PSL Quarterly Review

Garegnani and the surplus approach

Alessandro Roncaglia — 2026-01-17

The article reviews Garegnani’s 2024 book (Capital Theory, the Surplus Approach, and Effective Demand: An Alternative Framework for the Analysis of Value, Distribution and Output Levels, Springer), collecting his most important essays, carefully edited by Roberto Ciccone. Pierangelo Garegnani (1930-2011) was one of the main exponents of the surplus approach. The review article recalls his important contributions to the critique of the marginalist theory of value and distribution, and provides a critical overview of his contributions to the construction of a Classical-Sraffian approach based on the notions of a ‘core’ of economic theory and of ‘long-period positions’, suggesting the possibility of an alternative Sraffian-Keynesian construction.

The nature of central banking

Wesley C. Marshall — 2026-01-17

In this article we argue that we can more easily understand the duality of central banks (CBs) and independent central banks (ICBs) through an understanding of their underlying dualities. As we explore, heterodox and orthodox views and methodologies present two distinct ways of conceptualizing all that is involved in economic activity, and correspond to a social interpretation and a market interpretation of economics. This clear dividing line can be traced between visions of individuals, society, money and banking, and indeed central banking and independent central banking. As we will show, CBs and ICBs have well recognized – but poorly classified – distinctions that allow for a clear separation between their natures. Once revealed as quite distinct institutions, the public policy decision of maintaining independent central banks more fully aligns with the disastrous history of such institutions on the well being of national economies.

The lead-lag relationships between profits, investment and output: The evidence from Germany

Ivan Trofimov — 2026-01-17

This study considers the short-term lead-lag relationships between profits, private investment, and output. The interplay between the variables is examined using quarterly data for Germany during the 1991Q2–2020Q3 period. The methodology comprises: examination of the cross-correlations; the estimation of linear regression models with finite and polynomial distributed lags, as well as vector autoregressions; and the time-varying and frequency domain Granger causality tests to account for instabilities in the series and to distinguish causality at different time horizons. The findings provide strong support for the “profit as a driver of investment” and “investment as a driver of output” hypotheses, and ambiguous support for the opposite hypothesis (“investment that leads profit”). This paper is one of the few to examine profit-investment-output relationships in a setting other than the United States and to employ complementary and nondescriptive methods to obtain more robust findings.

Bitcoin Halvings and Institutional Investors: A Wavelet Analysis

Tatiana Silveira Camacho — 2026-01-17

As a highly speculative asset, bitcoin’s (BTC) demand is particularly based on the perceptions of agents about the financial asset. Especially institutions that began leaving a bigger footprint in the market, causing changes in transaction flow and price cycles. To assess how halving dynamics changed the BTC market, Wavelet methodology was carried out with daily data (from January 2011 to December 2021), on price and transaction count. Decomposition in scale and frequency indicate that flows were altered by the arrival of new investors, and stronger correlations between prices and transactions were found at lower frequencies (longer time horizon).