...What is the role of the reserve army of labor Marx? How would you gauge Marx's approach in relation to the theories of effective demand developed by Kalecki and Keynes? Throughout economic theory, there are various responses to the creation and subsequent role of unemployment and the wage rate. In Karl Marx’s theory, unemployment, or the ‘reserve army of labour’, is necessary for capitalism to regenerate itself, and is also what determines the wage rate. For John Maynard Keynes and Michael Kalecki, unemployment is caused by the failure of effective demand. This essay will first demonstrate Marx’s approach to employment through the study of the reserve army of labour and the cyclical tendencies of the capitalist system, and then Keynes and Kalecki’s theories of effective demand which led to the proposition that the economy ‘will not settle at full employment equilibrium; by and large it will not even reach it except by chance’ (Halevi, 2007, week 7, p. 8). For Marx, unemployment, or the reserve army of labour, is a ‘necessary requirement for capital accumulation’ (Halevi, 2007, week 4, p. 2), linked to fluctuations in the wage rate and thus the rate of profit. The existence of a large reserve army of labour keeps wages down, because there are many unemployed workers available and willing to work for little money. Like the classical economists, Marx contends that low wages mean capitalists reduce their costs of production, resulting in a higher rate of profit and...
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...Post-Keynesian Economics Post-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson. Keynes' biographer Lord Skidelsky writes that the post-Keynesian school has remained closest to the spirit of Keynes' work, particularly in his monetary theory and in rejecting the neutrality of money. Introduction Post-Keynesian economists maintain that Keynes' theory was seriously misrepresented by the two other principle Keynesian schools: neo-Keynesian economics which was orthodox in the 1950s and 60s - and by New Keynesian economics, which together with various strands of neoclassical economics has been dominant in mainstream macroeconomics since the 1980s. Post-Keynesian economics can be seen as an attempt to rebuild economic theory in the light of Keynes's ideas and insights. However even in the early years in the late 1940s post-Keynesians such as Joan Robinson sought to distance themselves from Keynes himself, as well as from the then emergent neo-Keynesianism. Some post-Keynesians took an even more progressive view than Keynes with greater emphases on worker friendly policies and re-distribution. Robinson, Paul Davidson and Hyman Minsky were notable for emphasising the effects on the economy of the practical differences between different types of investments in contrast to Keynes more abstract...
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...policy makers sought a structural solution. Neo-liberal policies, with theoretical origins in individual utility maximization (Mill and Bentham) and Adam Smith’s Laissez-Faire optimality imply a reduced role of government in reliance on the free market to provide the most efficient outcome. Development of a neo-liberal state would then encompass privatization of Government owned enterprises, deregulation of financial markets and redistribution of income from the poor to the rich in attempt to boost private investment and job creation through the trickle-down effect. A Marxist view of neo-liberalism would hold that it is merely a justification for increasing profits and a class struggle between workers and capitalists will always exist. Kalecki holds that the long boom ended due to the profit squeeze created by improved bargaining positions of workers as a result of Keynesian high growth policies. Dollar and Kraay argue that “the current wave of globalization has actually promoted economic...
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...followed. It is not the budget that Finance minister may present. In scenario IV, alternative budget proposal has been detailed out with a real fiscal correction. It has been assumed that the policies are in place for five years. The scenario III is the first year of transition. Changes in taxation both direct and indirect have been done to raise revenue. Expenditures for various sectors have been estimated and the overall impact on the economy has been explained. A comparison between the revised estimates of 1993-94 and alternative budget 1994-95 (Scenario IV) has been done. Finally, the critique has been given with the responses to the critique by Arun Kumar. THEORETICAL BACKGROUND Financing of economic development through taxation- Kalecki Assumptions: There are two classes in society: capitalists and workers Workers do not save. Consumption is equal to their income. Therefore total savings is equal to the saving out of the profit of the capitalists. Economy is divided into two sectors: Department I, Investment goods and department II the consumption goods. The value of production of each sector will be split...
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...THE ENDLESS CRISIS REPORT Introduction The Endless Crisis was written by John Bellamy Foster, the editor of Monthly Review and professor of sociology at the University of Oregon collaborating with Robert W. McChesney. The article came originally from the introduction of the book called The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China. The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding. Different views on the Stagnation In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential growth...
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...Definición Keynesiano. Teoría económica basada en las ideas. Corriente de pensadores que siguieron el pensamiento de John M. Keynes. El modelo Keynesiano se basó en la consideración de la renta nacional como dependiente de la demanda efectiva. En consecuencia, el ingreso pasaba a depender de los componentes de dicha demanda. A su vez, el primero estaba determinado por la renta personal que se destina al mismo, mientras que la segunda estaba influenciada por la propensión a invertir, el multiplicador de la inversión y la relación entre la eficiencia marginal del capital y el tipo de interés. El tipo de interés toma su valor de equilibrio entre la preferencia por la liquidez y la cantidad de dinero en circulación. Cuanta más alta fuera la diferencia entre la eficiencia marginal del capital y el tipo de interés, mayor será la propensión a invertir. De este modelo se desprendía pues, como medidas para la disminución del paro permanente involuntario, la adopción de una serie de políticas económicas intervencionistas, lo que provocaría un descenso del tipo de interés, aumento en el gasto publico especialmente en inversión en infraestructuras, con el fin de potenciar la demanda efectiva, una activa redistribución de la renta y, por último, una política comercial proteccionista, para defender los empleos de las industrias nacionales. Algunas características de esta corriente pueden resumirse de la siguiente manera. Características. • Es una teoría macroeconómica. • Su teoría es...
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...The Review of Economic Studies Ltd. Alternative Theories of Distribution Author(s): Nicholas Kaldor Source: The Review of Economic Studies, Vol. 23, No. 2 (1955 - 1956), pp. 83-100 Published by: The Review of Economic Studies Ltd. Stable URL: http://www.jstor.org/stable/2296292 Accessed: 22/03/2010 10:03 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=resl. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. The Review of Economic Studies Ltd. is collaborating with JSTOR to digitize, preserve...
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...7/7/2014 Evernote Export Modern Welfare Criteria Created: 5/22/2012 9:12 PM General Equilibrium and Perfect Competition General Equilibrium of Exchange and Consumption 1. We assume that there is no production and the economy is a pure exchange economy. There are 2 individuals and 2 goods, who will exhaust the goods together. Naturally they will consume until (MRS x,y )A = (MRS x,y )B. But we don't know beforehand what will be the exact equilibrium. But if we know the initial distribution, we can define the boundary within which the equilibrium solution will lie. 2. Thus the initial distribution of goods and their relative bargaining strengths will determine the equilibrium position. This general equilibrium determines not only the final distribution of goods but also the rates of exchange or relative prices. Note that however, we can't determine absolute prices from here, we can only determine relative prices. Show that in PC, General Equilibrium can exist 1. This ca be shown using the fact that under PC, relative prices which A is facing will be same as relative prices which B is facing and hence MRS x,y for both will be same. General Equilibrium of Production 1. We assume that all labor is homogenous, receives equal wages, total quantity of each factor (L and K) is fixed, the production function is continuous and twice differentiable and the technology is given which together with factor endowments limits the production possibilities. Naturally the equilibrium condition...
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...BUSINESS CIRCLE THEORY INTRODUCTION. The term business cycle (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade and economic activity in general over several months or years in an economy organized on free-enterprise principles. The business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around its long-term growth trend. These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and periods of relative stagnation or decline (a contraction or recession).Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable. History A BASIC ILLUSTRATION OF ECONOMY/BUSINESS CIRCLE. Theory The first systematic exposition of periodic economic crises, in opposition to the existing theory of economic equilibrium, was the 1819 Nouveaux Principes d'économie politique by Jean Charles Léonard de Sismondi. Prior to that point classical economics had either denied the existence of business cycles, blamed them on external factors, notably war, or only studied the long term. Sismondi found vindication in the Panic of 1825, which was the first unarguably international...
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...Wiki Loves Monuments: Photograph a monument, help Wikipedia and win! Production theory From Wikipedia, the free encyclopedia Jump to: navigation, search Production theory is the study of production, or the economic process of converting inputs into outputs. Production uses resources to create a good or service that is suitable for use, gift-giving in a gift economy, or exchange in a market economy. This can include manufacturing, storing, shipping, and packaging. Some economists define production broadly as all economic activity other than consumption. They see every commercial activity other than the final purchase as some form of production. Production is a process, and as such it occurs through time and space. Because it is a flow concept, production is measured as a “rate of output per period of time”. There are three aspects to production processes: 1. the quantity of the good or service produced, 2. the form of the good or service created, 3. The temporal and spatial distribution of the good or service produced. A production process can be defined as any activity that increases the similarity between the pattern of demand for goods and services, and the quantity, form, shape, size, length and distribution of these goods and services available to the market place. Contents * 1 Neoclassical Theory of Production * 1.1 Factors of production * 1.2 Total, average, and marginal product * 1.3 Diminishing returns * 1.4 Diminishing marginal returns...
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...CHAPTER NO. 01 1-PROBLEM & ITS BACKGROUND 1.1 Introduction In any economy banks play very important role. A bank is a reliable financial institution, which has core business of mobilizing the savings of people for investment purposes. It receives the money from one group and lends to other group of people. So bank performs the duty of financial intermediary. Usually there are two types of banks, conventional banks and Islamic banks. In simple words Islamic banks operate in interest free system. Prohibition of interest is ordained in Islam in all forms and intent. This Prohibition is strict, absolute and unambiguous. The Holy Qur'an in verse 278 of Surah Al-Baqarah states: "O ye who believe! Fear Allah and give up what remains of your demand for Riba, if ye are indeed believers." Verse 2: 279 says: "If you do it not, take notice of war from Allah and His Messenger. But if ye turn back, ye shall have your capital sums. Deal not unjustly and you shall not be dealt with unjustly." It therefore, follows that interest is prohibited as it leads to injustices and Islam is against all forms of injustices and exploitations and pleads an economic system, which aims at securing extensive socio-economic justice. The Islamic law of prohibition of Riba, which includes interest, was originally not based on economic theory but on Divine Authority, which considers the charging of interest as an act of injustice (Dr. Siddiqui). Islamic banks appeared on the world scene as active players...
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...THE ACCIDENTAL PRIME MINISTER THE ACCIDENTAL PRIME MINISTER THE MAKING AND UNMAKING OF MANMOHAN SINGH SANJAYA BARU VIKING Published by the Penguin Group Penguin Books India Pvt. Ltd, 11 Community Centre, Panchsheel Park, New Delhi 110 017, India Penguin Group (USA) Inc., 375 Hudson Street, New York, New York 10014, USA Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario, M4P 2Y3, Canada (a division of Pearson Penguin Canada Inc.) Penguin Books Ltd, 80 Strand, London WC2R 0RL, England Penguin Ireland, 25 St Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd) Penguin Group (Australia), 707 Collins Street, Melbourne, Victoria 3008, Australia (a division of Pearson Australia Group Pty Ltd) Penguin Group (NZ), 67 Apollo Drive, Rosedale, Auckland 0632, New Zealand (a division of Pearson New Zealand Ltd) Penguin Group (South Africa) (Pty) Ltd, Block D, Rosebank Office Park, 181 Jan Smuts Avenue, Parktown North, Johannesburg 2193, South Africa Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England First published in Viking by Penguin Books India 2014 Copyright © Sanjaya Baru 2014 All rights reserved 10 9 8 7 6 5 4 3 2 1 The views and opinions expressed in this book are the author’s own and the facts are as reported by him which have been verified to the extent possible, and the publishers are not in any way liable for the same. ISBN 9780670086740 Typeset in Bembo by R. Ajith Kumar, New Delhi Printed at Thomson Press India...
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...RETHINKING THE EAST ASIAN MIRACLE JOSEPH E. STIGLITZ AND SHAHID YUSUF Editors RETHINKING THE EAST ASIA MIRACLE JOSEPH E. STIGLITZ AND SHAHID YUSUF Editors A copublication of the World Bank and Oxford University Press i Oxford University Press Oxford • New York • Athens • Auckland • Bangkok • Bogotá • Buenos Aires • Calcutta • Cape Town • Chennai • Dar es Salaam • Delhi • Florence • Hong Kong • Istanbul • Karachi • Kuala Lumpur • Madrid • Melbourne • Mexico City • Mumbai • Nairobi • Paris • São Paulo • Singapore • Taipei • Tokyo • Toronto • Warsaw and associated companies in Berlin • Ibadan © 2001 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, N.W., Washington, D.C. 20433, USA Published by Oxford University Press, Inc. 198 Madison Avenue, New York, N.Y. 10016 Oxford is a registered trademark of Oxford University Press. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Cover design and interior design by Naylor Design, Washington, D.C. Manufactured in the United States of America First printing June 2001 1 2 3 4 04 03 02 01 The findings, interpretations, and conclusions expressed in this study are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations...
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...Chaotic Growth with the Logistic Model of P.-F. Verhulst Hugo Pastijn Department of Mathematics, Royal Military Academy B-1000 Brussels, Belgium Hugo.Pastijn@rma.ac.be Summary. Pierre-Fran¸ois Verhulst was born 200 years ago. After a short biograc phy of P.-F. Verhulst in which the link with the Royal Military Academy in Brussels is emphasized, the early history of the so-called “Logistic Model” is described. The relationship with older growth models is discussed, and the motivation of Verhulst to introduce different kinds of limited growth models is presented. The (re-)discovery of the chaotic behaviour of the discrete version of this logistic model in the late previous century is reminded. We conclude by referring to some generalizations of the logistic model, which were used to describe growth and diffusion processes in the context of technological innovation, and for which the author studied the chaotic behaviour by means of a series of computer experiments, performed in the eighties of last century by means of the then emerging “micro-computer” technology. 1 P.-F. Verhulst and the Royal Military Academy in Brussels In the year 1844, at the age of 40, when Pierre-Fran¸ois Verhulst on November c 30 presented his contribution to the “M´moires de l’Acad´mie” of the young e e Belgian nation, a paper which was published the next year in “tome XVIII” with the title: “Recherches math´matiques sur la loi d’accroissement de la e population” (mathematical investigations of the law of...
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...12:06 Page 1 WOMEN, GENDER AND WORK People are not defined solely by their work, nor is it possible to ignore the effects of factors outside the workplace on a person's status at work. To seek equality at work without seeking equality in the larger society – and at home – is illusory.Thus an examination of the issues surrounding women, gender and work must be holistic. That means considering the role of productive work in life as a whole and the distribution of unpaid work as well as the myriad questions relating to employment. This important anthology brings together the thinking of leading philosophers, economists and lawyers on this complex subject. Selected recent articles from the multidisciplinary International Labour Review are assembled for the first time to illuminate questions such as how we should define equality, what equal opportunity means and what statistics tell us about differences between men and women at work, how the family confronts globalization and what is the role of law in achieving equality. There is an examination of policy – to deal with sexual harassment and wage inequality, for example, as well as part-time work, the glass ceiling, social security, and much more. A major reference on the best of current research and analysis on gender roles and work. Martha Fetherolf Loutfi has been Editor-in-Chief of the International Labour Review, a Senior Economist for the Brandt Commission and in the ILO’s Employment and Development...
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