Keynes On Markets

A bstract . The heart of modern economics is the study of "the market," eventually ensuing in the General Equilibrium model. J. M. Keynes ignored, this line of inquiry but from 1907, when he was at the India Office, to the 1940s, when he made proposals for the post-war reconstruction of the financial system , he often addressed himself to the functioning of markets. He is critical of many markets for promoting instability , and especially for embodying low values (greed, fears). It is suggested that Keynes' views on markets were shaped by his personal experiences as an investor; by his realistic, non-theoretical approach; by his anti-Benthamite values and by his sensitivity to the unemployment and "chaos" they often caused.     

Keynesian economics in the twenty-first century1

The Keynesian theory as set out by Keynes embodied an Achilles heel which he himself half understood but chose to ignore. It is also ignored by “post-Keynesians” and “New Keynesians”. The trouble is not in the labour market but in the goods market, where The General Theory, at least up to Chapter 19, definitely assumes perfect competition. But on that assumption the possibility of a Keynesian recession requires that employers behave with highly inconsistent expectations. Once, however, the assumption of perfect competition in the goods market is replaced by imperfect competition or oligopoly, the Keynesian theory re-emerges not only as robust, but also totally relevant to the 21st century.     

Locke's Contract: would People consent to It?

Abstract . Examination of Locke's theory political obligation suggests some of the difficulties which beset any consent theory. Stress is placed on the need for the state of nature as a real alternative to civil society, if Locke is to maintain that people have consented. It is shown that Locke has precluded a decision to remain in the state of nature and, therefore, people have not consented. This conclusion inspires a reconstruction of Locke's theory wherein people consent hypothetically: they would consent to legitimate government, if they had the opportunity to found government anew. What would they consent to? What are the criteria of legitimate government? The provisions of the Lockeian contract set out and found wanting People, as Locke sees them and living under conditions which he describes, would not consent to his contract.     

The Roles of Intellectual Pedigrees in Economic Science

Abstract . Intellectual pedigrees, reviews of the intellectual history of a theory, perform important functions in economic science. The discipline of economics is comprised of numerous, competing Paradigm-schools. Therefore, both ‘normal and ‘revolutionary’ science occur continuously in economics. In normal science, pedigrees place current work in the context of an on going research program, demonstrate the “significance” of that work, influence the process of theory appraisal, and aid in establishing Professional consensus. J. M. Keynes' use of pedigrees in his General Theory illustrates their revolutionary functions. During revolutionary science, pedigrees establish the identity, legitimacy, relevancy and authority of one school of economists and seek to persuade nonmembers to convert their allegiance to its disciplinary matrix.     

Reading Keynes' Treatise on Probability

A Treatise on Probability was published by John Maynard Keynes in 1921. The Treatise contains a critical assessment of the philosophical foundations of probability and of the statistical methodology at the time. We review the aspects of the book that are most related with statistics, avoiding uninteresting neophyte's forrays into philosophical issues. In particular, we examine the arguments provided by Keynes against the Bayesian approach, as well as the sketchy alternative of a return to Lexis' theory of analogies he proposes. Our conclusion is that the Treatise is a scholarly piece of work looking at past advances rather than producing directions for the future.     

Frank Knight on Preachers and Economic Policy: A 19th Century Liberal Anti Religionist, He Thought Religion Should Support the Status Quo

Abstract . A central feature of the work of American economist and social philosopher Frank H. Knight was his antagonism toward organized religion, particularly Christianity and especially Catholicism. Knight's antagonism towards the Church may be traced to his historical views on the Liberal Revolution and the opposition of the Church to critical inquiry and open discussion, and its support for despotic social institutions. Additionally, Knight's antagonism stemmed from his skepticism about the possibilities of effective social reforms based upon Christian moral principles. Knight found little in Christian teaching that would offer appropriate solutions—certainly not the “Gospel of Love” which he took as the core of Christian social teachings. Furthermore he was critical of the reform efforts of preachers because of their ignorance of the function of the free market and their propensity towards radical solutions. On the centennial of his birth, he is remembered as an ardent social critic and a liberal supporter of the status quo.

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W. H. Hutt (1899–1988): Free Markets and Social Justice

W.H. Hutt reaffirmed the principles of classical economics and classical liberalism and, by applying them to urgent issues he observed in the world around him, he demonstrated the contemporary relevance of freedom and competitive institutions. A wide‐ranging critique of Keynes was founded upon a classical analysis of the labour market, while his trenchant opposition to apartheid advanced along economic and political paths. Hutt questioned the justice of the accumulation of wealth from the exploitation of monopoly power over generations. In all of these respects there are affinities between Hutt's thought and that of ‘Bleeding Heart Libertarians’.     

The Speculative Demand for Money: An Alternative Approach

Abstract . The speculative demand for money has occupied an important role in Keynes’ General Theory. Since then it has received only sporadic attention. The lack of sustained interest among specialists in monetary theory is largely due to the fact that the theory, in its original form, has usually failed to survive the empirical tests. In this paper, an attempt is made to estimate the speculative demand for money using the general framework of the “Efficient Markets Theory.” The study uses the United States seasonally adjusted monthly data for the period 1952-72. The results strongly indicate the existence of the speculative demand for money.     

How to understand, and deal with dictatorship: an economist's view

This paper explains in simple English some of the main ideas about autocracy first developed elsewhere (e.g., in my book, The Political Economy of Dictatorship (Cambridge University Press, 1998). I use rational choice theory to explain the behavior of dictatorships and develop policy toward them. Issues discussed in this paper include: How do successful regimes stay in power? What determines the repressiveness of a regime? Which type of regime redistributes more, dictatorship or democracy? Can dictatorships be good for economic growth and efficiency? The starting point of my analysis is The Dictator's Dilemma-the insecurity every dictator necessarily experiences about how much support he really has. Because of this, the dictator finds that the tool of repression is not enough to maintain his regime, and successful dictators typically rule with the loyal support of at least some groups of subjects (while repressing others). The levels of repression and support and the nature of the groups that give their support (labor, business, ethnic group, etc.) determine the character of the dictatorship. Among other results discussed, I show that some types of dictators – tinpots and timocrats – respond to an improvement in economic performance by lowering repression, while others – totalitarians and tyrants – respond by raising it. Finally I discuss optimal policy by the democracies toward dictatorships and I show that a single standard-aid or trade with a progressively tightening human rights constraint- is desirable if aid or trade with dictatorships of any type is to lower, not raise, repression. Submitted: February 1999 / Accepted: 10 November 1999     

ARTHUR SELDON: GREAT EDITOR, THINKER AND RADICAL ECONOMIST

Arthur Seldon, the founder editor of Economic Affairs and first Editorial Director of the IEA, died in October 2005, a few weeks before the 25th anniversary issue went to press. Many tributes have been paid to Arthur Seldon in obituaries in The Economist and the major national newspapers. In this special section of Economic Affairs we reproduce four of the speeches given at his memorial service on 15 January 2006. Respectively, they illustrate the fond affection for Arthur Seldon felt by Ralph Harris, the founder General Director of the IEA; Stuart Waterhouse, a fellow LSE student; Martin Anderson, who worked with Arthur Seldon editing Economic Affairs; and Geoffrey Howe, former Chancellor of the Exchequer. Three members of Arthur Seldon's family also spoke at the memorial service. Their talks concentrated on Arthur Seldon's family life, but the following more general thoughts particularly resonated with all present. His adopted son, Michael Perrott, commented that he was ‘a lion amongst thinkers, timeless and uncompromising’. Peter Seldon spoke of his father as ‘a visionary’ and ‘a genius’; he concluded, ‘we are all unique but the word could have been invented for Arthur’. Peter's brother Anthony Seldon commented that ‘he [Arthur] lives on in all of us’. – Philip Booth     

飞利浦“千日维新”

一家百年巨头在中国市场的"浩大实验":孔祥辉如何让飞利浦大中华区与全球战略"求同存异"?2012年2月,飞利浦全球700余高管将云集美国奥兰多市。届时,飞利浦大中华区CEO孔祥辉将代表中国市场,做题为《China Model》(中国模式)的演讲。     

STOCK‐FLOW INTERACTIONS,DISEQUILIBRIUM MACROECONOMICS AND THE ROLE OF ECONOMIC POLICY

This paper presents the ‘KMGT’ (Keynes–Metzler–Goodwin–Tobin) portfolio model and studies its stability properties. The approach to macrodynamic modelling taken here extends the KMG model of Chiarella and Flaschel (2000) , focusing in particular on the incorporation of financial markets and policy issues. The original KMG model considered three asset markets (equities, bonds and money) but depicted them in a rudimentary way so that they had little influence on the real side of the model. The only financial market influencing the real side of the economy was the money market (via an LM curve theory of interest). Here Tobin's portfolio choice theory models the demand for each asset in such a way that the total amount of assets that households want to hold equals their net wealth, which is a stock constraint attached to portfolio choice. There is also a flow constraint, that the net amount of assets accumulated (liabilities issued) by one sector must equal its net savings (expenditures). The Tobinian macroeconomic portfolio approach characterizes the potential for financial market instability, focusing on the interconnectedness of all three markets. The paper goes on to study the potential for labour market and fiscal policies to stabilize unstable macroeconomies.     

Evaluating PcGets and RETINA as Automatic Model Selection Algorithms*

The paper describes two automatic model selection algorithms, RETINA and PcGets, briefly discussing how the algorithms work and what their performance claims are. RETINA's Matlab implementation of the code is explained, then the program is compared with PcGets on the data in Perez‐Amaral, Gallo and White (2005 , Econometric Theory, Vol. 21, pp. 262–277), ‘A Comparison of Complementary Automatic Modelling Methods: RETINA and PcGets’, and Hoover and Perez (1999 , Econometrics Journal, Vol. 2, pp. 167–191), ‘Data Mining Reconsidered: Encompassing and the General‐to‐specific Approach to Specification Search’. Monte Carlo simulation results assess the null and non‐null rejection frequencies of the RETINA and PcGets model selection algorithms in the presence of nonlinear functions.     

Henry George and the Contemporary Debate over Industrial Protectionism

Abstract . The central question of Henry George's 1886 book. Protection or Free Trade, commemorated now after a century, was: do protectionist policies help or hinder the working man Have George's concerns in 1886 since become outdated or anachronistic? If not, what are some historic trends toward protectionism since that time? Some of the formal arguments for and against protectionism are examined. George contended that protectionism threatens labor unions and reduces workers’wages. An apparent counterexample is provided by the International Ladies’Garment Workers’Union, which now actively lobbies for protectionist legislation. Its arguments have merit when protectionism is viewed instrumentally, but one must recognize that there are substantive objections to protectionism as a comprehensive national policy. George linked protectionism to paternalism; his theory of economic value as well as his model of the rational economic man are derived from basic democratic principles which stand at sharp odds with the implicit paternalism of tariff policies.     

三代木头人的不老歌

木玩世家的繁衍,是精神和工艺的代代相传,正像那座"盖不完的庙""你有能力就当总经理,没能力的话就在边上当当股东算了。"何彬和父亲何尚清的回忆在这句话上重合了。2003年,25岁的何彬接了班,这时距父亲创立和信玩具有限公司已有12年。温州永强机场出来,坐去丽水的中巴,两小时后再转乘出租车,40分钟左右便可驶入云和县城。如果你跟我一样感兴趣于这个"中国木制玩具城"的商业家族,行业领路人何寿祯老先生是绕不过去的传奇。     

Legacy fundraising: a practical guide to the basics

• Remember a Charity, the public awareness campaign run by over 130 charities in the UK, has stated that donations in wills are the largest single source of voluntary income for charities—currently worth £1.3 billion per year (April 2005).
• So can legacies to charity still be described as just windfall money? Should charities spend precious funds on promoting legacy giving when it is difficult to monitor results? It so, what is the message? Who are the target audiences? What form should legacy promotional literature take? What part could or should solicitors and funeral directors play in legacy campaigns? Patrick Wise looks back on his twenty plus years of experience in the world of charitable legacies, and gives his views on the answers to these questions, and why he thinks all charities should take legacy promotion very seriously.

Copyright © 2005 John Wiley & Sons, Ltd.     

LIBERTY BETWEEN THE LINES IN A STATIST AND MODERNIST AGE: UNFOLDING THE ADAM SMITH IN FRIEDRICH HAYEK

This article interprets F. A. Hayek as having been constrained by the statism and modernism of his times, and as writing in a way that obscured some of his central ideas. I suggest that between the lines we can see a focus on liberty understood hardily as others not messing with one's stuff– even though Hayek in The Constitution of Liberty defined liberty in ways that tended to obscure this hardy definition, and Hayek often used code words like ‘competition,’‘the market,’ and ‘spontaneous’ where ‘liberty’ or ‘freedom’ would have been plainer, albeit more offensive to the culture. Seeing the hardy definition of liberty between the lines in Hayek enables us to see his focus on the liberty principle and his case for a presumption of liberty. Such a reading of Hayek, I suggest, is true to Adam Smith, who expounded a central message that by and large the liberty principle holds, and that it deserves the presumption in our culture and politics.     

‘Free actors’ and organizations: critical remarks about the new career literature,based on French insights

What is the reality of contemporary careers? Have individuals become masters of their professional destiny? While the ‘new career literature’ puts forward the figure of an individual free to invent his/her career (the ‘free actor model’), this article shows that the changes purported to affect careers are less radical than they seem. Despite a weakening of environments, discriminating career mechanisms are still imposed on cadres, at least in France. Because individuals do not always have the means or the will to escape those mechanisms, ‘external clues’ continue to mark careers more than the new career literature supposes. To account for the realities observed in France, this paper proposes a specific view on careers, which highlights why career rules still exist in the country.     

双雄早衰

什么力量,让新能源变老？两家迅猛崛起的明星公司,缘何以同样的速度坠入深渊？政府主导式的创新,能从这场代价昂贵的游戏中学到什么？     

How Analysts Process Information: Technical and Financial Disclosures in the Microprocessor Industry

Abstract

Following Bradshaw (‘Analyst information processing, financial regulation, and academic research’ [2009], and Analysts' forecasts: What do we know after decades of work? [2011]), this paper examines how analysts process information, particularly in an information environment characterised by multiple and potentially complementary information sources. The setting is the microprocessor industry, one in which technical information is particularly significant and complex to digest. Based on 3837 analyst earnings-forecast revisions, issued by 134 analysts, we examine quantitatively the speed, magnitude, and information content of the reactions of individual analysts and subgroups of analysts to both periodic and timely technical disclosures, and as a complement to periodic financial disclosure. We find that analysts are much slower to react to timely technical disclosures than they are to periodic financial disclosures. We find also that technical and financial disclosures complement each other. Furthermore, we find that there is a ‘hierarchy’ of analysts in this particular industry, as evidenced through the strength of reaction to timely technical disclosures. Finally, we find that lower speed in reacting to timely technical disclosures and a higher intensity in the use of timely technical disclosure (in conjunction with periodic financial disclosure) result in greater accuracy, and that more experienced analysts tend to be less accurate. We suggest that the findings may have implications for other industries such as Bio-Tech Pharma.