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Using two questionnaires, the first applied in Brazil in March 2020, at the beginning of the COVID-19 pandemic, and the second applied in August 2020, when the pandemic's effects were best known, the authors analyze society's perception of fair price and its influence on firms' actions in times of pandemic, through the lens of neoclassical and institutional theories. They also suggest if this perception causes consumers to punish companies that do not respect the informal rules of society. Together, the questionnaires provide evidence that society, through informal rules, plays a fundamental role in influencing the actions of firms. Finally, the analyses suggest that institutional theory produces better interpretations of society's behavior regarding its perception of fair price. This understanding could contribute to firms making more assertive decisions by mitigating possible risks that affect their brand and results. [ABSTRACT FROM AUTHOR]

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Neoclassical economic theories form the basis of modern economics, along with the principles of Keynesian economics. As part of economic theory, the main direction that reveals the functioning mechanism of a market economy is the neoclassical direction. In this regard, identifying the peculiarities of the relationship between the subject and method of the neoclassical direction is an urgent task, since it will make it possible to more clearly define the place of the neoclassical direction in modern economic thought, identify the theoretical basis and applicability of practical recommendations of neoclassics, in particular, more clearly define its capabilities as a theoretical basis for the formation market economy in different countries. In this article, the authors analyze the difference between neoclassical macroeconomics and microeconomics. It is shown that the microeconomic aspects of neoclassical theory have much greater theoretical and applied significance than neoclassical macroeconomics. They largely reflect real economic processes and determine the economic behavior of economic entities. The work examines, in a microeconomic aspect, the theoretical approaches of the main representatives of neoclassical theory, such as A. Marshall, L. von Mises and other representatives, to the analysis of economic processes. The authors note the importance of limit analysis, which has not only theoretical but also practical significance. The work also examines the approaches of representatives of neoclassical theory to assessing the value and price of goods and economic resources. In the real economy, markets of imperfect competition predominate, which are characterized by their own characteristics that influence the economic behavior of firms in commodity and resource markets, as evidenced by the use of marginal analysis to substantiate the position of the authors. The article assesses the views of representatives of the neoclassical school on the differences between market and planned economies. Their approach to the process of economic monopolization is characterized. [ABSTRACT FROM AUTHOR]

Public debt is a key issue for government institutions, both because of the amount of its revenues, which partly compensate for the possible shortfall in tax collection, and because it is an essential instrument of fiscal policy for the government. This paper reviews the literature on the determinants of public debt in order to identify the explanatory variables of public debt according to the main theoretical and empirical studies. This work will support policy makers who have to obtain financial resources to cover essential and very necessary expenditures nowadays, such as health, education, or infrastructure investment, by controlling debt levels and fiscal pressure. The main policy implication we can derive from these results is that governments should use some of these instruments to reduce general government debt. [ABSTRACT FROM AUTHOR]

The land question is an emotive issue across the world. At independence, erstwhile colonies adopted land reforms to address colonial imbalances in landholding. South Africa is one such country that has embarked on land reforms with the view to correcting economic imbalances created by the apartheid past. However, land reform in South Africa has not only been slow but has failed to deal with the twin challenges of poverty and inequality. Using qualitative research design and neoclassical theory, this paper investigates South Africa's land reforms under the auspices of radical economic transformation. The paper argues that the wholesale expropriation of land without compensation does not fit into the obtaining (neoliberal) economic blueprint that has dominated the country over the years. The call for a radical transformation of landholding rights in the country without structural changes in macroeconomic management remains political rhetoric. [ABSTRACT FROM AUTHOR]

Copyright of Realidad Economica is the property of Realidad Economica and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Migration is an active procedure and it plays a vital role in the growth of the country. There are many determinants and factors of migration, such as wage, employment, education, age, marriage, and job-related variables (Job search, transfer of job) (Labor Force Survey of Pakistan). Migration may be internal, external, regional, and rural-urban. The current study examined the intertemporal analysis of rural-urban migration in Pakistan by using micro data (Labor Force Survey of Pakistan). The study also investigated "Neo Classical Theory of Migration" holds in case of Pakistan by using different datasets of (1999-2000, 2005-06, 2009-10, 2014-15 and 2017-18) These regimes were selected with four years gap and the last one is the recent dataset. The dependent variable was migration which is binary or dichotomous. Therefore, the objectives of the current study were estimated by the logistic regression model. The results showed that the neo-classical theory exists in case of Pakistan and wage is the most significant and positive determinant of migration in Pakistan. [ABSTRACT FROM AUTHOR]

The neoclassical ambipolarity condition governing the radial electric field in stellarators can have several solutions, and sudden transitions (in radius) between these can then take place. The radial position and structure of such a transition cannot be determined from local transport theory, and instead a non-rigorous model based on a diffusion equation for the electric field is usually employed for this purpose (Turkin et al 2011 Phys. Plasmas 18 022505). We compare global (full plasma volume) drift-kinetic simulations of neoclassical transport in the Wendelstein 7-X stellarator with this model and find significant discrepancies. The position r _0 of the transition is not predicted correctly by the diffusion model, but the radial structure of the transition layer is in reasonable agreement if the diffusion coefficient is chosen appropriately. In particular, it should depend on the plasma temperature in the same way as the plateau-regime coefficient of neoclassical transport theory or the gyro-Bohm diffusion coefficient. In the small-gyroradius limit, the prediction of r _0 by the diffusion model simplifies to the so-called Maxwell construction (Shaing 1984 Phys. Fluids 27 1567–9; Shaing 1984 Phys. Fluids 27 1924–6). However, this property also emerges from a wide range of other mathematical models in the appropriate limit. The basic assumption underlying these models is that the diffusion, or generalisations thereof, is independent of the radial electric field, which is however unlikely to be the case in practice. Presumably this fact explains the discrepancy between the diffusion model and the drift-kinetic simulations. Finally, it is found that global simulations replicate the phenomenon of spontaneous root transitions driven by variations in the electron-to-ion temperature ratio, as predicted by local theory in the small-gyroradius limit.

The radial electric field in the Wendelstein 7-X stellarator is computed by means of self-consistent, global, neoclassical simulations using the gyrokinetic particle-in-cell code EUTERPE. The simulation results are compared with local predictions obtained from a transport code using locally computed neoclassical transport coefficients. The analysis focuses on ion-electron-root transitions and investigates their dependence on collisionality, normalised ion gyroradius, and the electron-ion temperature ratio. Several of the results cannot be reproduced using conventional, local neoclassical transport theory. An approximate criterion for root transitions is derived, which results in an analytical scaling law that is useful for understanding how the position of the transition layer varies with plasma parameters.

The initial operation of neutral beams in Wendelstein 7-X enabled the first measurements of carbon (C6+) temperature and rotation with a multi-chord charge exchange recombination spectroscopy system. In this article we analyse the velocity measurements obtained with this system to infer the profiles of radial electric field, E r, and net parallel velocity of fully stripped carbon ions, V ‖. We include a general treatment of the flow geometry and the velocity corrections due to the energy dependence of the charge exchange cross section. The inverted profiles are compared with neoclassical calculations for various plasma conditions and two magnetic configurations. It is found that both the E r and V ‖ experimental profiles agree in sign and order of magnitude with the neoclassical expectations and reproduce the expected dependencies on plasma parameters and magnetic configuration, within the reduced dataset presented. However, quantitative differences with respect to the neoclassical profiles are observed above the estimated errors in various conditions. [ABSTRACT FROM AUTHOR]

In scientific publications on the problems of monetary relations, "modern monetary theory" (MTT) is understood as a system of views formulated in the last two decades by a group of American and Australian economists, mostly university professors. The main stimulus for the development and popularization of the MTT was the need to create a scientific concept for overcoming such problems of the American economy as the accumulation of huge public debt, chronic budget deficits, and high unemployment. The analyzed theory offers a universal solution to these problems. The MTT contains paradoxical conclusions. Nevertheless, it is necessary to study it, in our opinion. The fact is that in the development of the MTT, balance sheet and economicmathematical methods of analysis were widely used. It was the peculiar interpretation of the results of their application that led the developers of the MTT to extraordinary conclusions. Thus, the emergence of MTT predetermined the need to more accurately interpret the results that researchers can come to when using these methods. Experience shows that it can be useful to discuss doctrines that contradict established ideas. An analysis of one of these theories - the concept of private money by F. von Hayek - led to the conclusion that there is a "taboo" in the economic system. In it, it is impossible to finally repay one's obligations by issuing one's own obligations. The opposite conclusion followed precisely from Hayek's theory. The foundations of SDT were laid in the studies of W. Mosler (Mosier, 2010) and S. Kelton (see: Kelton, 2020) and further developed by a large group of researchers. The views of MMT supporters are not just radical - some of their proposals deny the fundamental foundations of the modern monetary system. The popularity of MTT is rapidly growing in political circles, at universities, among financial analysts. This theory is actively promoted by economists - advisers to the US Congress. The publication of the textbook "Macroeconomics" by its active supporters W. Mitchell, R. Ray and M. Watts (Mitchell et al., 2019) contributed to the popularization of the MTT. In our opinion, the analysis of the theoretical foundations of the MMT, which makes it possible to reveal the features of the modern monetary system, to identify the possibilities and limitations of monetary policy in stimulating economic development, is of scientific interest. A number of publications by domestic economists are devoted to this topic (see: Moiseev, 2019; Andryushin, 2020). The main postulate of the MTT is that the government of an independent country (sovereign), which has the right to issue money, cannot go bankrupt under any circumstances. It is argued that such a sovereign always has the ability to pay its obligations by issuing money. At the same time, the emitted obligations are accepted by them when paying taxes by economic entities. MMTers are aware of this problem. Bill Mitchell says: "when the level of private sector activity is such that wage-price pressures form as the precursor to an inflationary episode, the government can manipulate fiscal and monetary policy settings (preferably fiscal policy) to reduce the level of private sector demand." In other words, the government will cut spending or raise taxes and/or interest rates in traditional mainstream style. As Randall Wray puts it: "The solution is to avoid spending more once full employment is reached; and to carefully target spending even before full employment to avoid bottlenecks." If there is inflation domestically that curbs exports for a country, the MMTers propose to float the currency. So no capital controls and interference in currency markets. Randall Wray: "I'd let the dollar float." That might be ok for the US, where the currency, the dollar, is the international reserve currency and has to be held by foreign states and companies to do business. But that is not the situation for smaller capitalist economies, particularly so-called emerging economies. If inflation takes hold because the government is printing pesos, lira or bolivaros without stopping to try and maintain full employment while capitalist production is collapsing, the result will be hyper-inflation. And if those currencies are floating without any controls, then the value of the currencies will plummet -- as in Turkey, Argentina, Venezuela etc. What this shows is that MMT is very much an US/Australia-oriented theory and with policy prescriptions that have no viable application to most economies globally -- just like Keynesian theory and policy. The state may control the issuance of its currency but it cannot control its value relative to other currencies or to gold, the world money. If trust in a currency's value is lost by the holders or potential buyers of that currency, then its value will collapse, heightening inflation. In this way, MMT acts as a backstop to capitalism -- the state is the employer of last resort but not the main employer. It aims to compensate (patch up) the failures of capitalist production, not replace it. [ABSTRACT FROM AUTHOR]

Bu çalışmada “bir işin iki ya da daha fazla bireye dağıtılarak, bir iş bileşenleri serisi haline getirilmesi” olarak tanımlanan işbölümü kavramı anlamından ve kullanımından ziyade evrimsel süreci içerisinde incelenmektedir. İş bölümü kavramı antik çağlardan başlayarak klasik yönetim düşüncesine kadar çeşitli alanlar dâhilinde incelenmiş ve yorumlanmıştır. İş bölümünün sadece teknik işlerde değil, zihinsel süreçlerde de ele alınması gerektiği savunulmaktadır. Bu bakış açısı klasik yönetim düşüncesindeki işbölümü kavramı ile değerlendirilmiş, klasik yönetim düşünürlerinden Fayol’un ortaya attığı yönetim ilkelerinin yönetsel işbölümü çerçevesinde şekillenmesine yol açmıştır. Bu çalışmada söz konusu olan yönetsel işbölümü Fayol’un işbölümü ilkesi hariç diğer 13 yönetim ilkesinin sınıflandırılması ile oluşturulmuştur. Bu doğrultuda, işbölümü kavramının tarihsel incelemesi yapılarak işletme yönetimi açısından öneminin vurgulanması, kavramın birçok düşünce ve akımın çıkış noktası olduğunun anlaşılması açısından önem taşımaktadır.

The article discusses the problem of conformity of existing macro-economic models to possible changes in the behavior of economic actors, which may affect the micro- and macro-functions used in these models. A historical excursion of the formation of «adaptive» and «rational expectations» in the process of macro-economic regulation is carried out. Several institutional factors that influence its effectiveness and predictability of results are allocated. The possibility of making the right decisions is displayed, if the expectations of economic actors are based on past experience, are constantly checked in the course of economic activity, and the subjective valuations of the future status of markets and prices coincide with the conditional mathematically calculated expectations based on the information currently available. Rational expectations are seen as an addition to the macro-economic theory. They provide greater accuracy to the macro-economic forecasts and grounds for decision-making by economic actors in the process of macro-economic forecasting and regulation. The methodological limitations of the neoclassical model of macro-economic equilibrium are shown and the need for an institutional model of «limited rationality» is proved. The possibility of a realistic assessment of the projected results of macro-economic intervention in the reproductive process is related to the presence in the macro-economic model of behavioral functions, which more accurately reflect the real individual and economic behavior of economic actors. The authors rise the question of the synthesis of new macro-economics and institutionalism to create more realistic models of human behavior, to accurately parameterize future economic conditions and prices in the process of macro-economic regulation.

Purpose: The purpose of this paper is to present the complexity of the modern world and the multitude of economic interactions that occur in it. The aim is to show to what extent managers make decisions in conditions of uncertainty using the achievements of economics and related economic sciences, i.e. finance and accounting. Methodology Approach: The paper uses a hypothetical-deductive method. It starts with a hypothesis, regardless of whether it concerns a single fact or an event, whether it expresses a general law or an even more general belief. Universal names (symbols, ideas) are used for the description. Each statement is a theory or hypothesis. There is a certain role of induction. The induction rules serve as the principles for validating scientific truths. Findings: The paper takes into account the latest achievements of the theory and the results of research conducted in recent years in the world in connection with changes taking place in the economy and society at the turn of the 20th and 21st centuries and still. Changes in the modern economy are given at several levels, mainly at the theoretical level by the science of economics and at the practical level by the applied sciences which include finance and accounting. At the turn of the 20th and 21st century, a new group of managers is being shaped on a global scale. Managers are hoped that they can agree on the interests of the company and other communities (local, national and regional), where these contradictions could lead to the crisis and all its negative consequences. The complexity of the modern world is expressed in the fact that capitalist economies are based on a foundation of debt. Borrowing is a condition for economic growth. Financial claims arising as a result of the interaction of consumers, producers, savers and investors in each economy are sustainable, provided that the expected future revenues are higher than the expected debt repayments. Practical Implications: Expectations regarding future financial flows are uncertain. Market conditions change unexpectedly. There are shocks in the economy and investors' expectations are changing. Originality: Even before 2020, the history of capitalism in the 20th and 21st centuries is marked by the sequence: debt, uncertainty, shocks. The deepening of financial connections brings inevitable problems, the solution of which requires collective and joint action by managers on a global scale.

Sraffa rescues the classical analysis and puts it in discussion with mainstream theory. The thesis of this paper is that his ontological analysis, specified in the market snapshot, allows us to understand Sraffa's theoretical position and, in turn, is a method to assess his traditional interpretations as well as the new perspectives arising from the reading of his drafts. Its position is not entirely precise, so it is necessary to include conventions, which open the way to institutional analysis. Finally, starting from the contrast with other interpretations, it proposes to defend the coherence between the vision of the world and the ideas developed. [ABSTRACT FROM AUTHOR]

Credible economic research demands discipline and defensible modeling assumptions—both theoretical and empirical—but incentives to strategically shape findings (e.g., p‐hack) can be strong. We examine recent waves of empiricism in economics and the ethical concerns and responses they prompted. Statistical abuses that opportunistically search for significance are often inseparable from conceptual abuses of opportunistic model identification (i.e., p‐hacking writ large). We compare neoclassical with positivist hacking proclivities and explore associated implications for empirical analysis and peer review. Drawing on our experiences, 25 years apart, as AJAE editors we reflect on efforts to evaluate research quality and enhance research transparency. Related Content: What Do you Mean by "Informed Consent"? Ethics in Economic Development Research Related Content: Research ethics beyond the IRB: Selection bias and the direction of innovation in applied economics Related Content: Ulysses' pact or Ulysses' raft: Using pre-analysis plans in experimental and nonexperimental research [ABSTRACT FROM AUTHOR]

The article is aimed at defining the place of behavioral economics in the paradigmatic structure of modern economic theory and its role in the development of modern economic knowledge. Poor attention of the classical economic theory to the behavioral aspect of decision-making by economic actors in the face of increasing instability and uncertainty of economic development has caused actualization and popularization of researches in the sphere of behavioral economics. It is emphasized that only the research construct of the theory of behavioral economics allows understanding of the irrational phenomena of economic behavior. Based on the identification of the general and distinctive characterizations of the neoclassical and the behavioral theories, as well as taking into account expert estimations, it is proved that the behavioral economics expands the theoretic and methodological basis of modern economic science through introduction of researches on the cognitive-psychological mods of the subject making economic decisions. It is defined that modern economic theory has a polyparadigmatic character, which is caused by the dominance of branching and heterogeneity of scientific interpretations of one and the same economic phenomena and problems. As a result, complex forms of coexistence and interaction of scientific paradigms are present and variations of interparadigmatic synthesis become possible, such as the active development of the theories of behavioral economics, e.g.: cognitive economics, neuroeconomics, etc. The development of behavioral economics takes place in cooperation with other modern economic theories (modern neoclassic, experimental economics, neo-institutional theory, evolutionary theory, etc.), but its applied potential is much greater, which transfers the behavioral economics from the scientific «periphery» to the «center» of the paradigmatic structure of modern economic theory.

The aim of this paper is to analyse in detail the most important theories on labour markets, paying attention to their view on international labour migration to identify elements that help to understand the migration phenomenon facing the urgency of global policies for its protection. Neoclassical theory, the institutionalist school, Keynesian theory, and the Marxist perspective are studied. The text confirms that each approach provides elements to explain the origin of migration and its role in the destination economies, but only Marxist theory reveals their historical contribution to the capitalist mode of production and offers a consistent and integral theoretical framework for understanding their patterns of development, which can serve as a guide for action to protect them. It concludes that we do not lack theories to explain migration, but we need to understand it historically as an intrinsic part of the process of labour exploitation. [ABSTRACT FROM AUTHOR]

• The Solid Waste (SW) industry is characterized by several innovations. • A general framework for analysing innovations in the SW industry is missing. • Two economic approaches are combined for understanding innovation typologies in SW. • We identify 4 types of SW systems, characterized by diverse kinds of innovation. Often considered a traditional labour intensive activity, in recent years, the solid waste management (SWM) industry has been largely interested in innovation. Nonetheless, the analysis of innovations in the SW industry is frequently confined to process innovation in the disposal segment, neglecting other kinds of innovation – such as product innovation and organizational innovation – in other segments. While several economic theoretical frameworks have been developed for interpreting eco-innovation in general, a specific analysis of innovation in each segment of SWM is still missing, despite the specificities of this sector. To fill this gap, this paper shows how complexity theory can be profitably used to integrate the more traditional neoclassical approach, offering a comprehensive theoretical framework to analyse innovation in the SWM industry from both a market and firm perspective (the neoclassical approach) and from a social perspective (the complexity theory framework). Four main typologies of the SW market system, exhibiting different kinds of innovation, are outlined: (i) a "traditional" landfill-oriented system; (ii) a modern "waste-to-energy" incinerator-oriented system; (iii) a "light recycling" system with integrated solutions and a selection performance that is lower than 50%; and (iv) a "hard recycling" system. [ABSTRACT FROM AUTHOR]

$Z_{\mathrm {eff}}$ is measured by two visible bremsstrahlung diagnostics on HL-2A tokamak, one of which uses a high spectral resolution spectrometer coupled with an electron multiplied CCD (temporal resolution of 100 Hz), and the other uses a filterscope system (temporal resolution of 1 MHz). The bremsstrahlung brightness measured by them coincides with each other very well. $\bar {Z}_{\mathbf {eff}}$ is systematically measured under different discharge conditions, such as divertor and limiter configurations, ohmic and auxiliary heating phases, before and after siliconization, and $L$ – $H$ transition. Under ohmic phase, $\bar {Z}_{\mathbf {eff}}$ is higher in the limiter configuration than that in the divertor configuration by a factor of ~1.5 under high-density regime. $\bar {Z}_{\mathbf {eff}}$ increases in all cases of auxiliary heating scenarios due to enhanced plasma–wall interaction, accompanied by influx increases of low ionization states of impurities such as C2+ and Fe1+ in plasma edge. Siliconization for wall conditioning is prominently effective in lowering the main impurity influxes in plasma edge and thus the impurity level, and a concentration of ~4% for carbon and ~0.2% for iron is roughly evaluated for a typical nonsiliconized plasma. A simple relationship that $Z_{\mathrm {eff}}$ is positively correlated with $\Phi _{\mathrm {in}}$ and $\tau _{\mathrm {p}}$ is verified from the L- and $H$ -mode features, where $\Phi _{\mathrm {in}}$ is the impurity influx and $\tau _{\mathrm {p}}$ the particle confinement time. A nearly constant $\bar {Z}_{\mathbf {eff}}$ evolution is observed during $L$ – $H$ and $H$ – $L$ transition and it seems that $\bar {Z}_{\mathbf {eff}}$ is insensitive to $L$ – $H$ and $H$ – $L$ transition under some $Z_{\mathrm {eff}}$ (0) threshold. The $Z_{\mathrm {eff}}$ profiles are flat/weakly hollow in plasma core region (rho < 0.7) in case of low $Z_{\mathrm {eff}}$ (0) and tend to be peaked when $Z_{\mathrm {eff}}$ (0) is larger than 3, which agrees with the neoclassical theory prediction. [ABSTRACT FROM AUTHOR]

Conflicting results on the relationship between government fiscal deficit, savings and investment behaviour of households remains unresolved. Some authors have argued that households might unconsciously play out adherence to the dictates of the Ricardian equivalence hypothesis (REH) because they practice an infinite consumption horizon. Relying on the vector autoregression (VAR) technique and the impulse response function (IRF), this study examines the validity of the REH and the interactions between fiscal deficit, aggregate savings, and private investment in Nigeria within a 48-year period. The results reveal that government fiscal deficit exerts negative effects on gross domestic savings and investment, which is further affirmed by the impulse response function (IRF). These findings rather uphold the neoclassical literary arguments that economic growth is retarded due to crowding out effects resulting from fiscal deficits; hence opposing the REH. Thus, policy-makers should adhere to the fiscal deficits benchmark of less than 40 percent of GDP as proposed by the International Monetary Fund (IMF) to maintain stable macroeconomic conditions. [ABSTRACT FROM AUTHOR]

On the methodological plain this paper outlines the conditions that contribute to the development of economic theories and it continues with an examination of the concrete circumstances that gave rise to modern neoclassical macroeconomic theories. The paper further claims that the current impasse in macroeconomics is indicative of the need for new directions in economic theory which becomes imperative in the long economic downturn that started in 2007 and concludes by suggesting the need for a synthesis between the classical analysis and the theory of effective demand.

The main purpose of the publication is to study formation of the household economic behavior modeling in the context of development of economic thought and methods of the economic-mathematical modeling. The study was carried out under the assumption that, when studying the development of theoretical and methodological foundations of the economic behavior of households one must take into account not only the history of development of economic theory, but also the transformation of attitudes in other areas of human knowledge, in particular the paradigm shift in scientific thinking. It has been specified that the massive use of mathematical methods in economics is associated with formation of the marginal theory and at the same time – with the proliferation of the marginal analysis. At the present stage, the economic behavior of households is being analyzed in the terms of concepts such as neoclassicism, institutionalism and behaviorism. But by dividing the concepts of «individual» and «household», it can be argued that precisely the institutionalism in conjunction with synergistic approach provide the basis for elaboration of strategies for the economic behavior of households, ensuring their economic security.

The aim of this paper is to provide a Post-Keynesian view to economic theory as an alternative to traditional theory. Keynesian economics consists of an approach to economics derived mainly from the work of Keynes. It is grounded on the fields of observations of stylized facts of the economy and attempts to provide solutions to arising problems, which cannot be adequately explained and resolved by mainstream theory. We wish not in this paper to contradict the conventional with Keynesian and Post-Keynesian theory, but instead to provide an alternative and complementary view. However, we highlight the differences between traditional neoclassical theory and Post-Keynesian macroeconomics. Therefore, we shall focus on Post- Keynesian analysis on the operation of monetary and financial system in the endeavour to fill gaps on the explanation of relative phenomena. The main scope is the explanation of the financial system and financial stability. [ABSTRACT FROM AUTHOR]

We examine the neoclassical interpretations of Shiller's tests on stock market volatility and analyze their theoretical and empirical limitations. We then show that volatility can be interpreted in an alternative way in the light of a new macroeconomic model whose main innovative feature is that it relates dividends to the Classical concept of "normal distribution" and stock prices to the Keynesian "principle of effective demand." While a relatively stable normal rate of profit determines dividends, the continuous fluctuations of investment, income, and saving and the related portfolio choices influence the demand for shares and provoke stock prices volatility with respect to dividends. The Classical-Keynesian model is then extended to contemplate also a "financial instability hypothesis" and a "monetary circuit." Neoclassical and alternative stock market models are presented here by adopting a comparative approach—that is, a single system of equations in which the causal relations among its variables change according to the theory examined. [ABSTRACT FROM AUTHOR]