nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒05‒11
eight papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Why Marx Still Matters By Jon D. Wisman
  2. Time Value of Money in Islamic Perspective and the Practice in Islamic Banking Implications By Nurrachmi, Rininta; Fathia , Mia; Mad-ahdin, Ashanee; Radenarmad, Ninasrin; Akhtar , Rulia
  3. To what extent are knowledge-intensive business services contributing to manufacturing? A subsystem analysis By Daria Ciriaci; Daniela Palma
  4. Is Public Education Viable? A brief critical review of neoliberalism in education with a special focus on the Portuguese situation By Margarida Chagas Lopes
  5. Luxe, innovations et socialisme. Le cas des cigares cubains. By Rémy Herrera
  6. The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test. By Anil Alpman
  7. Kinetic exchange models: From molecular physics to social science By Marco Patriarca; Anirban Chakraborti
  8. A note on fashion cycles, novelty and conformity By Federica Alberti

  1. By: Jon D. Wisman
    Abstract: This article explores why a deep understanding of Marx's project is essential for developing an adequate science of society. The imperative to re-examine Marx's project has been made evident not only by the incapacity of the fragmented contemporary social sciences to grasp the causes and necessary responses to capitalism's current crises, but more urgently what is arguably humanity's greatest challenge -- avoiding ecological devastation and perhaps even ecocide. Due to space limitations, this article cannot address these pressing issues directly. Instead, it focuses on how Marx's approach offers the most promising scope and method for addressing challenges such as these. Marx viewed humanity's struggle to overcome nature's scarcity as causally and dynamically related to social organization and social consciousness. Critical to this breadth, and what is yet more alien to the Anglo-American social science tradition, Marx unfolded a theory of our self-creation, the manner in which products of our manual and intellectual labor act back upon us to create us socially and intellectually. To the extent that we lose consciousness of this authorship, we are unfree. We are controlled by our own creations, frequently in harmful manners. Our full freedom, and therefore our capacity to come to terms with contemporary challenges requires a social science with the breadth of Marx's that enables us to recover awareness of our authorship of our social creations and thereby be empowered to control them, as opposed to being their victims.
    Keywords: freedom, dialectics, materialist history, methodology
    JEL: B3 B4 B51
    Date: 2013
  2. By: Nurrachmi, Rininta; Fathia , Mia; Mad-ahdin, Ashanee; Radenarmad, Ninasrin; Akhtar , Rulia
    Abstract: Time Value of money is a fundamental financial theory and a basic element in the monetary system. This concept serves as the foundation for all other notions in finance. It impacts consumer finance, business finance, and government finance. Basically the Conventional Time value of money results from the concept of interest that prohibited in Islamic principle. Moreover, there are several basic principles that caused the Conventional theory views “Money” and “commodity” differs and compares with the principle as defined by Islam. This leads the time valuation of money in Islamic Perspective is totally different from the conventional. The objective of this study is to discuss the concept of Time Value of Money in Islamic Perspective and its advantages. The paper attempts to analyze the difference between the concept of Time in Islamic and Conventional Perspective. Furthermore, we are going to highlight how Islamic Banks applied the concept of Time Value of Money in Islamic View to their implications in the practice. In addition, this study observed the practical issues and challenges in applying the concept of Time Value of Money in some financial products which are Murabahah, Istisna and Salam.
    Keywords: Islam, Islamic Banking, Shariah, Time Value for Money
    JEL: A11 Z1 Z12
    Date: 2012–03
  3. By: Daria Ciriaci (Inter-American Development Bank); Daniela Palma (Inter-American Development Bank)
    Abstract: The rise of knowledge-intensive business services (KIBS) may be considered as one of the decisive trends of economic evolution of industrialised countries in recent decades. This paper uses the concept of vertical integrated sectors and the subsystem approach to input-output matrix analysis to study the vertical integration of knowledge-based business services into manufacturing sectors. To date, companies increasingly rely on outside innovation for new products and processes and have become more active in licensing and selling results of their innovation to third parties. At the same time, they may rely on the marketing and financial consulting offered by third parties. As a consequence, considering manufacturing and KIBS as vertically inter-related sectors, the hypothesis of a virtuous circle can be expressed in the following way: the higher the degree of integration between KIBS and manufacturing sectors along what we could define as a ‘knowledge-based value chain’, the easier the knowledge diffusion and the competitiveness of the economic system as a whole. The study covers Germany, France, Italy, and the United Kingdom over the period 1995-2005. Results decisively support both the existence of structural differences among the countries considered, and a significant heterogeneity to the extent to which manufacturing outsources to knowledge-intensive business services.
    Keywords: Knowledge-intensive business services; subsystem approach; input-output analysis; knowledge diffusion
    JEL: L60 L84 O33 O32 P00
    Date: 2012–05
  4. By: Margarida Chagas Lopes
    Abstract: As well as in other social domains, neoliberalism has been invading education. This trend is leading to a general commodification and to the progressive substitution of some basic values, as the equality of opportunities, by efficiency and competitiveness. At the same time, education policies become more and more shaped by strict economic principles, reflecting the training acquired by decision makers in economics and economics of education courses. That is why we reject, as a critical social scientist, the view that the viability of public education could be discussed uniquely on the grounds of mainstream public economics criteria. On the contrary, that discussion must allow critical pedagogies and alternative approaches to express themselves. Also mainstream clichés must be systematically criticized, as we exemplify in the domain of economics of education. Actually, those are the indispensable complimentary pathways throughout which we can return to education its full meaning as a social service; and also to economics of education its legitimacy as a social science.
    Keywords: Public Education, Neoliberalism, Critical Pedagogy, Portugal
    JEL: H44 I21 I24 I19
    Date: 2013–02
  5. By: Rémy Herrera (Centre d'Economie de la Sorbonne)
    Abstract: This article deals with the relationships between luxury goods and innovations within the framework of a Socialist country. An original example is taken with the Habanos, the Cuban luxury cigars. In a first part, we analyze the main tendencies of the tobacco industry in general, and those of luxury tobacco in particular, in the case of Cuba. In a second part, the emphasis is put on the coexistence of traditional methods and the different forms of innovations characterizing this specific sector. These innovations can be scientific and technological, or linked to the production processes as well as to the products.
    Keywords: Luxury goods, innovations, socialism, cigars, Cuba.
    JEL: O13 O31 P32 Q16
    Date: 2013–04
  6. By: Anil Alpman (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper proposes a new formulation of the theory of social norms. The theoretical model explores the interrelation between individuals' income, time-use and consumption decisions on the one hand, and the determinants of their decision to conform or not to social norms on the other. It is shown that rational consumers will obey inefficient social norms, which in turn will slow economic development. An empirical test of the model is performed for different categories of countries using a voluminous cross-country micro dataset. The results yield the gain and the cost of disobeying inefficient social norms, the latter of which can be used as a freedom indicator regarding social pressure.
    Keywords: Consumer theory, social norms, social interactions, household production model, economic efficiency.
    JEL: D11 D12 Z13
    Date: 2013–04
  7. By: Marco Patriarca; Anirban Chakraborti
    Abstract: We discuss several multi-agent models that have their origin in the kinetic exchange theory of statistical mechanics and have been recently applied to a variety of problems in the social sciences. This class of models can be easily adapted for simulations in areas other than physics, such as the modeling of income and wealth distributions in economics and opinion dynamics in sociology.
    Date: 2013–05
  8. By: Federica Alberti (Max Planck Institute of Economics, Jena)
    Abstract: We develop a model in which novelty and conformity motivate fashion behavior.Fashion cycles occur if conformity is not too high. The duration of fashion cycles depends on individual-specific conformity, novelty, and the number of available styles. The use of individual-specific novelty and conformity allows us to also identify fashion leaders.
    Keywords: Novelty, Conformity, Fashion
    JEL: B5 L1 D1
    Date: 2013–04–24

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