Claudio Sardoni

Unemployment, Recession and Effective Demand

In the midst of the current world economic crisis, many claim there is a necessity to return to the Marxian and Keynesian traditions in order to better understand the dynamics of market economies. This book is an important step in that direction. It presents a critical examination of the foundations of macroeconomics as developed in the traditions of Marx, Keynes and Kalecki, which are contrasted with the current mainstream. Particular attention is given to the problem of market forms and their relevance for macroeconomics.

Some Aspects of Kalecki’s Theory of Profits: its Relationship to Marx’s Schemes of Reproduction

In this study, the relationships between Kalecki’s and Marx’s schemes of reproduction are examined. In particular, I point out that Kalecki’s views on finance are closely related to Marx’s treatment of the monetary aspects of the reproduction process. In developing his schemes of reproduction, Marx paid most attention to the monetary aspects of the process. Earlier in the first volume of Capital (Marx, 1954), Marx held that even the simple circulation and exchange of commodities could not possibly take place without money (cf. Marx, 1954, pp. 88-96). In Volume II of Capital (Marx, 1956), this point of view is reaffirmed when production, circulation and reproduction are dealt with at the macro level (cf. Marx, 1956, p. 358). But in later expositions and generalisations of Marx’s schemes the monetary aspects are frequently ignored.1

Growth with Unused Capacity and Endogenous Capital Depreciation

The paper contributes to the debate on growth and distribution in a non-mainstream perspective. It looks at the role that capacity utilization plays in the process of growth under the hypothesis that the rate of capital depreciation is a function of the degree of capacity utilization. Our hypothesis implies results partly different from those obtained by other models in which capacity utilization plays a key role. In particular, a varying rate of depreciation affects the conditions under which distributional changes in favor of wages affect the rate of growth positively.

Market forms and effective demand: Keynesian results with perfect competition ∗

In recent years there has been a flourishing of models with microfoundations based on imperfect (or monopolistic) competition that claim to yield Keynesian results which, it is held, are incompatible with perfect competi-tion. The paper shows that Keynes’s results do not depend on market forms but are contingent on his treatment of investment. In Keynes’s analysis, the existence of underemployment equilibria is demonstrated regardless of the assumed market form. Far from taking into account the importance of investment, recent models with ‘Keynesian results’ ignore investment altogether. The article argues that if the investment demand function, with its distinctive characteristics, is removed, involuntary unemployment can be explained only by imperfections or rigidities that prevent producers from pushing their supply up to the level of full employment. A conclusion that Keynes wanted to avoid. The introduction of a hypothesis of market forms different from imperfect competition may be useful in order to...

Money, the ‘ICT Revolution’ and Economics

Claudio Sardoni looks at some aspects of the ongoing debate around the so-called ‘ICT revolution’ and its effects on the economic system. He argues that economists have devoted much attention to ICTs effects on the functioning of the monetary and financial system in particular. It is, in fact, the monetary and financial sectors of advanced economies that have adopted ICT innovations more widely and faster than other sectors.

The General Theory of Employment, Interest and Money : Three views

In responding to Philip Arestis’s request for a contribution to the volume of essays in honour of Paul Davidson, a good friend of G.C.H. of well over 30 years’ standing, and of C.S. for 15 years or more, we thought that a ‘compare and contrast’ essay on interpretations of The General Theory would be a peculiarly suitable and appropriate subject. For it would enable us both to outline Paul’s own deep and astute interpretation and to compare it with the interpretations in two recent biographies of Keynes — Donald Moggridge’s magisterial economist’s life (1992) and Volume II of Robert Skidelsky’s superb biography (1992), which is centred on the creation, content and criticism of The General Theory. Moreover, his original and compelling interpretation has earned the reproach of Don Patinkin because of its post Keynesian characteristics (see Skidelsky, 1992: xi), so it seemed a good idea also to compare his arguments and approaches with those of one of America’s leading post Keynesian economists.1

Interpretations of Kalecki

In an essay which deals with the interpretation of Kalecki it is almost inevitable to discuss the relationship between Kalecki and Keynes. Most interpreters of Kalecki have concentrated on this relation and, moreover, some of the most authoritative interpreters of Kalecki have themselves been closely associated with the ‘Keynesian revolution’, Joan Robinson being the outstanding example.

A note on the sustainability of full employment in the presence of budget deficits

ABSTRACT In a recent issue of this journal, Tymoigne and Wray, as well as Palley, discussed whether economies can experience stable full-employment equilibria with persistent public budget deficits. This implies continuous growth of a stock-variable: high-powered money and/or government bonds in the hands of the private sector. Their discussion assumed a stationary state. The question is whether such a situation can be regarded as sustainable over time. This paper argues that a satisfactory solution to the problem can be found only by abandoning the hypothesis of stationary state and considering the effects that different compositions of public expenditure have on the rate of growth. To have a stable full-employment equilibrium with budget deficits, the economy must grow. Since the economy is assumed to be in full employment, the growth of aggregate output must be entirely due to the growth of productivity, which can be realized by changing the composition of public spending in favor of productive expenditures.

The contribution of Gerald Shove to the development of Cambridge Economics

Frank Gerald Shove was a close friend of Keynes and the other protagonists of the economic debates in Cambridge during the 1920s and 1930s. Shoves influence on those debates is not well documented because he published little and had all his notes destroyed after his death. This paper looks at Shoves most significant contributions to the debates of the 1930s. Attention is concentrated on the debates over increasing returns and imperfect competition. Shove emphasized the complexity of economic phenomena and the need to develop tools to deal with it. He found his analytical and methodological inspiration in Marshalls work. This position led him to clash with younger economists, in particular Joan Robinson, whose work on imperfect competition and whose efforts to achieve rigorous and ‘precise’ results failed, in his view, to capture the working of actual markets. The final section of the paper discusses the similarity of Shoves methodological outlook to that of Keynes. Both were well aware of the need to go beyond Marshall, but they wanted to retain the richness, complexity and realism of Marshalls approach.

Marx’s Theory of Money and Interest: A Reconsideration in the Light of Robertson and Keynes

Marx’s analysis of the role of money in a capitalist economy marked a significant advance with respect to classical political economy, and in particular with respect to Ricardo. For Marx, money was no longer just a means of circulation but also a store of value. This has significant macroeconomic implications.