G. C. Harcourt

Exchange Rates and the Macroeconomy in an Era of Global Financial Crises, with Special Reference to Australia

Unless the global financial system is radically reformed — and the necessary reforms are looking increasingly unlikely to occur — it will continue to be conducive to financial crises. Government rhetoric and actions can often influence in desirable ways both the speculative actions that now determine the exchange rate and the effect of exchange rate movements on the domestic economy. Managing the exchange rate should start with Australian support for measures such as the Tobin tax that dampen speculation. In 2008 and 2009, exchange rate changes were helpful in reducing the impact of the global financial crisis on Australia, largely because of a very clear commitment by the Australian government to make preservation of jobs its top priority. In 2009, a rapid rise in the exchange rate was unhelpful. In the short run, little can be done about this, but in the longer run, it is possible to offset the adverse effects.

On the Cambridge, England, Critique of the Marginal Productivity Theory of Distribution

The Cambridge critique of the marginal productivity theory of distribution is entwined with the critics’ theories of value, price, distribution, capital, growth, and methodology that occurred alongside it. The article first discusses these dimensions, then the inescapable need to explain the origin and size and rate of profits in any approach to the theory of distribution. The need in the neoclassical approach to have a unit in which to measure capital that is independent of distribution and prices is examined. The alternative classical/Marxian alternative and the relationship of pricing and market structures to systemic relationships in Post-Keynesian theory are analysed. Unresolved debates among the critics of the mainstream are outlined including those between Garegnani and Hahn. Ways forward are suggested in the concluding section.

On Ricardo and Cambridge

David Ricardo’s key place in the history of economic thought is well established. However, both the understanding of his Principles of Political Economy and Taxation and its role in the development of economic analysis is much more controversial. Cambridge economists have contributed significantly to both of these issues. They have played an important part in two extremely divergent interpretations of Ricardo’s place in the development of economic thought. Understanding how Ricardo has been viewed in Cambridge does not result in homogeneity, but in a spectrum of interpretations. In this paper, we focus on the role of Ricardo’s Principles in the development of economics as seen by Cambridge economists.

Faith, works and talents entwined: Driving forces behind John Nevile’s contributions

In this article, we consider the mainsprings of John Nevile’s many contributions to economics. John has repeatedly argued that because ‘economic actions, institutions and policies affect people’, they have an ethical dimension (Hawtrey and Nevile, 1986: 1), and he has stressed the importance of understanding the value judgements on which economics rests. His policy suggestions are aimed at improving social justice and the well-being of the most vulnerable. Apart from his deep knowledge of economic theory, his Christian faith provides an important foundation for his analysis, particularly of policy.

Introduction to Ethics and Economics

The first essay in this volume is a very generous and gracious article on the part my Christian faith plays in my work as an economist. It is not my place to comment on this essay except to provide a little historical background. From the first year in which I studied economics, in 1950 at the University of Western Australia, I had no doubt that a person’s faith, or ideology, or world view should provide an underpinning for one’s work as an economist. This was both appropriate and inevitable. Equally appropriate and inevitable was that it affected the conclusions to which one came as an economist. In those days of a brave new world of Keynesian economics it was easy to see a relationship between a faith that firmly believed in God’s concern for all human beings and an economics which would save Australian society from the horrors of the depression of the 1930s, of which I had some personal memories. Incidentally, the parochialism revealed in the last sentence was clearly there in practice, but would have been denied on principle if anyone had challenged me about it.

The Failure of Economic Planning: The Role of the Fel’dman Model and Kalecki’s Critique

In the 1920s, Soviet economists began to develop growth theory with the specific aim of facilitating the planning of their economy. Their work differed from that of most 20th-century economists because it was not aimed at academic economists but, rather, at politicians, bureaucrats and others involved in the machinery of planning. This meant that, although the work was often not as technical as the authors may have liked, it strongly related to the actual economy that they were attempting to model.