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on Heterodox Microeconomics |
| By: | Boldyrev, Ivan A.; Herrmann-Pillath, Carsten |
| Abstract: | In his Idea of Justice, Amartya Sen compares the two basic approaches to evaluate institutions, transcendental institutionalism and realization-focused comparisons. Referring to Smith's Impartial Spectator, he argues in favour of the latter and proposes the principle of Open Impartiality. However, this cannot solve the tension between universalism and contextualization of values that Sen therefore inherits from Smith. Based on recent Hegel scholarship, we argue that some of the difficulties can be resolved, considering the role Smith played in the development of Hegel's thinking. Hegel's concept of recognition plays an essential role in establishing the possibility of impartiality both on the level of consciousness and on the level of institutional intersubjectivity. Hegel's critique of Kants formalist ethics (also considered as transcendental institutionalism by Sen), his analysis of the civil society in the Philosophy of Right, especially his focus on associations and estates, can serve as a model for making Sen's focus on public discourse theoretically more concise and pragmatically feasible. Hegel shows that universalistic attitudes can only emerge in specific institutional contexts. -- |
| Keywords: | Theory of Moral Sentiments,Sen,Hegel,recognition,civil society,associations,public discourse |
| JEL: | B12 B25 B52 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:193&r=hme |
| By: | Auerbach, Paul (Kingston University London); Sotiropoulos, Dimitris P. (Kingston University London) |
| Abstract: | In the early twentieth century, a range of writers produced visions of a socialist economy whose distinguishing characteristic was an allocation of resources using a ‘technical’ perspective. In the 1930s, Oskar Lange took up the challenge of Ludwig von Mises’ claim of the ‘impossibility’ of constructing a socialist economy on such an engineering basis. He readily acceded to the need for efficiency calculations to be made in value terms rather than using purely natural or engineering criteria, but claimed that these values could emerge without a market for capital goods, and without private ownership of capital. Friedrich Hayek replied stressing the dynamic aspects of competition in the context of the capital market; the latter is to be seen as a discovery procedure wherein production possibilities must not be taken for granted. Thus, socialist calculation is impossible because of the absence of those markets for capital and risk that evaluate the success or failure of different investment decisions under capitalism. Appraising this debate, we emerge with two findings. First, Lange's contribution was based on a one-sided, static conception of the capitalist economy, and therefore of the construction of a socialist alternative. Second, the Austrian approach only surreptitiously concedes the key role of finance in its defence of the dynamic properties of capitalism. And yet it is the very gyrations and instability emerging from the financial sector in capitalism that was one of the central factors motivating the search for an alternative engineering method of allocation in the first place. The latter point invites us to reconsider the place of finance in various schools of economics in mainstream thinking. |
| Keywords: | Lange; von Mises; Hayek; risk; finance |
| JEL: | B24 B25 B26 |
| Date: | 2012–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kngedp:2012_006&r=hme |
| By: | Erik Stam; Jan Lambooy |
| Abstract: | In this paper we investigate the spatial aspects of the conditions of entrepreneurship on the one hand, and the consequences of entrepreneurship on the other hand. The consequences are the effects of individual interactions that may lead to the emergence of complex systems that are largely the "result of human action, but not of human design" (Hayek, 1967). These emergent systems have spatial coordinates and localized effects on the growth of knowledge and economic activity. The emergent systems - new organizations, institutions, industrial clusters, cities, and regions - in turn form the context for subsequent entrepreneurial actions. We show the strengths and opportunities of Austrian economics for the indeterminate dynamic analysis of entrepreneurship and evolving selection environments, and the spatial aspects of these processes and structures. We explicitly investigate the bridge between evolutionary economic geography and Austrian economics. The paper is structured as follows: in the second section, we introduce Austrian as well as evolutionary geographic treatments of entrepreneurship. In the third section we investigate entrepreneurship and its conditions of space and place. In the fourth section, we elaborate on the urban aspects of the conditions of entrepreneurship as it is approached in evolutionary theories. The fifth section centers on the spatial aspects of the consequences of entrepreneurship, with a particular focus on its impact on urban and regional development. |
| Keywords: | entrepreneurship, space, place, evolutionary economic geography, Austrian economics, regional development |
| JEL: | B52 B53 L26 M13 R11 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1211&r=hme |
| By: | Erik Stam; Ron Martin |
| Abstract: | This paper analyses mechanisms of decline and renewal in high-tech regions, illustrated with empirical evidence on the Cambridgeshire high-tech region in the UK. The paper contributes to ecological ('carrying capacity') and evolutionary (path dependence) theories of regional development. It provides a longitudinal, multilevel analysis of invention, firm, and industry dynamics and change in the supply and costs of resources in order to explain the decline of high-tech regions. While expansion of the Cambridgeshire high-tech region has been sustained over time, recently forces of decline have been stronger than those of renewal. Decline in employment has been most marked in the local telecommunications and biotech sectors, while the creation of variety by new firms has fallen off most strongly in the local IT software & services industry. Increasing diseconomies of agglomeration are in evidence, together with a contraction of finance that may have been a harbinger of financial stringency to come. |
| Keywords: | high-tech regions, industrial dynamics, innovation, entrepreneurship, cluster decline |
| JEL: | L22 M13 O31 R11 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1210&r=hme |
| By: | Fredin, Sabrina (CIRCLE, Lund University) |
| Abstract: | This paper aims to analyse how innovative, individual activities influence the evolution of local industries according to three stages. When discussing the evolution of industries or economies, the concept of path dependency is often a central element. Its vague nature makes it however difficult to be used as an interpretative lens when studying the evolution of local industries. In order to limit the broad concept, several aspects have been identified for discussion; all are explicitly linked to path dependency in economic geography literature and all are acknowledged to be of significance for stimulating the evolution of local industries. Based on the review of the evolutionary economic theory literature, the following three stages have been identified: first, the entering of new knowledge which may, or may not, be the starting point for a new local industry; second, the formation of the new local industry; third, the anchoring process of the new local industry. All three stages are intertwined and include the question how the new emerging industry and the existing local structures relate to each other. The three stages will be illustrated through the discussion of the evolution of the IT industry in Linköping, Sweden. |
| Keywords: | Entrepreneurship; local economic development; institutional foundation; informal institutions; path dependency |
| JEL: | N94 O14 R11 |
| Date: | 2012–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2012_007&r=hme |
| By: | TUNCEL, Cem Okan |
| Abstract: | Latecomer sectors in late-industrializing economies follow different patterns in their development and growth processes, which largely determine the share acquired from the global value chain. The development and growth process of the sectors is generally argued to be the result of the interaction of macro level specific institutional context and micro level firm strategic choices. In this study I argue that meso-level sectoral systems also play a critical role in the development and growth process of latecomer sectors. Accordingly, I aim to integrate these three theoretical perspectives -resource-based view (RBV) of the firm, sectoral system of innovation (SSI) perspective, and technological capability perspective for late industrializing economies- to explain the relative developmental failure of Turkish automotive industry compared to other successful latecomer industries such as South Korean automotive industry In the light of theoretical framework, I will try to investigate sectoral technological upgrading trajectory and compare between Korean and Turkish automotive industry development path by using case study method. I will end by discussing how a multilevel framework that takes into account the systemic factors can guide research on sectoral development in late-industrializing countries. In the light of a comparative historical analysis of development of Turkish and Korean automotive industries it is argued that a pace of industrial transformation can be accelerated by multilevel proactive state intervention. |
| Keywords: | Sectoral System of Innovation; Upgrading Strategies; Late-Industrializing Countries; Korean and Turkish Automotive Industry |
| JEL: | L92 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40843&r=hme |
| By: | Revoredo-Giha, Cesar |
| Abstract: | A supply chain in disarray can be identified not only as a barrier to growth for the agricultural sector but also as one to achieving food security in a country because it may lead to either a deficiency in food production and/or too high prices. Using the dairy sector of Malawi as an example, the purpose of this paper is to discuss the coherence between market structure and the development strategy pursued by international donors via. Within Malawi the dairy sector may be characterised as a segmented market: with both formal and informal milk markets, with smallholder producers serving both markets. The formal market includes a reducing number of processing firms operating with idle capacity and selling dairy products to an affluent segment of the urban population, whilst the informal market comprises the sale of unprocessed milk products to the less affluent urban population and also rural areas. In this context, cooperative international action, conducted through agencies from a range of countries, is targeted at improving the efficiency of the formal supply chain and also the creation of local supply chains that sell processed products directly to poor consumers. The paper discusses reasons why these two cooperation strategies, given the structure of the sector, may potentially conflict with each other, the need to address the degree of market imperfection of the formal sector and the desirability of ex-ante coordination of plans amongst donors. |
| Keywords: | Malawi dairy supply chain, development economics, industrial organisation., Food Security and Poverty, International Development, |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saclwp:131464&r=hme |
| By: | Herrmann-Pillath, Carsten |
| Abstract: | The paper proposes to ground the taxonomy of economic systems on the identification of strongly performative institutions as distinctive features. I analyse performativity on the basis of the Aoki model of institutions, enriched by current approaches to performativity, which I combine with Searle's notion of a status function. Performativity is conceived as resulting from the conjunction of public representations (sign systems) and behavioral dispositions which channel strategic interactions among actors such that certain sets of institutions are reproduced recurrently. I apply this approach on the case of financial capitalism and analyze three strongly performative institutions, the accounting standards (IFRS), managerial incentive systems and intellectual property rights. -- |
| Keywords: | performativity,distributed cognition,status functions,taxonomy of economic systems,financial capitalism |
| JEL: | B41 P00 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:194&r=hme |
| By: | Hollow, Matthew |
| Abstract: | This article looks in more depth at the different ways in which ideas about cashless societies were articulated and explored in pre-1900 utopian literature. Taking examples from the works of key writers such as Thomas More, Robert Owen, William Morris and Edward Bellamy, it discusses the different ways in which the problems associated with conventional notes-and-coins monetary systems were tackled as well as looking at the proposals for alternative payment systems to take their place. Ultimately, what it shows is that although the desire to dispense with cash and find a more efficient and less-exploitable payment system is certainly nothing new, the practical problems associated with actually implementing such a system remain hugely challenging. This paper was written for the Cashless Society Project, an interdisciplinary and international effort to add some historical and analytical perspectives to discussions about the future of money, banking and payments. For more information, see http://cashlesssociety.wordpress.com/. |
| Keywords: | utopian; cashless; money; pre-1900 |
| JEL: | E42 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40780&r=hme |
| By: | Andrea Bassanini; Thomas Manfredi |
| Abstract: | We examine the determinants of the within-industry decline of the labour share, using industry-level annual data for 25 OECD countries, 20 business-sector industries and covering up to 28 years. We find that total factor productivity growth – which captures (albeit imprecisely) capital-augmenting or labour-replacing technical change – and capital deepening jointly account for as much as 80% of the within-industry contraction of the labour share. We also find that other important factors are privatisation of state-owned enterprises and the increase in international competition as well as off-shoring of intermediate stages of the production process. By contrast, we are unable to detect any effect from increases in domestic competition brought about by entry deregulation.<BR>Nous examinons les déterminants du recul intrasectoriel de la part du travail, en utilisant des données sectorielles pour 25 pays de l’OCDE et 20 secteurs marchands sur une période couvrant jusqu’à 28 années. Nous trouvons que la croissance de la productivité totale des facteurs – qui peut représenter le progrès technique qui augmente la productivité du capital ou remplace le facteur travail – et l’accroissement de l’intensité capitalistique ont représenté ensemble à peu près 80 % de la diminution intrasectorielle moyenne de la part du travail dans les pays de l’OCDE. Nous trouvons aussi que d’autres facteurs importants sont la privatisation des entreprises publiques dans le secteur marchand ainsi que l’accroissement de la concurrence internationale et des délocalisations à l’étranger de la production de biens intermédiaires. Par contre, nous ne pouvons pas détecter un quelconque effet de l’accroissement de la concurrence intérieure résultant de la déréglementation de l’entrée sur les marchés des produits. |
| JEL: | I30 |
| Date: | 2012–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:133-en&r=hme |
| By: | Andreas Chai; Wolfhard Kaus |
| Keywords: | Conspicuous consumption, income distribution, signaling, status, South Africa |
| JEL: | J15 D83 D12 O12 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:gri:epaper:economics:201202&r=hme |
| By: | Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Terry Ward |
| Abstract: | The recent economic downturnThe decline in GDP during the recession has been concentrated in manufacturing and construction and triggered significant (though smaller) declines in basic services (distribution, hotels and restaurants, and transport). The decline in manufacturing production was particularly strong in Germany, while in Spain and Ireland as well as the Baltic states there was a pronounced decline in construction, which had expanded markedly in these countries over the years preceding the recession. Just as in previous economic downturns in the EU, the recent recession has hit investment goods industries (including construction) much harder than consumer goods industries, essentially because investment can be postponed in a way that consumption cannot; nevertheless, within the latter, the production of durable goods – which are similar to investment goods in this respect – was hit hard as well.The effect on employment of the downturn differed markedly among sectors and countries according to the strength of the measures adopted both by employers and governments to preserve jobs, but also according to expectations about the pace and scale of recovery and the sustainability of the previous pattern of growth. Although average hours worked declined significantly in manufacturing during the worst period of the recession in 2009, supported by measures to preserve jobs in many countries, since then there has been a widespread increase, reflecting the reluctance of employers to take on workers in the context of a hesitant recovery and the uncertainty of longer-term prospects. Just as the recession disproportionately affected industry, so too the recovery was in its initial stages stimulated by an upturn in manufacturing as demand for investment and durable goods picked up. This was especially the case for chemicals and motor vehicles where output began to recover strongly in the latter part of 2009 and during 2010. Value-added in industry grew by 6% between 2009 and 2010 in the EU as a whole, considerably more than in other parts of the economy (in construction, value-added continued to decline). In those sectors where most efforts have been made to preserve jobs – in the engineering industries and motor vehicles in particular – labour productivity at the beginning of 2011 was below the level before the onset of recession in a number of countries. This could dampen the rate of job creation as and when recovery takes place since it implies that output could be increased without any immediate need to expand employment.Employment trends in selected sectors results from analysis of long-term developmentsEmployment is strongly related to changes in value-added, though an increase in value-added tends to be partly met by productivity growth as well as by employing more people. Similarly, a fall in value-added tends to be associated with a decline in productivity growth as well as a decline in employment, though lags in adjustment may delay the latter.The relationship between employment and real wages tends to be significant in manufacturing, where increases in real wages tend to reduce the growth of employment; this is not the case in services. In the UK, as in the US, real wages tend to adjust more quickly to changes in labour demand than in Germany and France, suggesting that labour markets are more flexible in the former countries.There is an inverse relationship between average hours worked and the number employed, indicating in general that the more hours people work, the smaller the number employed and vice versa, so that adjustments in working time has an important effect on jobs.Investment in ICT has positive and significant effects on employment in manufacturing, probably working through improvements in productivity. The opposite is the case in services, suggesting that the increasing use of ICT tends to reduce employment. After a shock, it takes up to three years for employment to return to trend levels in France, Spain, Belgium and the Netherlands. In the other countries, the pace of adjustment is faster, at only one-and-a-half to two years on average. Changes in the composition of employmentOver the recession period from 2007 to 2010, the share of jobs filled by women continued to increase across the EU. This, however, reflects the large job losses in manufacturing and construction where few women are employed. In most sectors, even in services, the share of jobs filled by women declined.The share of jobs filled by workers aged 55 and over has increased in most parts of the EU over the past ten years, reflecting a tendency for older people to remain longer in work. This continued to be the case over the recession period, unlike during previous periods of economic downturn when early retirement has been a major means of reducing work forces. The main group hit by the present crisis are the young below the age of 25.The proportion of the work force with tertiary education increased in all sectors over the years leading up to the recession; the same is true for the share of employment accounted for by managers and professionals. Both trends have continued over the recession period.There has been a shift from full-time to part-time jobs over the recession period, which may reflect uncertainty among employers over future prospects as well as the pursuit of more flexible organization of work.Employment experience in previous economic downturns There are some differences between previous periods of downturn in those sectors in which employment was most affected. In all periods, however, employment continued to expand in business services and hotels and restaurants. Economic crises were predominantly weathered by adjustments in hours worked to preserve jobs and the know-how of the work force, thus limiting the costs of re-employment and training. This tendency was strongest in the 1970s, moderate in the 1980s and mixed in the 1990s. Value-added was generally more volatile than the number employed and hours worked. During the three periods of economic downturn, value-added grew only in business services. The largest losses were observed in machinery and equipment, basic metals and construction in all three periods.Sectoral interdependenciesFor each job created by an increase in final demand in a particular sector, there are between 1.4 and 2.3 additional jobs created in the economy as a whole. Employment multipliers are highest in manufacturing (especially in chemicals, electrical equipment and transport equipment) and are lowest in services, which need fewer inputs from other sectors. Domestic employment multipliers tend to have remained broadly unchanged over the past 15 years or so whereas international employment multipliers (the effect of growth in one country on employment in others) have increased markedly, reflecting the growing importance of production networks and international integration.Employment creation in services is mainly a domestic process, whereas within manufacturing, job creation takes place internationally (particularly in textiles, chemicals and electrical equipment and transport equipment).Growth of demand in the EU tends to lead to significant employment creation in other countries, reflecting the increase in imports that it results in. This is particularly so with respect to electrical equipment, textiles and chemicals, though it is also the case for each of those that growth of demand increases employment not only in the Member State in which it occurs but also in other parts of the EU.Measures taken to support employment during the crisisMeasures to counter the effect of the recession on employment were implemented in all Member States. However, those were mainly general; relatively few responses were sector-specific, such as car scrapping schemes, which were introduced in a number of countries, and cuts in value-added tax on hotels and restaurants (in Ireland and France). But there has been a decentralization of pay bargaining to company level in some sectors in some countries (such as in basic metals or chemicals in Germany). Many countries introduced expansionary fiscal policies to stimulate demand as well as short-time working arrangements (mainly concentrated in manufacturing). In a number of countries, there has been an expansion of training and work experience programmes, recruitment incentive schemes for employers hiring new workers, support to business start-ups, measures to increase access to credit, pay freezes and more flexible working arrangements, all designed to increase employment. Young people, who have been severely affected by the recession and the lack of job creation, have been a particular target for government support, in the form of subsidized employment schemes, work placement programmes, work experience or training guarantees and intensified job search assistance. |
| Keywords: | employment effects of crisis, sectoral employment, economic downturns and sectoral labour demand, policy reactions |
| JEL: | E24 J08 J21 J23 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:379&r=hme |
| By: | Lafrance, Amelie |
| Abstract: | Are small firms more profitable than large firms? This paper uses a longitudinal firm-level dataset to explore the financial performance of firms across size classes, and across industries and provinces during the 2000-to-2009 period. It also examines the volatility of profitability across firm size classes. |
| Keywords: | Business performance and ownership, Financial statements and performance, Small and medium-sized businesses |
| Date: | 2012–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2012026e&r=hme |
| By: | Dario Diodato; Anet Weterings |
| Abstract: | Although increasing attention is paid to the resilience of regions to economic shocks, theoretical and empirical insights in the determinants of regional resilience are still limited. This paper aims to make a first step in quantifying regional resilience. Using a model, we explore how three regional factors jointly contribute to the resilience of regions to economic shocks: 1) the network of buyer-supplier relationships within and between regions, 2) the level of relatedness between industries, which facilitates intersectoral labor mobility and, 3) the geographical position of a region which determines the possibilities of commuting for workers. The supply network mainly determines the propagation of the shock, while possibilities for intersectoral and interregional labor mobility affect a regional economy’s capacity to recover from the shock. To illustrate the workings of the model, it is applied to the case of the Netherlands using data on buyer-supplier relationships within and between Dutch regions, as well as on intersectoral and interregional labour mobility. |
| Keywords: | regional resilience, input-output network, labor mobility, related labor flows, commuting flows, the Netherlands |
| JEL: | J61 O18 R11 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1215&r=hme |
| By: | J. Easaw; R. Golinelli; M. Malgarini |
| Abstract: | The purpose of the present paper is to study how households form inflation expectations. Using a novel survey-base dataset of Italian households’ opinions of inflation we investigate two separate, but related, types of behavior: ‘inattentiveness’ and ‘anchoring’. The present analysis extends the existing literature by incorporating explicitly inflation targets and distinguishing between aggregate and disaggregate dynamics based on demographic groups. In addition, we extend the literature by considering both the short- and long-run dynamics as households update their inflation expectations while also accounting for their state-varying behavior. All these issues provide important insights into understanding actual inflation dynamics and the conduct of monetary policy. |
| JEL: | D1 D84 E1 E31 C33 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp842&r=hme |
| By: | Malgorzata Ogonowska (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université de Nice Sophia Antipolis (UNS)); Dominique Torre (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université de Nice Sophia Antipolis (UNS)) |
| Abstract: | Since 1990s environmental protection and awareness became major issues. Consumers are more and more aware of environmental issues and conscious of existing pollution caused by mass tourism. Consequently a new segment of demand desiring sustainable tourism products have appeared, enhancing service providers to offer this type of products. This paper analyzes the evolution of service provider's offer adapting to demand preferences modification. Using a theoretical framework, it explains how environmental quality standards can become general norms in tourism industry. By analyzing a case of monopoly and duopoly, it considers different possible frameworks and strategic choices that may be implemented by the incumbent. Though, it explains the role of industry in the emergence of the new environmental norms. |
| Keywords: | Economics of Tourism, tourism products' distribution, sustainable tourism, branding policies, environmental norms. |
| Date: | 2012–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00726127&r=hme |
| By: | Hottenrott, Hanna; Lawson, Cornelia |
| Abstract: | Based on a sample of research units in science and engineering at German universities, this study reports survey evidence showing that research grants impact research content. Research units that receive funds from industry are more likely to source ideas from the private sector. The higher the share of industry funding on the units' total budget, the more likely that large firms influenced the research agenda. Public research grants, on the other hand, are associated with a higher importance of conferences and scientific sources. What is more, the different sources of ideas impact scientific output. Research units that source research ideas from small and medium-sized firms (SMEs) patent more, but not more successful than others in terms of the impact of their inventions on future patents. If, on the other hand, research units source ideas from large firms we find them to publish less and with lower impact on future scientific work. -- |
| Keywords: | University Research,Scientific Productivity,Research Funding,Academic Patents,Technology Transfer |
| JEL: | C23 I23 O31 O34 O38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12048&r=hme |