Finance, Post-Keynesian, Sraffian Theory
Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Paul Cooney, Pontifical Catholic University of Ecuador (PUCE)
The Financial Structure Implicit in the Sraffa-Pasinetti Framework
AbstractThe aim of the paper is twofold: (1) Show that there is a financial structure implicit in the Sraffa-Pasinetti input-output production model and (2) use this financial structure in order to connect the Sraffa-Pasinetti framework to Keynes’ inter-sector monetary analysis of production. The combination of these two perspectives offers a method for the joint study of the financial and productive structures of the economy. These objectives are achieved through the notion of the production commitment
A Three Class Predator-Prey Model with Financial Super-Predators: The Financial Profit Squeeze
AbstractThis paper extends Goodwin’s (1966) predator-prey model to include labor, industrial capitalists and financial capitalists. The purpose of the model is to explain the stylized facts of the Neoliberal Era and the Great Recession of 2008.
The behavioral equations capture a finance-dominated profit-led accumulation regime in the context of growing international competition (liberalization), defensive investment, low-road competitive strategies and a growing share of income appropriated by financiers.
The model has three state variables: labor’s share of income, financial capitalist share of income and the level of production in the macro economy. The differential equations characterizing each state variable respectively capture the balance of power between workers and industrial capitalists, the balance of power between financial capitalists vis a vis workers and industrial capitalists, and production dynamics based on a class theoretic expenditure-income model.
The solution for the model is based on numerical simulations that are based on parameter values derived from econometric estimation.
The tendency for an under-consumption crisis accompanied by either the deleveraging of debt or a constrained supply of credit is considered.
Shadow Banking and Financial Intermediation
AbstractShadow banking is a broad term representing non-bank lending, securitization and market-based financial system (or securities financing). In the past, these activities were called fringe banking and parallel banking. The main argument of this study is that shadow banking has gained a central intermediary role in the US financial system and it is no longer on the fringes, or parallel to other financial institutions. Through its role in lending, securitization, and especially short-term funding of long-term assets, shadow banking is influential on bank lending and funding conditions in general. Empirical results show that shadow banking amplifies bank lending cycles and it is influential on the determination of terms and risk spreads.
- E1 - General Aggregative Models
- E4 - Money and Interest Rates