Multilateralism and military Keynesianism: Completing the analysis

Kalecki’s analysis of military Keynesianism highlights the difficulties of managing aggregate demand in one country, without coordination with trading partners. Military Keynesianism is effective as a means of reflation because, unlike civilian public works, it induces similar expenditure by political rivals. In this way it overcomes some of the trade difficulties that arise if aggregate demand expands in only one country.     

Postmaterialism influencing total entrepreneurial activity across nations

The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The objective of this paper is to explore how postmaterialism may explain these differences. A distinction is made between nascent entrepreneurship, new business formation and a combination of the two, referred to as total entrepreneurial activity, as defined within the Global Entrepreneurship Monitor (GEM). The model is also tested for the rate of established businesses. The measure for postmaterialism is based upon Inglehart’s four-item postmaterialism index. A set of economic, demographic and social factors is included to investigate the independent role postmaterialism plays in predicting entrepreneurial activity levels. In particular, per capita income is used to control for economic effects. Education rates at both secondary and tertiary levels are used as demographic variables. Finally, life satisfaction is included to control for social effects. Data from 27 countries (GEM, World Values Survey and other sources) are used to test the hypotheses. Findings confirm the significance of postmaterialism in predicting total entrepreneurial activity and more particularly, new business formation rates.

Monetary policy before and after the euro: evidence from Greece

We model Greek monetary policy in the 1990s and use our findings to address two interrelated questions. First, how was monetary policy conducted in the 1990s so that the hitherto highest-inflation EU country managed to join the euro by 2001? Second, how compatible is the ECB monetary policy with Greek economic conditions? We find that Greek monetary policy in the 1990s was: (i) primarily determined by German/ECB interest rates, though still influenced by domestic fundamentals; (ii) involving non-linear output gap effects; (iii) subject to a deficit of credibility culminating in the 1998 devaluation. On the question of compatibility our findings depend on the value assumed for the equilibrium post-euro real interest rate and overall indicate both a reduction in the pre-euro risk premium and some degree of monetary policy incompatibility. Our analysis has policy implications for the new EU members and motivates further research on fast-growing EMU economies.     

Silvio Gesell: “A strange,unduly neglected” monetary theorist

Abstract

In recent years negative nominal interest rates came to the attention of a wider audience as one instrument to overcome the lower zero bound to conventional monetary policy. Modern proponents trace the origin of the proposal back to Silvio Gesell, a largely forgotten German autodidactic scholar of the interwar period, whose work provides valuable insight into heterodox late nineteenth- and twentieth-century economic thinking. Against this backdrop, the present article provides a comprehensive review of Gesell’s life and social economy, firmly linking him to German anarchism of the interwar period. It suggests that Gesell not only provided a monetary theory of interest, but put forward an independent monetary theory of economic crisis that is essential in understanding the historical origins of depreciative currency proposals. Moreover, the article maintains that Gesell’s monetary theory of interest can be seen as the missing link between heterodox economics, The General Theory, and anarchist economic theory.     

Keynes on State and Economic Development

ABSTRACT

This article has two purposes. On the one hand, it develops Keynes’s concept of economic development. On the other hand, it presents Keynes’s ideas about the role of State, chiefly the State Agenda. Keynes believed that the stage of economic development would only be attained if the State Agenda was in practice. In turn, to Keynes the economic development would be a stage in which the economic problems of society have been surpassed, and the motto of the individual behavior has been changed from the love of money to the love of living.     

Involuntary unemployment: the missing piece in Keynes's General Theory *

Using a retrospective methodology, my paper examines critically the insights on involuntary unemployment offered by Keynes in his General Theory. Keynes, it is argued, gave involuntary unemployment a modern micro-founded definition yet — quite opportunely, in view of the difficulty of the task—did not attempt to provide a direct microeconomic explanation of it Rather, his claim to the demonstration of its existence rests on an indirect argument, where involuntary unemployment emerges at the corollary of effective demand falling short of its full employment level. This justification is based on the more or less tacit assumption that involuntary unemployment and effective demand-deficiency are equivalent. This claim of equivalence, it will be argued, is wanting. Hence the view that involuntary unemployment may have been demonstrated through the proxy of demand-deficiency falls. My paper evaluates whether Keynes's other arguments in favour of involuntary unemployment are robust. Several alternative interpretations of his General TheoryChapter Two ‘fundamental observation’, focusing respectively on money illusion, adjustment flaws, and resistance to cuts in nominal wages, are discussed. Here also the verdict will be negative. The general conclusion then follows that no solid explanation for the existence of involuntary unemployment is to be found in theGeneral Theory.     

Foreign direct investment in OECD countries: a special focus in the case of Greece

Foreign Direct Investment (FDI) is considered as an important instrument for economic development all over the world. The aim of this paper is to examine the FDI inflows determinants for 24 OECD countries. To this end we employ annual data from 1980 to 2012 for a series of potential FDI determinants that have been identified as the most important by the relevant literature. Our empirical strategy employs both the standard fixed effects panel as well as a dynamic panel approach. The empirical findings highlight the importance of market size, trade openness, unit labor cost, schooling, taxation, gross capital formation, institutional variables, and ROA/ROE as significant FDI determinants. In the case of the dynamic panel model those FDI inflows determinants are not uniform for all country groups. Additionally, the results indicate that corporate tax rates clearly affect FDI attractiveness. This finding is robust when testing different countries subgroups. The present study has important policy implications indicating the factors that host economies should place emphasis on in order to attract FDI inflows. Policy makers should not only pay attention to the corporate tax rate level but they should also design a simple, stable and transparent taxation system that minimizes the relevant business risk.     

Cost estimation of neonatal intensive care in Greece: the case of Athens maternity hospitals

Summary

This study aimed to estimate the hospitalisation costs for neonatal intensive care and to investigate any discrepancies with reimbursement by the social funds in Greece.

The study was based on a prospective selection of neonates admitted to the intensive care unit of two hospitals within a 3-month period in 2004. Data were collected and classified with respect to birthweight and gestational age. Microcosting recording of data was used. A National Health System hospital perspective was applied.

The study sample consisted of 99 neonates with mean cost per infant reaching €5,845 in contrast to the €3,952 reimbursed by the social security funds, showing a discrepancy between actual and nominal costs. Cost per infant was found to have an inverse relationship both with birthweight and gestational age. Personnel costs accounted for 59.9% of all resources consumed followed by enteral/parenteral feeding for 16.1% and pharmaceuticals expenses for 11.1%. The remaining covers the costs of consumables, diagnostic test and overheads (12.9%).     

Continuity and change: Mapping the community of economists in Greece (1944 to 1967)

Abstract

This paper combines quantitative, biographical and qualitative data to trace out the structure and dynamics of Greece's post-war community of economists, and explore its implications for the country's economic discourse. Greek economics was a state-centred profession whose fate was intertwined with that of the post-war developmental state apparatus. Most economists were employed in universities, the civil service or banking, with substantial interpenetration between branches. This configuration of professional constituencies, in conjunction with the structural features of each institution, conditioned the form and content of economic discourse. Professional and ideological cohesion went hand in hand, whilst substantial degrees of vertical and horizontal control by senior members further fostered consensus and increased professional sclerosis. Nevertheless, evidence from a new database of economic journal publications suggests that a substantial realignment took place in the late 1950s and 1960s, as a younger generation of scholars – most of them educated in the post-war UK/US, and affiliated with the newly established Centre for Planning and Economic Research – entered the scene.     

Inside the Institution of Growthmanship: Reprising the Stagnation Hypothesis

Growthmanship — the once institutionalized legacy of the Keynesian revolution in the US — holds that rapid, sustained growth in GDP should be (and can be) the uppermost macroeconomic policy objective. Postulating the automaticity of market forces, the Chicago school’s ascendency in the early 1970s effectively marginalized growthmanship, while eliding stagnation and refocusing economics on vacuous, equilibrium-driven models. As a result, growthmanship was superseded by the institutionalization of wage stagnation as a macroeconomic policy objective. An institutionalist analysis of stagnation posits conditional and contingent conjunctures and denies the determinism underlying the conceptualization of permanent tendencies. I hypothesize the emergence of a social structure of redistribution based on the institutionalization of wage stagnation. Wage stagnation is a condition arising from the pursuit of neoliberal macroeconomic policies that are antithetical to full employment and wage growth.     

The Keynesian Features of Graziani's Monetary Theory of Production and Some Unresolved Issues

Abstract

The aim of this article is twofold. First, it seeks to verify the elements of affinity between Graziani's approach to the Monetary Theory of Production and Keynes’ Treatise on Money and his General Theory. It is shown that two important theoretical elements, from the Treatise on Money, enter Graziani's basic schema, namely the view of endogenous money supply and the distribution process. At the same time, uncertainty and aggregate demand—conceived as a crucial variable in the General Theory—can play a significant role in the basic schema of the Monetary Theory of Production. Second, the article sets out a critical reconstruction of Graziani's basic schema emphasising the existence of ‘open issues’– such as bank behaviour and the ‘paradox of profits’—relating to internal and external inconsistencies.     

Testing the dependency theory on small island economies: The case of Cyprus

This paper empirically tests the validity of dependency theory in the small island setting of Cyprus, to establish whether a periphery/patron relationship exists between each of the island's two economies and their respective mainland partners of Greece and Turkey. Using data for the 1978–2013 period, we first test for the necessary condition, i.e. whether there is a long-run cointegrating relationship in the economic development of the Republic of Cyprus (RC) and Greece, and the Turkish Republic of Northern Cyprus (TRNC) and Turkey. We then test for the sufficient condition, i.e. whether periphery-economy per capita income series to be weakly endogenous, while those of patron economies are weakly exogenous. Our results indicate strong dependency within the periphery/patron economy pairs of the RC/Greece and the TRNC/Turkey. Further, we show that economic growth in the periphery economies is largely driven by that of the patron economies. Using a Markov-switching vector autoregressive (MS-VAR) model of the short-run business cycle, we demonstrate that the RC/Greece and the TRNC/Turkey co-move in the short-run, and that business cycles with each pair are synchronized. The policy implications of these findings are then discussed.     

Cost estimation of patients admitted to the intensive care unit: a case study of the Teaching University Hospital of Thessaly

Objective: This study aimed to estimate the cost of patients admitted to the Intensive Care Unit (ICU) of the Teaching University Hospital of Thessaly (TUHT) in 2006 and to demonstrate discrepancies between actual hospitalisation cost and social funds’ reimbursement.

Methods: Cost analysis was performed using a macro-costing approach, which focused on the estimation of nominal and actual cost per ICU patient. Data were derived from the annual records of resources consumed in each hospital unit and from hospital balance sheets. Sensitivity analysis was also performed by inflating nominal costs to present values.

Results: There were 312 patients admitted to the ICU. Mean actual cost per ICU patient was estimated at €16,516, whereas actual reimbursement from social funds was only €1,671. This means that reimbursement accounted for just 10% of the actual hospitalisation cost. Once nominal costs were inflated to present values, the reimbursement accounted for 25% of the actual hospitalisation cost. The major cost drivers of ICU hospitalisation were personnel costs followed by infrastructure, hotel services and pharmaceutical expenditure. These results may be limited by a lack of consideration for clinical outcomes along with a high level of aggregation in cost data.

Conclusion: Reimbursement should be re-adjusted in order to balance public hospital deficits and make public-private mix viable. This way, intensive care capacity would increase and allow a more equitable distribution of healthcare resources.     

High pressure and black clouds: Keynes and the frequentist theory of probability

The thesis of this paper is that Keynes wrote A Treatise onProbability in opposition to the frequentist theory of probability,systematised by John Venn, which denied any role for probabilityin decision theory. Keynes was interested in finding an alternativeconception of probability that could be utilised as a guideof life. To analyse this point, the paper considers Keynes'scriticisms of frequentist tradition in the two versions of hisFellowship dissertation, and in the published edition of hisTreatise. Keynes's project is then illustrated with the famousexample of whether or not to go out with one's umbrella in thesituation in which the pressure is high and the clouds are black.     

Examining the consistency of spatial association patterns across socio-economic indicators: an application to the Greek regions

This paper addresses an important empirical question for spatial economics that has so far attracted little attention in the literature, namely, how patterns of spatial association differ across socio-economic indicators. This issue is examined here with a large socio-economic dataset from the Greek prefectures. We start by identifying spatial patterns of association in the data through an exploratory spatial data analysis and then explore the persistence of spatial clustering across socio-economic indicators through the application of a number of simple statistical tests. Greece presents an interesting case for examination, given its complex nature of geographical disparities and spatial heterogeneity. The derived results are important for Greek regional policy, as they help highlight yet another dimension of the challenges it faces for regional development, but they are also of particular relevance for applied spatial analysis, as they offer new insights in the analysis of spatial processes. Earlier versions of this paper have been presented in the 2005 RSAI (British and Irish Section) conference in Stratford-upon-Avon and the 2006 International Workshop on Spatial Econometrics and Statistics in Rome. I am thankful to participants in these two conferences for useful comments and suggestions. I have also benefited from comments by Andreas Antoniadis, Giuseppe Arbia, Badi Baltagi, Eckhard Bode, Yiannis Chorianopoulos, Bernard Fingelton, Ian Gordon, Stamatis Kalogirou, Yiannis Kaplanis, Yiannis Psycharis and two anonymous referees. All errors and omissions remain with the author.     

On the importance of institutions and forms of organisation in Piero Sraffa's economics: the case of business cycles,money, and economic policy

Abstract

This paper is based on an investigation of the Sraffa Archives and tries to characterise Piero Sraffa's approach to business cycles and economic policy. It includes two parts. The first part of the paper shows the importance of economic institutions and social conventions in Sraffa's contribution to economics and their relation with social conflicts. The second part of the paper shows how this importance permits to understand better business cycles and economic policy but also indirectly contributes to a re-interpretation of Sraffa's contribution to economics.     

中国宏观经济形势与政策:2002—2003年

我国在2002年继续实行积极的财政政策,并且适当强化稳健货币政策的扩张倾向。2002年我国GDP预计增长7.86%以上,将明显高于2001年,总体经济景气能够在2003年承续2002年扩张趋势,从而实现从经济萧条到经济繁荣的经济周期形态的转换。随着顺应经济全球化而加入WTO,我国经济发展模式将从二元经济结构转向三元经济结构。在市场化的经济体制支持下和均衡化的经济政策维护下,我国经济仍然能够保持相对快速增长。“十五”计划时期与“十一五”计划时期,我国实际GDP年均增长速度有可能接近8%。     

Habits of Thought and the Process of Economic Development: Remarks on Receiving the Veblen-Commons Award

Among the many insightful contributions of Thorstein Veblen and John R. Commons is that habits of thought matter. Habits of thought condition policy and place limits on what is possible. This article tackles five habits of thought that inhibit the process of economic development. These include: (i) the confusion of economic development with economic growth; (ii) the crowding-out hypothesis; (iii) the concept of the steady state economy; (iv) the peak oil hypothesis; and (v) the inevitability of economic progress. None of the discussions in this article are intended to minimize the importance of other very real constraints to the development process. A few of these other constraints are war, racism, sexism, political instability, corruption, and climate change.     

Finance and industry: the case of Greece

This article argues that the Greek banking system contributed to the emergence of a weak, uncompetitive, and ultimately highly inefficient industrial sector. This inefficiency is quantified with the help of translog cost-curve estimates for 68 firms in eight industries. The estimation shows that Greek firms operate at too small a scale, relative to their capacity, and do not exploit scale economies. It was the structure of the financial sector, as it operated within the specific political context, that led to processes that dampened competition and ultimately distorted the country's development. The financial sector's behaviour is conditioned by three structural facets: it is an oligopoly; it possesses an internal hierarchy which is fully vertical; and it is state-owned. That the financial process led to inefficiency is confirmed by examining the counterexample of efficient industrial configurations. In this case, efficient industries were able to deny the potentially harmful policies of the financial sector. In conclusion, the structure of the financial sector, and by extension the structure of the state itself, played an important role in the Greek economy.