nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒07‒05
twelve papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Uncertainty, Instability, and the Control of Markets By Jo, Tae-Hee
  2. Why Firms Avoid Cutting Wages: Survey Evidence from European Firms By Du Caju, Philip; Kosma, Theodora; Lawless, Martina; Messina, Julián; Rõõm, Tairi
  3. Valor, Capital e Instituições Sociais em Carl Menger: as contribuições de uma obra inacabada By Eduardo Albuquerque
  4. Ein hermeneutischer Konstruktionsentwurf sozialer Systeme By Krcal, Hans-Christian
  5. Pay Growth, Fairness and Job Satisfaction : Implications for Nominal and Real Wage Rigidity By Smith, Jennifer C
  6. Directional, stabilizing and disruptive selection: An analysis of aspects of economic evolution based on Price’s equation By Esben Sloth Andersen; Jacob Rubæk Holm
  7. Industrial Concentration of Ethnic Minority- and Women-Owned Businesses in the United States By Qingfang Wang
  8. Economic regulation and state interventions: Georgia's move from neoliberalism to state managed capitalism By Timm, Christian
  9. Feminización de la pobreza en España: un análisis del estado de la cuestión By Oliveri, Mario Nicolás
  10. Ökonomisierungstrends im Dritten Sektor: Verbreitung und Auswirkungen von Wettbewerb und finanzieller Planungsunsicherheit in gemeinnützigen Organisationen By Droß, Patrick J.
  11. Economic models for new industrializing countries in comparative perspective By Wrobel, Ralph
  12. The Great Recession’s Impact on Women By Joyce P. Jacobsen

  1. By: Jo, Tae-Hee
    Abstract: Grounded in the methodological commitments shared by various traditions in heterodox economics, this paper explores going enterprises’ cooperative actions to control markets through social networks. It is argued that 1) market institutions are created and controlled by business enterprises and the state, that 2) competition and cooperation among business enterprises are two sides of the same coin, that 3) competition is regulated, and hence that 4) market instability is managed, if not eliminated, by those who control the market. Such arguments lead to the managed competition thesis that encompasses corporate governance, market governance, and market regulation in an integrative manner.
    Keywords: Market control, managed competition, uncertainty, instability
    JEL: B5 D40
    Date: 2013–07–01
  2. By: Du Caju, Philip (National Bank of Belgium); Kosma, Theodora (Bank of Greece); Lawless, Martina (Central Bank of Ireland); Messina, Julián (World Bank and Universitat de Girona); Rõõm, Tairi (Eesti Pank)
    Abstract: The rarity with which firms reduce nominal wages has been frequently observed, even in the face of considerable negative economic shocks. This paper uses a unique survey of fourteen European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why they avoid cutting wages. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in euro area countries but were one of the lowest ranked obstacles in non-euro area countries. The paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cuts.
    Keywords: labour costs, wage rigidity, firm survey, wage cuts, European Union
    JEL: J30 J32 J33 J51 C81 P5
    Date: 2013–06
  3. By: Eduardo Albuquerque (Cedeplar-UFMG)
    Abstract: The theoretical legacy of Carl Menger involves works on value, capital and the origin of social institutions. There is a huge literature on Menger, that has been growing since Schumpeter wrote his short article on the founding father of Austrian Economics in 1921. Reavaliations concerning the place of Menger in the history of economic thought have suggested the de-homogeneization of Menger, Walras and Jevons (Jaffé, 1976) and the desaggregation of Menger, Böhm-Bawerk e Weiser. It might be that now is a moment for a new line of investigation: the desequencing of Menger, Mises and Hayek.
    Keywords: Menger, value, capital, spontaneous order, Austrian Economics
    JEL: B13 B25
    Date: 2013–06
  4. By: Krcal, Hans-Christian
    Abstract: The paper handles central topics of social system theory, such as contingency,emergence, communication, reality construction based on cognitive epistemology, and differential logic. The conducted discussion is embedded in the construction of a hermeneutic approach to social system theory. Communication is a decisive part of economic systems, but often it is not object of scientific research on economic topics. Even informal business communication is seldom part of economic terms and models. To understand the meaning of social systems from a firms’ and methodological perspective we must develop a phase scheme driven by communication, because of their decisive structural role for social systems. Hermeneutic means hereby, from an observer’s point of view, a kind of didactical, philosophical opening of business life experiences – it is much more than pure text interpretation. Hence, the observer of social systems has to redefine his own language based preconditions of understanding social systems communication.
    Keywords: social system; communication; hermeneutic approach to social system structure.
    Date: 2013–06–26
  5. By: Smith, Jennifer C (Department of Economics, University of Warwick)
    Abstract: Theories of wage rigidity often rely on a positive relationship between pay changes and utility, arising from concern for fairness or gift exchange. Supportive evidence has emerged from laboratory experiments, but the link has not yet been established with field data. This paper contributes a fist step, using representative British data. Workers care about the level and the growth of earnings. Below-median wage increases lead to an insult e¤ect except when similar workers have real wage reductions or fim production is falling. Nominal pay cuts appear insulting even when the firm is doing badly. JEL classification: Pay cuts ; Social comparisons ; Gift exchange JEL codes: J33 ; M52 ; J28 ; E24
  6. By: Esben Sloth Andersen; Jacob Rubæk Holm
    Abstract: This paper tries to demonstrate that the well developed analysis of directional selection within evolutionary economics can be complemented by analyses of stabilizing selection and disruptive selection. It also tries to demonstrate that the evolutionary algebra provided by Price’s equation increases the intellectual coherence and power of thinking about selection and other aspects of evolutionary processes. The paper combines these aims by analysing the types of selection by means of the algebra of evolution provided by Price’s equation. To prepare for this task, the paper starts by reviewing recent discussions in relation to Price’s equation. This review includes the presentation of framework for analysing evolution that then is used for the definition and analysis of directional, stabilizing and disruptive selection. These types of selection are then related to fitness functions that can produce the different types of selection; and the functions are used for simple simulations of the change of the population distribution of a quantitative characteristic. Finally, Price’s equation is used to decompose the statistics of the changes of the frequency distributions. The changes of mean, variance, skewness and kurtosis are all decomposed as the sum of a selection effect and an intra-member effect. It is especially the signs of these effects that serve to define and characterize the different types of selection. Both this result and the general analysis of the types of selection seem to be of relevance for applied evolutionary economics.
    Keywords: Evolutionary economics; Directional selection; Stabilizing selection; Disruptive selection; Fitness functions; Price’s equation; Statistics of evolution; Higher moments; Simulation of selection
    JEL: C65 B52 O10
    Date: 2013
  7. By: Qingfang Wang
    Abstract: The number of ethnic minority and women-owned businesses has increased rapidly during the past few decades. However, the characteristics of these businesses and their owners differ by race, ethnicity, and gender. Using a confidential national survey of ethnic minority and women-owned businesses in the United States, this study examines ethnic minority- and women-owned businesses segmented by industrial sectors. Consistent with gender occupational segregation, male- and female- owned businesses have distinctive sectoral concentration patterns, with ethnic minority women- owned businesses highly concentrated in a limited number of industrial sectors. However, the relationship between business sectoral concentration and business performance is not uniform across ethnic and gender groups. Concentration in specific industrial sectors does not necessarily mean poor performance when measured by sales, size of employment or payrolls. However, for women-owned businesses, those sectors obviously pay less and have marginal profits, especially if considering the size of the firms.
    Keywords: ethnic business, female entrepreneurship, labor market segmentation, gender
    Date: 2013–06
  8. By: Timm, Christian
    Abstract: This paper explores the change in the Georgian economic policy from neo-liberalism to state-managed capitalism that occurred between 2003 and 2012. Centering on the distributive effect of institutions, the analysis reveals the underlying dynamic of that policy change. The paper argues that the introduction of a radical liberal regulatory environment contributed significantly to the development of informal state interventions in the economy. However, the Russian-Georgian war in 2008 destroyed the increasingly undermined FDIoriented liberal development model and forced the government to alter its economic policy. By relying on established informal instruments of intervention and the development of an official economic development agenda, a specific form of state-managed capitalism evolved in Georgia in the period that followed. --
    Date: 2013
  9. By: Oliveri, Mario Nicolás
    Abstract: The purpose of this paper is dual: on the one hand, to look into a synthesis of the complex meaning of poverty; on the other hand, to look into the concept of the feminization of poverty, through both its theoretical analysis and empirical evidence in Spain in recent literature. There are several different methodologies for approaching the study of poverty, thus divergent results will be expected. Moreover, the feminization of poverty is not an unequivocal concept, having diverse approaches and therefore, many different ways to empirically measure it. The analysis of recent and limited literature about the feminization of poverty in Spain shows the lack of consensus among researchers about its conceptualization and measure.
    Keywords: poverty, gender, feminization of poverty.
    JEL: I32 I39 Z13
    Date: 2013–05
  10. By: Droß, Patrick J.
    Abstract: Vereine, gemeinnützige GmbHs, Genossenschaften und Stiftungen bilden die wichtigsten Organisationsformen des Dritten Sektors in Deutschland. Sie gelten traditionell als multifunktionale Organisationen, deren Kurs ein steter Balanceakt zwischen sozialer, zivilgesellschaftlicher und ökonomischer Logik ist. Die Rahmenbedingungen für die Arbeit der Organisationen haben sich in den letzten beiden Jahrzenten jedoch gravierend verändert. Die Einführung marktförmiger Anreize und veränderter Finanzierungsmodalitäten erzeugte einen erheblichen Wettbewerbs- und Rationalisierungsdruck. Gleichzeitig treten vermehrt neue Akteure auf den Plan, die von sich aus stärker auf unternehmerische Lösungen für soziale und ökologische Probleme setzen. Diese Veränderungsprozesse werden innerhalb der Dritte-Sektor-Forschung bereits seit längerem als ein Prozess zunehmender Ökonomisierung beschrieben. Betriebswirtschaftliche Denk- und Handlungsweisen gewinnen dabei in den Organisationen an Bedeutung. Aktuelle Auswertungen der Erhebung Organisationen heute 2011/2012 liefern nun erstmals rechtsformspezifische repräsentative Ergebnisse zu diesen Ökonomisierungstrends. So können im vorliegenden Paper einerseits Unterschiede hinsichtlich der Verbreitung von Konkurrenzdruck und finanzieller Unsicherheit im heterogenen Feld des Dritten Sektors nachgezeichnet werden. Andererseits werden Auswirkungen unterschiedlicher Ökonomisierungsniveaus hinsichtlich Struktur, Arbeitsweise, Beschäftigungssituation und Selbstverständnis der Organisationen überprüft. Festhalten lässt sich, dass Wettbewerb und finanzielle Planungsunsicherheit einen wachsenden Teil des Sektors erfassen. Die Organisationen werden dabei zunehmend zu Akteuren auf regulierten Quasi-Märkten und konkurrieren um finanzielle Ressourcen sowie Klient_innen bzw. Nutzer_innen. Dennoch bleiben sie bislang in ihren Zielstellungen gemeinwohlorientierten, zivilgesellschaftlichen Leitlinien verpflichtet. -- Associations, nonprofit enterprises, cooperatives and foundations are the basic organizational forms within the German third sector. Traditionally considered multifunctional organizations, until recently third sector organizations' main societal functions were social integration, advocacy and social service provision. However, due to a changing regulatory framework, the conditions under which the organizations work have significantly changed within the last two decades. The implementation of market mechanisms and new financing modes put a competitive and rationalizing pressure on the organizations. At the same time, new organizations appeared on the scene, which on their own initiative strive for entrepreneurial solutions for social and ecological problems. These transformations have already been described in third-sector-research as a growing marketization of nonprofit organizations. Analyzing data from the organizational survey Organizations today 2011/2012, this paper offers empirical insights on this marketization trend, which also includes variations by organizational forms. On the one hand, differences regarding the distribution of the pressure from competition and financial insecurity within the heterogeneous field of the third sector are presented. On the other hand, possible impacts on the organizational structures, the modes of operation, the employment situation and the self-image of the organizations are studied. In summary, this paper shows that in the processes of marketization third sector organizations are increasingly becoming actors within regulated quasi-markets. Thus, they are competing for financial resources and clients and are becoming subject to managerial business practices. Nevertheless in their objectives they still remain oriented towards the common goods and civil society values.
    Keywords: Ökonomisierung,Dritter Sektor,Wettbewerb,multifunktionale Organisationen,organisationaler Wandel
    Date: 2013
  11. By: Wrobel, Ralph
    Abstract: The last decades are characterized more and more by the catching-up of former communist and developing countries especially in Central and Eastern Europe as well as in East Asia. But which economic system is able to develop an economic successful catching-up combined with human development and poverty reduction? In this paper the author argues that especially New Industrializing Countries (NICs) can learn a lot from developed market economies, not only in the positive sense but also from their mistakes. NICs are already quite developed and reached a level of functioning institutions which allow focussing on developed role models. Therefore, in this paper first catching-up strategies of Less Developed Countries (LDCs) and NICs in the past are described briefly. Then, common experiences from OECD countries and different role models are discussed. As possible role models for NICs five country groups were established: (1) Anglo-Saxon Free Market Economy, (2) Nordic Welfare State, (3) Social Market Economy, (4) Mediterranean Capitalism, and (5) Asian Capi-talism. As can be shown, emerging economies can use the experiences of these countries to improve their catching-up strategies. Therefore, advantages and disadvantages of the role models are discussed in comparative perspective. It results, that no single peak economy exists. But the role models can give political deciders an impression which model may be helpful to find adaptive institutions for the own catch-ing-up process. --
    Keywords: New Industrializing Countries,Catching-up Strategies,Varieties of Capitalism
    Date: 2013
  12. By: Joyce P. Jacobsen (Department of Economics, Wesleyan University)
    Date: 2012–06

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