In this paper we outline alternative policy recommendations addressing the problems of differential inflation, divergence in competitiveness, and associated current account imbalances within the euro area. The major purpose of these alternative policy proposals is to generate sustainably high...

The German debt brake is often regarded as a great success story, and has therefore served as a role model for the Euro area and its fiscal compact. In this paper we fundamentally criticize the debt brake. We show that (1) it suffers from serious shortcomings, and its success is far from certain...

This paper examines a major channel through which financialization or finance-dominated capitalism affects macroeconomic performance: the distribution channel. Empirical data for the following dimensions of redistribution in the period of finance-dominated capitalism since the early 1980s is...

We discuss the effects of rising shareholder power on distribution and capital accumulation in a Kaleckian model. Increasing shareholder power is associated with decreasing managements’ animal spirits, on the one hand, and increasing dividends distributed to shareholders, on the other hand. In...

In the present paper we explicitly introduce interest payments and debt into a Kaleckian distribution and growth model with an investment function very close to Kalecki's original writings. This implies that growth in this model is 'wage-led'. The effects of interest rate variations on the...

Assessing the effects of monetary policy and wage bargaining on employment and inflation in the European Monetary Union (EMU), in the first step a Post-Keynesian competitive claims model of inflation with endogenous money is developed. In this model the NAIRU is considered to be a short-run...

The introduction of monetary variables into post-Keynesian models of distribution and growth is an ongoing process. Lavoie (1995) has proposed a Kaleckian ‘Minsky-Steindl-model’ of distribution and growth, incorporating the effects debt and debt services have on short and long run capital...

This paper traces the euro zone’s inadequate macroeconomic performance in recent years back to the predominance of a restrictive macroeconomic policy mix based on a ‘new monetarist’ approach to economic policy. An approach based on a (post-)Keynesian analysis is presented as a growth and...

Starting from Schumpeter's important distinction between 'real analysis' and 'monetary analysis', in this paper it is shown that major elements of Marx's economic theory fall in the camp of 'monetary analysis'. This is true for Marx's theory of value, his rejection of Ricardo's interpretation of...

Peter Flaschel is Professor Emeritus at Bielefeld University, Germany. He holds a PhD degree in Mathematics and a Habilitation degree in Economics. He has extensively published on classical economics and heterodox macrodynamical model building. He was on numerous occasions Visiting Professor at...