nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒06‒30
thirteen papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. The High Wage Economy and the Industrial Revolution: A Restatement By Robert C. Allen
  3. Exploitation, Altruism, and Social Welfare: An Economic Exploration By Doepke, Matthias
  4. Quesnay and the analysis of the surplus in an agrarian capitalist economy By Serrano, Franklin; Mazat, Numa
  5. Solow’s Harrod: Transforming Cyclical Dynamics into a Model of Long-run Growth By Verena Halsmayer; Kevin D. Hoover
  6. Nain's Hierarchy of Needs: An Alternative to Maslow's & ERG's Hierarchy of Needs By nain, bhavya
  7. The launch of the euro brought about an impressive decrease of manufacturing production in France and huge losses of market shares By Eric Dor
  9. Value activity monitoring. By Silva, P. de Alencar
  10. Networks, proximities and inter-firm knowledge exchanges By E. Marrocu; S. Usai; R. Paci
  11. Does It Pay to Volunteer? The Relationship Between Volunteer Work and Paid Work By Helene Jorgensen
  12. Sticky Price Inflation Index: An Alternative Core Inflation Measure By Ádám Reiff; Judit Várhegyi
  13. Polarization of time and income – A multidimensional approach with well-being gap and minimum 2DGAP: German evidence By Joachim Merz; Bettina Scherg

  1. By: Robert C. Allen (Dept of Economics and Nuffield College, University of Oxford)
    Abstract: This article responds to Professor Jane Humphries’ critique of my assessment of the high wage economy of eighteenth century British and its importance for explaining the Industrial Revolution. New Evidence is presented to show that women and children participated in the high wage economy. It is also shown that the high wage economy provides a good explanation of why the Industrial Revolution happened in the eighteenth century by showing that increases of women’s wages around 1700 greatly increased the profitability of using spinning machinery. The relationship between the high wage economy of the eighteenth century and the inequality and poverty in Britain in the nineteenth century is explored.
    Date: 2013–06–01
  2. By: Ewa Lechman (Gdansk University of Technology, Gdansk, Poland); Anna Okonowicz (Gdansk University of Technology, Gdansk, Poland)
    Abstract: A kind of gender revolution is passing through various countries in various continents. By being offered free access to educational infrastructure, women become better educated, improve their skills and capabilities, gain possibilities to enter the labour market and use financial resources to start up their own businesses. All these bring women to play a role on the labour market and significantly contribute to overall socio-economic development. The women entrepreneurship unfolds various kinds of endowments concerning economic possibilities in wealth creation. The main scope of the paper is to identify and assess the role of gender equity and uniquely women entrepreneurship in the process of socio-economic development. Implying a set of variables, treated as proxies of gender equality and women entrepreneurship, we estimate their coherence with socio-economic development. In the empirical part, we use a cross-country panel data, for 83 economies, which are derived from World Development Indicators 2012 database International Monetary Fund World Economic Outlook Database April 2013. The time coverage is set for 1990-2011.
    Keywords: gender equity, women entrepreneurship, gender gap, economic development
    JEL: J16 J24 O15
    Date: 2013–06
  3. By: Doepke, Matthias (Northwestern University)
    Abstract: Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard dynastic social welfare function, which is commonly applied to intergenerational models, child labor is never exploitative. In contrast, under an inclusive welfare function, which places additional weight on the welfare of children, child labor is always exploitative. Neither welfare function captures the more gradual distinctions that common usage of the term exploitation allows. I resolve this conflict by introducing a welfare function with minimum altruism, in which child labor in a given family is judged relative to a specific social standard. Under this criterion, child labor is exploitative only in families where the parent (or guardian) displays insufficient altruism towards the child. I argue that this welfare function best captures the conventional concept of exploitation and has useful properties for informing political choices regarding child labor.
    Keywords: child labor, exploitation, social welfare function, altruism
    JEL: D63 D64 J10 J47 J80
    Date: 2013–06
  4. By: Serrano, Franklin; Mazat, Numa
    Abstract: In order to discuss the ‘rational foundation’ of certain aspects of Quesnay´s theory we use a simple formalization of the necessary connections between assumptions about the techniques in use, the distribution of income between the classes and sectors, the system of relative prices. We argue that Quesnay´s system was a truly capitalist agrarian economy and that he was indeed a pioneer of the classical political economy/surplus approach to economics as identified first by Marx, Sraffa and Garegnani, the physical surplus of grains being the necessary basis for his analysis of the distribution and relative prices.
    Keywords: Physiocracy, Capitalist Agrarian Economy, Surplus Approach, Classical Political Economy
    JEL: B11 B12
    Date: 2013–06–20
  5. By: Verena Halsmayer; Kevin D. Hoover
    Abstract: Modern growth theory derives mostly from Robert Solow’s “A Contribution to the Theory of Economic Growth” (1956). Solow’s own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod’s invoking a fixed-coefficients production function. We challenge Solow’s reading of Harrod’s “Essay in Dynamic Theory,” arguing that Harrod’s object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed medium-run fluctuations, the “inherent instability” of economies. It was an attempt to isolate conditions under which the economy might tend to run below potential. In making this argument, Harrod does not appeal to a fixed-coefficients production function – or to any production function at all, as that term is understood by Solow. Solow interpreted Harrod’s “Essay” in the light of a particular culture of understanding grounded in the practice of formal modeling that emerged in economics in the post-World War II period. The fate of Harrod’s analysis is a case study in the difficulties in communicating across distinct interpretive communities and of the potential for losing content and insights in the process. From Harrod’s English Keynesian point of view, Solow’s interpretation arose out of a culture of misunderstanding, and his objects – particularly, of trying to account for a tendency of the economy toward chronic recessions – were lost to the mainstream literature.
    Keywords: economic growth, Roy Harrod, Robert Solow, dynamics, dynamic instability, knifeedge, warranted rate of growth, natural rate of growth
    JEL: B22 O4 E12 E13 N1 B31
    Date: 2013
  6. By: nain, bhavya
    Abstract: This article gives reasons as to why Maslow's & ERG Theory of Needs is inaccurate. It also gives reasons why the same is inaccurate in an organizational perspective. The author also gives a alternative model of needs, namely the Nain Model, which is particularly applicable in an organizational perspective. This article has been written for those interested in Organizational Behaviour.
    Keywords: Maslow, Need, Hierarchy, organizational behaviour,employees,motivation
    JEL: D23 D29
    Date: 2013–06–16
  7. By: Eric Dor (IESEG School of Management (LEM-CNRS))
    Abstract: Since the launch of the euro, French and German industrial productions have extremely diverged. French manufacturing production decreased while German manufacturing industry very strongly increased. The decrease or stagnation of exports of French products contrasts with the strong increase of German exports. France lost market shares on the foreign markets. This evolution is a direct consequence of the flaws of the monetary union as it has been organized. Also, due to sharp differences in the average degree of sophistication of French products, sharing a common currency with Germany inevitably had to lead to a loss of competitiveness of France on foreign markets.
    Date: 2013–07
  8. By: Cansu Akpinar-Sposito (Centre de Recherche Magellan - Université Jean Moulin - Lyon III : EA3713)
    Abstract: Abstract: This study is particularly focused on the glass ceiling issues and the main career obstacles for female executives based on the findings of a cross-country comparative study between Turkey and France. Prior to collecting the required data, a review was carried out in both countries, the current available and attitudinal studies related to the concept of the 'glass ceiling'. A comparative descriptive analysis was conducted to show differences in career barriers for women between countries. The field study of this project generated 20 semi-structured interviews with 12 main questions concerning their career background and the glass ceiling syndrome with staff from 12 international companies in both France and Turkey. Interviews lasted approximately for one hour and were conducted in French, Turkish and English. After successively analyzing all the transcripts of the interviews, three ideological approaches have been identified from the field study. The three main topics that were mentioned by the women interviewed in both countries were personal Compromises, Career Encouragers, and Corporate Culture. These findings indicated that there were several similar approaches to helping the career advancement of women in both countries and also different approaches which are unique to each country involved in the study.
    Keywords: Career barriers, glass ceiling, women in management, Turkey, France.
    Date: 2013
  9. By: Silva, P. de Alencar (Tilburg University)
    Abstract: Abstract: Current value modeling ontologies are grounded on the economic premise that profit sharing is a critical condition to be assessed during the configuration of a value constellation. Such a condition ought to be reinforced through a monitoring mechanism design, since a value model expresses only promises (but not assurances) of value creation. Hence there is a need to extend current value modeling ontologies with a monitoring ontology. This ontology will enable business practitioners to design value models that are enriched with internal monitoring organization. It will also allow these stakeholders to develop a library of monitoring value models, which could be explored to discover and select the most cost-efficient monitoring policies according to their needs. Aligned with this vision, the main contribution of this work is the so-called Value Monitoring Ontology (VMO), which formalizes a Service monitoring logic for value constellations. The logic combines fundamental principles of Agency Theory, Language Action Perspective (LAP) and Service-Dominant Logic. The ultimate modeling rationale behind VMO is to leverage Service monitoring as a question of Business Strategy, through the injection of a Service monitoring logic in value models, as part of the initial configuration of value constellations. The applicability of VMO is demonstrated here through real-world business cases in Customs Control, Intellectual Property Rights in the Digital Music Industry, and Renewable Energy. The feasibility analysis reported in this document supports the claim that VMO is a valid ontological proposition, which is addressed especially to research communities in Business Service Design, Service-Oriented Computing, Value Modeling and Ontology Engineering.
    Date: 2013
  10. By: E. Marrocu; S. Usai; R. Paci
    Abstract: Building on previous literature providing extensive evidence on flows of knowledge generated by inter-firm agreements, in this paper we aim to analyse how the occurrence of such collaborations is driven by the multi-dimensional proximity among participants and by their position within firms’ network. More specifically, we assess how the likelihood that two firms set up a partnership is influenced by their bilateral geographical, technological, organizational, institutional and social proximity and by their position within networks in terms of centrality and closeness. Our analysis is based on agreements in the form of joint ventures or strategic alliances, announced over the period 2005-2012, in which at least one partner is localised in Italy. We consider the full range of economic activities and this allow us to offer a general scenario and to specifically investigate the role of technological relatedness across different sectors. The econometric analysis, based on the logistic framework for rare events, yielded three noteworthy results. First, all the five dimensions of proximity jointly exert a positive and relevant effect in determining the probability of inter-firm knowledge exchanges, signalling that they are complementary rather than substitute channels. Second, the higher impact on probability is due to the technological proximity, followed by the geographical one, while the other proximities (social, institutional and organizational) have a limited effect. Third, we find evidence on the positive role played by networks, through preferential attachment and transitivity effects, in enhancing the probability of inter-firm agreements.
    Keywords: networks, joint ventures, proximities, knowledge flows, strategic alliances
    JEL: R12 O33 O31 L14
    Date: 2013
  11. By: Helene Jorgensen
    Abstract: It is widely believed that volunteering will improve workers’ job prospects. The logic is that volunteering offers opportunities to expand work-related experience, develop new skills, and build a network of professional contacts. For young people with little history of paid employment it can also signal that a person would be a reliable and motivated employee. In spite of these widespread views about volunteering, surprisingly little research has been done on the effect of volunteering on employment and pay in the United States. This analysis examines volunteering as a pathway to employment during a period of high unemployment, when it is reasonable to expect the beneficial effects of volunteering to be especially pronounced.
    Keywords: volunteering, jobs, employment, unemployment, economy, volunteer, job prospects
    JEL: J J6 J2 J64 J2
    Date: 2013–06
  12. By: Ádám Reiff (Magyar Nemzeti Bank (central bank of Hungary)); Judit Várhegyi (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: We show that in both time-dependent and state-dependent sticky price models, prices of sticky price products (i.e. whose price changes rarely) contain more information about medium term inflation developments than those of flexible price products (i.e. whose price changes frequently). We do this by establishing a novel measure for the extent of forwardlookingness of newly set prices, and showing that it is at least 60% when the monthly price change frequency is less than 15%. This result is robust across various sticky price models. On the empirical front, we show that the Hungarian sticky price inflation index indeed has a forward-looking component, as it has favorable inflation forecasting properties on the policy horizon of 1-2 years to alternative inflation indicators (including core inflation). Both theoretical and empirical results suggest that the sticky price inflation index is a useful indicator for inflation targeting central banks.
    Keywords: sticky prices, core inflation, inflation measurement
    JEL: E31 E37 E58
    Date: 2013
  13. By: Joachim Merz (LEUPHANA University Lüneburg); Bettina Scherg (LEUPHANA University Lüneburg)
    Abstract: A growing polarization of society accompanied with an erosion of the middle class experiences more and more attention at least in the German recent economic and social policy discussion. Our study contributes to the polarization discussion with respect to multidimensional theoretical measurement and empirical application in two ways: First, we propose extended multidimensional polarization indices based on a CES-type well-being function and present a new measure to multidimensional polarization, the mean minimum polarization gap 2DGAP. This polarization intensity measure provides transparency with regard to each singular attributes – important for targeted policies – and ensures at the same time its interdependent relations. Second, the empirical application – in addition to the traditional income measure –incorporates time as a fundamental resource for any activity. In particular, genuine personal leisure time will take care of social participation in the spirit of social inclusion/exclusion and Amartya Sen’s capability approach. Instead of arbitrarily choosing the attributes’ parameters in the CES well-being function the interdependent relations of time and income will be evaluated by German Society. With the German Socio-Economic Panel (SOEP) and detailed time use diary data of the available German Time Use Survey (GTUS) 1991/92 and 2001/02 we quantify available and extended multidimensional polarization measures as well as our new approach for the polarization development of the working poor and the working rich in Germany. Results: Genuine personal leisure time in addition to income is an important polarization attribute. Compensation is of economic and static significance. In particular supported by the new minimum 2DGAP approach, multidimensional polarization increased over that decade in Germany.
    Keywords: Multidimensional polarization, intensity of time and income poverty and affluence, interdependent multidimensional time and income poverty and affluence, minimum multidimensional polarization gap (2DGAP), extended economic well-being, satisfaction/happiness, working poor, CES well-being function, German Socio-Economic Panel, German Time Use Surveys 1991/92 and 2001/02.
    JEL: I32 D31 J22
    Date: 2013–05

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