Strategic Competition, Dynamics, And The Role Of The State
A New Perspective
Jamee K. Moudud
Jamee K. Moudud, Member, Economics Faculty, Sarah Lawrence College, US
|2010 192 pp Hardback 978 1 84542 923 2
|ebook isbn 978 1 84980 540 7
Hardback £70.00 on-line price £63.00
Series: New Directions in Modern Economics series
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This study investigates the policy implications of a long-run cyclical growth model in the tradition of Sir Roy Harrod. Emphasizing the role of Keynesian uncertainty, it shows that the growth model is anchored in a new interpretation of the Oxford Economists’ Research Group’s microeconomic analysis and a variant of the stock-flow consistent framework. By extending Sir Roy’s insights, Jamee Moudud discusses taxation and public investment policies and the relevance of capital budgeting for raising the Harrodian warranted growth path.
Contents: Foreword by Anwar M. Shaikh 1. Introduction 2. The Microfoundations of Long-run Growth: Controversies on Capacity Utilization and Competition 3. A Review of the Literature on Growth 4. A Model of Disequilibrium Dynamics 5. Warranted Growth and the Role of the State 6. Conclusion: The Relevance of Microfoundations and Politics References Index
‘. . . exposes the theoretical shortcomings of both neoclassical and neoliberal economic policies, and expands on existing Post-Keyensian and heterodox theories.’
– Tazewell V. Hurst III, Eastern Economic Journal
‘Economists from all heterodox traditions of political economy will benefit from reading this book – both for its confirmation of many of the basic precepts of classical, Marxian and Harrodian economics and the challenges it poses for its trenchant Post-Keynesian/Kaleckian critics, for whom short-period analytics of effective demand can and should be extended to long-period analysis. While his critique of the principle of effective demand for the long run would leave many Post-Keynesians uncompromising, the strong Keynesian view held by the author on the necessity for public-sector capital budgeting, and a developmental state upon which ought to be grafted a long-term growth policy based on public investment would certainly find strong resonance in the context of the global economic crisis.’
– Mario Seccareccia, University of Ottawa, Canada and Editor of the International Journal of Political Economy
‘Jamee K. Moudud’s book is in the best tradition of dynamic economics stemming from the work of Harrod and Kalecki. Moudud demonstrates a solid command of the intellectual history of his subject. His insightful critical survey of the growth literature focuses on an often neglected dimension of the topic, i.e. the question of how real-world firms make decisions about capacity utilization and capacity creation. This discussion grounds Moudud’s subsequent theoretical analysis of the disequilibrium dynamics of cyclical growth. The book is that rarest of things – both a useful teaching tool and an original contribution in its own right. Graduate students will find it a superb introduction to the analytical issues that are at the center of economists’ debates about growth, economic development and the business cycle. Growth theorists will find in it much to stimulate and challenge their thinking.’
– Gary Mongiovi, St John’s University, US and Co-Editor, Review of Political Economy
‘The pillar upon which this magnificent must-read volume was erected is strategic competition, a theory that cogently authenticates the concentration and centralization of capital. This stands in stark contrast against the fanciful neoclassical “perfect completion” and its methodological double, “imperfect competition.” In Strategic Competition, Dynamics, and the Role of the State, Jamee Moudud has taken a novel approach to the study of macrodynamics. Here turbulence and crisis are deemed inseparable from the dynamics of capitalist economies and the last three decades of neoliberal policies are eloquently called into question. Moudud also provides a timely and effective critique of both new Keynesian and post-Keynesian approaches to macroeconomic theory and policy.’
– Cyrus Bina, University of Minnesota (Morris Campus), US and an Editor of the Journal of Critical Studies on Business and Society
‘The current economic crisis has thrown into disrepute the representative agent models at the forefront of the “microfoundations” agenda. Jamee Moudud takes a different approach, going back to first principles to re-establish the theory of the firm and the nature of market competition. The result is an important addition to two ongoing quests in macroeconomics: integrating the principle of effective demand into long run macrodynamics; and relating aggregate outcomes to firm behaviour and the functioning of markets.’
– Mark Setterfield, Trinity College, US
‘This is a very timely, refreshing and challenging book, an excellent contribution in the areas of competition and growth. It blends beautifully the microeconomic analysis of the Oxford Research Group, at the center of which is the idea of strategic competition; and an extension of Harrod’s work on growth. The discussions of uncertainly and excess capacity, and the interpretation of Harrod’s work are outstanding. This combination leads one to think about policy issues such as taxation or public investment in a novel way, as the implications differ not only from those that derive from neoclassical models, but also from Post-Keynesian models. Moudud provides a very serious alternative for thinking systemically about key microeconomic questions, as well as problems of growth, political economy, including development, the role of the State, and applied policymaking. I have no reservations in recommending this excellent book.’
– Jesus Felipe, Asian Development Bank, Philippines
Jamee Moudud provides a new microfoundational explanation for the Harrodian long-run or warranted growth rate. The author, emphasizing the role of Keynesian uncertainty, shows that the growth model is anchored in a new interpretation of the Oxford Economists’ Research Group’s microeconomic analysis and a variant of the stock-flow consistent framework. In a distinctly Kaldorian vein, Jamee Moudud discusses the relationship between capital budgeting, public investment, and taxation policy as it relates to the warranted growth rate and its impact on long-term involuntary unemployment.
Combining ideas from theorists involved in the Oxford Economists’ Research Group (especially Sir Roy Harrod, P.W.S. Andrews, and others), Kaldor, and Keynes, Jamee Moudud offers original insights into the impact of government spending and taxation policies on output. The book discusses and extends Harrod’s taxation-cum-public investment proposals to raise the warranted growth rate and strengthen the social safety net. Other topics explored in the text include: reasons that higher government spending/GDP shares have opposite short- and long-run effects, whether money supply can ever be different from money demand in a stock-flow consistent framework, and the effects of changes in the composition of government spending on the long-run growth path.
The book provides the theoretical basis for new policy insights regarding the role of the state dealing with mass unemployment and poverty.
Professional economists, graduate and advanced undergraduate students in economics, and policy researchers in international organizations will find this work a stimulating and thought-provoking addition to the field.