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  4. Preliminary Program
  5. Heterodox Approaches to Political Economy
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Heterodox Approaches to Political Economy

Paper Session

Friday, Jan. 7, 2022 12:15 PM - 2:15 PM (EST)

Hosted By: Union for Radical Political Economics
  • Chairs:
    Joshua Mason, City University of New York-John Jay College
  • Joshua Greenstein, Hobart and William Smith Colleges

The Precariat Class and the COVID-19 Crisis

Joshua Greenstein
,
Hobart and William Smith Colleges

Abstract

I analyze the interaction between precarious work and job losses and gains during the COVID-19 economic crisis and recovery. In a previous paper, I applied the precariat class schema developed by Standing to the US workforce to illustrate an increased polarization between those who do and do not have quality jobs from 1980 to 2018. The precariat is typified by unstable, short-term, part-time, and benefit-free jobs. I found that that the precariat made up a large and growing share of the US workforce during this time period, while the “old” working class shrank precipitously. In this paper, I focus on the monthly Current Population Surveys from 2020 and 2021. I use statistical imputation to employ relevant characteristics from the Annual Social and Economic Supplement of the Current Population Survey, in order to apply the precariat class schema to workers in the monthly survey. In this way, I track how the jobs lost in 2020 and regained in 2021 affected, and were affected by, trends in the precarization of work and the growing precariat class.

A Decomposition Approach to Trade Balances

Joshua Mason
,
City University of New York-John Jay College
Arjun Jayadev
,
Azim Premji University

Abstract

A central feature of heterodox approaches to international trade is that shifts in trade balances are associated as much or more with changes in national income, as with changes in relative prices. In this paper, we discuss a simple decomposition approach to describe changes in trade balances in terms of the relative contributions of income growth rates, expenditure switching and terms of trade. We apply the decomposition to a number of historical episodes, including the growth of trade imbalances in the euro area; the shift toward trade surpluses in Asian countries after the 1997 crisis; and the development of India’s trade balance before and after the liberalization of the 1980s. We show that this simple decomposition can reveal surprising patterns in shifts in trade flows; often, they suggest that the role of relative prices in trade must be smaller than mainstream accounts tend to assume. Unlike econometric approaches, which seek general relationships that hold across the relevant universe, the decomposition approach offers a quantitative description of particular historical developments. We suggest that this approach could be used more widely in macroeconomics.

When Socialism Comes One Country at a Time

Robin Hahnel
,
American University

Abstract

What should a country which has rejected capitalism and is beginning to build a socialist economy do with regards to international trade and investment in today’s world, where other countries still have capitalist economies and there are very large differences in levels of economic development? Hoping to stimulate discussion, my presentation will explore dilemmas such a country will face, and propose concrete answers in the form of rules such a country might follow to (1) take advantage of attractive opportunities which international trade and investment provide, but (2) avoid undermining fundamental principles that are the backbone of its socialist economy.

Path Dependence and Stagnation in a Classical Growth Model

Thomas Michl
,
Colgate University

Abstract

This paper embeds a technical progress function in a classical growth model and studies the effects of permanent changes in parameters and temporary shocks such as pandemics. Technical change is driven by dynamic economies of scale and responds to distributional forces: the wage share regulates labor-saving technical change and employment regulates its capital using bias. The model features path dependence in the employment-population rate and the output-capital ratio. Population growth and distribution can respond to the employment rate. Interpreted through the model, secular stagnation under neoliberal capitalism has been driven by a combination of diminished investment and reduced worker bargaining power more than by slower technical change and population growth. A temporary unfavorable shock to the output-capital ratio will permanently reduce the employment rate. In the fully endogenous model, this will increase the profit share and reduce the rates of technical change, capital accumulation, and population growth.
JEL Classifications
  • B4 - Economic Methodology
  • B5 - Current Heterodox Approaches