Archive

Peter Bartelheimer, Volker Baethge-Kinsky, Alexandra Wagner:
Zu den Auswirkungen von Hartz IV auf den Arbeitsmarkt -- Fakten und Fragen | Effects of Hartz IV on the Labour Market -- Facts and Questions

Stefan Collignon:
Democracy and Europe's Crisis of Legitimacy

Do Heterodox Th eories Have Anything in Common? A Post-Keynesian Point of View
by Marc Lavoie

The paper questions the wide-spread assertion that non-orthodox schools of thought in economics have only one thing in common --their rejection of mainstream (neoclassical) economics. The author shows by contrast that heterodox currents share some fundamental analytical insights. The paper focuses on a comparison of modern Marxist conceptions with those of Post-Keynesian economists, including the works of Kaleckians and Sraffians. This is shown by examining four fields: the issue of rationality (where the adjustment principle is explicitly accepted by important heterodox authors), price theory (with cost-plus pricing combined to some long-run adjustment), growth theory (where the Kaleckian model has been adopted by authors from all schools), and finally monetary theory (where authors from all backgrounds are successfully integrating real and monetary analysis by taking into account financial markets). The author concludes that mutual feedback between the various heterodox currents has been beneficial to all, despite an unavoidable hyper-specialisation.

JEL classification: B5
Keywords: heterodox schools, coherence, procedural rationality, cost-plus pricing, effective demand, integration of money

Globalisation, Gender, and Equity -- Effects of Foreign Direct Investment on Labour
Markets in Rural Indonesia
by Karin Astrid Siegmann

This study assesses the impact of foreign direct investment (FDI) on gendered labour markets in rural Indonesia. It focuses on the gender composition of the
workforce, female and male workers' employment conditions and gender wage inequality. The research strategy of "between-methods triangulation" is chosen, denoting the combination of quantitative and qualitative types of data generation and analysis. Two underlying mechanisms have been identified. A "cost effect" associated with transnational corporations' (TNCs') greater orientation towards the world market is the preferential recruitment of, on average, lower paid female workers. In light of global competitive cost considerations, this appears as a rational strategy for TNCs. Conversely, foreign firms' advanced technological endowments relative to domestic companies require a well-educated workforce with technical skills. In light of these perspectives, gender gaps in education and, on average, women's weaker labour market attachment disadvantage female workers' employment in TNCs. Both effects are mediated by a "reproductive constraint". This refers to the asymmetric distribution of reproductive obligations between
female and male household members, whereby female input into the domestic economy is more demanding relative to that of males.

JEL classifications: J16, J31, J81, F02, F21, B41
Keywords: gender, globalisation, foreign direct investment, labour markets, Indonesia,
economic methodology

Basel II -- Benefits for Developing Countries?
by Martina Metzger
The major target of the new capital accord which was adopted in 2004 and is implemented not before 2007 is to prevent bad banking by introducing more
risk-sensitive capital requirements. This paper analyses the impacts of Basel II on developing countries which have been most strongly affected by bad banking. The paper identifies structural, price and displacement effects of Basel II which will change international lending to developing countries. While lower-rated developing countries' access to international capital markets will be restrained even further, an accumulation of foreign debt by higher-rated developing countries will be encouraged. Moreover, the new capital accord induces structural and displacement effects on credit markets in developing countries themselves. Due to the use of different approaches toward the measurement of risk, domestic banks will loose competitiveness against subsidiaries of internationally operating banks. For the former this will result in an increased vulnerability to shocks and financial crises.
JEL classifications: E44, F34, G15, G28
Keywords: Basel II, currency crises, bad banking, herding behaviour

Does Public Deficit Mean Inflation? A Reflection on the Kaleckian and Minskian Tradition
by Narciso Tuñez-Area
This paper analyses the determination of prices within a Kaleckian and Minskian framework. In the Minskian model, public deficit generates mark-up inflation, a result that resembles Neo-Keynesian models of growth. In the Kaleckian model, an increase in aggregate demand is not absorbed by inflated prices but by a higher utilisation of capacity. This paper discusses issues at the core of Post-Keynesian thought.

JEL classification: E12
Keywords: Kalecki, Minsky, public deficit, inflation, mark-up, Post-Keynesian economics