PSL Quarterly Review

Post-Keynesian Economics 50 Years after the Eichner and Kregel Paradigm Article: Coherence or Incoherence?

Marc Lavoie — 2026-04-10

This paper examines the coherence, or lack thereof, among the three major strands of post-Keynesian economics. Most claims of incoherence pertain to the Sraffian strand in relation to the Fundamentalist and Kaleckian strands. The first section highlights how some authors have exacerbated these claims by mischaracterizing the work of colleagues. The second section argues that many accusations of incoherence originate from methodologists, often justified by the distinction between open and closed systems. The third section addresses claims of incoherence that stem from divergent theoretical positions and the potential for internal contradictions. The final section concludes that young scholars, as well as those engaged in actual research in theory and modeling, tend to emphasize the commonalities among the three strands. Some examples of possible synthesis, old and new are provided.

Does trade liberalization promote investment in Sub-Saharan Africa? Evidence from selected free trade areas

Busani Moyo — 2026-04-10

This study investigates the impact of trade liberalisation on foreign and domestic investment in selected African free trade areas. Using 29 countries that are members of the three regional economic communities, namely, the East African Community, the Common Market for East and Southern Africa, Southern African Development Community, and data for the period 2000 to 2019, results from various panel models show that trade liberalisation indicators used have heterogenous effects on investment in these regional economic communities. This is partly explained inter-alia by, differences in the ease of doing business environment, variances in the levels of economic growth, and lack of ratification and domestication of some regional investment agreements. Countries must reduce non-tariff barriers if they are to boost investment.

Market-based environmental regulation and competitiveness: A comparative analysis of developed and developing economies

Rim Mansouri — 2026-04-10

This study investigates the impact of market-based environmental regulations on industrial performance and innovation across 48 countries (30 developed, 18 developing) from 1995 to 2021. Using environmental taxes, instrumented by lagged CO₂ emissions and women’s political empowerment, and public environmental expenditures as a robustness check. The results reveal heterogeneous effects across development levels. Environmental taxes increase productivity and R&D investment in developed economies but have limited impact in developing ones. Public environmental expenditures reduce productivity in both groups while affecting innovation differently. These findings suggest that environmental regulation can promote competitiveness and innovation, but its effectiveness depends on national economic and institutional conditions.

A note on the Kaleckian government spending multiplier and self-financing fiscal policy

Leonardo Vera — 2026-04-10

This paper formulates a simple short-term Kaleckian model where the impact on output of an active fiscal policy can be assessed and the Kaleckian government spending multiplier introduced. The model also allows us to verify the limits through which an expansion of public spending can be self-financing. As in DeLong and Summers (2012) and Leão (2013), an unbalanced fiscal expansion raises aggregate demand and output through the short-term fiscal multiplier, and higher current output brings with it higher tax collections. Thus, under certain conditions, this mechanism allows for the recapture of some of the costs of the fiscal expansion. Due to the Kaleckian features of the model economy, a change in the functional distribution of income will generate an alteration in the conclusions reached regarding the evolution of the incremental debt-to-GDP ratio and self-financing. This is an important aspect of the distributional effects in Kaleckian models that has received very little or no attention from the theoretical literature.