E12 - General Aggregative Models: Keynes; Keynesian; Post-KeynesianReturn

This article simulates a programme called Employer of Last Resort, and analyses its potential impact in the Czech Republic. The design of the programme guarantees perfectly inelastic demand for labour at a given wage level. In practice, the state would offer a job to anyone willing to work in order to eliminate involuntary unemployment, reduce poverty and income inequality and secure stable growth. My aim is to estimate hypothetical effects on the main objectives and calculate fiscal demands if the programme was launched on the Czech labour market. The results suggest that the programme could significantly reduce unemployment and decrease income inequality. On the other hand, it would have limited impact on income poverty. The gross wage costs of implementing the Employer of Last Resort programme in the Czech Republic are in all constructed scenarios below 1% of the gross domestic product and further calculations suggest that the total net costs could even be negative.

The paper deals with a problem of conceptualization of historical time in Post Keynesian models. The authors introduce a new notion that they call hysteretic persistence, which they see as essential because such a phenomenon as path-dependence in the short-run equilibrium cannot be described by the existing of notions of hysteresis and persistence. In the field of system (ir)reversibility, drawing upon their previous research (Chytil, Máslo, 2014, 2015), the authors introduce a new notion of general reversibility, which they justify on the account that such phenomena as a shock - counter-shock sequence in both hysteretic-persistent and hysteretic systems cannot be described by either of Setterfield's (2008) notions of super-reversibility and irreversibility. Questioning Setterfield's (1998b, 1995) only too general dichotomy of lower/higher level of historical time, the authors rather suggest a characterization of historical time based on 6 attributes of "high-level" historical time based on the criteria of path-(in)dependence of equilibrium and (ir)reversibility. The suggested attributes underlie the authors' conceptualization scale which enables an assessment of a degree of "historicity" of any system. Finally, a practical application of the concept of hysteretic persistence is demonstrated on a case of Lavoie's PKA model (Lavoie, 2006) affected by a transitory demand shock. Setting the hysteretic persistence of Lavoie's PKA model into the conceptualization scale, the authors draw conclusions for a degree of "historicity" of this system.

In this paper there are analysed the characteristics of various important macroeconomic variables in the Slovenian economy and compared with the macroeconomic development in the Czech Republic, Germany, Greece and Ireland in two periods of 1997-1999 and 2000-2002. The main objectives of the paper are to observe changes in the macroeconomic variables of the analysed countries during the observed periods, to determine the sources of any differences in macroeconomic characteristics between Slovenia and the other analysed countries and, finally, to suggest some steps and measures to improve the macroeconomic situation of these countries. Data from national accounts are used in the analysis. In terms of methodology, the paper is based on post-Keynesian economic theory and its long-term economic model of a market economy with private ownership. Based on the analysis it was concluded that in all analysed countries there should be a greater emphasis on tax policy to create an incentive for investing and saving, on incomes policy to control the dynamics of nominal wages, and on technological policy as a prerequisite for improved economic efficiency.

New concepts have been presented in modelling of inflation dynamics recently, among others the new Keynesian Phillips curve (NKPC). There are several traditional ways of NKPC model validity testing, but none of them seems to be practically applicable in conditions of the Czech Republic. We tried to test the validity of NKPC on the basis of time series. For this purpose we applied an interesting non-traditional method proposed by Demery and Duck. This method does not rely on direct estimation of NKPC parameters, but relatively easy tests based on the cointegration analysis of time series are employed. Its application indicates that the NKPC model cannot be considered as effective in conditions of the Czech Republic; this model does not describe the inflation process sufficiently and it is not a suitable model for inflation prediction or for the choice of appropriate monetary (anti-inflation) policy.

The paper analyzes the relationship between saving and export in the Czech economy. Because the Czech economy has been increasingly trading with Western Europe, testing the relationship between these two variables is significant. OLS and 2SLS are applied to quarterly data between gross national savings, gross domestic product and exports over the period 1994 - 2001. The 2SLS procedure has also the advantage of identifying the underlying principles of the formal paradigm by means of instruments (productivity, real investments and unemployment). This study does lend support to the paradigm advanced by Maizels in 1968, which relates a country's increase in domestic savings to exports.