Economic Issues Volume 28

ECONOMIC ISSUES

Volume 28 (2023)

Part 1, March

Please select from the titles below:

Special Issue on Capitalism and Heterodox Economics

I Negru and A Arntsen, Introduction to the Special Issue on Capitalism and Heterodox Economics, Vol.28, No.1, p.1-4
D Aparicio, G Rivera and M Meireles, Latin America post-pandemic: debt, financial instability, and uneven economic recovery, Vol.28, No.1, p.5-19
M F d C Resende, Conventions and the Brazilian Fiscal Policy to Face the Aftermath of the COVID-19 Economic Crisis: a Post Keynesian view, Vol.28, No.1, p.21-42
S T Marchina, Valorisation of capital and the externalisation of social reproduction in an era of rising economic inequality, Vol.28, No.1, p.43-55

Articles

Book Reviews

Part 2, September

Please select from the titles below:

Articles

Book Reviews

G B Gorton and G L Ordonez, Macroeconomics and Financial Crises: Bound Together by Information Dynamics, Vol.28, No. 2, p.87-89

Part 1, March

Special Issue on Capitalism and Heterodox Economics

Introduction to the Special Issue on Capitalism and Heterodox Economics

by I Negru and A Arntsen

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Latin America post-pandemic: debt, financial instability, and uneven economic recovery (p.5)

by D Aparicio, G Rivera and M Meireles

Abstract: This paper deals with the discussion of the effects of the pandemic on public and private indebtedness in Latin America, which reached record levels in 2020. We seek to critically map the implications of massive private indebtedness for financial instability in the post-pandemic context, anchored in the theoretical contribution of heterodox economics - especially inspired by post-Keynesian literature and discussions on development by Latin American structuralist authors - and supported by the interpretation of descriptive statistical data. Imminent risks include: a) an increase in non-performing portfolios; b) inertial overaccumulation of debt; and c) bankruptcy accompanied by job losses. However, when analysing the behaviour of public debt to finance exceptional government spending to counteract the negative economic effects of the pandemic, we find that it both contributed to making the fall in economic activity less pronounced and facilitated the conditions for a better economic recovery.

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Conventions and the Brazilian Fiscal Policy to Face the Aftermath of the COVID-19 Economic Crisis: a Post Keynesian view (p.21)

by M F d C Resende

Abstract: With the exception of 2020, when Brazilian GDP fell because of COVID-19, the policy of 'expansionary fiscal austerity' has been implemented in Brazil since 2015, but with poor results in terms of economic growth. From the Post-Keynesian perspective, sustainable economic growth depends on investment and the latter depends on optimistic conventions. This article analyses the feasibility of a Keynesian fiscal policy to resume Brazilian economic growth and the role of conventions for the success of fiscal policy.

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Valorisation of capital and the externalisation of social reproduction in an era of rising economic inequality (p.43)

by S T Marchina

Abstract: As economic inequality has broadened in the past four decades, social reproduction, understood as people's daily and generational maintenance (Bhattacharya 2017), has become increasingly challenging, particularly in the Global South. In this context, households rely heavily on gendered relationships and practices to sustain subsistence through multiple forms of informal, partial, and self-employment alongside a heavy load of domestic and care work (Beneria 2019). In that context, from a critical political economy and Social Reproduction Theory perspective, this paper sets a closer lens into Marx's formula of capital to explore how the heightened pressure on social reproduction serves as a strategy to increase externalities that enable economic inequality to continue growing.

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Articles

Wage inequality associated with job status: Evidence from Indonesia and the Philippines (p.57)

by T T Nguyen-Huu

Abstract: This research investigates the wage differentials between temporary and permanent workers in Indonesia and the Philippines, based on their national Labour Force Survey data. The estimates show evidence of wage penalties in both countries. Moreover, Quantile Regression Estimates report that wage gaps could greatly vary across the wage distribution. The wage gap is smaller at the lower tails and becomes wider at the upper tails of the wage profile in Indonesia, suggesting the presence of a glass ceiling effect. On the other hand, no distribution effect is observed in the Philippines.

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The Great Recession and Small States (p.81)

by J A Edwards, C B Naanwaab and S P Simkins

Abstract: This paper raises a simple question: relative to the rest of the world, how was small state real per capita GDP growth impacted by the Great Recession of 2008-2009? While holding constant average business cycle dynamics, we isolate this shock to measure how small countries around the globe responded to the recession - something that has not been studied before. The results indicate that while small states had a more pronounced contraction than the rest of the world going into the Great Recession, their rebound was both stronger and quicker, allowing them to return to their long-run growth rates more rapidly than other countries. Additionally, the methods and data configurations used in this study will provide guidance to researchers analysing future global exogenous shocks.

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Part 2, September

Effect of Aid for Trade on Financial Development (p.1)

by S K Gnangnon

Abstract: Many studies have considered the macroeconomic effects of Aid for Trade (AfT) flows, that is, the part of official development assistance allocated for the development of the trade sector. The present paper aims to expand this literature by investigating the effect AfT flows on financial development. The empirical analysis draws on an unbalanced panel dataset of 121 countries over the period 2002-2019, and uses primarily the two-step system Generalised Method of Moments estimator. Empirical outcomes show that total AfT flows exert a positive effect on financial development. The magnitude of this positive effect is greater, the lower the share of manufactured exports in total merchandise exports, or the lower the level of economic complexity. The magnitude of this positive effect is also greater, the lower the size of real net foreign direct investment inflows in the AfT beneficiary countries. These findings highlight the key role of AfT flows in promoting financial development in beneficiary countries, and therefore, in fostering economic development in these countries.

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Whose Policy Uncertainty Matters in the Trade between Mexico and the US? (p.39)

by M Bahmani-Oskooee and H Harvey

Abstract: The main goal of this paper is to determine whose policy uncertainty affects commodity trade flows between the US and Mexico the most. By using monthly data from each of the 93 industries that trade between the two countries, we find that while, in the short-run, trade by most industries is affected by US and Mexican policy uncertainty measures, in the long run only a limited number of industries are affected. More precisely, 17 US exporting industries to Mexico, with 30 per cent export share, are affected positively by the US uncertainty measure and 21 US exporting industries with 45 per cent export share are affected negatively by the Mexican uncertainty measure. On the other hand, 25 Mexican exporting industries to the US with only 4.9 per cent export share are affected by the US uncertainty measure and 27 Mexican exporting industries with 5.1 per cent export share are affected by the Mexican uncertainty measure. Thus, both uncertainty measures have their largest long-run effects on US exports to Mexico.

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The effect of food stamps on fibre intake (p.71)

by D M Zimmer

Abstract: This paper examines the impact of food stamps on fibre intake, using data from the National Health and Nutrition Examination Study (NHANES), and a matching estimator to address possible endogeneity of food stamp participation with respect to dietary behaviour. Results suggest that food stamps reduce fibre intake by approximately 11 per cent. Food stamps also reduce the probability of reaching the daily recommended 20-gramme threshold by 18 per cent. But why do food stamps reduce fibre intake? A long-running concern is that, despite restrictions preventing food stamp recipients from using them at fast food/pizzas establishments, the fungible nature of household budgets might produce a link between food stamps and the consumption of such low-fibre fare. However, the data do not support that conjecture. Rather, the reason for reduced fibre intake appears to be that food stamp enrolees consume 50 per cent fewer servings of legumes (beans) and 30 per cent fewer servings of pasta/rice. Those foods, long associated with low-income diets, also happen to be rich in fibre.

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