money macroeconomics and keynes essays in honour of victoria chick volume 1 phần 1 docx

MONEY, MACROECONOMICS AND KEYNES This volume, along with its companion volume Methodology, Microeconomics and Keynes, is published in honour of Victoria Chick, inspired by her own contributions to knowledge in all of these areas and their interconnections. It represents both consolidation and the breaking of new ground in Keynesian monetary theory and macroeconomics by leading figures in these fields. The chapters have been contributed by some of the many who admire Chick’s work: ● C. Rogers, Rogério Studart and Fernando J. Cardim de Carvalho make contributions in monetary theory. ● Philip Arestis, Peter Howells, Charles Goodhart, David Laidler, Malcolm Sawyer, Alain Parguez, and Joseph Halevi and Rédouane Taouil make contributions relating specifically to endogenous money. ● Peter Kriesler, John Nevile, G. C. Harcourt, Peter Skott, Augusto Graziani, John Smithin, the late Bernard Corry and Maurizio Caserta make contribu- tions in macroeconomics. ● Penelope Hawkins, Christopher Torr, Jesper Jespersen, Stephen F. Frowen and Elias Karakitsos make contributions in open economy macroeconomics. The volume opens with an account of Victoria Chick’s academic career and ends with a list of her publications. Philip Arestis is Professor and Research Director at the South Bank Business School at South Bank University. Meghnad Desai is Professor of Economics and Director of the Centre for the Study of Global Governance at the London School of Economics. Sheila Dow is Professor, Department of Economics, University of Stirling. ROUTLEDGE FRONTIERS OF POLITICAL ECONOMY EQUILIBRIUM VERSUS UNDERSTANDING Towards the rehumanization of economics within social theory Mark Addleson EVOLUTION, ORDER AND COMPLEXITY Edited by Elias L. Khalil and Kenneth E. Boulding INTERACTIONS IN POLITICAL ECONOMY Malvern after ten years Edited by Steven Pressman THE END OF ECONOMICS Michael Perelman PROBABILITY IN ECONOMICS Omar F. Hamouda and Robin Rowley CAPITAL CONTROVERSY, POST KEYNESIAN ECONOMICS AND THE HISTORY OF ECONOMICS Essays in honour of G. C. Harcourt, volume one Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer MARKETS, UNEMPLOYMENT AND ECONOMIC POLICY Essays in honour of G. C. Harcourt, volume two Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer SOCIAL ECONOMY The logic of capitalist development Clark Everling NEW KEYNESIAN ECONOMICS/POST KEYNESIAN ALTERNATIVES Edited by Roy J. Rotheim THE REPRESENTATIVE AGENT IN MACROECONOMICS James E. Hartley BORDERLANDS OF ECONOMICS Essays in honour of Daniel R. Fusfeld Edited by Nahid Aslanbeigui and Young Back Choi VALUE, DISTRIBUTION AND CAPITAL Essays in honour of Pierangelo Garegnani Edited by Gary Mongiovi and Fabio Petri THE ECONOMICS OF SCIENCE Methodology and epistemology as if economics really mattered James R. Wible COMPETITIVENESS, LOCALISED LEARNING AND REGIONAL DEVELOPMENT Specialisation and prosperity in smalll open economies Peter Maskell, Heikki Eskelinen, Ingjaldur Hannibalsson, Anders Malmberg and Eirik Vatne LABOUR MARKET THEORY A constructive reassessment Ben J. Fine WOMEN AND EUROPEAN EMPLOYMENT Jill Rubery, Mark Smith, Colette Fagan, Damian Grimshaw EXPLORATIONS IN ECONOMIC METHODOLOGY From Lakatos to empirical philosophy of science Roger Backhouse SUBJECTIVITY IN POLITICAL ECONOMY Essays on wanting and choosing David P. Levine THE POLITICAL ECONOMY OF MIDDLE EAST PEACE The impact of competing trade agendas Edited by J. W. Wright, Jnr THE ACTIVE CONSUMER Novelty and surprise in consumer choice Edited by Marina Bianchi SUBJECTIVISM AND ECONOMIC ANALYSIS Essays in memory of Ludwig Lachmann Edited by Roger Koppl and Gary Mongiovi THEMES IN POST-KEYNESIAN ECONOMICS Essays in honour of G. C. Harcourt, volume three Edited by Peter Kriesler and Claudio Sardoni THE DYNAMICS OF TECHNOLOGICAL KNOWLEDGE Cristiano Antonelli THE POLITICAL ECONOMY OF DIET, HEALTH AND FOOD POLICY Ben J. Fine THE END OF FINANCE Capital market inflation, financial derivatives and pension fund capitalism Jan Toporowski POLITICAL ECONOMY AND THE NEW CAPITALISM Edited by Jan Toporowski GROWTH THEORY A Philosophical Perspective Patricia Northover THE POLITICAL ECONOMY OF THE SMALL FIRM Edited by Charlie Dannreuther HAHN AND ECONOMIC METHODOLOGY Edited by Thomas Boylan and Paschal F O’Gorman GENDER, GROWTH AND TRADE The miracle economies of the postwar years David Kucera NORMATIVE POLITICAL ECONOMY Subjective freedom, the market and the state David Levine ECONOMIST WITH A PUBLIC PURPOSE Essays in honour of John Kenneth Galbraith Edited by Michael Keaney THE THEORY OF UNEMPLOYMENT Michel De Vroey THE FUNDAMENTAL INSTITUTIONS OF CAPITALISM Ernesto Screpanti TRANSCENDING TRANSACTION Alan Shipman POWER IN BUSINESS AND THE STATE An historical analysis of its concentration Frank Bealey EDITING ECONOMICS Essays in Honour of Mark Perlman Hank Lim, Ungsuh K. Park and G. C. Harcourt MONEY, MACROECONOMICS AND KEYNES Essays in honour of Victoria Chick, volume one Philip Arestis, Meghnad Desai and Sheila Dow vii CONTENTS 1 List of figures ix 1 List of tables x 1 List of contributors xi 1 Introduction: On Chick’s life as an academic 1 PHILIP ARESTIS, MEGHNAD DESAI AND SHEILA DOW 2 The ‘Great Inflation’, 1520–1640: Early views on 4 endogenous money PHILIP ARESTIS AND PETER HOWELLS 3 The endogeneity of money 14 CHARLES GOODHART 4 The transmission mechanism with endogenous money 25 DAVID LAIDLER 5 Economic policy with endogenous money 35 MALCOLM SAWYER 6 Victoria Chick and the Theory of the Monetary Circuit: An enlightening debate 45 ALAIN PARGUEZ 7 Keynes, money and modern macroeconomics 56 COLIN ROGERS 8 ‘The stages’ of financial development, financial liberalization and growth in developing economies: In tribute to Victoria Chick 68 ROGÉRIO STUDART 9 On Keynes’s concept of the revolving fund of finance 79 FERNANDO J. CARDIM DE CARVALHO CONTENTS viii 10 On a post-Keynesian stream from France and Italy: the Circuit approach 91 JOSEPH HALEVI AND RÉDOUANE TAOUIL 11 IS–LM and macroeconomics after Keynes 103 PETER KRIESLER AND JOHN NEVILE 12 On Keynes and Chick on prices in modern capitalism 115 G. C. HARCOURT 13 Aggregate demand policy in the long run 124 PETER SKOTT 14 The investment decision in Keynes’s thought 140 AUGUSTO GRAZIANI 15 Aggregate demand, effective demand, and aggregate supply in the open economy 150 JOHN SMITHIN 16 Some myths about Phillips’s curve 163 BERNARD CORRY 17 Transitional steady states: A contradiction in terms? 173 MAURIZIO CASERTA 18 Unemployment in a small open economy 182 PENELOPE HAWKINS AND CHRISTOPHER TORR 19 Why do macroeconomists disagree on the consequences of the Euro? 193 JESPER JESPERSEN 20 The fate of key currencies: DM, sterling and the Euro 205 STEPHEN F. FROWEN AND ELIAS KARAKITSOS Victoria Chick’s publications 216 Index 222 ix FIGURES 7.1 Krugman’s liquidity trap 63 15.1 An aggregate demand and supply diagram in r, Y space 152 15.2 Alternative presentation of aggregate demand and supply in r, Y space 153 15.3 Adjustment to a lower real rate of interest 157 15.4 Effect of effective demand on output and employment 157 15.5 Impact of cheap money on the individual member-state 158 TABLES 6.1 Cases I, II and III 51 8.1 Patterns of development finance in different financial structures 72 19.1 New dividing lines in EU policy attitudes 193 19.2 EMU attitude and the political spectrum 194 19.3 Shocks and ‘optimal policies’ (in an imperfect economy) 202 x xi CONTRIBUTORS Philip Arestis is Professor and Research Director at the South Bank Business School at South Bank University, London, UK. He is also joint editor of International Papers in Political Economy. Fernando J. Cardim de Carvalho is Professor of Economics, Institute of Economics, Federal University of Rio de Janeiro, Brazil. Maurizio Caserta is Professor of Macroeconomics at the Faculty of Economics, University of Catania, Italy. Bernard Corry (died 2001) was Emeritus Professor at Queen Mary and Westfield, UK. Meghnad Desai is Professor of Economics and Director of the Centre for Study of Global Governance at the London School of Economics. Sheila Dow is Professor in the Department of Economics, University of Stirling, Scotland. Stephen F. Frowen is Honorary Research Fellow at The University College, London, and Honorary Professor at the Institute for German Studies, The University of Birmingham. He is also a senior Research Associate at the Von Huegel Institute, Fellow Commoner at St Edmund’s College, Cambridge, and Honorary Research Fellow in the Department of Economics, University College, London. Charles Goodhart is Deputy Director of the Financial Markets Group and the Norman Sosnow Professor of Banking and Finance at the London School of Economics. Augusto Graziani is Professor at the University of Rome, ‘La Sapienza’, Italy. Joseph Halevi is based at the Department of Economics, University of Sydney, Australia, and is associated to the CNRS’s (France’s National Research Council) center Institut de Recherches Economiques sur la Production et le Développement at the University of Grenoble as well as to the Centre d’Etudes de Macroéconome et Finance Internationale at the University of Nice. G. C. Harcourt is Emeritus Reader in the History of Economic Theory at the University of Cambridge and Emeritus Fellow at Jesus College, Cambridge, UK, and Emeritus Professor at Adelaide University, Australia. Penelope Hawkins is Managing Director of Feasibility (Pty) Ltd, Johannesburg, South Africa. Peter Howells is Professor of Economics at the University of East London, UK. He is also Editor of the Royal Economic Society’s Newsletter and Associate Editor of the journal Economic Issues. Jesper Jespersen is Professor Economics at Roskilde University, Denmark. Elias Karakitsos is Professor of Economics at the Imperial College of Management, London, UK. Peter Kriesler is Associate Professor, Department of Economics, University of New South Wales, Australia. David Laidler is Professor of Economics at the University of Western Ontario and a Fellow-in-Residence of the C.D. Howe Institute, Cananda. John Nevile is Emeritus Professor and Visiting Professor at the University of New South Wales, Australia. Alain Parguez is Professor of Economics at the University of Franche-Compte, Besancon, France, and is associated with the Economics Department at the University of Ottawa. Colin Rogers is Associate Professor and Dean of the School of Economics at the University of Adelaide, Australia. Malcolm Sawyer is Professor of Economics and Leeds University Business School, UK. He is joint editor of International Papers in Political Economy and editor of International Review of Applied Economics. Peter Skott is Associate Professor, Department of Economics, University of Aarhus, Denmark. John Smithin is Professor of Economics at York University, Canada. Rogério Studart is Professor of Economics, Institute of Economics, Federal University of Rio de Janeiro, Brazil. Rédouane Taouil is based at the CEPSE, UFR Sciences Economique, Université Pierre Méndes, France. Christopher Torr is the Director Honours Studies, Department of Economics, University of South Africa. CONTRIBUTORS xii [...]... 4) 4 The mint price of 1lb weight of fine silver rose from £2.40 to £6.00 between 15 42 and 15 51 (i.e 15 0 per cent) By March 15 42 the silver standard was 75 per cent of the original pure sterling silver standard, 50 per cent by March 15 45, 33.5 per cent by March 15 46 and 25 per cent in 15 51 (Davies 19 94: 19 9) 5 The fullest version of the Discourse is that edited by E Lamond (London, 18 93) Throughout this... 13 00 10 4.8; 14 70 10 4.6; 15 26 13 5 .1; 15 46 17 2.3; 15 61 289.3; 16 00ϭ478.3; 16 43ϭ597.8 It is not clear from the table what is the base year 3 The reasons for the systematic debasement of the coinage can be traced to those which lay also behind the Henrician dissolution of the monasteries (which began in 15 34): ‘Finance is indeed the key to the proper understanding of the dissolution’ (Woodward 19 93: 4) 4 The mint... other headings Does this not seem rather odd? If Laidler had included a section on the supply of money, one of my preferred candidates1 for inclusion would have been Victoria Chick s paper on ‘The Evolution of the Banking System and the Theory of Saving, Investment and Interest’ In this Vicky argues persuasively that the factors determining the stock of bank deposits (the largest component of the money. .. promoted to Reader in 19 84 and to Professor in 19 93 2 INTRODUCTION During the time Victoria Chick has spent at UCL, she supervised a great number of Ph.D students, many of whom are represented in the two volumes Victoria Chick has also taught at a number of universities throughout the world These include McGil1 University in Canada, University of California at Berkeley and at Santa Cruz in the USA, Aarhus... commodity money an upper limit to the money stock is of course set by the total amount of precious metal available But only a fraction of what was available, in the sense of having been mined and melted, was ever used as a circulating medium In the event of extreme shortage, the melting and coining of plate and other decorative objects could introduce some elasticity into the money supply And the specie... Population in Britain was 2 million in 14 50 and by 16 00 jumped to 4 million (Davies 19 94: 214 ) Its distribution changed too, with a pronounced urban drift, especially to London 12 For details of the bill, see Tawney and Power (19 53, II: 15 4–63) and for subsequent infringements (ibid.: 16 3–75) Other sources of contemporary comment on the practice of usury are contained in Tawney and Power (III: 345–86) The interest... Bodin, J (19 97) In H Tudor and R W Dyson (eds), Response to the Paradoxes of Malestroit Bristol: Thoemmes Press Challis, C E (19 92) A New History of the Royal Mint Cambridge: Cambridge University Press Chick, V (19 86) ‘The Evolution of the Banking System and the Theory of Saving, Investment and Interest’, Économies et Sociétés (Série M P, No 3) Chick, V (19 93) ‘The Evolution of the Banking System and. .. Hamilton, E J (19 28) ‘American Treasure and Andalusian Prices, 15 03 16 60’, Journal of Economic and Business History, I, 33 Hamilton, E J (19 34) American Treasure and the Price Revolution in Spain, 15 01 16 50 Cambridge, Mass: Harvard University Press Hauser, H (ed.) (19 32) La Réponse de Jean Bodin a M de Malestroit, 15 68 Paris: Librairie Armand Colin Laidler, D W (19 91) ‘The Quantity Theory is Always and Everywhere... An Institutionalist Appraisal’, Journal of Economic Issues, 25 (1) , 13 7– 51 Outhwaite, R B (19 82) Inflation in Tudor and Early Stuart England Basingstoke: Macmillan, 2e Phelps-Brown, E H and Hopkins, S V (19 56) ‘Seven Centuries of the Price of Consumables Compared with Builders’ Wage Rates’, Economica, 23, 296– 314 ; reprinted in E M Carus-Wilson (ed.), Essays in Economic History, II (19 62) Tawney, R and. .. table 1) provides estimates of velocity at nine dates between 13 00 and 17 00 Over the whole period, the trend is slightly downward but the figures show a quite remarkable jump from 3.5 71 (15 26) to 5. 517 (15 46) to 9. 310 (15 61) , declining then to 6.286 (16 00) but falling back to long-term orders of magnitude (c 3.5) only by 16 43 In the early stages of the inflation, therefore, there appears to be a distinct . present in the outburst of complaints about usury and excessive interest rates from the 15 60s onward. A usury bill prohibiting interest in excess of 10 per cent was introduced in 15 71 and cases of. effective demand on output and employment 15 7 15 .5 Impact of cheap money on the individual member-state 15 8 TABLES 6 .1 Cases I, II and III 51 8 .1 Patterns of development finance in different financial. demand and supply diagram in r, Y space 15 2 15 .2 Alternative presentation of aggregate demand and supply in r, Y space 15 3 15 .3 Adjustment to a lower real rate of interest 15 7 15 .4 Effect of