Tuesday, December 28, 2010

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Concert at Villa Grazioli - International Conference 'Sraffa s Production of Commodities by Means Commodities


2nd-4th December 2010, Roma Tre University, Faculty of Economics






Program








Sunday, December 19, 2010

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Scenarios for the European theater




By Sergio Cesaratto




December 15, 2010
In December 16-17 meeting in Belgium, the Council of EU leaders. What are the scenarios that are facing Europe?
The unresolved crisis of solvency of Greece was in Ireland this fall and added that turning the infection, as evidenced by an increase in interest rates on government bonds, also came to Italy and Spain and Portugal and now to Germany. What are the prospects? We are faced with three scenarios: 1) Give a little bit of liquidity to the peripheral countries to ask them "Reckoning" to "sacrifice" internally. 2) failure to anticipate and manage to avoid the most painful, as you can, 3) attack the root problems in the direction of building a union with political and economic performance.
The crisis in Europe is similar to many of the debt crisis in developing countries, whose most recent dramatic example was the default of Argentina in 2002. In short, the establishment European Monetary Union (EMU) in 1999 has encouraged the flow of cheap capital from Central European countries (Germany and France in particular) to the peripherals, the famous PIGS. The ECB's monetary policy has been at the same time, marked by low nominal interest rates in Germany, to compensate for moderate fiscal policy and wage moderation that little sustain demand and production. Capital flows have led to a boom in housing and household debt in Spain and Ireland, and the public sector in Greece. Construction is a stimulus to the economy and these countries have in fact grown, so also the nominal wage prices. This has meant that real interest rates [1] were, in those countries, very low, further stimulating demand.
The productivity of these countries has increased more than in Germany, but in the latter money wages rose less than productivity in the periphery increased more than productivity, so that the latter lost competitiveness.
Germany and its environment (Germany, Austria, Netherlands, etc) won so in terms of net exports to the European periphery is because demand in those countries grew much, that their loss of competitiveness. In fact, exports of capital from countries Central ended up financing the purchase of products from the same countries. But if this happens for a number of years, the peripheral countries end up accumulating heavy debt. Initially it was in Spain and Ireland, only private, but now was added after the outbreak of the crisis, the public sector borrows in turn to help domestic banks in debt to the Central Europe. If the creditor countries reached a moment believe that debtors can not pay its debt, may no longer refinance, and debtors filing for bankruptcy (default).

One solution to this situation is to: a) in the short term to ensure sufficient liquidity cheaper for these countries and not to fall, b) in the medium-term solvency to solve their problem by stimulating production and exports. Consider the three scenarios.
1. In the first stage, already in place, the "help" and a very timid ECB curb the liquidity crisis by supporting evidence of the debtor countries where markets will not do or would do so only at exorbitant prices, but insufficient extent do truly and without prejudice to the usurious rates that these countries pay (and that aggravate the debt). At the same time, fiscal and wage deflation causes a fall in GDP, with the consequent loss of tax revenue, so the adjustment accounts is a Sisyphean task (not to mention the social sacrifices involved). Traditionally, internal accounting adjustments are accompanied by a devaluation, boosting exports has offset the damage of GDP. But now the national currencies are no more! Moreover Germany itself becomes the champion of deflation, which aggravates the crisis of aggregate demand in Europe and worldwide. The markets know this, and this is the failure of the peripheral countries and the currency is on the current agenda. If debtors go bankrupt, also break the creditor countries (including U.S.), what would be the mother of all crisis.
2. A breakdown of the EMU ordered the release of the peripheral countries is a complicated issue (Blejer and Levy-Yeyati 2010, Eichengreen 2010). The central fact to keep in mind is that the external debt of these countries are still denominated in euros. Measures in the new local currencies, which would fall in value, and much against the euro, the value of that debt would increase, so surely must be what is called a "haircut" (a haircut), which would be to renegotiate (it is agreed that part is not returned, and the rest is returned in a longer time.) But if markets consider this possibility, speculation trigger giving to an immediate and "messy" default. So the decision of a break must be taken in secret before the market suspected something - so a bit before the system falls apart by itself, in a forum that can not exclude, however, U.S., China and Japan, at least, as well as major European countries. Wikileaks times secrecy is not easy! The advantage of regaining its own currency would be in the revival of exports, but measures to prevent the onset of a strong domestic inflation, would be necessary.
would not need to print new tickets in advance, at present and are marked by country (an "S" after the serial number identifies eg "Italian"). Drastic measures of capital controls, obviously, would be necessary. If this were Germany (and perhaps a recalcitrant France) the case to leave the euro, this would constitute in itself a cut debts denominated in foreign currency, the euro, would be devalued against the German mark again. And if what remains of EMU collapses, everyone will return to national currencies and the foreign debt is denominated in those, which in fact would sanction a haircut done.
3. The failure of the first hypothesis, and the drama of the second, could eventually to arrive at reasonable solutions. With respect to issues of sustainability in the short term, more effective action by the ECB in supporting the bonds and the Europeanization of the debts (as proposed, among others, Tremonti) ensure that markets allow refinancing costs be contained. Structural problems then should be treated by the reversal of fiscal restraint and wage moderation German that the German economy loses a bit of competitiveness and at the same time, boost domestic demand [2]. Moreover, only by working with measures contrary to what so far have characterized the EMU, they can invest trends.
This is unacceptable at the time in Germany, which bases its model of growth of internal discipline and exports with the expansion in non-European countries in mind.
If God truly blind to those who really want to lose in the December 16-17 meeting of the European countries decide draconian plans to return the debt to which our country will, without a government that has authority to oppose such folly.

[1] The real interest rate is the difference between the nominal interest rate and inflation rate. If we take € 100 in loans to 5% nominal rate and inflation rate is 4% (so that we will return in a year is 4% less in terms of purchasing power), the real rate actually paid is 1%.
[2] One of the goals for the Germans would aceptadísimos accepting that nominal wages in the country grew at a rate of productivity growth of 2% which is the rate of the ECB's inflation target.




Original

Friday, December 17, 2010

1.1.0.89 Patch Port Royale

Closure of the international conference by Professor Heinz Kurz




International Conference Sraffa's Production of Commodities by Means of Commodities 1960-2010.
2nd-4th December 2010, Roma Tre University, Faculty of Economics

Gay Sitting On Stomach

Antonella Palumbo: Potential output, output current and demand-led growth.

International Conference
Sraffa's Production of Commodities by Means of Commodities 1960-2010.
2nd-4th December 2010, Roma Tre University, Faculty of Economics






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Comment: V. Maffeo

Discussion after the comment

Answer of Palumbo


Abstract

En el documento se explora las diferentes definiciones potential product found in the literature, given its relevance for policy. First, it addresses the theoretical change in the mainstream literature, the Keynesian idea of \u200b\u200bpotential output as a ceiling of actual production to the idea of \u200b\u200ba permanent tendency to gravitate toward actual production potential output and the empirical counterpart of the change as regards the manner in which estimates of potential output is constructed. It then explores the complex relationship between actual and potential theories of demand growth. Finally, tentatively address the issue of the possible relationships between output and inflation in a classical-Keynesian theoretical framework.

Thursday, December 16, 2010

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Roberto Ciccone: Public Debt and the determination of Raul Prebisch's output


International Conference Sraffa's Production of Commodities by Means of Commodities 1960-2010.
2nd-4th December 2010, Roma Tre University, Faculty of Economics















First Second


Comment: From John
Answer
of Ciccone




Abstract This article deals the issue of public debt within a different theoretical context that prevails today both in terms of pure theory or in applications to concrete problems.
In particular, the approach adopted here is based on two fundamental premises, which are closely linked. The first is the classical explanation "of the distribution of income in terms of social and institutional circumstances, and therefore the rejection of the determination of the distribution in terms of forces of supply and demand which is characteristic of the dominant theory various formulations.
The second premise is the idea that long-term levels of production are determined, no less than its fluctuations, by the size of aggregate demand, the ultimate determinants of which are conceived as independent of the production potential of the economy

The specific objective of the work is to reconstruct, in the theoretical framework outlined above, some basic relations and proposals on the effects in the economic system of government deficit spending and debt. Since a crucial role in the work is obviously played by the admitted influence public spending on aggregate demand, and therefore the level of income, the paper also discusses some of the arguments in the literature are used to maintain this influence is small or even negative.

Although there is an obvious link with the literature of functional finance the 40 and 50, a distinguishing feature of this analysis is that demand openly conceived as a determinant of total production in the long (and short) term, while early work left in general, without specifying whether the limits of demand had permitted purely circumstantial, or if extended to the trend of economic activity



Ciccone previous Paper on the subject in English at the Circus 3

Wednesday, December 15, 2010

Left Nostril Scabbing

evolving views on the business cycle and money, 1919-1949

For Perez Caldentey and Vernengo



Exhibition held in the CEFID-Ar on Friday December 10






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Raul Prebisch's Paper Evolving views on the business cycle and money, 1919-1949

How To Remove Spots From Dupioni

Marc Lavoie: Should Sraffian economics be dropped out of the post-Keynesian school?


International Conference Sraffa's Production of Commodities by Means of Commodities 1960-2010.
2nd-4th December 2010, Roma Tre University, Faculty of Economics








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Comments Antonella Stirati

2


After the speech the Following Lavoie Took discussion place




Paper Abstract


Several methodologists post-Keynesians argue that Sraffian should be left out of post-Keynesian school (eg, Dunn, 2000, p. 350), as Sraffian seem preoccupied with maximizing benefits, static efficiency and long term, paying little attention to issues such as uncertainty, liquidity and short term. A division between fundamentalists and Kaleckians Sraffian and post-Keynesians, in their opinion, contribute to a more coherent post-Keynesian economics. This paper argues that it is an unnecessary movement.
First, the Sraffian are closely related to post-Keynesian analysis of tradition and history. Second, the Sraffian agree with other post-Keynesians on crucial issues such as the causal link between investment and savings, the role of effective demand tanto a corto como a largo plazo, la endogeneidad de la oferta de dinero y la posibilidad de que el banco Central fije las tasas de interés a corto plazo en los niveles de su elección (Dutt y Amadeo, 1990). En tercer lugar, las opiniones sraffianas no son homogéneas y se han desarrollado a través del tiempo, de modo que, como señaló Nell (2009 y Harcourt 2001), las distinciones entre los Sraffianos y otras de sus vertientes no parece ser tan fuerte como antes’. Los Sraffianos modernos no suponen más que la economía está siempre funcionando en la capacidad normal o completa. La mayoría de ellos ni siquiera suponer que la economía está funcionando a capacidad normal en el largo plazo. En cuarto lugar, los Sraffian provide the equations that explain the production and distribution in an interdependent environment, something lacking somewhat in the other chapters. The Sraffian price theory can be seen as an idealization of the theory of administered prices, a specific type of reference price (Nell, 1998), which make abstraction of imperfect information, previous imbalances, the non-uniform rates of profit or target rates of return, debt structure, etc.

Finally, Sraffian have made contributions to monetary analysis. The Sraffian were the first to claim that relative prices and real wages are affected by the level of the trend rate of interest, through its proportional impact on the normal profit rate, ie, the target rate of return embedded in the setting of mark ups. The paper develops these points, arguing that the economy Sraffian has made a positive contribution to post-Keynesian economics.

Tuesday, December 14, 2010

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Tony Aspromourgos: Sraffa's System in relation to some main currents in unorthodox economics


International Conference Sraffa's Production of Commodities by Means of Commodities 1960-2010.
2nd-4th December 2010, Roma Tre University, Faculty of Economics







2



Comments, Ciccone




Paper Abstract

If one asks the question - how is the theoretical system in the production of Sraffa's Production of Commodities by Commodity regarding the scope and content of the economy as a whole? - The answer, at one level, it seems clear half a century later. The book reconstructs a new coherence at least one essential element of classical economics, and the same system, the theory implies a critique of the marginalist approach to the theory of functional income distribution, and hence also the focus of supply and demand commodity prices and quantities.
While there appears to be intractable problems to capture the relationship of Sraffa's book with orthodoxy, what is your relationship with other streams of heterodox economics? The two most important currents of thought are the economy Marxist and post-Keynesian economics.
The significance of Sraffa's book for the first was discussed considerably in the decades immediately after its publication. The focus here is therefore to post-Keynesian economics, a fundamental aspect refers to the theory of functional income distribution, the relationship between Sraffa system and Marxism also be considered.
Therefore, the purpose of this paper is to consider the relationship between the approach based on certain elements of economic theory implied or implicit in Sraffa's book and the current post-Keynesian heterodox economics in particular. The three sections of the document have successively in price theory, income distribution and levels of activity and growth.