nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2012‒11‒11
twenty-one papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Failing Institutions Are at the Core of the U.S. Financial Crisis By Yochanan Shachmurove
  2. The relationship between economic preferences and psychological personality measures By Becker Anke; Deckers Thomas; Dohmen Thomas; Falk Armin; Kosse Fabian
  3. Economic ideas and tax policy: The introduction of progressivity in tax systems in Western Europe. The cases of France and Spain By Javier San Julian Arrupe (Universitat de Barcelona)
  4. Levando a Sério o Que Nos Dizem - Notas Sobre Narrativas e Avaliação Nas Políticas Públicas By Luiz Eduardo Abreu; Frederico A. Barbosa da Silva
  5. The Polytheistic Condition: Incomparable Assets and Special Currency By Matteo Aria; Nicolò Bellanca
  6. The Economics and Politics of Women's Rights By Matthias Doepke
  7. Structural Change in The Brazilian Economy in The 2000s By Alexandre Messa
  8. Recent evidence in the support of oligopolistic cooperation: a network approach By Mitchell, Green
  9. Uma Investigação Sobre a Desigualdade na Distribuição de Renda e o Endividamento dos Trabalhadores Norte-Americanos dos Anos 1980 Aos Anos 2000 By Lucas Azeredo da Silva Teixeira
  10. More than connectedness – Heterogeneity of CEO social network and firm value By Fang, Yiwei; Francis , Bill; Hasan, Iftekhar
  11. Tecnologia Militar e Desenvolvimento Econômico: Uma Análise Histórica By Érico Esteves Duarte
  12. Desindustrialização: Luzes e Sombras no Debate Brasileiro By Gabriel Coelho Squeff
  13. « L'économie des discriminations » peut-elle se passer d'une « philosophie économique des discriminations ? ». By Cléo Chassonnery-Zaïgouche
  14. The treatment of housing co-operatives in a house price index By Evangelista, Rui; Santos, Daniel
  15. Rhetoric and practice of cultural districts as a model of governance: Empirical evidence from the Veneto region By Monica Calcagno; Maria Lusiani; Fabrizio Panozzo
  16. Heterogeneidade Produtiva na Agricultura Brasileira: Elementos Estruturais e Dinâmicos da Trajetória Produtiva Recente By Gesmar Rosa dos Santos; José Eustáquio Ribeiro Vieira Filho
  17. Financialization of the U.S. corporation: what has been lost, and how it can be regained By Lazonick, William
  18. Les indices composites sont-ils de bonnes mesures de la compétitivité des pays ? By Raphaël Chiappini
  19. Was Brazil's recent growth acceleration the world's most overrated boom? By Palma, J.G.
  20. When the first interaction matters : Recruitment in the French retailing. By Géraldine Rieucau; Marie Salognon
  21. Failing Institutions Are at the Core of the Euro Crisis By Yochanan Shachmurove; Alojzy Z. Nowak

  1. By: Yochanan Shachmurove (Department of Economics and Business, The City College of The City University of New York,and Department of Economics, The University of Pennsylvania)
    Abstract: This paper uses the structure of institutional economics to provide an explanation of the recent U.S. financial crisis. Institutional theory suggests that a county’s political, legal, social, and cultural institutions determine and characterize its economy. An institutional perspective of financial crises therefore incorporates unquantifiable aspects of the real world. Different institutions interacted to ignite and fuel the global crisis. A thorough understanding of all of the legal, political, and cultural institution that encompass a society, as well as their role in the market, is needed to explain and avoid the reoccurrences of financial crises.
    Keywords: Institutional Economics; Financial Crisis; Law and Economics; Interdependence; Behavioral Economics; Behavioral Finance; Hume; Veblen; Coase
    JEL: G O1 B52
    Date: 2012–10–16
  2. By: Becker Anke; Deckers Thomas; Dohmen Thomas; Falk Armin; Kosse Fabian (ROA rm)
    Abstract: Although both economists and psychologists seek to identify determinants ofheterogeneity in behavior, they use different concepts to capture them. In this reviewwe first analyze the extent to which economic preferences and psychological conceptsof personality - such as the Big Five and locus of control - are related. We analyze datafrom incentivized laboratory experiments and representative samples and find onlylow degrees of association between economic preferences and personality. We thenregress life outcomes - such as labor market success, health status and life satisfaction- simultaneously on preference and personality measures. The analysis reveals that thetwo concepts are rather complementary when it comes to explaining heterogeneity inimportant life outcomes and behavior.
    Keywords: labour economics ;
    Date: 2012
  3. By: Javier San Julian Arrupe (Universitat de Barcelona) (Universitat de Barcelona)
    Abstract: In the last decade of the 19th century, the United Kingdom, France and Spain established progressive rates in their succession taxes. This paper compares the legislative processes that France and Spain countries followed in this matter. In both cases politicians arguments for and against progressive taxation were similar, and backed by well-known economic ideas and authors. The process in France was leaded by a majority of MPs believing that progressive taxes aided in the achievement of real justice in taxpaying. In Spain, there was not this majority, but the reform passed due to other circumstances. This would be one step in the application of new insights on tax fairness; however, proportionality as the right technique of taxation and government refrain from modifying distribution were still predominant.
    Keywords: parliament, public finance, inheritance tax, progressivity, political economy, liberalism
    JEL: K34 B12 N43 A11 H24
    Date: 2012
  4. By: Luiz Eduardo Abreu; Frederico A. Barbosa da Silva
    Abstract: O texto examina a aplicação do conceito de narrativas para a avaliação de políticas públicas. Para tanto, utiliza como exemplo a pesquisa sobre o programa Mais Cultura, realizada pelo Ipea. Palavras-chave: Narrativas, discursos, institucionalismo discursivo, neo-institucionalismo, políticas públicas. Public policy studies in Brazil strongly rely on sociological, historical or rational choice neo-institutionalisms. A forth "newest new institutionalism" argues that ideas and discourse matter, meaning they play a paramount role in politics. The concept of narratives may provide insights into the daily routine of public institutions that remain unperceived by "older new-institutionalisms". It also helps to develop one`s sensibility to what people say into a more conspicuous representation of what that really means. Numbers, norms, and official or unofficial discourses only make sense as parts of broader, although unsettled narratives. Keywords: Narratives, discourse, discursive institucionalism, new institucionalism, public policies.
    Date: 2012–04
  5. By: Matteo Aria; Nicolò Bellanca (Università degli Studi di Firenze)
    Abstract: In this paper we intend to rethink and to reinforce the arguments of the authors who critique the mainstream economic theories and the rational choice theory. We start asserting that a fundamental anthropological condition of the choice is the incomparability of many alternatives and that in this situations the subject chooses without being able to give any adequate comparison judgments. Then we show that these choices, even if not deriving from any rational processes, and not being measurable in terms of utility, can be made for “good reasons”. Such incomparability roots in the polytheistic condition of the subject, in which numerous action criteria coexist conflicting with each other. We also elaborate a conceptual framework investigate the cases in which more institutional logics are combined, as well as the cases in which such logics mingle with each other. In the last part of the paper, rethinking the theories of Richard Thaler and Viviana Zelizer, we try to propose an explanation of the presence and diffusion of “special currencies” in economic life circuits.
    Keywords: incompleteness; commodification; special currency
    JEL: Z13 B52 O10
    Date: 2012
  6. By: Matthias Doepke (Northwestern University)
    Abstract: Women's rights and economic development are highly correlated. Today, the discrepancy between the legal rights of women and men is much larger in developing compared to developed countries. Historically, even in countries that are now rich women had few rights before economic development took off. Is development the cause of expanding women's rights, or conversely, do women's rights facilitate development? We argue that there is truth to both hypotheses. The literature on the economic consequences of women's rights documents that more rights for women lead to more spending on health and children, which should benefit development. The political-economy literature on the evolution of women's rights finds that technological change increased the costs of patriarchy for men, and thus contributed to expanding women's rights. Combining these perspectives, we discuss the theory of Doepke and Tertilt (2009), where an increase in the return to human capital induces men to vote for women's rights, which in turn promotes growth in human capital and income per capita.
    Date: 2012
  7. By: Alexandre Messa
    Abstract: This paper investigates the sources of structural change in the Brazilian economy in the 2000s. On that purpose, it uses the input-output structural decomposition analysis and introduces a method to correct the influence of prices on the time behavior of the technical coefficients, making them actually represent changes in the production structure. Results show that most of the growth differential between services and industry in that period was induced by the production structure: more precisely, by a lower intermediate consumption of domestic industrial inputs by the production chain of all economic sectors, concomitant with a higher intermediate consumption of services. Keywords: structural change; input-output analysis. Este artigo investiga as fontes de mudanças estruturais na economia brasileira ao longo da década de 2000. Para tal, utiliza-se a análise de decomposição estrutural de insumo-produto e introduz-se um método que corrige a influência dos preços sobre o comportamento dos coeficientes técnicos ao longo do tempo, fazendo com que estes reflitam de fato a evolução da estrutura produtiva. Os resultados obtidos mostram que a maior parte do diferencial de crescimento ente os serviços e a indústria durante aquele período foi induzida pela estrutura produtiva: mais precisamente, por um menor consumo intermediário de insumos industriais domésticos pela cadeia produtiva de todos os setores da economia, concomitante a um maior consumo intermediário de serviços. Palavras-chave: mudança estrutural; análise de insumo-produto.
    Date: 2012–10
  8. By: Mitchell, Green
    Abstract: This paper seeks to retest the oligopolistic cooperation hypothesis of market structure from the Centralized Private Sector Planning literature, using 2010 data on corporate board membership and recent advances in social network analysis. Centrality measures are calculated based upon the corporate governance network emerging from common board membership on Fortune 100 firms. The findings herein suggest that not only does oligopolistic cooperation continue to characterize the US economy, but directors from the finance and insurance sector occupy a significantly more central role in the planning process than those of other industries.
    Keywords: John Munkirs; Centralized Private Sector Planning; Social Network Analysis; Oligopolistic Cooperation
    JEL: L14 D21 B52 Z13 D43
    Date: 2012–01–01
  9. By: Lucas Azeredo da Silva Teixeira
    Abstract: Este artigo discute as origens do processo que mais chamou atenção na economia norte-americana antes da eclosão da crise do subprime: o crescente endividamento do consumidor. Segundo a hipótese adotada neste trabalho, são causas deste endividamento a mudança na distribuição de renda (aumento da concentração) e as desregulamentações e inovações financeiras, que se desenvolvem a partir do fim dos anos 1970. Tendo em vista que este aspecto vem sendo bem explorado na literatura especializada, o presente trabalho concentra sua explicação na mudança no padrão de distribuição de renda. Analisando por esse prisma, chega-se à conclusão adicional de que não se trata de endividamento das famílias, ou dos consumidores em geral, mas, mais especificamente, de uma parcela destes, os trabalhadores norte-americanos, que se endividaram para financiar seus gastos, em um contexto de salários reais estagnados. Por fim, os rumos da economia norte-americana pós-crise são brevemente avaliados. The purpose of this paper is to discuss the origins of a critical process in the North American economy before the subprime crisis, namely, the increasing debt of households. It is argued that causes of this indebtedness are alterations in income distribution (an increased concentration of income) and the process of financial deregulation and innovation, developed in the late 1970s. Considering that the latter has previously been explored in great detail, this particular examination explores the changes on income distribution pattern. Based on this perspective, it is concluded that the indebtedness does not come from families or households in general but, more specifically, from North American workers, who had to finance their spending through an on-going stagnation, or even deterioration, of the real wages at their disposal. Further, the direction of the North American economy after the crisis is evaluated in the contexts of these findings.
    Date: 2012–01
  10. By: Fang, Yiwei (Lally School of Management and Technology, Rensselaer Polytechnic Institute); Francis , Bill (Lally School of Management and Technology, Rensselaer Polytechnic Institute); Hasan, Iftekhar (Fordham University and Bank of Finland Research)
    Abstract: This paper examines through various channels the effects of CEO social network heterogeneity on firm value. We construct four measures of heterogeneity based on demographic attributes, intellectual backgrounds, professional experience, and geographical exposures of individuals in the CEO social network. We find that CEO social network heterogeneity leads to higher Tobin's Q of firms. Greater CEO social network heterogeneity also leads to: (i) more innovation, (ii) more foreign sales growth, (iii) higher investment sensitivity to Tobin’s Q, and (iv) better M&A performance. Overall, our results indicate that CEO social network heterogeneity is an aspect of CEO social capital and soft skills that deserves the attention of shareholders.
    Keywords: CEO; social networks; corporate finance policy decisions; firm value
    JEL: D71 G30 G32 Z10
    Date: 2012–08–20
  11. By: Érico Esteves Duarte
    Abstract: O presente artigo busca contribuir para o debate público motivado pela Estratégia Nacional de Defesa contrapondo-se à expectativa de que a modernização em tecnologia militar tenha efeitos positivos e diretos na capacidade combatente das forças armadas e no desenvolvimento tecnológico civil. O artigo: i) propõe uma definição de tecnologia, assim como uma análise histórica de sua evolução e dos requisitos sociais para seu desenvolvimento; ii) qualifica os limites e dificuldades de inovação em forças armadas na conduta da guerra; e iii) infere as tendências históricas de transferência tecnológica entre esferas militares e civis. O artigo conclui que as forças armadas não são o vetor ideal de inovação de uma sociedade; por isso se argumenta que a decisão pela modernização das Forças Armadas brasileiras não deve ser sujeita a critérios de desenvolvimento econômico, bem como as iniciativas de ganho de produtividade ou inovação tecnológica do parque industrial civil brasileiro não devem obedecer a critérios e necessidades de organizações militares. Palavras-chave: Tecnologia militar, desenvolvimento econômico, história militar, estudos estratégicos, defesa nacional, spin-off. This article aims to foster the national defense debate by arguing against the expectative in favor of the linkage between military technology, on one side, and combatant capacity and economic development, on another one. This article argues: i) a definition of technology that entails on a historical analysis of its evolution and a set of social requirements for its development; ii) the aspects of the conduct of war that limit and hamper overall innovation within armed forces; and iii) the causes that explain the historical trends of technological exchanges between military and civilian areas. This article concludes that the armed forces are not the ideal driving-force of innovation within a society. It sustains the argument that Brazilian armed forces modernization should not be according to economic development requirements and that Brazilian non-military industrial and technological promotion should not be dependent of military requirements and demands. Keywords: Military technology, economic development, military history, strategic studies, national defense, spin-off.
    Date: 2012–06
  12. By: Gabriel Coelho Squeff
    Abstract: Este texto discute a hipótese de desindustrialização brasileira a partir de indicadores não encontrados usualmente na literatura sobre o tema. A avaliação foi feita com base na estrutura e dinâmica da indústria de transformação vis-à-vis o restante da economia e, adicionalmente, sob a ótica intraindustrial a partir da classificação das atividades econômicas segundo intensidade tecnológica da Organização para a Cooperação e Desenvolvimento Econômico (OCDE). Ambos os métodos permitiram discutir este tema sob uma perspectiva mais ampla e acurada, identificando-se dados que corroboram e contrariam a hipótese de que o Brasil está passando por um processo de desindustrialização de sentido pejorativo. Palavras-chave: desindustrialização; setor manufatureiro; intensidade tecnológica. This paper discusses the de-industrialization hypothesis in Brazil based on indicators usually not found in the literature. The evaluation was based on the structure and dynamics of the manufacturing sector vis-à-vis the rest of the economy and, in addition, from an intra-industrial standpoint using OCDE`s classification of technological intensity. Both methods allowed us to discuss this subject broadly and accurately, identifying data that support and contradict the hypothesis that Brazil is suffering a de-industrialization process in the negative sense. Key words: de-industrialization; manufacturing; technological intensity.
    Date: 2012–06
  13. By: Cléo Chassonnery-Zaïgouche (Centre d'Economie de la Sorbonne)
    Abstract: Since the 1950's, Nobel Prize economists such as Akerlof, Arrow, Becker, Heckman, Phelps and Stiglitz have analyzed discrimination in an economic framework, essentially in "positive" perspective. The two seminal models – Becker's model based on a "taste for discrimination" and Arrow and Phelps' theories of "statistical discrimination" – give two different answers to the implicit question of efficiency. Discrimination is inefficient – by assumption – in Becker's work because it's a « non-monetary cost », whereas discrimination could be efficient – in some cases – in statistical discrimination models. When discrimination is efficient, the normative basis disappears and no political recommendations could be made. The eficiency criterion is not sufficient to analyze discrimination both in a « positive » and in a « normative » perspective. The paper discusses two principles to renew this analysis : 1) individuals make choice using normative criteria ; 2) the non-discrimination principle is lexically prior to an efficiency criterion.
    Keywords: Discrimination, statistical discrimination, normative economics, positive economics.
    JEL: A13 J7 B40 B41
    Date: 2012–10
  14. By: Evangelista, Rui; Santos, Daniel
    Abstract: Housing co-operatives, also known as “tenant-owner co-operative housing”, provide an alternative to both renting and owning a dwelling. As an indirect form of ownership, it poses some conceptual and practical issues to anyone aiming at compiling a price index covering all forms of own-occupied housing. Starting from the position that these co-operatives provide a type of tenure similar to owner- occupied housing, this paper provides some practical guidance on the way they can be treated in the compilation of a house price index. An empirical bootstrap study, based on advertised co-operative flats in Oslo, supports the proposals done in this paper. To our knowledge, this is the first time such a study is carried out in this context.
    Keywords: Housing co-ops; House Price Indexes; Owner-occupied housing; Bootstrap
    JEL: C43 E31
    Date: 2012–04–06
  15. By: Monica Calcagno (Department of Management, Università Ca' Foscari Venezia); Maria Lusiani (HEC Montreal); Fabrizio Panozzo (Department of Management, Università Ca' Foscari Venezia)
    Abstract: Culture is a key word in the story of Italy. The richness of its cultural past together with the present and future potential of its creativity has given culture a central role in the agenda of public policies. As a new element in this pattern, most recently the word ÒcultureÓ has been increasingly and explicitly combined with the word competitiveness. The relationship between the two words is mediated by the creative process and seems to evoke a new model of economic development based on the attempt to govern the economy through a careful use of culture as a key dimension. This connection looks at the territory as the context where cultural processes can be encouraged, and used to transform the economy. The declination of culture as an economic issue produced two main streams of research: a first one focusing on the creative cities and a second one more devoted to the question of cultural clusters. The paper is centred on the second one, and offers a critical review of the literature on cultural cluster and on culture as a key dimension of economic development. The theoretical debate is further discussed through an empirical investigation based on an in depth analysis of a number of entrepreneurial experiences taking place in a limited area of the Veneto region. The final discussion identifies critical key points emerging from the comparison between the rhetoric of the debate and the practice of the experiences.
    Keywords: cultural clusters, policy, governance, culture, creativity, culture-led development
    JEL: L26
    Date: 2012–11
  16. By: Gesmar Rosa dos Santos; José Eustáquio Ribeiro Vieira Filho
    Abstract: Este estudo aborda a heterogeneidade estrutural e produtiva da agricultura brasileira, recorrendo a indicadores econômicos de produtividade do trabalho, de especialização produtiva e de concentração da renda na agropecuária. A heterogeneidade estrutural pode ser evidenciada por meio da permanência de diferenças estruturais e econômicas que prejudicam o desenvolvimento econômico inclusivo. Interessa discutir os motivos e as questões institucionais e estruturais que levam à heterogeneidade. Os dados mostram uma elevada especialização produtiva e concentração de renda e recursos que afetam o desenvolvimento sustentável do setor em suas diversas dimensões. Analisadas do ponto de vista da heterogeneidade estrutural, as políticas públicas têm sido falhas tanto na difusão de tecnologia aos produtores como também no incentivo ao ganho de escala neste grupo. Disparidades inter-regionais destacadas também evidenciam a fragilidade de grande parte de produtores e mostram distintas trajetórias da agropecuária brasileira. Palavras-chave: Heterogeneidade, produtividade, especialização e concentração. This study addresses the structural heterogeneity and production of Brazilian agriculture. Economic indicators of labor productivity, specialization and income concentration in agriculture are analyzed. The structural heterogeneity can be evidenced through the persistence of economic differences that hinder economic development inclusive. The central objective is discussing the structural and productive issues that lead to heterogeneity in agriculture. We show a high specialization and concentration of income in a few group of products and resources that affect sustainable development of the sector in its various dimensions. When analyszed from the standpoint of structural heterogeneity, public policies have been failures in both themes: diffusion of technology to producers as well as the incentive to gain in scale. Interregional disparities also highlight some weaknesses of the majority of producers, as well as their different trajectory of agricultural production. Keywords: Heterogeneity, productivity, specialization and concentration
    Date: 2012–06
  17. By: Lazonick, William
    Abstract: The employment problems that the United States now faces are largely structural. The structural problem is not, however, as many economists have argued, a labor-market mismatch between the skills that prospective employers want and the skills that potential workers have. Rather the employment problem is rooted in changes in the ways that U.S. corporations employ workers as a result of "rationalization", "marketization", and "globalization". From the early 1980s rationalization, characterized by plant closings, eliminated the jobs of unionized blue-collar workers. From the early 1990s marketization, characterized by the end of a career with one company as an employment norm, placed the job security of middle-aged and older white-collar workers in jeopardy. From the early 2000s globalization, characterized by the movement of employment offshore, left all members of the U.S. labor force, even those with advanced educational credentials and substantial work experience, vulnerable to displacement. Nevertheless, the disappearance of these existing middle-class jobs does not explain why, in a world of technological change, U.S. business corporations have failed to use their substantial profits to invest in new rounds of innovation that can create enough new high value-added jobs to replace those that have been lost. I attribute that organizational failure to the financialization of the U.S. corporation. The most obvious manifestation of financialization is the phenomenon of the stock buyback, with which major U.S. corporations seek to manipulate the market prices of their own shares. For the decade 2001-2010 the companies in the S&P 500 Index expended about $3 trillion on stock repurchases. The prime motivation for stock buybacks is the stock-based pay of the corporate executives who make these allocation decisions. The justification for stock buybacks is the erroneous ideology, inherited from the conventional theory of the market economy, that, for superior economic performance, companies should be run to "maximize shareholder value". In this essay I summarize the damage that this ideology is doing to the U.S. economy, and I lay out a policy agenda for restoring equitable and stable economic growth.
    Keywords: U.S. economy; employment; financialization; stock buybacks; executive pay; shareholder value; stock-market manipulation; income inequality; equitable and stable economic growth
    JEL: D21 D31 L21 G35 G38 J23
    Date: 2012–07–17
  18. By: Raphaël Chiappini (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - Université Montesquieu - Bordeaux IV : EA2954, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: Cet article analyse l'utilisation d'une batterie d'indicateurs composites comme mesure de la compétitivité. À partir de tests de rangs de Spearman et Kendall (1938), nous montrons que les classements induits par ces différents indices de compétitivité sont très fortement corrélés. De plus, à partir d'une analyse critique de ces indicateurs, nous prouvons qu'ils ne peuvent être utilisés comme mesure de la compétitivité des pays. En effet, le manque de fondements théorique et empirique dans le choix des variables et leurs pondérations induisent des problèmes d'interprétations en termes de politique économique. Les " scores " obtenus à ces différents indicateurs sont donc à interpréter avec prudence et les indices composites doivent plutôt servir de variables indicatrices ou benchmark de la compétitivité résultant sur des tableaux de bords.
    Keywords: Compétitivité des pays, indices composites, coefficients de corrélation de rang
    Date: 2012–08–10
  19. By: Palma, J.G.
    Abstract: As soon as international financial markets felt reassured in 2003 by the surprisingly neoliberal orientation of President Lula’s government, the ‘spot-the-new-Latin-tiger’ financial brigade became dazzled by Brazil — they just couldn’t have enough of it. So much so, that they had little difficulty in turning a blind eye to the obvious fact that (except for several commodities, finance, and a small number of other activities) Brazil’s economic performance since the beginning of neo-liberal reforms (c.1990) had been remarkably poor. This not only contrasted with its own performance pre-1980, but also with what was happening in Asia. I shall argue that the weakness of the new neo-liberal paradigm is rooted as much in its intrinsic flaws as in the particular way it was implemented. As in the rest of Latin America, Brazil’s economic reforms were undertaken primarily as a result of its perceived economic weaknesses — i.e., there was an attitude of ‘throwing in the towel’ vis-à-vis the previous state-led import substituting industrialisation strategy, because most politicians and economists interpreted the 1982 debt crisis as conclusive evidence that it had led the region into a cul-de-sac. As Hirschman has argued, policy-making has a strong component of ‘path-dependency’; as a result, people often stick with policies after they have achieved their aims, and those policies have become counterproductive. This leads to such frustration and disappointment with existing policies and institutions that is not uncommon to lead to a ‘rebound effect’. An extreme example of this phenomenon is post-1982 Latin America, where the core of the discourse that followed ended up simply emphasising the need to reverse as many aspects of the previous development strategy as possible. This helps to explain the peculiar set of priorities, the rigidity and the messianic attitude with which the reforms were implemented in Brazil, as well as their poor outcome. As the then President of Brazil’s Central Bank explained at the time, their main task was “ undo forty years of stupidity.” With this ‘reverse-gear’ attitude, this experiment in economic reform almost inevitably ended up as an exercise in ‘not-very-creative-destruction’ — especially vis-à-vis its manufacturing industry. Something very different happened in Asia, where economic reforms were often intended (rightly or wrongly) as a more targeted and pragmatic mechanism to overcome specific economic and financial constraints. Instead of implementing reforms as a mechanism to reverse existing industrialisation strategies, in Asia they were put into practice in order to continue and strengthen ambitious processes of industrialisation. Although the Brazilian economy has been unable to deliver sustainable productivity-growth since the beginning of economic reforms (just a few short growth-dashes), Brazilian-style neo-liberal capitalism became unrivalled when it came to offering world-class commodities, an abundance of precarious (mostly service) jobs, stylish retail, extremely lucrative finance, and the ‘purity of beliefs.’
    Keywords: Ideology, Neo-liberalism, Productivity, Employment, Investment, Income distribution, Premature De-industrialisation, ‘middle-income trap’, financialisation.
    JEL: B52 D31 E20 F13 F59 H54 J20 L50 N16 N36 O16 O40 P50
    Date: 2012–11–01
  20. By: Géraldine Rieucau (Laboratoire d'Economie Dionysien - Université Paris 8 Saint-Denis); Marie Salognon (Centre d'Economie de la Sorbonne)
    Abstract: In France, one of ten recently-hired workers works in retailing. The literature provides evidence about the screening criteria used to fill low-wage vacancies in stores. However, neither the stage when criteria matter nor the forefront role of information channels (direct applications, word-of-mouth, employment agency and job ads) has been well explored. Drawing on 35 interviews conducted in 2010-2011, with actors involved in recruitment activites and with recently-hired workers in large stores in Greater Paris. This article explores the initial interaction between job seekers and recruiters. It is argued that the screening criteria vary according to the way employers received information about applicants and first interact with them (by mail, phone or face-to-face). This contribution highlights the importance of walk-in applications, which prioritize selection based on residence, appearances and availability. Changes in the first interaction impact the whole selection process and may change the profile of the workers hired.
    Keywords: Economy of conventions, French retailing, information channels, low-wage jobs, recruitment, screening criteria.
    JEL: B59 J60 J71 L81
    Date: 2012–10
  21. By: Yochanan Shachmurove (Department of Economics and Business, The City College of The City University of New York,and Department of Economics, The University of Pennsylvania); Alojzy Z. Nowak (University of Warsaw, Poland)
    Abstract: The European Union was created to promote economic, cultural, and regional prosperity. However, the Global Financial Crisis demonstrates that its economic institutions are flawed. While each sovereign state in the Eurozone forfeits the control of its money supply, the lack of a common fiscal institution allows individual countries to pursue their own political and financial agendas. The on-going economic hardship emphasizes the critical role of economic and political institution ions. This paper analyzes both beneficial and perverse incentives of joining the European Union, discusses the consequences of deficient economic institutions and provides potential solutions towards the alleviation of the crisis.
    Keywords: European Union; Eurozone; Harmonized Index of Consumer Prices; Portugal, Ireland, Greece and Spain (PIGS); Fiscal Union; Financial Crises; Maastricht Criteria; Maastricht Treaty; Exchange Rate; Euro
    JEL: B52 F00 F01 F33 K0
    Date: 2012–10–18

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