Africa, the article proposes an alternative, anti-disciplinary framework for understanding drivers
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The Ethics and Politics of Care: Reshaping Economic Thinking and Practice Review of Political Economy Pub Date : 2023-08-14 Wendy Harcourt
ABSTRACT As the Covid pandemic and unprecedented ecological change unsettle our lives, the growing public awareness of care is reshaping economic thinking and practice as we emerge from the pandemic but find ourselves in deepening social reproduction crises and the ongoing climate crisis. Feminist economists have long identified that unpaid care work forms the basis for social reproduction or the unseen
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Introduction to Post-Keynesian Economics: New Foundations by Marc Lavoie Review of Political Economy Pub Date : 2023-08-10 Sylvio Kappes, Louis-Philippe Rochon
Published in Review of Political Economy (Vol. 35, No. 4, 2023)
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A Functional Analysis of the Role of Deposits in the Traditional Banking Industry Review of Political Economy Pub Date : 2023-07-25 Riccardo Zolea
This paper proposes a functional analysis of the input of the traditional banking sector in an endogenous money framework. Although banks create bank money, central bank money (or reserves) cannot ...
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Post-Keynesian Economics: New Foundations by Marc LavoieChapter 8: Inflation Theory Review of Political Economy Pub Date : 2023-07-20 Julia Braga, Franklin Serrano
The conflicting claims approach to the theory of inflation so thoroughly surveyed and well presented in Chapter 8 of Lavoie's [(2022). Post-Keynesian Economics. New Foundations. Cheltenham, UK: Edw...
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Principles of Behavioral Economics: Bringing Together Old, New and Evolutionary Approaches Review of Political Economy Pub Date : 2023-07-11 Stavros A. Drakopoulos
Published in Review of Political Economy (Ahead of Print, 2023)
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Post-Keynesian Economics: New Foundations by Marc LavoieChapter 1: Essentials of Heterodox and Post-Keynesian Economics Review of Political Economy Pub Date : 2023-07-04 John King
Marc Lavoie’s very long (74-page), very stimulating and sometimes very provocative first chapter has the title ‘Essentials of heterodox and post-Keynesian economics’. It deals with an extremely bro...
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Post-Keynesian Economics: New Foundations, by Marc LavoieChapter 4: Credit, Money and Central Banks Review of Political Economy Pub Date : 2023-06-30 Sylvio Kappes, Louis-Philippe Rochon
This article focuses on an analysis of chapter 4 of Lavoie’s magnus opus, Post-Keynesian Economics: New Foundations. It is the opening chapter of the macroeconomic section of the book. As we argue,...
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Post-Keynesian Economics: New Foundations, by Marc LavoieChapter 5: Effective Demand and Employment Review of Political Economy Pub Date : 2023-06-28 Peter Kriesler
This article examines Chapter 5 ‘Effective Demand and Employment’ in Post-Keynesian Economics: New Foundations by Marc Lavoie. This chapter covers one of the most distinctive contributions of the p...
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Post-Keynesian Economics: New Foundations, by Marc LavoieChapter 7: Open Economy Macroeconomics Review of Political Economy Pub Date : 2023-06-28 Robert Guttmann
Reviewing Marc Lavoie’s comprehensive and well-structured discussion of open-economy macroeconomics allows us to revisit some key Post-Keynesian contributions and confirm their continued relevance ...
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Post-Keynesian Economics: New Foundations by Marc LavoieChapter 3: Theory of the firm Review of Political Economy Pub Date : 2023-06-20 Rosaria Rita Canale
This article represents a systematic presentation of the post-Keynesian alternative to mainstream economic theory. It places observation of reality at the centre of the investigation and derives — ...
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Gender, Feminist Pedagogy, and Economics Education Review of Political Economy Pub Date : 2023-06-13 Melanie G. Long
Published in Review of Political Economy (Vol. 35, No. 3, 2023)
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Demand-led Growth, Conflict Inflation and Distribution: Institutional and Sectoral Specificities and Applications to Advanced and Developing Economies Review of Political Economy Pub Date : 2023-06-13 Ricardo Summa, Lídia Brochier
ABSTRACT We introduce the symposium with papers presented at the 3rd Workshop on Demand-led Growth. It gathers six contributions on autonomous demand, capacity utilization, conflict inflation and income distribution. It advances the research of previous editions of the Workshop by going deeper into (i) institutional and sectoral features; (ii) the application of demand-led growth and conflict-claims