nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2020‒01‒20
seven papers chosen by
Matthew Baker
City University of New York

  1. The Origins of the Division of Labor in Pre-modern Times By Depetris-Chauvin, Emilio; Özak, Ömer
  2. Expensive Labour and the Industrial Revolution: Evidence from Stable Employment in Rural Areas By Rota, Mauro; Weisdorf, Jacob
  3. Effective Demand and Prices of Production: An Evolutionary Approach By Rotta, Tomas
  4. Geographical Roots of the Coevolution of Cultural and Linguistic Traits By Galor, Oded; Özak, Ömer; Sarid, Assaf
  5. Affective empathy in non-cooperative games By Jorge Vasquez; Marek Weretka
  6. State History and State Fragility: Evidence from Sub-Saharan Africa By Kodila-Tedika, Oasis; Khalifa, Sherif
  7. Linguistic Traits and Human Capital Formation By Oded Galor; Ömer Özak; Assaf Sarid

  1. By: Depetris-Chauvin, Emilio; Özak, Ömer (Southern Methodist University)
    Abstract: This research explores the historical roots of the division of labor in pre-modern societies. Exploiting a variety of identification strategies and a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, it shows that higher levels of intra-ethnic diversity were conducive to economic specialization in the pre-modern era. The findings are robust to a host of geographical, institutional, cultural and historical confounders, and suggest that variation in intra-ethnic diversity is a key predictor of the division of labor in pre-modern times.
    Date: 2018–10–29
  2. By: Rota, Mauro (Sapienza University of Rome); Weisdorf, Jacob (Sapienza University of Rome)
    Abstract: In explaining the Industrial Revolution, the so-called high-wage hypothesis argues that mechanisation served to replace expensive labour. Supporting evidence comes from daily wages of urban construction workers and shows that these were higher in northwest Europe than in the south. We argue that casual urban wages overestimate the cost of early-industrial labour. Early factories were rural and thus did not pay an urban wage premium. Moreover, early factories employed stable rather than casual workers and thus did not pay a premium for job insecurity. We present novel premia-free wages paid to stable workers in rural Italy, which we compare to wages paid to similar workers in England. We find that English workers earned only 20 per cent more than their Italian counterparts in 1650, but a staggering 150 per cent more in 1800. Although our empirical evidence shows that the precondition for the high-wage hypothesis is still in place, it is no longer clear – because growing English wages and early industrialisation coincide – whether it was high wages that drove mechanisation or the other way around.
    Keywords: Stable Employment, Economic Growth, Industrial Revolution, Great Divergence; Living Standards, Prices, Wages. JEL Classification: J3, J4, J8, I3, N33
    Date: 2019
  3. By: Rotta, Tomas
    Abstract: In this paper I develop an innovative evolutionary framework to integrate Keynes’ short-run principle of effective demand and the formation of long-run prices of production in Classical Political Economy. At the intersection of Keynes, Marx, and Kalecki, my evolutionary framework integrates effective demand, functional income distribution, profit rate equalization, technological diffusion, and the gravitation towards prices of production. My approach bridges two gaps at once: the absence of the short-run principle of effective demand in Classical Political Economy; and the absence of technological diffusion, profit rate equalization, and the formation of long-run prices of production in Keynes and Kalecki. To formalize the feedback effects between individual decisions taken at the micro level and the unintended social outcomes at the macro level I develop a simple model using replicator dynamics from evolutionary Game Theory. My approach offers a better understanding of how effective demand determines the rate of exploitation, the equalization of profit rates, and the convergence of market prices towards prices of production.
    Keywords: Effective Demand, Prices of Production, Marx, Keynes, Kalecki
    JEL: B51 C73 D20
    Date: 2020–01–01
  4. By: Galor, Oded; Özak, Ömer (Southern Methodist University); Sarid, Assaf
    Abstract: This research explores the geographical origins of the coevolution of cultural and linguistic traits in the course of human history, relating the geographical roots of long-term orientation to the structure of the future tense, the agricultural determinants of gender bias to the presence of sex-based grammatical gender, and the ecological origins of hierarchical orientation to the existence of politeness distinctions. The study advances the hypothesis and establishes empirically that: (i) geographical characteristics that were conducive to higher natural return to agricultural investment contributed to the existing cross-language variations in the structure of the future tense, (ii) the agricultural determinants of gender gap in agricultural productivity fostered the existence of sex-based grammatical gender, and (iii) the ecological origins of hierarchical societies triggered the emergence of politeness distinctions.
    Date: 2018–11–07
  5. By: Jorge Vasquez (Smith University; Group for Research in Applied Economics (GRAPE)); Marek Weretka (Group for Research in Applied Economics (GRAPE); University of Wisconsin-Madison)
    Abstract: According to psychology, affective empathy is one of the key processes governing human interactions. It refers to the automatic transmission and diffusion of emotions in response to others' emotions, which gives rise to emotional contagion. Contrary to other forms of empathy, affective empathy has received little attention in economics. In this paper, we augment the standard game-theoretic framework by allowing players to affectively empathize. Players' utility functions depend not only on the strategy prole being played, but also on the realized utilities of other players. Thus, players' realized utilities are interdependent, capturing emotional contagion. We offer a solution concept for these empathetic games and show that the set of equilibria is non-empty and, generically, finite. Motivated by psychological evidence, we analyze sympathetic and antipathetic games. In the former, players' utilities increase in others' realized utilities, capturing unconditional friendship; whereas in the latter the opposite holds, resembling hostility.
    Keywords: affective empathy, emotional contagion, Interdependent utilities, non-paternalistic preferences
    JEL: D64 D90 D91
    Date: 2020
  6. By: Kodila-Tedika, Oasis; Khalifa, Sherif
    Abstract: This paper examines the association between the length of experience with statehood, or state history, on the likelihood of state fragility. The argument is that the accumulation of knowledge by state personnel, and the build up of experience within state institutions, allows the state to avoid the exposure to recurrent crises, which is considered a symptom of weakness. The paper focuses on sub-Saharan African countries and uses Probit estimation techniques. The analysis shows that state history has a negative and statistically significant effect on the state fragility index. This result is robust after the inclusion of a variety of economic, political, institutional and historical variables. We also use extreme fragility as our dependent variable. The Probit and Relogit estimations also show a statistically significant negative effect of state history on extreme fragility. This is the case even after the inclusion of control variables
    Keywords: history, institutions, fragility, Africa
    JEL: N00 O55 P5
    Date: 2019–12–30
  7. By: Oded Galor (Brown University); Ömer Özak (Southern Methodist University); Assaf Sarid (Brown University)
    Abstract: This research establishes the influence of linguistic traits on human behavior. Exploiting variations in the languages spoken by children of migrants with identical ancestral countries of origin, the analysis indicates that the presence of periphrastic future tense, and its association with long-term orientation has a significant positive impact on educational attainment, whereas the presence of sex-based grammatical gender, and its association with gender bias, has a significant adverse impact on female educational attainment.
    Keywords: Human capital, Long-term Orientation, Gender Bias, Periphrastic Future Tense, Sex-Based Grammatical Gender, Culture, Language
    JEL: D91 I25 J16 J24 Z10 Z13
    Date: 2020–01

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