Topics in Heterodox Economics

Paper Session

Saturday, Jan. 7, 2017 7:30 PM – 9:30 PM

Swissotel Chicago, Monte Rosa
Hosted By: Union for Radical Political Economics
  • Chair: Matias Vernengo, Bucknell University

A Euro Fiscal Union: Lessons From the United States Experience

Nathaniel Cline
University of Redlands
David Mathew Fields
University of Utah


This paper critically examines the argument that fiscal transfers associated with fiscal federalism would have avoided the crises of some members states within the Eurozone. Often these arguments suggest that inter-state transfers in the United States are responsible for the sucesss of the dollar as common currency. We review the history of state and regional balance of payments in the United States, and conclude that while fiscal transfers lift a long term balance of payments constraint for deficit states, they do not resolve more general national and regional crises. Instead, historically it took the combination of an active central bank, international monetary sovereignty, and a central fiscal authority willing to run aggregate deficits to resolve these kinds of crises. We further examine the data on state fiscal transfers since the 1970s and show that they were not adequate in resolving large economic crises. For the Eurzone, this would imply a common fiscal authority that issues its own debt, supported by the European Central Bank in addition to long run fiscal transfers.

Profit-Led Growth, Social Democracy and the Left: An Accumulation of Discontent

William McColloch
Keene State College


The present paper seeks to locate the Bhaduri-Marglin (B-M) model as an historical outcome of the Left's internal disputes over the prospects for social democracy. In better contextualizing the B-M model as a historical response to the perceived political economic failings of the social compromises upon which the growth of post-War advanced capitalist economies had rested, both the model’s popularity and its potential limitations can more easily be understood. Though the B-M framework has frequently come to be referred to as the neo- or post-Kaleckian growth model, such labels perhaps obscure the model's diverse ancestry. The model constituted an attempt to reconcile seemingly incompatible theoretical perspectives, and to highlight those special conditions that made possible a ‘Golden Age’ of social democracy. Moreover, they sought to show that the conclusions of Keynesian social democrats and of radical Marxists could be viewed as two possible outcomes of the same broadly Keynesian theoretical framework in which investment played a leading role. While this synthesis has fostered a vast literature and useful dialogue, it is argued that it should, nevertheless, be seen as the outcome of a generation Left social scientists that had become deeply skeptical of the possibility of egalitarian redistribution under capitalism, and of the political ambitions of Keynesian and social democratic parties.  

Services-Led Growth Versus Manufacturing: Indian and Chinese Development Strategies Compared

Suranjana Nabar-Bhaduri
Grinnell College


India and China have been lionized in the international press as two of the emerging market economies (EMEs) from the BRICS that will take over the world economy in the twenty-first century. Central to these optimistic predictions have been the rapid rates of economic growth that the two countries have experienced in recent years. This paper shows that despite similarities in terms of their rapid growth rates, there are major differences in the growth trajectories of the two economies. In the case of China, the industrial sector has been the leading sector contributing to its rapid growth performance, whereas in India, the services sector that has been the leading sector. The paper further shows that these differences in the sectoral contributions to output have translated into differences with respect to the relative success of the two economies in transferring labour from agriculture to other sectors.

A Study of the Demand Regime of United States Economy (1900-1929)

Ahmad Borazan
California State University-Fresno


In times of growing income inequality studying income distribution and growth dynamics gains significant importance. While it has been commonplace to raise the analogy between recent experience in income distribution patterns and growth and the era before the Great depression, no study of the demand regime was done for the early 20th century period; a gap in the literature this study tries to fill. The paper investigates the demand regime of the pre-Great Depression era for the private domestic output in terms of factors share of income, in addition to wealth and debt. To study the effects of wealth on consumption I constructed a wealth index for this period. The results of the study shows the demand regime was wage-led, while capacity utilization driven investment spending; suggests a Kaldorian investment function.
Adem Yavuz Elveren
Fitchburg State University
Xiao Jiang
Denison University
Jared Ragusett
Central Connecticut State University
Rojhat Avsar
Columbia College
JEL Classifications
  • B5 - Current Heterodox Approaches