Antonella Stirati

Technical Change, Effective Demand and Employment

Ricardo and Marx saw technological change as a possible cause of long-period unemployment. Neoclassical and Schumpeterian economists regard technological unem ployment as a transitory phenomenon. This paper argues that the capital critique (i) demolishes the neoclassical claim that market mechanisms will restore full employment whenever workers are displaced by technical change, and (ii) rehabilitates the old Ricardian argument that automatic compensation factors are generally absent. The neo-Schumpeterian notion of autonomous investment is also rejected, in favour of the view that, in the long period, all investment is induced. By extending Keyness theory of effective demand to the long period through a model based on the supermultiplier, this paper suggests that the ultimate engines of growth are located in the autonomous components of effective demand--exports, government spending and autonomous con sumption. Technical change plays a role in the accumulation process through its effects on consumption patterns and the material input requirements. However, the impact of technical change is now seen to depend upon circumstances such as income distribution, the availability of bank liquidity and exchange rate policy.

Inflation, Unemployment and Hysteresis: An alternative view

This paper integrates ideas concerning the influence of the interest rate on the rate of profits with an analysis of inflation and its relation with unemployment. Inflation is regarded, as in Kaleckian contributions, as resulting from inconsistent claims on income, but the approach taken leads to different conclusions concerning the effects of inflation (or deflation) on income distribution, and the circumstances giving rise to acceleration of inflation. The approach followed in the paper also provides explanations of phenomena that have appeared puzzling, particularly the association of different unemployment rates with stable inflation, and the persistence of high rates of unemployment.

The Italian Ph.D ten years on: Educational, scientific and occupational outcomes

The doctorate in Italy is a new institution. In this paper we present the results of an investigation that attempts to assess the experience from three main points of view: (i) the didactic structure of the courses (ii) their scientific output and (iii) the employment of Ph.Ds. From the survey, the didactic structure of the courses appeared weak, i.e. they were based on occasional activities. The main reason might be the unclear location of the Ph.D within the departmental activities. The scientific productivity of Ph.Ds seems promising. Only an extremely low percentage of Ph.Ds work in industrial R&D, a fact explained by the small amount of original R&D carried out by Italian firms. We found, however, a significant degree of co-operation between industry and university at doctorate level. Obstacles have also been encountered by Ph.Ds in obtaining jobs in the University or in public research institutes, not only because of the scarcity of job openings, but also because of the absence of the social convention whereby in most countries the doctorate is regarded as the normally necessary background for these careers.

The influence of unemployment, productivity and institutions on real wage trends: the case of Italy 1970-2000

The aim of this chapter is to describe and attempt to interpret the trends of wages in Italy in the period 1970–2000. While it is an applied work, it may be useful to provide at the beginning a brief clarification of the broader framework implicit in the analysis. On consideration of the analytical faults found in neoclassical substitution mechanisms as a foundation for decreasing factor demand schedules, we do not approach the explanation of wages by assuming that the economic forces underlying their determination can be described by the interaction between labour demand and supply functions. More generally, we envisage no tendency of the economy towards full employment or NAIRU (non-accelerating inflation rate of unemployment) equilibria, such as is still assumed in the models that replace the traditional labour demand and supply curves with ‘pseudo-curves’ based respectively on firm pricing rules and models of wage determination.1 In line with the classical approach and its modern revival, we instead expect wage trends to be affected by a set of historical and current circumstances that can be broadly classified as labour-market conditions, the degree of organization of the parties involved, and broader economic and political/institutional factors. All these circumstances affect wage determination through the same channel, that is their influence on the ability of the parties involved to establish favourable conditions for themselves in the distribution of income (Stirati 1992; Levrero 2006).

Distribuzione del reddito e prezzi relativi in Italia 1970-2002

The paper examines empirically the evolution of income shares in the business sector as a whole and in various industries adopting a framework of analysis that does not rely on neoclassical substitution mechanisms. After showing that the increase in the profit share since the end of the seventies cannot be attributed to structural changes in output or labour force composition and that it is associated to increases in the ex post profitability of capital, we address the question of different profiles in the evolution of profit share and profitability in various sectors. We argue that the exchange rate regime, changes in international markets and in some instances, privatizations, have tended to cause a redistribution to profits from manufacturing to other sectors via changes in relative prices, particularly in phases characterized by a tendency to the real appreciation of the exchange rate, including the last part of the 1990s till 2002. We conclude that this situation may have contributed to the slow growth and recent stagnation of real wages, since manufacturing is the leading sector in wage determination.

Smith's Legacy and the Definitions of the Natural Wage in Ricardo

There is an on-going controversy on the interpretation of David Ricardos wage theory, which has undoubtedly been fueled by the existence of contradictions and difficulties in Ricardos own treatment of wages. The aim of this paper is to clarify the sources of these difficulties, and to trace their possible historical and analytical reasons. To this end, Ricardos contribution is put in historical context, and compared with the received doctrine of his time, that is, with Adam Smiths wage theory. This comparison shows that there are many Smithian elements in Ricardo, and that the problems emerge when Ricardo departs from Smith. These problems are essentially the coexistence of Smithian and Ricardian notions of the natural wage in Ricardos work and the difficulties in reconciling the latter with the distinction drawn by Ricardo between natural and market variables. The reason.for Ricardos partial departure from Smith, it will be argued, may have been his wish to render more clear-cut his conclusions concerning the tendency of the profit rate to fall in consequence of a rising price of corn. The effort to clarify the difficulties in Ricardos theory and the comparison with Smith also entail an interpretation that differs in important respects from those found on both the main sides of the controversy over his wage theory.

Wealth, Capital and the Theory of Distribution: Some Implications for Piketty’s Analysis

ABSTRACT Thomas Piketty’s Capital in the Twenty-First Century (2014) has been spectacularly successful. One reason for this is that while it often challenges received views and supports a non-apologetic interpretation of capitalism, at the same time it relies on mainstream economics. This theoretical framework, however, is not always conducive to consistency and interpretative accuracy. This paper points out some of the book’s analytical weaknesses and shows that some empirical evidence, a clearer distinction between wealth and capital, and a different theoretical perspective, could lead to questioning some of the book’s claims. In particular, it argues that the increase in the wealth-to-output ratio (but not the capital-to-output ratio) cannot explain the observed changes in income shares. It also contends that non-mainstream perspectives on income distribution and growth suggest that changes in income distribution are due more to policy and power relations than to the factors Piketty identifies.

On the causes of the changes in income shares: Some reflections in the light the United States experience

ABSTRACT The last 30 years have witnessed a dramatic change in the distribution of income, with the wage share falling in all major industrialized countries. Main-stream analyses, including New Keynesian ones, which retain the notion of factor substitution leading to a “factor intensity” inversely related to its rate of return, have encountered some difficulties in the interpretation of this change. Nonmainstream approaches present an advantage in the explanation of the phenomenon, consisting in the fact that they entail no a priori connections between the changes in distribution and the changes factor proportions. Hence if a change in institutions or in the bargaining strength of the parties affects distribution, income shares may vary significantly (i.e., changes in wages need not be accompanied by changes in labor to output ratio in the opposite direction as in mainstream analyses). Yet empirical observation may question also some of the analyses that have been advanced outside the mainstream. The article will explore the ways in which nonmainstream approaches have interpreted the described changes in distribution, and assess them from an analytical viewpoint and with reference to U.S. data. The purpose is that of pointing at some open questions and problems.

Alternative ‘Closures’ to Sraffa’s System: Some Reflections in the Light of the Changes in Functional Income Distribution in the United States

The last 30 years have witnessed a dramatic change in income distribution, with the wage share1 falling in all major industrialised countries (Figure 9.1).

Introduction. Special Issue: A Selection of Papers Presented at the Annual Conference of the European Society for the History of Economic Thought in Rome, May 2015

In 2010, the European Journal of the History of Economic Thought (EJHET) and the European Society for the History of Economic Thought (ESHET) initiated a fruitful cooperation, leading to the publication of a special annual issue of EJHET consisting of a selection of papers from the preceding year’s ESHET conference. After seven years of committed collaboration, this joint venture has put down strong roots and the two autonomous institutions – the Journal and the Society – have successfully joined forces in their mission to promote innovative and promising research in the academic field of the history of economic thought. This special issue publishes a selection of the papers presented at the annual ESHET conference held in Rome on 14–16 May 2015, jointly organised by Universit a Roma Tre (where the conference took place), Sapienza Universit a di Roma and Universit a degli Studi di Roma “Tor Vergata.” The theme of the Rome conference was “Great Controversies in Economics”, and the meeting attracted almost 300 participants to its plenary and parallel sessions. Although many of the papers addressed other themes, the all-encompassing nature of the conference offered a broader framework for the contextualisation of major conflicts, as well as minor debates, between different theoretical and methodological approaches to the study of economic problems and phenomena. Indeed, it is hard to understand the changing nature of the subject matter of economics over time without considering the role of intellectual and political debates centred upon the analytical constructions, ideological motivations, and policy implications of economic knowledge. The persistent and enduring nature of such controversies, regarded as driving forces for scientific improvement, is not to be underestimated. No economist is an island, and, therefore, even amid remote theoretical explorations, one can easily find the explicit reference to, or implicit shadow of, other controversial meanings that are debated, revised, or contested. The total number of papers initially submitted was 37. A preliminary selection was made by the editors of this special issue, taking into account the likelihood of final acceptance and the time required for revisions within strict deadlines. After this screening, the editors of the special issue supervised a rigorous reviewing process, faithfully adhering to the high standards of the peer review system put in place by the managing editors of EJHET. The set of seven papers finally accepted for publication in this issue offers a variety of approaches to different eras and controversies in the history of economic thought. Anders € Ogren presents Anders Wappengren, a neglected Swedish author of the late eighteenth century who – in the context of early controversies about monetary and financial stability in paper