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1 – 10 of 41Yeva Nersisyan and L. Randall Wray
In this paper, the authors examine the causes of 2021–2023 inflation and evaluate whether raising interest rates is the right solution.
Abstract
Purpose
In this paper, the authors examine the causes of 2021–2023 inflation and evaluate whether raising interest rates is the right solution.
Design/methodology/approach
The authors evaluate both the macroeconomic (too much demand) and microeconomic (monopoly pricing and supply chains) explanations for the causes of inflation.
Findings
The authors argue that the spike in inflation is due to disrupted supply chains and corporations taking advantage of the situation to raise their prices. The aggregate demand stimulus from fiscal policy had all but played out by the time inflation arose, making it an unlikely cause of said inflation.
Originality/value
The authors' paper demonstrates that raising interest rates is the wrong solution to tackling the problem of inflation, especially since it's coming from the supply side.
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Economists usually shy away from talking about power. They assume an economy comprised of many small and medium-sized firms, each competing for consumer dollars. This circumvents…
Abstract
Economists usually shy away from talking about power. They assume an economy comprised of many small and medium-sized firms, each competing for consumer dollars. This circumvents the problem of economic power. John Kenneth Galbraith, however, refused to ignore power. It stood at the center of his economics, and he saw it as a key reason the US economy thrived in the years following World War II (WWII). This chapter examines Galbraith’s changing views regarding economic power. American Capitalism explains how countervailing power, or power on the other side of the market, solves the problem of economic power. In The New Industrial State, scientists and educated managers within the firm (the technostructure) mitigate the negative consequences of economic power wielded by large firms. The Affluent Society and Economics and the Public Purpose look to the government as the main check on corporate power. It does this through labor legislation or programs such as the New Deal and Fair Deal. This chapter then evaluates the different solutions Galbraith proffered to the problem of economic power. It contends that Galbraith got three things right when analyzing economic power. First, we no longer live in a world of scarcity due to oligopolistic firms. Second, capitalism was different in the post-WWII era because the US economy thrived and gains were shared widely. Third, Galbraith understood that power was unequally distributed – both between the public and private sectors and within the private sector itself. On the other hand, Galbraith was overly optimistic in believing the market economy or the public sector could counter corporate power.
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Oswald A. J. Mascarenhas, Munish Thakur and Payal Kumar
This chapter focuses on critical thinking as a new, powerful, and specialized tool and technique for understanding and analyzing the subtle operations of the free enterprise…
Abstract
Executive Summary
This chapter focuses on critical thinking as a new, powerful, and specialized tool and technique for understanding and analyzing the subtle operations of the free enterprise capitalist market system and its ethics and morality. Everything in the world of consumers and market enterprise systems are determined by our supply–demand system that in turn are determined by our presumed limitless production–distribution and consumption (LDPC) systems. From a critical thinking viewpoint, we study the free enterprise capitalist system (FECS) as a dynamic, interconnected organic system and not as a discrete or compartmentalized body of disaggregate parts. Systems thinking with critical thinking calls for a shift of our mindset from seeing just parts to seeing the whole reality in its structured dynamic unity; both mandate that we see ourselves as active participators or partners of FECS and not as mere cogs in its wheels or as mere factors of its production processes. Critical thinking seeks to identify the “structures” that underlie complex situations in FECS with those that bring about high- versus low-leveraged changes in various versions of capitalism. Specifically, this chapter applies critical thinking to FECS as defined by its founder, Adam Smith, in 1776 to its fundamental and structural assumptions, and as supported or critiqued by serious scholars such as Karl Marx, Maynard Keynes, C. K. Prahalad and Allen Hammond (inclusive capitalism), John Mackey and Rajendra Sisodia (conscious capitalism), and others.
Basing himself on the premise that present economic progress cannot follow the ‘Business as usual paradigm’ and hope for continued and unlimited progress, the author holds that we…
Abstract
Basing himself on the premise that present economic progress cannot follow the ‘Business as usual paradigm’ and hope for continued and unlimited progress, the author holds that we need to look into the larger dimensions of growth and development, which include social, environmental and other complex factors. So in this chapter, the author makes some pertinent suggestions for a sustainable growth model inspired by green growth and degrowth.
The first section evaluates the salient features of green growth and its drawbacks. It is followed by a discussion on the notion of degrowth, with its challenge to change the direction of growth (economic, ecological, social and cultural), without which human civilisation, as we know it today, may not survive. Finally, in the concluding chapter, based on these two notions of green growth and degrowth, an all-inclusive and sustainable regrowth model is propounded.
By creating an awareness of the need to shift development goals and Corporate Social Responsibility (CSR), the author argues that we could use economic regrowth strategically and responsibly to make the world more sustainable and viable. Responsible corporates will make their contribution to such an organic, resilient and sustainable regrowth and their CSR activities could be the starting point for this change, without which humanity's future is seriously threatened.
Finally, the author acknowledges that humanity has profited from the tremendous technological and economic progress we have made in the last four centuries, learnt from its mistakes and are ready to reorient ourselves individually and collectively towards a sustainable economic regrowth.
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Exports are near all-time highs. Prices have risen solidly for three successive quarters, indicating that Japan's period of deflation and weakly rising prices may be ending.
This study investigates the impact of the increasing proportion of older workers in the workforce by establishing a theoretical framework and estimating the degree of…
Abstract
Purpose
This study investigates the impact of the increasing proportion of older workers in the workforce by establishing a theoretical framework and estimating the degree of substitutability between them and their younger counterparts.
Design/methodology/approach
The first step is to establish a theoretical framework that combines older and younger workers with imperfect substitutability in the production of final goods within an aggregate production function. The author then derives an equation that relates the relative wage, relative supply and elasticity of substitution between the worker types, for use in estimation. Using data from Japan’s Basic Survey on Wage Structure and Population Census from 2010 to 2019 across 47 prefectures, the author estimates the elasticity of substitution between older and younger workers in Japan.
Findings
The author finds that workers aged 55 and over and their younger counterparts are gross substitutes, and the estimated elasticity of substitution is in the range of 2.33–2.86. This implies that a 10% increase in the relative number of workers aged 55 and older leads to a fall in their relative wage in the range of 3.5–4.3%. The study estimations suggest that since 2010, there has been a convergence in the relative wage of older workers across Japan’s prefectures.
Originality/value
Understanding the degree of substitutability between older and younger workers is essential for quantitatively assessing the impact of workforce aging, technological advancements and labor policies on the wage distribution. This study estimates the elasticity of substitution between the two worker types based on a theoretical model, and utilizes recent datasets and methodology not adequately addressed in previous literature.
This paper explores the empirical relationship between population age structure and bilateral trade.
Abstract
Purpose
This paper explores the empirical relationship between population age structure and bilateral trade.
Design/methodology/approach
The author includes age structure in both log and Poisson pseudo-maximum likelihood (PPML) formulations of the gravity equation of trade. The author studies relative age effects, using differences in the demographic structure of each country-pair.
Findings
The author finds that a relatively larger share of population in working age increases bilateral exports. This is robust to various estimation models, as well as to changes in the method of specifying the demographic controls. Old-age shares have a negative, but less robustly estimated impact on trade. Estimating instead the balance of trade between trading partners produces similar results, with positive effects of age structure peaking later in working life.
Practical implications
Global populations are poised to undergo a massive transition. Trade a crucial way that the demographic deficits of one country may be offset by the dividends of another as comparative advantages shift along with the size and strength of their underlying workforce.
Originality/value
The author’s work is among the first to quantify the effect of relative age structure between two countries and their bilateral trade flows. Focusing on the aggregate flows, relative age shares and PPML estimates of the trade relationship, this paper provides the most comprehensive picture to date on how age structure affects trade.
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Thiago Da Silva Telles Constantino, Antônio Carlos Magalhães Da Silva and Maria Aline Moreira De Oliveira Constantino
Most scientific research has focused on understanding Ponzi schemes from the point of view of the schemes and their operators, based on qualitative analysis. This paper aims to…
Abstract
Purpose
Most scientific research has focused on understanding Ponzi schemes from the point of view of the schemes and their operators, based on qualitative analysis. This paper aims to analyze Ponzi schemes from the perspective of their investors, emphasizing behavioral aspects, which have been little explored in the scientific literature, especially in quantitative research. In this way, the authors sought to understand the effects of heuristics and cognitive biases in understanding investor behavior.
Design/methodology/approach
A logistic regression was carried out with Brazilian investors, some of them participants in Ponzi schemes, who answered a structured questionnaire by means of a survey.
Findings
The authors found that social pressures, overconfidence and deliberate ignorance lead to credulity, generating little risk analysis and the desire to make a lot of money quickly.
Practical implications
Helping investors improve their levels of information through financial education and self-knowledge about their behavior. Contribute to the competent authorities in the search for improvements in the information displayed to investors.
Social implications
Understanding the mechanisms used when making a financial decision from the point of view of investors in general, but especially those exposed to Ponzi schemes, has the mission of enlightening them about the importance of financial education and the weight of psychological factors so that they can reduce the effects of heuristics and analysis biases when faced with a financial decision.
Originality/value
The basis of this work will be the inclusion of psychological variables and financial education, adapting existing models in an attempt to demonstrate the effects they may or may not have on mental accounting in the specific case of investors
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