Price expectations, capital accumulation and employment: Lindahl's macroeconomics from the 1920s to the 1950s

Erik Lindahl's approach to macroeconomics focused on the non-neutralityof monetary policy (in the short and the long run) and on thedenial of the existence of natural rates of interest and unemployment.From the 1920s until his death in 1960, Lindahl advocated theuse of norms for monetary policy to fight inflation and deflationprecisely because he would not rely on the market system's returnto natural rates. Making use of hitherto unexplored material,this paper analyses the development of Lindahl's thinking aboutprice level changes, investment and employment from the 1920sto the 1950s.     

Has Devolution Injured American Workers? State and Federal Enforcement of Construction Safety

Although the issue of regulatory devolution has received muchscholarly scrutiny, rigorous empirical studies of its effectson important policy outcomes are scarce. This article exploresthe effects of partial regulatory devolution in the occupationalsafety arena by exploiting a unique historical anomaly wherebysome US states enforce protective labor regulations that areenforced elsewhere by the federal Occupational Safety and HealthAdministration. Analyzing data from the construction industry,this article contains several important findings. First, stateinspectors use traditional enforcement tools more sparinglythan their federal counterparts, typically citing fewer violationsand collecting lower fines per violation. Second, although federalenforcement significantly lowers the estimated frequency ofnonfatal construction injuries, it also predicts a significantincrease in occupational fatalities. I suggest that althoughhigher underreporting of nonfatal injuries in federally regulatedstates could explain this puzzling finding, it is equally possiblethat different regulatory styles have different "comparativeadvantages" in deterring nonfatal injuries on one hand and occupationalfatalities on the other. (JEL D73, D78, H73, I18, J08, J28,J88, K00, K23, K31, K32, L51, and L74)     

Does Partisan Heritage Matter? The Case of the Federal Reserve

Received evidence suggests that changes in appointer- and overseer-preferencesinfluence monetary policy (i.e., partisan heritage matters).Evidence presented here, on the other hand, is consistent withchanges in the cost of pursuing a common preference influencingpolicy. I draw this evidence from a panel of Federal Open MarketCommittee (FOMC) votes and find support for the following conclusions:(1) Federal Reserve Board (FRB) governors who were nominatedand confirmed by the same party (Republican or Democrat) prefersignificantly looser policy than do other FOMC members. (2)Monetary policy is significantly looser when either party controlsthe oversight mechanism (i.e., the presidency and Senate) thanwhen control is split. (3) Oversight acts less forcefully ondistrict bank presidents than on FRB governors. In short, thepresent evidence suggests that political agents from both partiesprefer loose money and pursue this preference more efficientlywhen their parties are aligned.     

Hollander, de Vivo and the 'further evidence' for the corn model interpretation of Ricardo: a conspiracy of silence?

This paper reconsiders the debate between de Vivo and Hollanderover the ‘further evidence’ in favour of Sraffa's‘corn model’ interpretation of Ricardo in the lightof Torrens's Letter to Lord Liverpool (1816). It is argued thatthe Letter provides unique evidence of the influence on Torrensof Ricardo's Essay on Profits (1815); and that, contrary tode Vivo, the evidence is not that of a ‘corn model’influence. It is further argued that the manner in which theLetter has been dealt with is unsatisfactory. The shortcomingsin Hollander's position are traced to peculiarities in his long-standinginterpretation of the early Ricardo.     

David Gawen Champernowne, 1912-2000: in appreciation

David Champernowne, who died in August 2000 aged 88, was notdirectly associated with the Cambridge Journal of Economics,but his major contributions belong to and serve to extend theapproach to economics which the journal wishes to preserve andadvance. This short obituary article records the journal's appreciationof his life and work.     

Institutionalism and Fiscal Policy at Midcentury

This article analyzes the career and contributions of Roy Blough (1901–2000) as a case study of Wisconsin institutionalism in government policy-making at midcentury. As a faculty member at Cincinnati, Chicago and Columbia, editor of the National Tax Journal, director of the research division of the U.S. Treasury and member of the Council of Economic Advisors, Blough played a significant role in the development of fiscal policy. The article also considers Blough’s contributions to tax policy and his views on Keynesian public finance. It further identifies the contributions of Wisconsin institutionalism to modern fiscal policy.     

Formal and Informal Labour Markets: Challenges and Policy in the Central and Eastern European New EU Members and Candidate Countries

The paper aims at comparing the formal and informal labour marketsin the Central and Eastern European new EU Member States andcandidate countries of the European Union. First, the currentsituation of the labour market is described, focusing on therecent developments since the breaking up of the East. Thenthe policy design of these labour markets is depicted and itseffects on formal and informal labour markets. The most importantchallenges for employment policy as well as the effects of enlargementon the labour markets are analysed. The paper ends with a shortsummary. (JEL J21, J23, H26, H11, O17, O57)     

Modern Perspectives on Fiscal Stabilization Policies

The present paper describes recent research on two central themesof Keynes' General Theory: (i) the social waste associated withrecessions, and (ii) the effectiveness of fiscal policy as astabilization tool. The paper also discusses some evidence onthe extent to which fiscal policy has been used as a stabilizingtool in industrial economies over the past two decades. (JELE32, E63)     

Analyzing the Interaction of Monetary and Fiscal Policy: Does Fiscal Policy Play a Valuable Role in Stabilisation?

This paper provides an overview of recent papers which use estimatedNew Keynesian models to study the extent to which fiscal policycan be used to stabilize the economy. We use a variety of differentNew Keynesian models, estimated on data for both the US andfor the Euro area, and highlight the diverse transmission channelsthrough which fiscal policy acts in these models. Although wefind that fiscal policy can provide a useful complement to monetarypolicy, especially in models where consumers have finite horizons,there are important limitations to the value added of fiscalpolicy. (JEL E58, E62, E63)     

The neglect of replacement investment in keynesian economics

Abstract

This article describes Keynes's early analysis of replacement investment and his subsequent neglect of the subject, especially by his followers. It goes on to explain how this deficiency helped to mislead later economists who attempted to use Keynes as a guide for economic policy and theory and the consequences of the errors of these economists.     

Sraffa's path to Production of Commodities by Means of Commodities. An interpretation

The present article provides a reconstruction of the path followedby Sraffa in the long journey (begun in the late 1920s) whichbrought him to his 1960 book. The starting point of Sraffa'sresearch was the formulation of his cost-price equations, whichsurprisingly enough appear to have been derived neither fromRicardo's theory of value, nor from Marx's ‘transformationof values into prices of production’, but rather fromMarx's reproduction schemes, published in volume II of Capital,to which Sraffa was almost certainly brought by his study ofMarx's interpretation of Physiocratic theory in volume I ofTheories of Surplus Value. The main device that Sraffa usedin his attempts to bring to light the existence of solutionsto his system and their properties, which basically meant buildinga consistent wage–profit–price relationship, wasthat of somehow cutting out the prices from this relationship.The paper shows that different routes were attempted by Sraffato achieve this end, and that the main influences on these attemptswere Ricardo and Marx, in particular Ricardo's corn-ratio theoryof profits, and the related conception of a maximum rate ofprofits. In the course of his research, Sraffa was helped bysome distinguished mathematicians, in particular Frank P. Ramseyand Abram S. Besicovitch. Of Ramsey's contribution there areimportant traces, but no more than traces, while ample recordsremain of the relationship between Sraffa and Besicovitch, andthey will play an important part in the story told in this paper.