nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2011‒06‒11
eleven papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Struggling for Political Economy: an Institutional Issue By Bruno Tinel
  2. Is the Falling Rate of Profit the Driving Force Behind Globalization? By Miguel Ramirez
  3. An Analysis of the Relationship Between Wages in the Public and Private Sector in Colombia: A Panel Data Approach By Jesús Otero; Luis Fernando Gamboa; Andrés García-Suaza
  4. Transcending the great foreign aid debate: managerialism, radicalism and the search for aid effectiveness . By Gulrajani, Nilima
  5. The links between gender and poverty are over-simplified and under-problematised: a time of economic crisis is an opportune moment to re-think the ‘feminisation of poverty’ and address the ‘feminisation of responsibility’. By Chant, Sylvia
  6. Gender, Productivity and the Nature of Work and Pay: Evidence from the Late Nineteenth-Century Tobacco Industry By Björn Eriksson; Tobias Karlsson; Tim Leunig; Maria Stanfors
  7. The Evolution of the Modern Worker: Attitudes to Work By Alex Bryson; John Forth
  8. Transfer pricing at glass, porcelain and ceramic industry By Danuše Nerudová; Veronika Solilová
  9. Field Experiments with Firms By Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
  10. Sectors May Use Multiple Technologies Simultaneously: The Rectangular Choice-of-Technology Model with Binding Factor Constraints (Revised) By Faye Duchin; Stephen H. Levine
  11. New Firm Creation and Failure: A Matching Approach By Thomas Gries; Stefan Jungblut; Wim Naude

  1. By: Bruno Tinel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: The financial crisis has turned into a real economic crisis and then into a public finance crisis: its political and social implications show very obviously, even to the most unaware people, how much economic matters are a social and political phenomenon. Is political economy going to be more influential on economic policy and in the public debate? It depends on the evolution of social and political struggles in the society as a whole. But it also depends on our ability to built an alternative view of the situation and credible alternative solutions. In order to promote our ideas in the future, we have to deal urgently with our own institutional reproduction. What is happening in France on this issue?
    Keywords: political economy; academic reproduction; crisis of economic science
    Date: 2011–05–20
  2. By: Miguel Ramirez (Department of Economics, Trinity College)
    Abstract: This paper examines critically the role of the law of the tendency of the falling rate of profit in the geographic expansion (globalization) of competitive capitalism. It contends that Marx did not believe there was an iron-clad connection between the falling rate of profit and globalization; in addition, it argues that Marx believed that the capitalists’ insatiable search for colonial markets was driven by their desire to overcome recurrent (and growing) realization problems in the home market arising from deficient aggregate demand on the part of both workers and capitalists.
    Keywords: Geographic Expansion of Capitalism (Globalization); Law of the Falling Tendency of the Rate of Profit; Underconsumptionist Tendencies; Simple and Expanded Reproduction; Realization Crises.
    JEL: B10 B14 B24
    Date: 2011–05
  3. By: Jesús Otero; Luis Fernando Gamboa; Andrés García-Suaza
    Abstract: This document examines the time-series properties of the wage differentials that arise between the public and private sector in Colombia during the sample period 1984 to 2005. We find conflicting results in unit-root and stationarity tests when looking at wage differentials at an aggregate level (such as for men, women or both). However, when we analyse wage differentials at higher levels of disaggregation, treat them jointly as a panel of data, and allow for the presence of potential cross section dependence, there is more supportive evidence for the view that wage differentials are stationary. This implies that although wage differentials do exist, they have not been consistently increasing (or decreasing) over time.
    Date: 2011–03–31
  4. By: Gulrajani, Nilima
    Abstract: The Great Aid Debate pits those who are radically opposed to foreign aid against those who champion its reform to achieve greater aid effectiveness. This paper offers an analysis of this debate by introducing a heuristic distinction between aid 'radicals' and aid 'reformers'. The radical position is notable as it uncharacteristically unites neo-liberals and neo-Marxists against foreign aid, while reformers espouse the tenets of managerialism as an ideological and practical vehicle for aid's improvement. Radicals remain skeptical and suspicious of reformist managerial utopias, while aid reformers see little value to radical nihilism. This paper calls for an end to the Great Aid Debate by moving to a discussion of foreign aid that intertwines both radical and reformist perspectives. The 'radical reform' of foreign aid is both desirable and achievable so long as aid is re-theorized as a contested, commonsensical, contingent and civically oriented endeavor.
    Date: 2011
  5. By: Chant, Sylvia
    Abstract: Women’s poverty levels are at the centre of political discussions around the world as governments put into place deficit reduction plans. These discussions often fail to take account of the complex relationship between gender and poverty, argues Sylvia Chant, and a renewed focus on the time and labour that women invest in bearing the burden of dealing with poverty is now needed.
    Date: 2011–03–10
  6. By: Björn Eriksson; Tobias Karlsson; Tim Leunig; Maria Stanfors
    Abstract: Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men's greater strength and correspondingly higher productivity. This paper investigates the gender wage gap in cigar making around 1900. Strength was rarely an issue, but the gender wage gap was large. Two findings suggest that employers were not sexist. First, differences in earnings by gender for workers paid piece rates can be fully explained by differences in experience and other productivity-related characteristics. Second, conditioning on those characteristics, women were just as likely to be promoted to the better paying piece rate section. Neither finding is compatible with a simple model of sex-based discrimination. Instead, the gender wage gap can be decomposed into two components. First, women were typically less experienced, in an industry in which experience mattered. Second there were some jobs that required strength, for which men were better suited. Because strength was so valuable in the other jobs at this time, men commanded a wage premium in the general labour market, raising their reservation wage. Hiring a man required the firm to pay a 'man's wage'. This implies that firms that were slow to feminise their time rate workforce ended up with a higher cost structure than those that made the transition more quickly. We show that firms with a higher proportion of women in their workforce in 1863 were indeed more likely to survive 35 years later.
    Keywords: gender, productivity, discrimination, piece-rates, time-rates, labour markets, firm survival
    JEL: J16 J24 J71 J33 J40 L25
    Date: 2011–06
  7. By: Alex Bryson; John Forth
    Abstract: This paper examines how employees' experiences of, and attitudes towards, work have changed over the last quarter of a century. It assesses the extent to which any developments relate to the economic cycle and to trends in the composition of the British workforce. Many of the findings are broadly positive, particularly when compared with a picture of deterioration in the late 1980s and 1990s. The onset of a major recession in the late 2000s might have been expected to herald a fundamental shift in employees' attitudes to paid work and their working environment. The impression at the time of writing is, instead, of a more muted reaction than was seen in the early 1990s - in keeping with the more muted impact of the current recession on the labour market as a whole.
    Keywords: wages, job security, employee engagement, employment relations, recession
    JEL: J28 J31 J53
    Date: 2010–12
  8. By: Danuše Nerudová (Department of Accounting and Taxes, FBE MENDELU in Brno); Veronika Solilová (Department of Accounting and Taxes, FBE MENDELU in Brno)
    Abstract: Glass, porcelain and ceramic industry which has a long tradition in the Czech Republic is a part of the manufacturing industry. The effect of globalization, international trade development, export orientation and dependence on a range of related industries causes that many enterprises operating in this industry have been constantly looking for ways how focus on high value-added production, how enhance innovation, how cope with competition or with lingering worldwide crisis. Many enterprises operating in this industry have been entering into cross-border situations facing international tax issues. The aim of the paper is to evaluate the impact of the different forms of the manufacturing subsidiary distributing own products through distributing subsidiary in the form of commission agent on the total tax liability of the parent company operating in this industry and further to identify the most suitable legal form of manufacturing subsidiary for parent company with respect to the selected transfer pricing policy.
    Keywords: transfer prices, arm's length principle, tax liability
    JEL: F23 H21 K33
    Date: 2011–04
  9. By: Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
    Abstract: We discuss how the use of field experiments sheds light on long standing research questions relating to firm behavior. We present insights from two classes of experiments: within and across firms, and draw common lessons from both sets. Field experiments within firms generally aim to shed light on the nature of agency problems. Along these lines, we discuss how field experiments have provided new insights on shirking behavior, and the provision of monetary and non-monetary incentives. Field experiments across firms generally aim to uncover firms' binding constraints by exogenously varying the availability of key inputs such as labor, physical capital, and managerial capital. We conclude by discussing some of the practical issues researchers face when designing experiments and by highlighting areas for further research.
    Keywords: field experiments; firms; organizations
    JEL: C9 M5
    Date: 2011–06
  10. By: Faye Duchin (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA); Stephen H. Levine (Department of Environmental Engineering, Tufts University, Boston, MA, USA)
    Abstract: We develop the rectangular choice-of-technology model with factor constraints, or RCOT, a linear programming input-output model for analysis of the economy of a single region. It allows for one or more sectors to operate more than one technology simultaneously, with the relatively lowest-cost one supplemented by others if it encounters a binding factor constraint. The RCOT model solves for sector outputs, goods prices that are set by the highest-cost technologies in use, and scarcity rents that correspond to binding factor constraints experienced by the lower-cost technologies. The model is motivated by the fact that mineral deposits of different qualities may be exploited simultaneously, as may primary and recycled sources for the same materials or irrigated and rainfed techniques for producing the same crop. RCOT generalizes Carter’s square choice-of-technology model, in particular adding the factor constraints that allow several alternatives to operate simultaneously. The Appendix gives a numerical example.
    JEL: C67 O33 Q32
    Date: 2011–05
  11. By: Thomas Gries (University of Paderborn); Stefan Jungblut (University of Paderborn); Wim Naude (United Nations University)
    Abstract: We propose that the rate of creation and failure of new firm start-ups can be modelled as a search and matching process, as in labor market matching models. Deriving an "entrepreneurial" Beveridge curve, we show that a successful start-up depends on the efficiency with which entrepreneurial ability is matched with business opportunity, and outline a number of possible applications of this matching approach to assist in formalizing the economics of entrepreneurship.
    Keywords: Entrepreneurship, start-ups, labor market matching
    JEL: L26 M13 O10 O14
    Date: 2011–06

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