This paper examines the coherence, or lack thereof, among the three major strands of post-Keynesian economics. Most claims of incoherence pertain to the Sraffian strand in relation to the Fundamentalist and Kaleckian strands. The first section highlights how some authors have exacerbated these claims by mischaracterizing the work of colleagues. The second section argues that many accusations of incoherence originate from methodologists, often justified by the distinction between open and closed systems. The third section addresses claims of incoherence that stem from divergent theoretical positions and the potential for internal contradictions. The final section concludes that young scholars, as well as those engaged in actual research in theory and modelling, tend to emphasize the commonalities among the three strands. Some examples of possible synthesis, old and new are provided.
This study investigates the impact of trade liberalisation on foreign and domestic investment in selected African free trade areas. Using 29 countries that are members of the three regional economic communities, namely, the East African Community, the Common Market for East and Southern Africa, Southern African Development Community, and data for the period 2000 to 2019, results from various panel models show that trade liberalisation indicators used have heterogenous effects on investment in these regional economic communities. This is partly explained inter-alia by, differences in the ease of doing business environment, variances in the levels of economic growth, and lack of ratification and domestication of some regional investment agreements. Countries must reduce non-tariff barriers if they are to boost investment.
This paper formulates a simple short-term Kaleckian model where the impact on output of an active fiscal policy can be assessed and the Kaleckian government spending multiplier introduced. The model also allows us to verify the limits through which an expansion of public spending can be self-financing. As in DeLong and Summers (2012) and Ledo (2013), an unbalanced fiscal expansion raises aggregate demand and output through the short-term fiscal multiplier, and higher current output brings with it higher tax collections. Thus, under certain conditions, this mechanism allows for the recapture of some of the costs of the fiscal expansion. Due to the Kaleckian features of the model economy, a change in the functional distribution of income will generate an alteration in the conclusions reached regarding the evolution of the incremental debt-to-GDP ratio and selffinancing. This is an important aspect of the distributional effects in Kaleckian models that has received very little or no attention from the theoretical literature.
This study investigates the impact of market-based environmental regulations on industrial performance and innovation across 48 countries (30 developed, 18 developing) from 1995 to 2021. Using environmental taxes, instrumented by lagged CO2 emissions and women's political empowerment, and public environmental expenditures as a robustness check. The results reveal heterogeneous effects across development levels. Environmental taxes increase productivity and R&D investment in developed economies but have limited impact in developing ones. Public environmental expenditures reduce productivity in both groups while affecting innovation differently. These findings suggest that environmental regulation can promote competitiveness and innovation, but its effectiveness depends on national economic and institutional conditions.
In this article we argue that we can more easily understand the duality of central banks (CBs) and independent central banks (ICBs) through an understanding of their underlying dualities. As we explore, heterodox and orthodox views and methodologies present two distinct ways of conceptualizing all that is involved in economic activity, and correspond to a social interpretation and a market interpretation of economics. This clear dividing line can be traced between visions of individuals, society, money and banking, and indeed central banking and independent central banking. As we will show, CBs and ICBs have well recognized-but poorly classified-distinctions that allow for a clear separation between their natures. Once revealed as quite distinct institutions, the public policy decision of maintaining independent central banks more fully aligns with the disastrous history of such institutions on the well being of national economies.
As a highly speculative asset, Bitcoin's (BTC) demand is largely driven by agents' perceptions of the asset. This is particularly true for institutions, which have started to leave a more significant footprint in the market, causing changes in transaction flow and price cycles. To assess how halving dynamics have changed the BTC market, wavelet methodology was applied with daily data (from January 2011 to December 2021) on the BTC price and transaction count. Decomposition in scale and frequency indicates that flows were altered by the arrival of new investors, and stronger correlations between prices and transactions were found at lower frequencies (i.e., a longer time horizon).
This study considers the short-term lead-lag relationships between profits, private investment, and output. The interplay between the variables is examined using quarterly data for Germany during the 1991Q2-2020Q3 period. The methodology comprises: examination of the cross-correlations; the estimation of linear regression models with finite and polynomial distributed lags, as well as vector autoregressions; and the time-varying and frequency domain Granger causality tests to account for instabilities in the series and to distinguish causality at different time horizons. The findings provide strong support for the "profit as a driver of investment" and "investment as a driver of output" hypotheses, and ambiguous support for the opposite hypothesis ("investment that leads profit"). This paper is one of the few to examine profit-investment-output relationships in a setting other than the United States and to employ complementary and nondescriptive methods to obtain more robust findings.
The article reviews Garegnani’s 2024 book (Capital Theory, the Surplus Approach, and Effective Demand: An Alternative Framework for the Analysis of Value, Distribution and Output Levels, Springer), collecting his most important essays, carefully edited by Roberto Ciccone. Pierangelo Garegnani (1930-2011) was one of the main exponents of the surplus approach. The review article recalls his important contributions to the critique of the marginalist theory of value and distribution, and provides a critical overview of his contributions to the construction of a Classical-Sraffian approach based on the notions of a ‘core’ of economic theory and of ‘long-period positions’, suggesting the possibility of an alternative Sraffian-Keynesian construction.
In recent decades, governments around the world have increasingly used various forms of state aid to try to attract and retain the business activity of foreign-owned multinational corporations. Yet, in most cases, this "commercialisation of state sovereignty" (Palan, 2002) has failed to catalyse foreign investment and economic growth as intended. This paper seeks to understand the general failure of such commercialised state strategies, while also explaining how demand and income growth in some notable exceptions (e.g., Ireland and Singapore) can be understood. To this end, a simple demand-led framework is presented that suggests that foreign-targeted state aid may lead to beggar-thy-neighbour, FDIdriven growth in one economy if certain conditions are met, such as there being sufficiently little policy competition from other countries. It is argued that the exceptional cases tend to be the early movers and that state aid for the attraction of foreign multinationals is unlikely to be an effective growth strategy in the current environment of intense state competition.
This paper models the dynamics of long-term Chinese government bond (CGB) yields based on an autoregressive distributive lag (ARDL) approach. It examines whether the current short-term interest rate has a decisive influence on long-term CGB yields, after controlling for various macroeconomic variables. The estimated models all show that the current short-term interest rate has an economically and statistically significant effect on the long-term CGB yields of various maturity tenors. John Maynard Keynes claimed that a central bank's policy rate exerts an important influence overlong-term government bond yields through the current short-term interest rate. The paper's findings evince that Keynes's claim holds for China, implying that the actions of the People's Bank of China(PBoC) are a key driver of the long-term CGB yields.
This paper explores how global economic and financial imbalances have evolved amid rising protectionism and geopolitical tensions. While globalisation and technological change have had a positive impact on global growth and poverty reduction, they have also led to increased inequality, environmental degradation and debt. The paper discusses the structural causes and consequences of growing external and domestic imbalances, focusing on the sharp deterioration in the US net international investment position and the increase in market power among dominant technology firms. Besides creating market uncertainty and likely causing a recession, the significant unilateral reorientation of US trade and financial strategy could have major implications for international monetary and financial stability. Further weakening of global dialogue, cooperation, and commitment to institutional reform would make addressing savings-investment mismatches, managing the dominance of mega-tech firms, and navigating the transition towards a more balanced and resilient global system particularly challenging.
This paper formalizes the theory of price level determination from Modern Monetary Theory by building two toy models of ‘monopoly money’. Drawing inspiration from mainstream models of durable goods with monopoly producers, the government is modelled as the sole producer of its liabilities, which can then be resold in secondary markets. The steady-state results follow the MMT argument that the price level is a function of the prices paid by government when it spends; thus government spending itself is the nominal anchor that determines the price level in the short-run. The goal in presenting these results is primarily communication: by expressing MMT’s price level story in the language of mathematics, the assumptions and dynamics behind the theory become clearer, which should encourage better dialogue between different schools of thought.
The present study aims at studying productivity growth, employment, and income distribution in a Young-Kaldor investment dynamics in which productivity growth and a higher markup sustaining investment are endogenous to growth and support better employment and wage outcomes. Investment-led growth requires equality of investment and profit. However, it also involves increases in wages as compensation for the increased incidence of specialized employment, which adds force to the investment-led dynamics. It is contended that empirical support for this investment-led transitional dynamics can point towards an employment Phillips curve: a positive correlation between wages and employment at given prices. A lack of dynamic evolution can indicate wage-price correlation, but without necessarily having spiral connotations, and provides alternative understandings to the price Phillips curve on which the literature focuses.
Starting from the Plaza Agreement, which in 1985 proposed to regulate the functioning of the dollar standard, the international monetary system has experienced a series of evolutions following the collapse of the USSR, the development of globalization, culminating in the birth of the WTO and the growth of China, and the protectionist reversal of US foreign relations. The abnormal growth of finance resulted in the world crisis of 2008, paving the way for the emergence of Bitcoin, the private virtual currency, followed by many cryptocurrencies, which met with market approval, leading the authorities to legitimize their existence, until the Trump Administration’s statement in March 2025, which laid the foundations for a profound change in the international monetary regime from the dollar to a crypto standard.
The purpose of this essay is to point out two errors which exist in Patinkin’s Money, Interest and Prices. The aim is to show that the rehabilitation of the neoclassical theory of money and interest is not convincing. I shall try to show that Patinkin’s refined version of the quantity theory presents the same pitfalls as the older versions; that his attack on the Keynesian theory of liquidity preference misses the point, while his theory of the demand for money and of the rate of interest is open to many objections.
Development depends on a nation’s ability to produce sophisticated goods, making economic complexity crucial. Considered as an ecological sophistication of technological, social, and cultural factors, ecological structural change, the core of Green New Developmentalism, can address environmental and socio-economic challenges, particularly in developing countries. As green policies can act as drivers of structural changes, eco-innovations, and international green competitiveness, this paper examines the impact of green policies on green export competitiveness, testing the strictly strong version of the Porter hypothesis and evaluating the moderating effect of economic complexity and pollution intensity. This paper used a panel dataset covering 40 OECD countries from 1990 to 2016, and the results indicate that stringent environmental regulations positively impact green exports only in the medium term. When the moderating factors are introduced, stringent green policies become effective in the short term, and their positive impact increases with the country’s economic complexity and pollution intensity. Combining stringent environmental policies and green economic sophistication could allow for integrating economic growth, sustainable production, and international green competitiveness.
This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key highlight is the RER’s ability to induce structural changes toward more complex and technology-intensive sectors. To illustrate this, a formal multisectoral model is presented, demonstrating the conditions under which a higher RER can alleviate external constraints. Finally, several related considerations are addressed.
This paper develops a unified framework to analyze the environmental, social, and economic dimensions of sustainable development within the context of a center-periphery international system. It introduces a three-gap model to address the challenges posed by the discrepancies among three key growth rates: the maximum growth rate compatible with external equilibrium, the minimum growth rate required for social inclusion, and the maximum growth rate consistent with environmental sustainability. Using updated theoretical and empirical insights, the paper applies the model to Latin American economies, highlighting the structural constraints and opportunities for achieving sustainable development in peripheral regions. By quantifying the interactions between technological capabilities, green investments, and social inclusion policies, the study offers policy recommendations to foster balanced and inclusive growth paths aligned with global sustainability commitments.
The aim of the article is to analyse the performance of the manufacturing sector in Europe in order to check whether there is a relationship between the level of development and the share of the industrial sector, and whether the manufacturing sector plays a key role in the economic growth and catching-up processes in European countries. The results of the study show that the evolution of the manufacturing sector is very different between countries, not only between countries at different levels of development but also between similar countries. The results also show the key role played by the Global Financial Crisis in explaining the fall in manufacturing output and employment and the deindustrialisation processes detected in certain countries.
This paper aims to explore the relationship between economic complexity and the productive structure of Goiás, Brazil, particularly in the context of environmental issues within international trade agreements. To this end, the export agenda of Goiás was analysed using the Herfindahl-Hirschman Index to assess the concentration of exports by partners and products. Through the collection of statistical data on the Goiás economy for the calculation of concentration indicators, it is revealed that Goiás’ production structure is concentrated in primary products and mining and it has just a few trade partners, exacerbating its vulnerability to evolving environmental challenges and international regulations. This scenario demands a transition towards low-carbon practices and more sustainable technologies while preserving native vegetation and its ecosystem services. For large commodity producers like Goiás, this necessitates continuous diversification and sophistication of the productive structure to enhance economic complexity.
