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Economics

2010

Economics Department Working Paper Series

Articles 1 - 14 of 14

Full-Text Articles in Social and Behavioral Sciences

Does Productivity Respond To Exchange Rate Appreciations? A Theoretical And Empirical Investigation, Yao Tang Dec 2010

Does Productivity Respond To Exchange Rate Appreciations? A Theoretical And Empirical Investigation, Yao Tang

Economics Department Working Paper Series

Although real currency appreciations pose direct difficulties for exporters and import-competing firms as they will face more intense competition, is it possible that such competition spurs firms to improve productivity? To answer this question, the paper first constructs a theoretical model to show how the competitive pressures of currency appreciations induce firms to improve productivity by adopting new technologies. In addition, the model predicts that during appreciations there will be a positive relation between market concentration and improvements in productivity for industries highly exposed to trade, because the marginal benefits of productivity improvement will be bigger for firms with a …

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Relations Of Production And Modes Of Surplus Extraction In India, Amit Basole, Deepankar Basu Oct 2010

Relations Of Production And Modes Of Surplus Extraction In India, Amit Basole, Deepankar Basu

Economics Department Working Paper Series

This paper uses aggregate-level data, as well as case-studies, to trace out the evolution of some key structural features of the Indian economy, relating both to the agricultural and the informal industrial sector. These aggregate trends are used to infer: (a) the dominant relations of production under which the vast majority of the Indian working people labour, and (b) the predominant ways in which the surplus labour of the direct producers is appropriated by the dominant classes. This summary account is meant to inform and link up with on-going attempts at radically restructuring Indian society.

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The Exchange Rate, Diversification, And Distribution In A Modified Ricardian Model With A Continuum Of Goods, Arslan Ramzi Sep 2010

The Exchange Rate, Diversification, And Distribution In A Modified Ricardian Model With A Continuum Of Goods, Arslan Ramzi

Economics Department Working Paper Series

Several recent empirical and theoretical studies have revived interest in the relationship between the level of the exchange rate and economic development. This paper develops a dynamic model based on the Ricardian framework with a continuum of goods to consider the issue from a somewhat different perspective. In the short run, a devaluation can boost profits in spite of real wage rigidity. Moreover, the resulting diversification can offset the negative consequences for the trade balance of higher employment and profitability at home. Over the longer run, and in the presence of learning-by-accumulation, the initial boost to profits and investment induced …

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Exploitation And Profits: A General Axiomatic Approach In Convex Economies With Heterogeneous Agents, Roberto Veneziani, Naoki Yoshihara Sep 2010

Exploitation And Profits: A General Axiomatic Approach In Convex Economies With Heterogeneous Agents, Roberto Veneziani, Naoki Yoshihara

Economics Department Working Paper Series

This paper provides an innovative axiomatic analysis of the notion of exploitation as the unequal exchange of labour, focusing on the relation between exploitation and profits. General convex economies with heterogeneous agents endowed with unequal amounts of physical and human capital are considered. An axiomatic characterisation of the class of definitions that preserve the Fundamental Marxian Theorem (FMT) in this general context is derived. It is shown that none of the main received definitions preserves the FMT. Instead, a definition related to the `New Interpretation' (Dumenil, 1980; Foley, 1982) is presented which preserves the FMT and allows one to generalise …

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The Great Detour, Peter Skott Sep 2010

The Great Detour, Peter Skott

Economics Department Working Paper Series

This note comments on the state of macroeconomics, arguing that the ‘micro founded’ macro that developed after 1970s has been a wasteful detour. The paper will appear in a symposium in Homo Oeconomicus, vol. 27 (2), 2010, on the crisis and the response from the British Academy to the questions from the British Queen.

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Labor Productivity And The Law Of Decreasing Labor Content, Peter Flaschel, Reiner Franke, Roberto Veneziani Sep 2010

Labor Productivity And The Law Of Decreasing Labor Content, Peter Flaschel, Reiner Franke, Roberto Veneziani

Economics Department Working Paper Series

This paper analyzes labor productivity and the law of decreasing labor content (LDLC) originally formulated by Farjoun and Machover (1983). First, it is shown that the standard measures of labor productivity may be rather misleading, owing to their emphasis on monetary aggregates. Instead, the conventional classical-Marxian labor values provide the theoretically and empirically sound measures of labor productivity. The notion of labor content and the LDLC are therefore central in order to understand the dynamics of capitalist economies. Second, some rigorous theoretical relations between different forms of profit-driven technical change and productivity are derived in a general input-output framework with …

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An Empirical Evaluation Of Three Post Keynesian Models, Peter Skott, Ben Zipperer Sep 2010

An Empirical Evaluation Of Three Post Keynesian Models, Peter Skott, Ben Zipperer

Economics Department Working Paper Series

Structuralist and post Keynesian models differ in their assumptions about firms’ investment behavior and pricing/output decisions. This paper compares three benchmark models: Kaleckian, Robinsonian and Kaldorian. We analyze the implications of these models for the steady growth path and the cyclical properties of the economy, and evaluate the consistency of the theoretical predictions with empirical evidence for the US. Our regression results and the stylized cyclical pattern of key variables are consistent with the Kaldorian model. The Kaleckian investment function and the Robinsonian pricing behavior find no support in the data.

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Intergenerational Justice In The Hobbesian State Of Nature, Paola Manzini, Marco Mariotti, Roberto Veneziani Sep 2010

Intergenerational Justice In The Hobbesian State Of Nature, Paola Manzini, Marco Mariotti, Roberto Veneziani

Economics Department Working Paper Series

We analyse the issue of justice in the allocation of resources across generations. Our starting point is that if all generations have a claim to natural resources, then each generation should be entitled to exercise veto power on the unpalatable choices of the other generations. We analyse this situation as one of bargaining à la Rubinstein, Safra and Thomson [15], which incorporates a notion of justice as mutual advantage, rather than justice as impartiality, as in the Kantian-Rawlsian tradition. Our framework captures some key aspects of the interaction between isolated agents in a Hobbesian state of nature, in which agents …

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Labor Heterogeneity, Inequality And Institutional Change, Peter Skott Sep 2010

Labor Heterogeneity, Inequality And Institutional Change, Peter Skott

Economics Department Working Paper Series

US earnings inequality has increased dramatically since the 1970s, and the prospect of a reversal depends on what caused the trend. The standard explanation emphasizes skill-biased technical change. This paper briefly considers some aggregation issues and then proceeds to outline two alternative perspectives .power biased technical change and the effects of induced mismatch in the labor market .and their implications.

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A Classical-Marxian Model Of Education, Growth And Distribution, Amitava Krishna Dutt, Roberto Veneziani Sep 2010

A Classical-Marxian Model Of Education, Growth And Distribution, Amitava Krishna Dutt, Roberto Veneziani

Economics Department Working Paper Series

This paper develops a classical-Marxian macroeconomic model to examine the growth and distributional consequences of education. First, the role of education in skill formation is considered and it is shown that an expansion in education will promote growth and have beneficial distributional effects within the working class, but it will redistribute income from workers to capitalists. Second, the model is extended analyze the broader political economic consequences of education on class relations and class conflict. The model suggests the importance of a progressive type of education rather than one which weakens the power workers, for it allows for equitable growth …

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A Concise History Of Exchange Rate Regimes In Latin America, Roberto Frenkel, Martin Rapetti Jan 2010

A Concise History Of Exchange Rate Regimes In Latin America, Roberto Frenkel, Martin Rapetti

Economics Department Working Paper Series

The paper analyzes exchange rate regimes implemented by the major Latin American countries since the Second World War, with special attention on the period of the second globalization process beginning in the 1970s. The analysis follows a historical narrative aiming to provide an understanding of the domestic and external circumstances in which various regimes were adopted. A simple conceptual framework is developed in order to emphasize how the exchange rate regime may affect key nominal and real variables in a small open economy. After an overview of the main trends followed by the major countries in the region over the …

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Employment And Distribution Effects Of The Minimum Wage, Fabian Slonimczyk, Peter Skott Jan 2010

Employment And Distribution Effects Of The Minimum Wage, Fabian Slonimczyk, Peter Skott

Economics Department Working Paper Series

This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. Using an effciency wage model we show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers.

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Is There A Tendency For The Rate Of Profit To Fall? Econometric Evidence For The U.S. Economy, 1948-2007, Deepankar Basu, Panayiotis T. Manolakos Jan 2010

Is There A Tendency For The Rate Of Profit To Fall? Econometric Evidence For The U.S. Economy, 1948-2007, Deepankar Basu, Panayiotis T. Manolakos

Economics Department Working Paper Series

The law of the tendential fall in the rate of profit has been at the center of theoretical and empirical debates within Marxian political economy ever since the publication of Volume III of Capital. An important limitation of this literature is the absence of a comprehensive econometric analysis of the behaviour of the rate of profit. In this paper, we attempt to fill this lacuna in two ways. First, we investigate the time series properties of the profit rate series. The evidence suggests that the rate of profit behaves like a random walk and exhibits "long waves" interestingly correlated with …

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Cyclical Patterns Of Employment, Utilization And Profitability, Ben Zipperer, Peter Skott Jan 2010

Cyclical Patterns Of Employment, Utilization And Profitability, Ben Zipperer, Peter Skott

Economics Department Working Paper Series

The interaction between income distribution, accumulation, employment and the utilization of capital is central to macroeconomic models in the `heterodox' tradition. This paper examines the stylized pattern of these variables using US data for the period after 1948. We look at the trends and cycles in individual time series and examine the bivariate cycical patterns among the variables.

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