Post-Keynesian Institutionalism Research Articles

Silencing the Sirens: The Odyssey of Post-Keynesian Institutionalism in Revitalizing Capital Formation in Ukraine’s Post-War Economy

This article illuminates the potential contribution of Post-Keynesian Institutionalism (PKI), especially in its Kaleckian complexion, to the debate concerning Ukraine’s post-war economic recovery. It explores how Ukraine can restore its productive capacity after having lost sixty percent of its industrial potential due to the Russo-Ukraine war, juxtaposes existing approaches to financing capital formation in the country, and questions the role of foreign capital, especially foreign direct investment, in this process. The article’s first section exposes the dangers associated with adopting predatory and increasingly globalized structures of money manager capitalism for financing capital accumulation in vulnerable economies such as Ukraine. The second expands the Post-Keynesian Institutionalist approach to capital formation to include emerging and developing economies. Specifically, it brings under consideration the important contribution of Michal Kalecki (1899–1970) to the analysis of capital formation in less-advanced industrialized market economies, a category to which Ukraine belongs at present. To date, this part of Kalecki’s legacy has not been considered in the Post-Keynesian Institutionalist argument. Drawing on the works of Kalecki and PKI scholars, the article sketches an alternative reconstruction strategy for Ukraine.

Telling It Like It Is: Reflections of a Maverick Economist

Following the advice of institutionalist Wendell Gordon, the author aims to “tell it like it is” by reflecting on his own path to institutionalism, the economic contributions of post-Keynesian institutionalism, and some of the major issues that deserve institutionalists’ further attention. Several heterodox economists are identified as influences contributing to the making of this economic maverick, but so too are Barbara Jordan and Michael Harrington. Then attention is given to the institutionally focused pre-analytic vision of post-Keynesian institutionalism, the inescapable reality of business cycles in market-oriented economies, and the institutionalized myopia of money-manager capitalism. Some key issues warranting our further attention include the expansion of economic insecurity, the threat of authoritarianism, and the climate crisis.

POST-KEYNESIAN INSTITUTIONALISM: CONTOURS AND FRONTIERS

Post-Keynesian institutionalism (PKI)—a branch of the (original) institutionalist school that builds on common ground with post-Keynesianism—constitutes a robust tradition with secure foundations and broad methodological, analytical, and policy contours. Since its emergence in the 1980s, that tradition has consistently been ahead of the economic mainstream in shedding light on real-world problems. Drawing on the work of various heterodox economists—including John Kenneth Galbraith, Joan Robinson, Alfred Eichner, and Hyman Minsky—this article sketches the contours of today’s PKI, including its attention to institutional characteristics of labor and product markets, features of industrial organization, interrelations of finance and macroeconomics, and long-term trends in capitalist development. The article also discusses how PKI relates to the post-Keynesian economics of Fernando Cardim de Carvalho and surveys the frontiers of PKI. The discussion of frontiers and the article’s brief conclusion underscore post-Keynesian institutionalists’ commitment to an ever-evolving body of theory and policy research.

Social Capital and Civil Society in Public Policy, Social Change, and Welfare

Mainstream economics reduces concepts of social capital and civil society to means for profit and competition, reproducing inequality and power. Alternative approaches identify social capital with state-society synergy relations and generalized networks of cooperation, which enable the civil society to promote solidarity, democracy, public policy, social change, and welfare. Similarly, Post-Keynesian Institutionalism recognizes the creative role of the state, democratic institutions, and civic values. However, questions remain regarding how social groups and the state interact and promote change. This article seeks to fill that void by connecting these analyses with the literature on the commons and participatory and deliberative democracy.

Transforming Oligarchic Capitalism in Post-Soviet Space into Social-Democratic Capitalism: Words of Wisdom from Post-Keynesian Institutionalist Forerunners and Early Contributors

That the predatory capitalist orders in the emerging markets of the former Soviet Union require progressive reform is evident. To outline a framework for starting that comprehensive reform, this article begins with key insights from the work of Post-Keynesian Institutionalist forerunners and early contributors. Since important features of many Post-Soviet economies have much in common with the earlier era of Western industrial capitalism on which the founders of traditional Institutionalism and originators of Post-Keynesian Institutionalism primarily focused, their analyses are particularly useful. The resultant template for progressive reform assumes as given that a forced fragmentation of large companies is unwise, given their important role in alleviating market uncertainties, stabilizing the economy, and promoting investment spending. Instead, the proposed reform includes comprehensive democratization of the relations of large-scale productive property, progressive regulation of industry by the democratic state, and the nurturance of all-encompassing participatory processes throughout the economy.

Post-Keynesian Institutionalism and the Failure of Neoliberalism: Returning Realism to Economics by Highlighting Economic Insecurity as the Flip Side of Financialization

Post-Keynesian institutionalism (PKI) has always been about starting with the reality of human experience and working to fashion a better world rooted in broadly shared prosperity. In contrast, a decades-long pursuit of the neoliberal agenda has failed to deliver such prosperity and, in many ways, has actually moved the United States further from PKI’s conception of a better world. In an effort to bring economics back in touch with reality, this article describes the economic insecurity that has been a central problem confronting Americans for more than a generation. It then shows how PKI explains that insecurity as a consequence (in fact, the flip side) of a key aim of neoliberalism: financialization. PKI accounts for these trends with a theory of capitalist development that draws on the work of Hyman Minsky. Contributors to PKI also offer more than just theory and analyses: they also propose policy recommendations and institutional changes designed to bolster democratic decision-making, community vitality, economic opportunity, environmental sustainability, and individual wellbeing. The COVID-19 pandemic underscores the need for such changes.

An Institutionalist Approach to Finance and an Illustrative Application to Investment Banking in the United States (1981-2008)

The 2008 US crisis revived contributions of Post-Keynesian Institutionalism (PKI) and particularly those of Hyman Minsky. As is known, his theories connected finance with macroeconomic dynamics from an institutional perspective. However, many of these Minskyan revisions focused on the Financial Instability Hypothesis (FIH) in terms of over indebtedness and fragility of balance sheets, without explicitly accounting for the relationship between finance, macroeconomic dynamics, and the institutional environment. This paper intends to deepen this threefold connection from a theoreticalmethodological perspective; as well as to illustrate how the proposed framework can be applied (in this paper, to the study of investment banking in the United States in 1980-2008).

Post-Keynesian institutionalism: past, present, and future

Post-Keynesian institutionalism (PKI) is a branch of institutional economics that draws on the common ground shared by many institutionalists and post-Keynesians. PKI emerged in the USA in the 1980s; attracted considerable attention during the Internet boom and crash (roughly from 1995 through 2002); and offered vital economic insight to address the global financial crisis of 2007–2009. This article presents a two-part examination of PKI: the first part surveys PKI’s origins and development; the second highlights existing contributions in the course of outlining directions for future PKI research. PKI began with a focus on understanding business cycles and seeking to prevent or contain economic downturns; over time, attention also centered on structural economic changes and the spread of worker insecurity. In the coming years, scholarship in those areas must be complemented by—indeed, carried out in tandem with—contributions that shed light on the problem of global warming and the widespread consequences of climate change.

Institutionalism and the “Common Man” Through the Lens of Philip Klein: Business Cycles, the Public Sector, and Keynes’s Economics

:This article reviews and assesses Philip Klein’s work on business cycles and macroeconomics, the public sector, and the economics of John Maynard Keynes. The article makes several findings. First, Klein built on the pioneering efforts of Wesley Mitchell to advance the development of cycle indicators and to outline an eclectic theory of cycles that remains useful for synthesizing a broad literature. Second, Klein’s essays on macroeconomics contain enduring discussions of the malleability of the “natural” rate of unemployment and the value of a behavioral approach to expectations. Third, he refocused the institutionalist attention on the public sector by introducing “higher efficiency” and other concepts to help explain how government policy plays a role in economic life. Fourth, Klein emphasized the role of fiscal policy in moderating business cycles. Fifth, his work points in the direction of today’s post-Keynesian institutionalism, both by stressing that Keynes was “profoundly institutionalist” in his approach and by arguing that conjoining Keynes and institutionalism would provide a stronger foundation for macroeconomic theory and policy.

Wallace C. Peterson: A Post-Keynesian Institutionalist

:Wallace C. Peterson was an exemplary post-Keynesian institutionalist. He wrote about the foundations of economics in a manner that paved the way for today’s post-Keynesian institutionalism. He analyzed the U.S. economy with a keenness that not only shed new light on the macroeconomic issues of his day, but also put him decades ahead of other economists on the problem of United States’ silent depression. Furthermore, he identified policy issues that continue to spark widespread public interest and discussion. I examine his contributions in each of those areas (foundations, analyses, and policy).

Pluralism: lifeblood of post-Keynesian institutionalism

This article examines the scholarship of W. Robert Brazelton to underscore the vital role that pluralism plays in post-Keynesian institutionalism (PKI). In the early 1980s, Brazelton embraced pluralism within economics and drew attention to the compatibility of post-Keynesian economics and institutionalism. More recently, he highlighted the relevance to economics of research in other disciplines, including psychology and sociology. All the while, Brazelton has devoted special attention to the problem of business cycles, demonstrating how insight gleaned from a pluralist perspective toward economics advances our understanding of that problem. The article is structured as follows: an overview of PKI; a description of what is meant by pluralism in the context of PKI; an examination of Brazelton's scholarship; a discussion, including some suggestions for economics education that flow from Brazelton's research; and a conclusion.

Post-Keynesian Institutionalism after the Great Recession

This article surveys the context and contours of contemporary Post-Keynesian Institutionalism (PKI). It begins by reviewing recent criticism of conventional economics by prominent economists as well as examining, against the backdrop of the current context, important research that paved the way for PKI today. Then it sketches essential elements of PKI – drawing heavily on the contributions of Hyman Minsky – and identifies directions for future research. Although there is much room for further development, PKI offers a promising starting point for economics after the Great Recession.

Do Institutionalists and post-Keynesians share a common approach to Modern Monetary Theory (MMT)?

Are Institutional and post-Keynesian economists converging on a shared approach to understanding Modern Monetary Theory (MMT)? The literature suggests growing recognition that post-Keynesians and Institutionalists share a common intellectual history, conceptual frameworks, and overlapping professional memberships. For this reason, Post-Keynesian Institutionalism (PKI) has emerged as a unifying approach to heterodox economics. In this review of the Modern Monetary Theory (MMT) literature, I explore the degree to which this PKI convergence extends, or fails to extend, to the historical, theoretical, and policy issues surrounding MMT. The point of this paper is to delineate where scholars from these traditions agree, where they specifically disagree, and to explore whether or how these disagreements may be ameliorated with respect to MMT.

Financial instability and economic security after the great recession

Contents: Preface Introduction: Instability, Prosperity and Economics After the Great Recession Charles J. Whalen PART I: FOUNDATIONS 1. Subverting Say's Law: Harlan McCracken and the Commons-Keynes Connection Steven Kates 2. Towards a Synthesis of Institutional and Post Keynesian Economics W. Robert Brazelton and Charles J. Whalen 3. Futurity: Cornerstone of Post-Keynesian Institutionalism Glen Atkinson and Charles J. Whalen PART II: THE AMERICAN ECONOMY 4. Understanding and Preventing Financial Instability: Post-Keynesian Institutionalism and Government as Employer of Last Resort Fadhel Kaboub 5. Towards a More Rapid Recovery: Incorporating Subsidiarity into Macroeconomic Policy David A. Zalewski and Charles J. Whalen 6. Financial Stability, Regulatory Buffers and Economic Growth After the Great Recession: Some Regulatory Implications Eric Tymoigne PART III: THE GLOBAL ECONOMY 7. Regulating for Stability: Bank Capitalization and the Emergence of an International Lender of Last Resort Jan Toporowski 8. Evolution Without Fundamental Change: The Washington Consensus on Economic Development and its Significance for Post-Keynesian Institutionalism John Marangos and Charles J. Whalen 9. Money-manager Capitalism, Capital Flows and Development in Emerging Market Economies: A Post-Keynesian Institutionalist Analysis Yan Liang PART IV: CONCLUSION 10. The Future of Post-Keynesian Institutionalism Charles J. Whalen Index

Post-Keynesian Institutionalism after the Great Recession

This paper surveys the context and contours of contemporary Post-Keynesian Institutionalism (PKI). It begins by reviewing recent criticism of conventional economics by prominent economists as well as examining, within the current context, important research that paved the way for PKI. It then sketches essential elements of PKI — drawing heavily on the contributions of Hyman Minsky — and identifies directions for future research. Although there is much room for further development, PKI offers a promising starting point for economics after the Great Recession.

John R. Commons and John Maynard Keynes on Economic History and Policy: The 1920s and Today

In a pair of 1925 lectures, John Maynard Keynes described world economic history with reference to a classification of stages developed by John R. Commons. This article examines Keynes’s two 1925 lectures in the context of Commons’s writings. It spotlights lesser-known aspects of Commons’s scholarship and helps clarify ambiguities in Keynes’s two addresses. It also identifies a key document, written by Commons, upon which Keynes relied when developing his presentations. In addition, the article explains how the work of Commons and Keynes in the 1920s has relevance for the contemporary development of evolutionary Keynesianism (which can also be called Post-Keynesian Institutionalism).

Toward ‘Wisely Managed’ Capitalism: Post-Keynesian Institutionalism and the Creative State

Post-Keynesian Institutionalism (PKI), a synthesis of post Keynesian and institutional economics, emerged in the USA as a strand of evolutionary economics in the early 1980s and has attracted increasing attention in recent years. This article examines milestones in the development of PKI, devoting particular attention to the tradition’s conception of the role of the state. The first section identifies antecedents to PKI in the writings of John R. Commons and John Maynard Keynes. The second describes how PKI emerged against the backdrop of increasing dissatisfaction with neoclassical Keynesianism in the era of stagflation. The third summarizes the subsequent contributions of Hyman P. Minsky, whose work was a model of PKI in the 1980s and 1990s. The final two sections outline PKI’s contemporary characteristics and identify elements of an agenda for future research. PKI has always been about achieving a more humane form of capitalism, which requires the state to play a creative role in shaping economic life.