IDEAS home Printed from https://ideas.repec.org/a/elg/ejeepi/v10y2013i1p76-92.html
   My bibliography  Save this article

Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach

Author

Listed:
  • André de Melo Modenesi

    (Federal University of Rio de Janeiro)

  • Rui Lyrio Modenesi

    (Fluminense Federal University)

  • José Luis Oreiro

    (Universidade de Brasilia)

  • Norberto Montani Martins

    (Federal University of Rio de Janeiro)

Abstract

This article aims at analysing the relationship between conventions and monetary policy using both the post-Keynesian and the French-conventions-school approaches, treated as complementary; and stressing the design of monetary policy frameworks (for example, inflation targeting) and the setting of interest rates as phenomena highly governed by conventions. The Brazilian monetary policy after the mid 1990s – marked by the highest real interest rates in the world – will be used as a case study.

Suggested Citation

  • André de Melo Modenesi & Rui Lyrio Modenesi & José Luis Oreiro & Norberto Montani Martins, 2013. "Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(1), pages 76-92.
    • Handle: RePEc:elg:ejeepi:v:10:y:2013:i:1:p76-92
    as

    Download full text from publisher

    File URL: http://www.elgaronline.com/view/journals/ejeep/10-1/ejeep.2013.01.07.xml
    Download Restriction: Restricted access
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Salais, 2006. "Salais R., "Conventions (Economie des)"," Post-Print hal-00178992, HAL.
    2. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 51(2), pages 209-223.
    3. J. -P. Dupuy & F. Eymard-Duvernay & O. Favereau & A. Orléan & R. Salais & L. Thévenot, 1989. "Introduction," Revue Économique, Programme National Persée, vol. 40(2), pages 141-146.
    4. Jose Luis Oreiro & Lionello F. Punzo & Eliane C. Araujo, 2012. "Macroeconomic constraints to growth of the Brazilian economy: diagnosis and some policy proposals," Cambridge Journal of Economics, Oxford University Press, vol. 36(4), pages 919-939.
    5. Paul Davidson, 2002. "Financial Markets, Money and the Real World," Books, Edward Elgar Publishing, number 2467.
    6. Arthur T. Denzau & Douglass C. North, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31, February.
    7. Miguel A. LeÛn-Ledesma & A. P. Thirlwall, 2002. "The endogeneity of the natural rate of growth," Cambridge Journal of Economics, Oxford University Press, vol. 26(4), pages 441-459, July.
    8. Philip Arestis & Fernando Ferrari-Filho & Luiz Fernando de Paula, 2011. "Inflation targeting in Brazil," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(2), pages 127-148.
    9. Hicks, John, 1977. "Economic Perspectives: Further Essays on Money and Growth," OUP Catalogue, Oxford University Press, number 9780198284079.
    10. Fernando de Holanda Barbosa, 2006. "The contagion effect of public debt on monetary policy," Brazilian Journal of Political Economy, Center of Political Economy, vol. 26(2), pages 231-238.
    11. N/A, 1989. "Editor's Introduction," Review of Radical Political Economics, Union for Radical Political Economics, vol. 21(3), pages 1-1, September.
    12. Marc Lavoie & Mario Seccareccia (ed.), 2004. "Central Banking in the Modern World," Books, Edward Elgar Publishing, number 3297.
    13. Dequech, David, 2009. "Institutions, social norms, and decision-theoretic norms," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 70-78, October.
    14. Bresser-Pereira, Luiz Carlos, 2009. "A tendência à sobreapreciação da taxa de câmbio," Textos para discussão 183, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    15. Gilberto A. Libânio, 2009. "Aggregate demand and the endogeneity of the natural rate of growth: evidence from Latin American economies," Cambridge Journal of Economics, Oxford University Press, vol. 33(5), pages 967-984, September.
    16. David Dequech, 2011. "Financial conventions in Keynes's theory: the stock exchange," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 33(3), pages 469-490, April.
    17. André de Melo Modenesi & Norberto Martins & Rui Modenesi, 2013. "A modified Taylor rule for the Brazilian economy: convention and conservatism in eleven years of inflation targeting (2000-2010)," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 35(3), pages 463-482.
    18. Jean-Pierre Dupuy, 1989. "Convention et Common knowledge," Revue Économique, Programme National Persée, vol. 40(2), pages 361-400.
    19. Nakabashi, Luciano & Costa da Silva, Guilherme Jonas & Oreiro, José Luis & Guimarães e Souza, Gustavo José, 2012. "La economía del crecimiento impulsado por la demanda. Teoría y evidencia respecto del Brasil," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    20. David Dequech, 2003. "Conventional and unconventional behavior under uncertainty," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 26(1), pages 145-168.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arestis, Philip & Gonzalez-Martinez, Ana Rosa, 2016. "Revisiting the accelerator principle in a world of uncertainty: Some empirical evidence," Economic Modelling, Elsevier, vol. 56(C), pages 35-42.
    2. Modenesi, Rui Lyrio & Modenesi, André de Melo & Martins, Norberto Montani & Fontaine, Patrick, 2015. "Restructuring the Economic Policy Framework in Brazil: Genuine or Gattopardo change?," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 17.
    3. Rui Lyrio Modenesi & André De Melo Modenesi, 2016. "Development Conventions: Theory And The Brazilian Case After The Mid-20th Century," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 082, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Modenesi, Rui Lyrio & Modenesi, André de Melo & Martins, Norberto Montani & Fontaine, Patrick, 2015. "Restructuring the Economic Policy Framework in Brazil: Genuine or Gattopardo change?," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 17.
    2. Rui Lyrio Modenesi & André De Melo Modenesi, 2016. "Development Conventions: Theory And The Brazilian Case After The Mid-20th Century," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 082, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Hans D. G. Hyun, 2023. "A financial frontier model with bankers' susceptibility under uncertainty," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 94-118, February.
    4. Julien Vercueil, 1997. "Institutionnalism and the Economics of Conventions : A research on the methodological position of theories [Institutionnalisme et économie des conventions : Recherches sur le positionnement méthodo," Post-Print halshs-01418943, HAL.
    5. Nabakashi, Luciano & Costa da Silva, Guilherme Jonas & Oreiro, José Luis & Guimarães e Souza, Gustavo José, 2012. "The economics of demand-led growth: theory and evidence for Brazil," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    6. Dequech, David, 2006. "The new institutional economics and the theory of behaviour under uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 59(1), pages 109-131, January.
    7. Emanuele Citera & Lino Sau, 2021. "Reflexivity, Financial Instability and Monetary Policy: A ‘Convention-Based’ Approach," Review of Political Economy, Taylor & Francis Journals, vol. 33(2), pages 327-343, April.
    8. David Dequech, 2006. "Towards An Alternative To The Game-Theoretic Concept Of Conventions," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 77, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    9. Arestis, Philip & Gonzalez-Martinez, Ana Rosa, 2016. "Revisiting the accelerator principle in a world of uncertainty: Some empirical evidence," Economic Modelling, Elsevier, vol. 56(C), pages 35-42.
    10. Kevin S. Nell & A.P. Thirlwall, 2017. "Why does the productivity of investment vary across countries?," PSL Quarterly Review, Economia civile, vol. 70(282), pages 213-245.
    11. Dirk Ulbricht & Konstantin A. Kholodilin & Tobias Thomas, 2017. "Do Media Data Help to Predict German Industrial Production?," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 36(5), pages 483-496, August.
    12. Alfonso Palacio Vera, 2008. "The "New consensus"and the Post-Keynesian approach to the analysis of liquidity traps," Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales 08-03, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
    13. Matteo Lanzafame, 2014. "The balance of payments-constrained growth rate and the natural rate of growth: new empirical evidence," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(4), pages 817-838.
    14. Laura Carvalho & Fernando Rugitsky, 2015. "Growth and distribution in Brazil the 21st century: revisiting the wage-led versus profit-led debate," Working Papers, Department of Economics 2015_25, University of São Paulo (FEA-USP).
    15. Ashok Chakravarti, 2012. "Institutions, Economic Performance and the Visible Hand," Books, Edward Elgar Publishing, number 14751.
    16. Ognjen Radonjić & Miodrag Zec, 2010. "Subprime Crisis and Instability of Global Financial Markets," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(2), pages 209-224, June.
    17. Bill Lucarelli, 2011. "The Economics of Financial Turbulence," Books, Edward Elgar Publishing, number 14252.
    18. Mark Hayes, 2006. "The Economics of Keynes: A New Guide to The General Theory," Books, Post Keynesian Economics Society (PKES), number nggt.
    19. A.P. Thirlwall, 2018. "Una vita nell’economia," Moneta e Credito, Economia civile, vol. 71(283), pages 179-210.
    20. Kevin S. Nell & A.P. Thirlwall, 2017. "Perche' la produttivita' degli investimenti varia tra paesi? (Why does the productivity of investment vary across countries?)," Moneta e Credito, Economia civile, vol. 70(279), pages 197-231.

    More about this item

    Keywords

    conventions; monetary policy; interest rates;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:ejeepi:v:10:y:2013:i:1:p76-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Phillip Thompson (email available below). General contact details of provider: http://www.elgaronline.com/ejeep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.