PhD-Project: Demand and Growth Regimes in Emerging Market Economies since the 2000s – A Post-Keynesian Political Economy Perspective

Benjamin Jungmann (HWR Berlin, IPE Berlin), PhD registered at Université Paris Sorbonne Nord

Supervisors: Prof. Eckhard Hein, HWR Berlin; Prof. Jonathan Marie, Université Paris Sorbonne Nord

About

The economic and political significance of emerging market economies (EMEs) such as China, India and Brazil increased notably in recent years. In economic terms, most of the growth nowadays takes place in EMEs where, despite all the progress, efforts still need to be made to lift people out of poverty. In political terms, the growth progress of EMEs renders them more independent and influential in international relations. Researching growth in EMEs is therefore a cornerstone for understanding the current international political economy landscape.

Applying post-Keynesian demand-led growth theory (Hein 2014), economic growth can be studied, firstly, by analysing the dynamics of the sources and financing of the main components of aggregate demand. The concept of a demand and growth regime incorporates both aspects (Hein 2012). It allows for a first assessment of the sustainability of a demand and growth regime but also of international regime constellations. Assessing changes in regimes and regime constellations requires, secondly, to analyse growth drivers, i.e. those institutional, financial, distributional and macroeconomic policy determinants of the different demand components (Kohler/Stockhammer 2022). Thirdly, regime and regime changes do not only rests on economic factors but also on political ones, as the policies to establish and sustain a regime are conducted by the domestic dominant social bloc (Amable 2003).

Prominently, the Global Financial Crisis (2007-09) constituted the culmination of an unstable demand and growth regime constellation at the global level, in which debt-led private demand economies like the US were complemented by export-led mercantilist economies like Germany. In these analyses, EMEs have only played a minor role so far. Hence this PhD-project examines the demand and growth regimes of EMEs since the 2000s considering economic and political aspects. It does so by addressing the following research questions:

1. How do the different concepts of demand and growth regimes, growth drivers and macroeconomic policy regimes relate to each other?
2. How did demand and growth regimes in EMEs develop since the start of the 2000s?
3. Which growth drivers have underpinned EMEs’ demand and growth regimes?
4. How do changes in EMEs’ dominant social blocs relate to changes in growth drivers and demand and growth regimes?

This PhD-project will employ an interdisciplinary mixed-method approach. Post-Keynesian macroeconomics and economic structuralism complemented by political economy approaches set the basis of the theoretical framework, which accounts for the specific conditions of EMEs. Empirically, the project assess descriptive statistics through a theoretically founded regime-taxonomy while it employs econometric methods – bivariate coefficients, time-series and panel data analyses – to determine growth drivers. To understand properties of demand and growth regimes like sustainability, cyclicality and regime changes, this project will build analytical economic models. Finally, political factors will be examined by descriptive indicators in large-scale analysis and complemented by case studies using process-tracing methods.

Amable, B. (2003). The diversity of modern capitalism. Oxford; New York: Oxford University Press.

Hein, E. (2012). The Macroeconomics of Finance-dominated Capitalism – and Its Crisis, Cheltenham: Edward Elgar.

Hein, E. (2014). Distribution and Growth after Keynes: A Post-Keynesian Guide. Cheltenham: Edward Elgar

Kohler, K. & Stockhammer, E. (2022). Growing differently? Financial cycles, austerity, and competitiveness in growth models since the Global Financial Crisis. Review of International Political Economy, 29(4), 1314–1341.

First results

Developed market economies, particularly in Europe, have tended to increase their export-led stance after the Global Financial Crisis, In contrast, EMEs have seen an increased importance of domestic demand stabilized by public, and in some cases private, deficits and facilitated by financial and/or distributional factors. Hence, EMEs, together with domestic demand-led developed market economies like the US and UK, have contributed to the necessary global counterpart to export-led mercantilist economies with high current account surpluses. (Akcay et al 2022; Campana et al 2024).

In terms of growth drivers, EMEs display considerable heterogeneity with some regional patterns, but non price competitiveness represents a driver across EMEs. Following the Global Financial Crisis, there was a general increase in private debt and expansionary fiscal policy across EMEs (Jungmann 2023).

Differences in growth drivers can result in variations among seemingly similar growth regimes. This affects both the economic characteristics of the regime and the composition of the dominant social bloc and its growth strategy. In the 2010s, Poland and Turkey developed export-led regimes with distinct growth drivers. Poland adopted an export-led strategy driven by non-price factors, supported by capitalists operating in finance and sectors with higher technological sophistication. In contrast, Turkey pursued an export led strategy emphasizing price competitiveness, supported by capitalists operating in sectors with lower technological sophistication (Akcay/Jungmann 2023)

Related Publications

• Akcay, Ü., Hein, E. & Jungmann, B. (2022). Financialisation and macroeconomic regimes in emerging capitalist countries before and after the Great Recession. International Journal of Political Economy, 51(2), 77-100.
• Akcay, Ü., Jungmann, B. (2023). Growth regimes, dominant social blocs and growth strategies: Varieties of export-led growth regimes and strategies in Turkey and Poland, European Journal of Economics and Economic Policies: Intervention, forthcoming.
• Campana, J., Embova Vaz, J., Hein, E., Jungmann, B. (2024). Demand and growth regimes of the BRICs countries –the national income and financial accounting decomposition approach and an autonomous demand-led growth perspective, European Journal of Economics and Economic Policies: Intervention, forthcoming.
• Jungmann, B., (2023). Growth drivers in emerging capitalist economies: Building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis, Review of Evolutionary Political Economy, forthcoming.