Interest rates,distribution and capital accumulation – A post-Kaleckian perspective on the US and Germany

We analyse the effects of interest rate variations on the rates of capacity utilisation, capital accumulation and profit in a simple post-Kaleckian distribution and growth model. This model gives rise to different potential accumulation regimes depending on the values of the parameters in the investment, saving and distribution function. Estimating these core behavioural equations for the US and Germany in the period 1960–2007, we find significant and robust effects of interest payments with the expected sign in each of the equations. Our estimation results imply, both for the US and for Germany, that the effects of changes in the real long-term rate of interest on the equilibrium rates of capacity utilisation, capital accumulation and profits, are characterised by the ‘normal regime’: rising long-term real rates of interest cause falling rates of capacity utilisation, capital accumulation and profits, as well as redistribution at the expense of labour income and hence an increasing profit share in both countries.     

Author Index Volume 24 2003

Authors Index

Author Index Volume 24 2003     

Deficiencies of orthodox foreign trade theory with regard to employment

The orthodox theory of foreign trade, which is simply a theory of re-allocation, can scarcely do justice to the issues that arise in the context of North-South relations. Its isolation from the problems of world and regional economic development, different trade flows and the transfer of production factors reduces its relevance to employment.     

Regionalisation versus regionalism— Problems of change in the world economy

The distinct trends towards regionalisation in the world economy that could be observed in recent years should not be interpreted merely as the formation of economic blocs or “fortresses”. This would amount to adopting a biased, backward-looking approach that sees only the sombre experiences of the thirties and forties and does not take sufficient account of the different challenges of the post-war period.     

Information Systems for “Wicked Problems”

The objective of this commentary is to propose fruitful research directions built upon the reciprocal interplay of social media and collective intelligence. We focus on “wicked problems” – a class of problems that Introne et al. (Künstl. Intell. 27:45–52, 2013) call “problems for which no single computational formulation of the problem is sufficient, for which different stakeholders do not even agree on what the problem really is, and for which there are no right or wrong answers, only answers that are better or worse from different points of view”. We argue that information systems research in particular can aid in designing appropriate systems due to benefits derived from the combined perspectives of both social media and collective intelligence. We document the relevance and timeliness of social media and collective intelligence for business and information systems engineering, pinpoint needed functionality of information systems for wicked problems, describe related research challenges, highlight prospective suitable methods to tackle those challenges, and review examples of initial results.     

A Critical Review of the Rationale Approach to the Microfoundation of Post-Keynesian Theory

While modeling macroeconomic interactions, post-Keynesians propose rationales to verbally motivate the choice of behavioral equations. This informal approach to microfoundation results in inconsistencies and fuzzy arguments. The rationales for different behavioral rules are mutually inconsistent, require strong and nontransparent assumptions, or refer to highly endogenous variables that are not part of the model. The postulated behavioral rules are invariant to endogenous changes in the microenvironment, whereas the rationales imply that they adjust endogenously. The prevailing assumption of purely backward-looking expectations is neither theoretically nor empirically satisfying. The article concludes that revisiting the issue of microfoundation within the post-Keynesian framework may be a rewarding line of research. Furthermore, post-Keynesians should be open to various microfoundations as long as models feature the core of post-Keynesian theory—the principle of effective demand.