Arestis / Sawyer Frontiers of Heterodox Macroeconomics

1. Auflage 2019
ISBN: 978-3-030-23929-9
Verlag: Springer Nature Switzerland
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 396 Seiten

Reihe: Economics and Finance

In the past few decades, and intensified since the global financial crisis of August 2007, heterodox macroeconomics has developed apace and its scope has broadened in a number of directions. The purpose of this volume is to review the 'state of the art' in heterodox macroeconomics, its strengths and weaknesses and future directions. Heterodox macroeconomics has broadened its scope through gender macroeconomics, ecological macroeconomics and further incorporated income distribution and inequality into macroeconomics analysis. New macroeconomic models, particularly stock-flow consistent modelling has become a widely used mode of analysis. Money and finance, monetary policy and fiscal policy as well as other policies have been discussed widely. The focus of this edited collection is on all of these issues, with chapters focusing on inflation, ecological sustainability and regulatory policy.


Philip Arestis is Professor and Director of Research at the Cambridge Centre for Economics and Public Policy, Department of Land Economy, University of Cambridge, UK, and Professor at the Department of Applied Economics, University of the Basque Country, Spain. He is also Adjunct Professor, University of Utah, USA, and Research Associate, Levy Economics Institute, New York, USA.

Malcolm Sawyer is Emeritus Professor of Economics, Leeds University Business School, University of Leeds, UK. He has been the principal investigator for the European Union funded  (8 million euros) five year research project Financialisation, Economy, Society and Sustainable Development, involving 15 partner institutions across Europe and more widely.

Autoren/Hrsg.

Arestis, Philip

Sawyer, Malcolm

Inhaltsverzeichnis

1;Preface;6
2;Contents;8
3;Notes on Contributors;10
4;List of Figures;17
5;List of Tables;20
6;1 Critique of the New Consensus Macroeconomics and a Proposal for a More Keynesian Macroeconomic Model;22
6.1;1Introduction;22
6.2;2New Consensus Macroeconomics and Policy Implications;23
6.2.1;2.1The Open Economy NCM Model;23
6.2.2;2.2Economic Policy Implications of the NCM Model;27
6.2.3;2.3Assessing the New Consensus Macroeconomics;28
6.3;3Our Theoretical Macroeconomic Model;35
6.3.1;3.1The Model;35
6.3.2;3.2Economic Policies;45
6.3.2.1;3.2.1 Distributional Policies;46
6.3.2.2;3.2.2 Financial Stability Policies;49
6.4;4Summary and Conclusions;56
6.5;References;57
7;2 Approaching Budget Deficits, Debts and Money in a Socially Responsible Manner;66
7.1;1Introduction;66
7.2;2Money Creation and Budget Deficits;68
7.3;3‘People’s Quantitative Easing’;74
7.4;4The Tarnished ‘Golden Rule of Public Finance’;77
7.5;5What Should the Budget Position Be and How Should It Be Funded?;79
7.6;6Political and Social Obstacles to Full Employment Budget Deficit;87
7.7;7On Multipliers and Expansionary Austerity;89
7.8;8Structural Budgets;93
7.9;9On Interest Rates and Fiscal Policy;96
7.10;10Sustainability of Debt;97
7.11;11Fiscal Space;100
7.12;12Summary and Conclusions;101
7.13;References;104
8;3 Advances in the Post-Keynesian Analysis of Money and Finance;109
8.1;1Introduction;109
8.2;2Horizontalist Advances;111
8.2.1;2.1Endogenous Money and Interest Rate Targeting;111
8.2.2;2.2Reversed Causality and the Defensive Behaviour of the Central Bank;114
8.2.3;2.3Modern Money Theory (MMT) and the Relationship Between the Government and the Central Bank;116
8.2.4;2.4The Compensation Thesis and Foreign Exchange Reserves;119
8.3;3Unconventional Monetary Policies;121
8.3.1;3.1Quantitative Easing;121
8.3.2;3.2Other Alternative Monetary Policies;125
8.4;4Three Views of Banking;128
8.4.1;4.1The Two Mainstream Views;128
8.4.2;4.2The Post-Keynesian Credit Creation View of Banking;130
8.5;5Structuralist Advances;132
8.5.1;5.1Credit Creation Versus Liquidity Creation;132
8.5.2;5.2Shadow Banks and the Credit Boom;135
8.5.3;5.3Are There Limits to the Creation of Bank Credit?;139
8.5.4;5.4A Multiplicity of Interest Rates;142
8.6;6Summary and Conclusion;144
8.7;References;145
9;4 Why the Subprime Financial Crash Should Have Been Prevented and Implications for Current Macroeconomic and Regulatory Policy;150
9.1;1Introduction;150
9.2;2Securitisation and the Failure to Regulate Derivatives;152
9.2.1;2.1Early Warnings That Were Ignored;155
9.3;3The Collapse of Long-Term Capital Management: The Canary in the Mine;158
9.4;4The Forgotten Banking Crisis: The Savings and Loans Debacle, 1980–1989;163
9.4.1;4.1The Early Years of the S&Ls;164
9.4.2;4.2Reactions to the Immediate Crisis;166
9.4.3;4.3How Did Control Fraud, or Looting, Occur and How Widespread Was It?;168
9.5;5Fraud and Malfeasance in the Banking Industry;170
9.5.1;5.1Too Big to Jail and Moral Hazard;173
9.5.2;5.2The Case of HSBC and Fraud Post-2008: What Needs to Be Done?;175
9.6;6The Aftermath of the Subprime Crisis: The New Regulatory Environment;178
9.6.1;6.1The Dodd-Frank Act;178
9.6.2;6.2Stress Testing: How Effective Is It?;182
9.6.3;6.3Credit Default Swaps and the Dodd-Frank Act: A Phoenix Rising from the Ashes?;184
9.7;7Summary and Conclusions;185
9.8;References;186
10;5 Inflation: Failures of Inflation Targeting—A European Perspective;192
10.1;1Introduction;192
10.2;2Monetary Policy: Historical Settings and Macroeconomic Implications;195
10.2.1;2.1Framing the Historical Setting: When Inflation Got into the Centre of Macroeconomics Analysis;195
10.2.2;2.2Monetary Theory: Paving the Way for Inflation Targeting;199
10.2.3;2.3The Set-Up of Inflation Targeting;204
10.2.3.1;2.3.1 Prerequisites for Implementing Inflation Targeting and Additional Effects of the System;205
10.2.3.1.1;Central Bank Independence;206
10.2.3.1.2;Sound Financial System;207
10.2.3.1.3;Credibility of Monetary Policy;208
10.2.3.2;2.3.2 The ‘Action Plan’ of Inflation Targeting Within the New Consensus Framework;208
10.3;3Dead Ones Live Longer: Empirical Evidences and Challenges After the Financial Crisis;210
10.3.1;3.1Forms of Reshaping;213
10.3.1.1;3.1.1 Add-Ons to the System of Inflation Targeting;214
10.4;4Post-Keynesian Critique and Alternatives;214
10.4.1;4.1Reframing the Underlying Paradigm;215
10.4.2;4.2Institutional and Structural Set-Up;216
10.4.3;4.3Stepping Back from the Taylor Rule;220
10.5;5Inflation Targeting After the Global Financial Crisis: Are Low Interest Rates What the Post-Keynesian Approach Demanded?;222
10.5.1;5.1Asset Prices Developments: Housing and Its Immediate Effects for Redistribution;223
10.5.2;5.2How Sound Is the New Buffer Regime of the European Banking Union?;226
10.5.3;5.3Monetary Policy and Government Bonds;228
10.6;6Summary and Conclusions;230
10.7;Appendix;231
10.8;References;233
11;6 Stock-Flow Consistent Dynamic Models: Features, Limitations and Developments;241
11.1;1Introduction;241
11.2;2Origins of the SFC Approach;243
11.3;3SFC Models: Definition and Main Features;246
11.4;4SFC vs. DSGE Models: A Comparison;250
11.5;5Recent Developments in SFC Modelling;255
11.5.1;5.1E-SFC Models;256
11.5.2;5.2MC-SFC Models;257
11.5.3;5.3Eco-SFC Models;264
11.6;6An Eco-2C-SFC Model Prototype;272
11.7;7Concluding Remarks;280
11.8;Appendix: Eco-2C-SFC Model Equations;281
11.9;References;288
12;7 Fiscal Policy and Ecological Sustainability: A Post-Keynesian Perspective;295
12.1;1Introduction;295
12.2;2Which Are the Key Green Fiscal Policies?;297
12.3;3Modelling Green Fiscal Policies;299
12.4;4The DEFINE Model;309
12.5;5A Comparative Evaluation of Green Fiscal Policies;314
12.6;6Conclusions and Directions for Future Research;330
12.7;References;333
13;8 Secular Stagnation and Income Class Structure in Europe: Policy and Institutional Implications;341
13.1;1Introduction;341
13.2;2Understanding the Debate on Secular Stagnation and Its Links with Inequality;343
13.3;3Growth and Income Distribution: A Complex Relationship;350
13.4;4Income Class Structure in European Countries;355
13.5;5Levels of Economic Growth and Income Class Structure in European Countries;361
13.6;6Tackling Stagnant Growth and Inequality Simultaneously: Some Policy and Institutional Considerations;372
13.7;7Summary and Concluding Remarks;377
13.8;Appendix;378
13.9;References;382
14;Index;389