Post-Keynesian Economics a Siena! Post-Keynesian Economics at Siena (in English)

 The heterodoxs fight back!

Post-Keynesian Economics - Provisional program 2016-17 (in English)

Module Prof. Ernesto Screpanti

The course begins with a presentation of classical and Marxian economics, focusing on the theory of prices as determined by production condition, on Marx’s critique of Say’s law, and on the theories of crisis and business cycle.

Then Keynes’ and Kalecki’s approaches to effective demand are presented. The notion of underemployment equilibrium is illustrated. It is argued that the level of activity is determined by the autonomous components of aggregate demand, and that these are widely conditioned by the animal spirits of investors and the uncertainty of expectations. Prices are fixed by firms, on the ground of a markup rule, and are determined by production conditions. Income distribution plays a fundamental role in determining the magnitude of the income multiplier.

Finally, by means of the Aggregate Supply - Aggregate Demand model, a comparison is proposed between the monetarist, neo-Keynesian, and Post-Keynesian models.

Module Prof. Fabio Petri

This module tries to explain why the advances in capital theory due to Sraffa and others have persuaded many economists that the marginalist/neoclassical approach is irremediably flawed and therefore a turn to another approach appears inevitable. The module presents the basic structure of the neoclassical approach, the roots of its differences from the classical/Marxian approach, and the difficulties it encounters in dealing with capital goods both in its traditional versions and in its recent neo-Walrasian versions. 

Module Prof. Sergio Cesaratto

This module takes stock of prof. Screpanti’s introduction to the Classical economists and Marx and of prof. Petri’s illustration of the marginalist value and distribution theory to show the relevance of the capital theory critique to rescue the Keynesian theory of effective demand from the reabsorption in neoclassical theory.

Garegnani (1978-79) firstly pointed out this relevance. In his contribution, he moved from the Wicksellian macroeconomic long-period equilibrium (that is, still the current reference for modern macroeconomics) and its weakness vis-à-vis the capital critique. He then exposes the most revolutionary aspects of Keynes’ General Theory, in particular the overturning of neoclassical saving-investment nexus. Unfortunately, Keynes also accepted some fundamental conclusions of the dominant theory and this opened the way to its reabsorption by that theory.

Keynes’ most original results were expressed in a short-run framework, with a given productive capacity. The challenge for heterodox economists is, therefore, to extend those results to a long period context, when capacity is allowed to vary. In this regard we shall consider two alternative demand-led growth models, the Sraffian supermultiplier model (Cesaratto et al. 2003) and the Neo-Kaleckian model (Lavoie 2006), and compare them (Cesaratto 2015, 2016).

The supermultiplier approach will be linked to another heterodox strong point, endogenous money theory. Nowadays, also many conventional economists and most central bankers increasingly provide open support this view.

Basic Textbooks

Garegnani, P. (1978-79) ‘Notes on consumption, investment and effective demand, Parts I & II’, Cambridge Journal of Economics, 1978, pp. 335-353, and 1979, pp. 63-82.

Garegnani, P. (1990), ‘Quantity of capital’ in J. Eatwell, M. Milgate, P. Newman (a cura di), The New Palgrave: Capital Theory, pp. 1-75.

Petri, F. (2016), “What capital theory can teach us”, forthcoming in volume collecting the 2014-15 Pisa lectures on heterodox ecnomic theory.

Screpanti E., Zamagni S. (2005) An outline of the history of economic thought, second edition, Oxford: Oxford University Press. Sections: 2.2, 3.1, 4.3, 7.1, 7.2, 7.3, 9.5, 9.6

Lavoie, M. (2006) Introduction to Post-Keynesian Economics, Basingstoke: Palgrave Macmillan.

Suggestions for further readings

Cesaratto S. (2016) The modern revival of the Classical surplus approach: implications for the analysis of growth and crises, <Quaderni del Dipartimento di Economia politica e statistica>, Università di Siena, n. 735/2016.

Cesaratto, S. (2016) “Initial and final finance in the monetary circuit and the theory of Effective Demand.” Metroeconomica (forthcoming).

Cesaratto, S. (2015) “Neo-Kaleckian and Sraffian controversies on the theory of accumulation.” Review of Political Economy, 2015, 27 (2): 154-182.

Cesaratto, S., Stirati, A. & Serrano, F. (2003) Technical change, effective demand and employment. Review of Political Economy, 15, pp. 33-52.

Jakab, Z., Kumhof, M. (2015) ‘Banks are not intermediaries of loanable funds - and why this matters’, Bank of England, Working Paper No. 529. pp. 1-14 only

Lavoie L. (2013) ‘The monetary and fiscal nexus of neo-Chartalism: A friendly critical look’, Journal of Economic Issues, 47(1), pp. 1-32.

Lavoie M. (2005) ‘A primer in endogenous credit-money’, in: Rochon, L.P., Rossi S. (eds.), Modern Theories of Money. The Nature and Role of Money in Capitalist Economies, Edward Elgar, Cheltenham (UK).

McLeay M., Amar, R. Ryland, T. (2014) Money creation in the modern economy, Bank of England, Quarterly Bulletin, No. 1  

McLeay M., Amar, R. Ryland, T. (2014) Money in the modern economy: an introduction, Bank of England, Quarterly Bulletin, No. 1

Petri, F. (2016) ‘Capital Theory’, in G. Faccarello, H. D. Kurz, eds., Handbook of the History of Economic Analysis vol. III.

Petri, F. (2015) Review of M. Lavoie, Post-Keynesian Economics: New Foundations, in Review of Political Economy, 2015 (4).  

Screpanti, E. (1997) “Banks, increasing risk, and the endogenous money supply”, Economic Notes, 26(3), 567-88.

La critica dell'economia politica, ieri, oggi e domani

 Pubblichiamo un nostro intervento (in italiano, solo l'abstract è in inglese) sulla rivista di filosofia Kainos che ringraziamo per l'invito.
Informativa: martedì 1 Aprile l'associazione studentesca LINK ha organizzato un dibattito sulle tematiche europee nell'aula Franco Romani di Economia a Siena alle ore 16. Invitati Massimo D'Antoni, Eladio Febrero (noto economista post-keynesiano spagnolo) e il sottoscritto.

La critica dell’economia politica, ieri e oggi

di Sergio Cesaratto

Abstract

The paper examines the Sraffian contribution to critical political economy. Piero Sraffa (1898-1983), an opponent of the fascist regime, left Italy in 1927. In Cambridge he belonged to Keynes's inner circle and became a close acquaintance of Wittgenstein. He regularly visited Antonio Gramsci in jail. In 1961 the Swedish Academy of Science awarded him the gold medal for Economics, an honor he shared with Keynes and Myrdal only. His contribution was twofold. He recovered the Classical economists' surplus approach "submerged and forgotten" after the marginalist revolution of the late XIXth century. In addition he challenged the dominant marginalist (neoclassical) theory in one core aspect, capital theory. Sraffa's criticism was analytical and not ideological and, therefore, quite dangerous for the received view. Leading mainstream economists, mainly from the MIT, reacted to the criticism in the so-called "controversy between the two Cambridge" during the 1960s. The leader of the neoclassical camp, the Nobel laureate Paul Samuelson, had to admit defeat. Nonetheless mainstream economics survived intact and the controversy is today largely ignored. However, the result of the controversy gave self-confidence to the opponents of mainstream theory and heterodox schools flourished in the 1970s until the early 1980s also in connection with social movements. Today heterodox theory is relatively emarginated in the academy while mainstream economics has surprisingly been untouched by the financial crisis. The light of critical economic theory is, however, still kept alive by numerous economists around the world.

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1. A mo’ di premessa: la parabola dell’economia critica

Nel lontano 1973 due valorosi economisti sraffiani aprivano un (allora) influente articolo su marxismo ed economia con la seguente ottimistica affermazione: «[c]rediamo non si possa mettere in dubbio che la teoria economica, che ha dominato praticamente incontrastata per quasi un secolo, attraversa oggi una crisi profonda»¹. Purtroppo questa veniva sostenuto proprio nel mentre nelle università degli Stati Uniti si consolidava la contro-rivoluzione monetarista che avrebbe rapidamente spazzato via quella keynesiana dei primi due decenni del secondo dopoguerra, preparando culturalmente l’avvento alla fine del decennio di Reagan e Thatcher. Naturalmente il clima in Italia era ancora ben diverso. Attraverso la fondazione della Facoltà di economia di Modena e l’esperienza delle 150 ore, la critica dell’economia politica, profondamente influenzata dall’opera di Sraffa, si fondeva, per esempio, con le esperienze operaie e sindacali più avanzate². Di lì a pochissimo le cose sarebbero evolute in direzioni ben diverse anche in Italia.

Diseguaglianza e crescita. Prosegue il dibattito con Franzini

Su E&P e su Micromega prosegue la mia discussione con Maurizio Franzini. Qui la mia contro-replica, che ha beneficiato di molti consigli da splendidi amici che ringrazio. Avrei potuto fare di meglio, ma si fa quel che si può.

Una contro-replica a Franzini

Sergio Cesaratto

Ringrazio anch’io Maurizio Franzini per le puntualizzazioni delle sue idee che, tuttavia, mi inducono a ribadire le mie perplessità. Sgombrando il campo da questioni marginali, il punto in discussione sono gli effetti della diseguaglianza sulla crescita. Tralasciamo anche ogni considerazione sulla desiderabilità della crescita. La mia tesi è che questa sia necessaria, privilegiando consumi sociali e rispettosi dell’ambiente. Tanto più che la “cautela” che Franzini nuovamente evoca se “crescita [sia] sistematicamente desiderabile, al punto da subordinare al suo perseguimento il giudizio da dare nei confronti della diseguaglianza”, non riguarda me che ritengo che crescita ed equità si sostengano reciprocamente. Così come non vale la pena soffermarsi sul fatto che gli economisti “eterodossi” della tradizione Classico-Kaleckiana trovano, ovviamente, la diseguaglianza immorale anche indipendentemente dagli effetti sulla crescita. Essi  ritengono però decisivo smentire la tesi “ortodossa” che una maggiore equità danneggi la crescita.

Deve peggiorare prima di migliorare - intervento a un convegno CGIL

La situazione economica deve peggiorare prima che quella politica migliori, ma dobbiamo prepararci con un pensiero economico pienamente eterodosso. L’esempio dell’Argentina.

1. Nonostante l’apparente bonaccia, la situazione economica rimane preoccupante. Non c’è ragione per cui gli spread scendano sotto i 300 punti, e semmai risaliranno se la situazione delle altre economie periferiche si aggraverà, com’è presagibile. Solo un quadro di politiche economiche assai diverse – rinnovato ruolo della BCE e politiche espansive in primis in Germania – potrebbe raddrizzare la situazione. In questo ambito, le politiche adottate in Italia sono non solo inutili, ma controproducenti.