Engagement with the Mainstream in the Future of Post Keynesian Economics

This paper examines the reasons for the difficulties Post Keynesian economics has had in supplanting mainstream neoclassical theory and for its resulting marginalization. Three explanations are given: intellectual, sociological and political, where the latter two are largely responsible for the current relationship of Post Keynesian economics to the mainstream. The paper also reviews various strategies for improving the future of Post Keynesian economics, including a focus on methodological issues by maintaining an ‘open systems’ approach; a strategy of ‘embattled survival’; the development of a positive alternative to mainstream economics; a strategy of ‘constructive engagement’ with the mainstream; and a dialogue with policymakers. While the global financial crisis has increased the potential for constructive engagement with the mainstream, significant barriers remain to the effectiveness of this approach. The crisis has, however, enhanced the possibility of engaging directly with policymakers and gaining a greater role in management education.     

Making the Processes of Designing Explicit Within an Information Technology Environment

In this paper, technology is described as involving processes whereby resources are utilised to satisfy human needs or to take advantage of opportunities, to develop practical solutions to problems. This study, set within one type of technology context, information technology, investigated how, through a one semester undergraduate university course, elements of technological processes were made explicit to students. While it was acknowledged in the development and implementation of this course that students needed to learn technical skills, technological skills and knowledge, including design, were seen as vital also, to enable students to think about information technology from a perspective that was not confined and limited to `technology as hardware and software'. This paper describes how the course, set within a three year program of study, was aimed at helping students to develop their thinking and their knowledge about design processes in an explicit way. An interpretive research approach was used and data sources included a repertory grid `survey'; student interviews; video recordings of classroom interactions, audio recordings of lectures, observations of classroom interactions made by researchers; and artefacts which included students' journals and portfolios. The development of students' knowledge about design practices is discussed and reflections upon student knowledge development in conjunction with their learning experiences are made. Implications for ensuring explicitness of design practice within information technology contexts are presented, and the need to identify what constitutes design knowledge is argued.     

Does endogenous formation of jurisdictions lead to wealth-stratification?

Conditions under which endogenous processes of jurisdiction formation entail wealth-stratification are examined in a model where unequally wealthy households with identical preferences form jurisdictions in order to produce a public good financed by proportional taxation. We define a stable jurisdiction structure to be a partition of the households into jurisdictions that is immune to individual deviations. We define a jurisdiction structure to be wealth-stratified when each jurisdiction is composed of households who form an interval with respect to the ordering of their wealth. We show that a necessary and sufficient condition for the stratification of any stable jurisdiction structure is for the individual preferences for the public and the private good to exhibit a relation of gross substitutability/complementarity between the public good and the private good that is independent from prices and wealth.     

What do Thirteen Million Price Records have to Say about Consumer Price Rigidity?*

Based on the analysis of 13 million price records underlying the computation of the French consumer price index, we provide a detailed assessment of consumer price rigidity. Our main results are as follows. The average duration of prices is around 8 months. Price durations and the patterns of price‐setting strongly differ across sectors. Price cuts are almost as frequent as increases, suggesting no specific downward nominal rigidity. Price changes typically have large absolute sizes. Time variation in the frequency of price changes and in their size both contribute to inflation fluctuations. Overall there is evidence of both time‐ and state‐dependent price‐setting.     

The Impact of Profit Sharing on the Performance of Financial Services Firms*

abstract Relying on macro theories (agency and organizational control) as well as micro theories (goal setting and expectancy), this study investigates the impact of profit‐sharing plan (PSP) adoption on the value creation process of financial services firms. The study relies on a comprehensive methodological approach that is both quantitative, with a dual cross‐sectional/longitudinal (pre‐post) design that compares PSP adopters with a control group of PSP non‐adopter firms, and qualitative through interviews with some adopting firms’ managing directors. Results show that firms adopting a PSP enhance their profitability in comparison to both their own prior performance and to firms that are not adopting a PSP. Results also show that the adoption of a PSP: (a) positively influences only profit drivers that are under employee control; and (b) is more likely to have a long term, positive impact on external profit drivers than on internal profit drivers. Qualitative data from field interviews corroborate and enrich these quantitative findings.     

Momentum in Australian style portfolios: risk or inefficiency?

Momentum strategies have been reported to be successful across a range of different markets and asset classes. Three possible explanations for momentum have been hypothesised: risk, return continuation and excessive co‐movement of stock returns compared with dividends. Lewellen (2002) adds to this literature by providing evidence of strong momentum returns in style portfolios that can be explained by negative cross‐serial correlation, a result which supports the excess co‐movement hypothesis. We report robust evidence of style momentum in the Australian market and use the Jegadeesh and Titman (1995) return decomposition to show that this momentum strategy is predominately explained by positive autocorrelation. Our results support the return continuation hypothesis and confirm Chen and Hong's (2002) assertion that Lewellen's (2002) explanation of style momentum returns does not stand up out‐of‐sample.     

The Feller diffusion,filter rules and abnormal stock returns

We determine the conditional expected logarithmic (i.e. continuously compounded) return on a stock whose price evolves in terms of the Feller diffusion and then use it to demonstrate how one must know the exact probability density that describes a stock’s return before one can determine the correct way to calculate the abnormal returns that accrue on the stock. We show in particular that misspecification of the stochastic process which generates a stock’s price will lead to systematic biases in the abnormal returns calculated on the stock. We examine the implications this has for the proper conduct of empirical work and for the evaluation of stock and portfolio performance.     

Patinkin as a reader of Keynes’ General Theory: Are wage cuts a good remedy to unemployment?1

Abstract

This paper analyses Patinkin's appraisal of Keynes’ concept of involuntary unemployment while focusing on his reading of the General Theory Chapter 19. On several critical issues, Patinkin departs from Keynes’ original matters of concerns. He leans against an individual criterion for unemployment and implicitly endorses Wicksell's understanding of voluntary unemployment as chosen leisure. His appraisal of involuntary unemployment as a disequilibrium phenomenon ultimately relies on nominal rigidities and assumes the existence of a competitive adjustment process. On all these three critical points, Patinkin departs from Keynes but also initiates the contemporary New Keynesian programme that went even further from Keynes.     

Loving Diversity/Controlling Diversity: Exploring the Ambivalent Mobilization of Upper‐Middle‐Class Gentrifiers,South End,Boston

This article centers on a group of upper‐middle‐class gentrifiers living in a neighborhood in the South End of Boston, and their complex attitude towards diversity. I use data from my fieldwork in the South End, based on ethnographic observation and 77 interviews with residents active in local organizations, such as neighborhood associations. These residents explicitly stress their endorsement of diversity, in terms of class, race, but also sexual orientation, and their commitment to maintaining it. I examine the meaning they give to this principle, the actions they take in its name and the kind of relations they establish with those ‘others’ who embody such diversity. I argue that the gentrifiers' love of diversity, which cannot be reduced to sheer hypocrisy, is intrinsically linked to their capacity to control it, thus shedding light on the changing definition of social distinction in upper‐middle‐class culture.