economics curriculum

The roots of gender and poverty studies began with Pearce (1978) who coined the expression ‘feminization of poverty’. Pearce considered female-headed families, excluding poor women who live in male- headed families, based on the argument that the proportion of families headed by women among the poor has been  increasing since the 1950s. In her opinion, women have become poorer because of their gender.

The recent dynamics of the global labour market has reinforced the precariousness of women’s employment and working conditions. Among other issues, the recent global highlights about the participation of women in the labour markets are listed below:

Unemployment: Women are more likely to be unemployed than men, with global unemployment rates of 5.5 per cent for men and 6.2 per cent for women

Informal Work:      In 2015, a total of 586 million women were own-account or contributing family workers. Many working women remain in occupations that are more likely to consist of informal work arrangements

Wage and salaried jobs: Moreover, 52.1 per cent of women and 51.2 per cent of men in the labour market are wage and salaried workers.

Jobs and occupations by economic sectors:  Globally, the services sector has overtaken agriculture as the sector that employs the highest number of women and men. In the period between 1995 and 2015, women are employed in the services sector: since 1995, women’s employment in services has increased from 41.1 per cent to 61.5 per cent.

High-skilled occupations: High-skilled occupations expanded faster for women than for men in emerging economies where there is a gender gap in high-skilled employment in women’s favour.

Part-time jobs: Globally, women represent less than 40 per cent of total  employment, but make up 57 per cent of those working on a part-time basis.

Hours of work: Across the global labour scenario, one fourth of women in employment (25.7 per cent) work more than 48 hours a week, mainly in Eastern , Western and Central Asia, where almost half of  women employed work more than 48 hours a week.

Gender wage gap: Globally, women earn 77 per cent of what men earn.


Indeed, although women have been increasing their participation rate in the labor market in the last decades, they worked in more precarious occupations. This situation characterized by precarious jobs, mainly based on short-term contracts, enhances the vulnerability of workers, mainly women, as the financialization of management strategies turns out to be subordinated to economic efficiency targets, that shape employment relations, overwhelmed by longer working hours, job destruction, turnover and outsourcing. Workforce displacement and loss of rights could also be part of the spectrum of management alternatives aimed at cost reduction. In addition to the wage gap, women’s participation is stronger in the services sector where working hours are longer and wages lower.

Besides, unpaid work could also be considered an extra onus on women. In addition to women´s challenges in the labour market, the increasing weight of unpaid work is more likely when women become unemployed and return to their homes and take more responsibility for housework than men, or because the loss of family income makes it impossible to support the remuneration of domestic workers. Gender-differentiated time use patterns are affected by many factors, including:  household composition (age and gender composition of household members); seasonal considerations; regional and geographic factors; availability of infrastructure and social services. But social and cultural norms also play an important role both in defining, and sustaining rigidity in, the gender division of labour.

Building on the United Nations goals, gender equality is required for the erradication of the many dimensions of poverty and to promote sustainable human development. Taking into account a macroeconomic approach to the labour markets, the “vicious circle” of impoverishment could be surmounted if policy makers rethink employment an income policies under a gender approach to the labour markets.


Ilo (2016)—dgreports/—dcomm/—publ/documents/publication/wcms_457086.pdf

Pearce, Diana (1978). “The feminization of poverty: women, work, and welfare”. Urban and Social Change Review, Special Issue: Women and Work, Vol. 11, No. 1-2, pp. 28–36.

This is an outline of the lecture 3 in Advanced Microeconomics — expands somewhat on the slides available from the link. This should be useful to heterodox economists looking for ways to teach an alternative course, radically different from conventional approaches. First two lectures consisted of some preliminary math, and can be skipped without lack of continuity.  Video of the lecture (90m) is available at the bottom of the post.

Supply & Demand is Central to Economics: This is the modern Theory of Value. The market price determines the value – this is in conflict with classical conceptions of value.

BUT, this theory is WRONG!  The central question in theory of Value is: HOW are prices determined? Why are water and tomatoes cheap, and why are diamonds expensive?

Current answer is the Supply and Demand theory of economics. Classical economists’ answers were  Labor Theory of Value.

Modern Answers are seriously deficient. Classical Schools had substantially more insight into these questions. We will be discussing classical thinking (Adam Smith, Ricardo, Marx, Sraffa) later in the course. This lecture deals with: Failure of Supply & Demand in Labor Market. This failure was the Raison-d’etre of Keynesian Economics

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Before proceeding with Re-Reading Keynes, I would like to clarify the issue of exogeneity and endogeneity, which he understands, but most of his followers failed to understand.  This is to clarify a segment of a phrase he uses in describing the four ways in which level of employment can increase within the framework of the classical theory of economics. The fourth factor listed by Keynes appears somewhat mysterious in the original text:
(d) an increase in the price of non-wage-goods compared with the price of wage-goods, associated with a shift in the expenditure of non-wage-earners from wage-goods to non-wage-goods.
== in the previous post (P9: Theory of Employment) I re-stated this as an exogenous increase in real wage, to clarify what Keynes wanted to say. However, (d) above is what Keynes actually wrote, and I want to explain why Keynes wrote in this way. This involves an excursion into the supply and demand model, and the concepts of exogeneity and endogeneity.
What Keynes is saying here is that if there is an increase in demand for luxury goods consumed by aristocrats, and an associate decrease in demand for necessities purchased by laborors, then the real wage will rise and that will increase employment. Keynes is very careful to create a scenario in which the real wage rises due to EXOGENOUS factors shift in demand by non-wage earners — the aristocrats.  What Keynes understood is something basic which is not understood by modern economists like Varian when they discuss the supply and demand model — ONE CANNOT CONTEMPLATE VARIATIONS IN AN ENDOGNEOUS VARIABLE (because endogenous variables are not free to move; they can only change if some of the exogenous variables which affect them change). This means that asking what consumers will demand if the price changes is a WRONG question — prices are endogenous and they cannot change by themselves. An increase in price cause by shortfall in supply would lead different consequencs from an increase in price caused by an upward shift in the demand. If a consumer is asked what he will do when the price changes, he should ask WHY did the price change, because his response to the price change DEPENDS on cause of the price change. He cannot provide a response to the question without learning about the cause, and whether or not this is a temporary or permanent change.


Comments on Varian: Intermediate Microeconomics. Chapter 1, which sets up a simple supply and demand model.

Brief Summary of Post:

These comments are about the first few pages of the chapter. Quotes from Varian are in italics. Criticisms are made in this post about the concepts of models, optimization, equilibrium, and the concept of exogeneity, as dealt with by Varian. Models are used without explicit discussion of the relationships between model and reality, which is essential to understanding how models work. For an extended discussion see my lecture on Models Versus Reality. The post explains why optimization, taken is tautological by Varian, is false as a description of consumer behavior. For an extended discussion of the conflict between axiomatic theory of consumer behavior and actual human behavior, see my one hour video: Behavioral Economics Versus Neoclassical Economic Theory.  Similarly, the decision to study only equilibrium behavior handicaps economists, making them blind to disequilibrium events like the Global Financial Crisis.

Detailed Discussion

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Joan Robinson (1903- 1983) studied microeconomic issues, such as pricing, consumer demand, producer supply, competition and monopolistic strategies. Her first major book was The Economics of Imperfect Competition, published in 1933. In the same year, Edward Chamberlin published The Theory of Monopolistic Competition.

Robinson restates the Marshallian contribution to price theory so as to examine the outcomes of imperfect competition. In her understanding, perfect competition is considered to be a very special case where buyers should have the same preferences and each buyer should deal with only one firm at any one time. If these conditions are fulfilled, an increase in the price of one firm would lead to a complete cessation of its sales if the prices of other firms remained the same.

Considering the markets where imperfect competition dominates, Robinson starts the analysis with a single firm in an industry. She clarifies that physical differentiation is not a necessary condition for market imperfection because two commodities may be alike in every respect except the names of the firms producing them. However, the market in which they are sold will be imperfect if different buyers have different scales of preference as between the two firms.

Imperfect competition in the markets affects the slope of the demand curve of an individual firm and of the industry. The first prerequisite of perfect competition is a product clearly demarcated from others, that is to say, the characterization of a perfect market depends on the clear demarcation of the commodity that is sold and bought. In particular, she examines how price discrimination and market segmentations policies influence the slope of the curve of the individual firm and the market equilibrium. Competition will be less perfect the lower is the elasticity of the total demand curve. Indeed, the form of the demand curve represents the degree of competition between the product of this industry and other products.


Besides, in a context of imperfect competition, the firm’s supply curve could express increasing, decreasing, or constant costs. As a result, the equalization of the marginal cost curve and the price as a condition of equilibrium is considered as the main problem in those imperfect markets.  According to Robinson, competition will be less perfect the higher is the ratio of the output of one firm to the output of the industry. If competition is imperfect, an increase in the output of one firm by one unit of its good would change the output of the industry and this may lead to a relevant change in the price of this good.

Robinson addresses that it is empirically true that a high level of normal profits will often be found where competition is imperfect.           The normal level of profits will be different according to the industry and the scales of production in the same industry because  the level of normal profits will depend upon the conditions of supply of the firm. An old-established firm enjoys a “good will” which turns out not only to enable the firm to influence the price of the commodity but also to set increasing costs of entry to new rivals. Powerful firms which use methods of “unfair competition” to strangle rivals are unlikely to sell in perfect markets. In these powerful firms, managerial decisions, including price discrimination and market segmentation, for instance, are practices oriented to increase market share and profits.

Joan Robinson’s microeconomic approach is still relevant to show the failures of a theory of value and distribution based on the assumptions of either perfect competition or perfect monopoly. In truth, her analysis of the monopolistic trends in contemporary capitalism sheds light on how powerful firms fix prices and strengthen  their power in the markets.

Business strategies around long-run investment have varied over time. In General Theory (GT), John Maynard Keynes reinforces the analysis of the modifications in the structure of the capitalist class to explain the differences between entrepreneurs and investors in terms of the effects of their behaviour and decisions on capital accumulation. In Chapter 12 (GT), he establishes the difference between the old and the new business models. This historical approach shows that, in the old business model, there was an irrevocable commitment towards investment. Taking into account the new business model, the decisions about what amount and where to invest are no more an irrevocable commitment for investors and managers. Indeed, in the new business model, investors decide the volume of investment, but aggregate investment is not irrevocable since liquidity is the target.  This fact fosters macroeconomic instability in the economic system. As Keynes wrote:

Decisions to invest in private business of the old-fashioned type were, however, decisions largely irrevocable, not only for the community as a whole, but also for the individual. With the separation between ownership and management which prevails today and with the development of organized investment markets, a new factor of great importance has entered in, which sometimes facilitates investment, but sometimes adds greatly to the instability of the system” (Keynes, General Theory, 12, III).

And he added:

If I may be allowed to appropriate the term speculation for the activity of forecasting the psychology of the market, and the term enterprise for the activity of forecasting the prospective yield of assets over their whole life, it is by no means always the case that speculation predominates over enterprise. As the organisation of investment markets improves, the risk of the predominance of speculation does, however, increase” (Keynes, General Theory, 12, VI).

The historical changes in business have been related to qualitative transformations in capital accumulation and competition. Mainly after the 1970s, the changing practices in corporate finance fostered the growth of the participation of institutional investors, such as pension funds or private equity firms, in business management as relevant shareholders. The drive to increase the share-holders’ value and the incorporation of the managerial strata through share options has tended to postpone long-term investments. In addition, these practices have favoured mergers and acquisitions and fostered financial speculation.

After the middle 1990s, public policies and private strategies influenced the dimension and composition of balance sheets in different economic sectors. Among the main features:

  • The household sector has got increasingly indebted.
  • Corporations have moved to “surplus units” running financial surpluses that have been diverted towards the acquisition of financial assets instead of financing physical investments.
  • The balance sheets of mutual investment funds are now larger that before the global crisis with respect to the GDP and they have influenced the flows of investment in companies.

Considering the evolution of the business models since the 2000s, the strategies  of corporations and private equity funds have turned out to focus on short-term gains and the distribution of dividends to shareholders, that is to say, to investors. In other words,  the current business model can be apprehended as a form of governance that aims increasing short-term earnings by means of a “clash of rationalization”. In this context, competitiveness and productivity have been put together in the attempt to promote higher business performance.

In fact, the centralization of capital, through waves of mergers and acquisitions, created new challenges to business stability. Accordingly the OCDE, the current investment chain is complex due to cross-investments among institutional investors, increased complexity in equity market structure and trade practices, and an increase in outsourcing of ownership and asset management functions. In this scenario, the economic and social outcomes have involved a trend to ‘downsize and distribute’, that is to say, a trend to restructure, reduce costs and focus on short- term gains. In practice this has meant plants displacement and closures, changing employment and labour conditions, outsourcing jobs, besides the pressure on supply chain producers in the global markets.

As a result of current business strategies, investments that are fixed for society turn out to be liquid for investors. Today, the dominance of a culture based on short-term speculation has major implications that go far beyond the narrow confines of the financial markets.  The costs of this business model fall disproportionately on society because of the commitment to liquidity.  As Keynes warned,

“Thus the professional investor is forced to concern himself with the anticipation of impending changes, in the news or in the atmosphere, of the kind by which experience shows that the mass psychology of the market is most influenced. This is the inevitable result of investment markets organized with a view to so-called ‘liquidity’. Of the maxims of orthodox finance none, surely, is more anti-social than the fetish of liquidity, the doctrine that it is a positive virtue on the part of investment institutions to concentrate their resources upon the holding of ‘liquid’ securities. It forgets that there is no such thing as liquidity of investment for the community as a whole” (Keynes, General Theory, 12, V).

If we WEA economists want to disseminate among our students these relevant changes in business models, then it would be interesting to include some of the following readings  mainly in micro and macroeconomic courses.

Berle, Adolf A., and Gardiner C. Means (1932), The Modern Corporation and Private Property, Macmillan.

Blair, Margaret M. (1995) Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century, Brookings Institution.

Crotty, J. (2002) “The effects of increased product market competition and changes in financial markets on the performance of nonfinancial corporations in the neoliberal era”. Working Paper Series, n. 44.  University of Massachusetts Amherst, Political Economy Research Institute,

Çelik, S. and Isaksson, M. (2013) “Institutional Investors as Owners: Who Are They and What Do They Do?”, OECD Corporate Governance Working Papers, No. 11, France: OECD Publishing. (accessed 10 October 2015)

Fligstein, N. (2001) The architecture of markets, New Jersey: Princeton University Press.

Jacoby, S. (2008)  Finance and Labor: Perspectives on Risk, Inequality and Democracy, Working Paper, Institute for Research on Labor and Employment, USA, California Digital Library.

Keynes, J. M. [1936 (1964)] The General Theory of Employment, Interest, and Money. New York: Harcourt Brace.

Lazonick, W. (2013) “From Innovation to Financialization: How Shareholder Value Ideology is Destroying the US Economy” , in Martin H. Wolfson and Gerald Epstein, eds., The Handbook of PoliticalEconomy of Financial Crises, Oxford University Press.

Lazonick, W. and O´Sullivan, M. (2000) “Maximizing shareholder value: a new ideology for corporate governance”, Economy and Society, 29 (1).

Seccareccia, M.  (2012) “Financialization and the transformation of commercial banking; understanding the recent Canadian experience before and during the international financial crisis”, Journal of Post Keynesian Economics, 35 (2): 277-300.

The huge growth of deregulated finance has been associated to a new financial regime and great transformations in the pattern of economic growth. Looking back, there has been  a narrow relationship between the crisis of the post-war accumulation pattern, the evolution of the international monetary system and the process of financial deregulation. In fact, as Bello (2006) warned, in the 1980s, Reaganism and structural adjustment were not successful attempts to overcome the post-war accumulation crisis. One decade later, the Clinton administration embraced globalization as an American strategy. First, this strategy aimed to accelerate the integration of production and markets by transnational corporations. Secondly, it aimed to create a multilateral system of global governance centred on the World Trade Organization, the International Monetary Fund and the World Bank.

In the last decades,  financial capital  exercised control over the structural forms necessary for the continuing cycles of valorisation of productive capital, thanks to the centralized money at  disposal. Different growth models overwhelmed this global scenario: while some countries have presented a consumption-driven growth model fuelled by credit, generally followed by current account deficits, other countries have shown an export-driven growth model, mainly characterized by modest consumption growth and large current account surpluses (Stockhammer, 2009). The growth of financial assets, generated by the new debt cycle, included growing and sophisticated risk management practices. Besides, the financial expansion also proved to subordinate the pace of investment to financial commitments. The overall changes strengthened private and public debt and further social inequalities.

 The idea of autonomous monetary management has collapsed under the 2008 global financial crisis and the tensions that emerged within the markets have been shifted to the political sphere. In truth, the financial crisis and the erratic movements of key-currencies have shown that central banks do not have control on the complexity of global, innovative and speculative markets. Otherwise, central banks´ actions are not independent from private and public pressures.

 In addition, macroeconomic policies that currently privilege fiscal austerity and further labour market  flexibility can be socially costly.  Considering the labour markets, employability  seems to be conditioned to private strategies that aim cost reductions, labour flexibility and efficiency targets. Longer working hours, job destruction, turnover, outsourcing, workforce displacement and loss of rights have also been part of the spectrum of management alternatives aimed at cost reduction. Indeed, the current dynamics of labour markets favoured  the vulnerability of workers, mainly young people, and precarious jobs.

The apprehension of this political and social reality is decisive in the attempt to reformulate the economics curriculum in order to include a deep reflection on current labor challenges that coudl take into account the changing employment relationship.  Students must be increasingly aware that, considering the current investment scenario and its outcomes in  terms of labour challenges, that in the near future workers will be increasingly polarized into two forces: on one side, an elite that controls and manages the high-tech and financial global economy; and on the other side, a growing number of displaced workers who have few prospects for meaningful job opportunities.





Bello, W.  (2006) “The capitalist conjuncture: over-accumulation, financial crises, and the retreat from Globalization”’,Third World Quarterly, 27:8, pp. 1345 — 1367.


Minsky, H.P (1986),  Stabilizing an Unstable Economy. New Haven, Connecticut: Yale University Press.


Stockhammer, E. (2009), “The finance-dominated accumulation regime, income distribution and the present crisis”, Department of Economics Working Paper Series, Vienna: Vienna University of Economics & B.A.



 Special contribution from Grazia Ietto-Gillies

The business media is awash with news about transnational companies (TNCs) be they in the services or manufacturing or agriculture sector. The news may refer to performance or strategies or plans for real investment (or the lack of them) or takeovers. There is currently also considerable interest in their tax minimization strategies.

Yet economics textbooks and courses are still shying away from this most relevant part of our contemporary economies. This is true of both orthodox/neoclassical approaches and – I regret to say – of alternative ones as a quick analysis of textbooks recommended in the WEA Pedagogy page shows.

It could be argued that the nationality of the investor, employer, or producer does not matter: a firm is a firm and the task of economics is to study it independently of where it invests or its nationality. I have argued (Ietto-Gillies, 2004 and 2012: introduction and Ch. 14) that the existence of nation-states with their different regulatory regimes makes a specific study of the TNC necessary. The regulatory regimes refer to taxation or labour and social security or currencies or environmental laws. The differences in regulatory regimes across different countries generate opportunities for alternative, profitable strategies for firms able to operate across national frontiers. Such operations allow the TNC to take advantage of different fiscal, currency or labour and social security or environmental regulations. Most relevant, transnationality increases the bargaining power of TNCs over labour as we see on an almost daily basis throughout the world. On the fiscal side the advantages that TNCs derive from their tax minimization strategies are partly linked to strategic location of their headquarters in tax-friendly countries and partly to the widely used manipulation of transfer prices (Eden, 2001; OECD, 2010).

Additional advantages of transnationality for companies may also derive from: (a) the spreading of risk across different locations; and (b) the acquisition of knowledge from a variety of cultural and business contexts that the location of production in different countries allows. There are, of course, also costs and risks associated with operating in different locations.

There is more to this issue. Most of us who have embraced alternative and realist approaches to the study and teaching of economics are still, on the whole, stuck with the distinction between micro and macro economics largely taken by us from the orthodox literature. How appropriate is this distinction in a world in which a few firms dominate markets and industries even at the global level? The domination is not just in terms of market shares. On the production side we must take account of the domination that principal firms exercise over smaller contractors many of which operate in other countries. The domination by a few large firms in a particular industry affect labour, consumers and smaller firms linked to the large ones by contractual arrangements. It also affects governments and their policies. Celi et at. (2017: Ch 2) show how the offshoring and outsourcing investment strategies of French, German and Italian automobile manufacturers can largely explain changes in the country’s trade balance. The micro is almost the meso and greatly affects the macro. Governments and labour force as well as economics teachers take note.

If we WEA economists want to disseminate among our students an alternative and realist approach to the study of economics, then we need to include the study of TNCs in our courses. The task is feasible because there is, indeed, a large literature on theories and effects of TNCs and their activities. The topic is widely researched mostly in Business Schools. Here are some sources of literature.

UNCTAD publishes, among others, the following:

  • World Investment Report: a yearly thematic analysis with considerable empirical content; full databases available free online.
  • Transnational Corporations: a quarterly academic, peer reviewed journal which focuses on analysis and policy.

Among the many journals that deal with ‘International Business’ are the following:

Journal of International Business Studies (JIBS)

International Business Review (IBR)

Critical Perspectives on International Busines (CPoIB).

Most of the journals tend to be multi- and inter-disciplinary dealing with economics, management, accounting and organizational issues. CPoIB deals also with social and political issues and its content can be of particular interest to WEA members. It has published, among others, papers by a radical accountant, Prof. Prem Sikka of Essex University (including Sikka and Wilmott, 2013).

My (2012) listed below has a comprehensive treatment of the various theories of the TNCs (Part II) and of their effects (Part III) with suggestions for further reading at the end of each chapter. The chapters on theories first summarize a specific theory and then critically analyses it in a separate section.

See also ‘The theory of the Transnational Corporation at 50+’ in the WEA journal

Economic Thought:

The same issue of the journal has a debate on the questions raised in the article with John Cantwell as a result of the Open Peer Review process.


Eden, L. (2001), Taxes, Transfer Pricing, and the Multinational Enterprise, in A.M. Rugman and T.L. Brewer (eds), The Oxford Handbook of International Business, Oxford: Oxford University Press, ch. 21, pp. 591-619.

Celi, G., Ginzburg, A., Guarascio, D. and Simonazzi, A (2017), Northern and Southern Europe in the long European Crisis: a core-periphery perspective, forthcoming, London: Routledge (fortcoming).

Ietto-Gillies, G. (2004), ‘Should the study of transnational corporations be part of the economics syllabus?’, in Fullbrook, E. (ed.) A Guide to What is Wrong with Economics, Ch. 26: 289-98,  London: Wimbledon Publishing.

Ietto-Gillies, G. (2012), Transnational Corporations and International Production. Concepts, Theories, Effects, Second Edition, Cheltenham, UK and Northampton, MA, USA: Edward Elgar

Organization for Economic Cooperation and Development (OECD), (2010), Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrators, Paris: OECD

Prem Sikka and Hugh Willmott, “The Tax Avoidance Industry: Accountancy Firms on the Make”, Critical Perspectives on International Business, Vol. 9, No, 4, 2013, pp.415-443. I am grateful to Maria Alejandra Madi for useful comments on an earlier draft and to Andrea Ginzburg for information on offshoring in the European automobile industry.