nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒07‒20
fifteen papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Mainstream, Orthodoxie und Heterodoxie: Zur Klassifizierung der Wirtschaftswissenschaften By Hirte, Katrin; Thieme, Sebastian
  2. Herd behavior in consumer inflation expectations - Evidence from the French household survey. By Andreas Karpf
  3. Innovation and Income Inequality. By Antonelli, Cristiano; Gehringer, Agnieszka
  4. Capital's Pons Asinorum: the Rate of Turnover in Karl Marx's Analysis of Capitalist Valorisation By Passarella, Marco; Baron, Hervé
  5. The Economic Complexity of Innovation as a Creative Response. By Antonelli, Cristiano
  6. Technology Diffusion: Measurement, Causes and Consequences By Diego Comin; Martí Mestieri
  7. Monetary Neutrality under Evolutionary Dominance of Bounded Rationality By Gilberto Tadeu Lima; Jaylson Jair da Silveira
  8. URMI and its Integration into a framework for Ethics in Economics By Gul, Ejaz
  9. Institutional Cognitive Economics: some recent developments By Gigante, Anna Azzurra
  10. Restatement of the I-O Coefficient Stability Problem By Dobrescu, Emilian
  11. Debating the Responsibility of Capitalism in Historical and Global Perspective By Geoffrey G. Jones
  12. The Dissemination of Management Innovations through Consultancy in the Postwar Period By Ćwiklicki, Marek; Alcouffe, Alain
  13. The Women's Empowerment in Agriculture Index By Sabina Alkire, Ruth Meinzen-Dick, Amber Peterman, Agnes R. Quisumbing, Greg Seymour and Ana Vaz
  14. Identity, Authority and Evolution of Order: the trajectory of dueling simulated By Behrooz Hassani-Mahmooei , Behrooz; Vahabi, Mehrdad
  15. Duration dependence and change-points in the likelihood of credit booms ending By Vitor Castro; Megumi Kubota

  1. By: Hirte, Katrin; Thieme, Sebastian
    Abstract: [Kritisches Resümee und Ausblick] Der Versuch, die Wirtschaftswissenschaften anhand der schon bestehenden Ausarbeitungen zu klassifizieren, ist mit einer Reihe von Problemen konfrontiert. Die Schwierigkeiten beginnen bereits mit den unterschiedlichen und teils synonymen Begrifflichkeiten, mit denen in der wissenschaftlichen Debatte und der ideengeschichtlichen Literatur die Wirtschaftswissenschaften für gewöhnlich charakterisiert werden. Ergänzt wird das durch Widersprüche, die z. B. dadurch zu Stande kommen, dass einzelne Autoren zwischen 'sozialen' und 'intellektuellen' Klassifizierungskategorien unterscheiden wollen, sich aber beide Kategorien dann wieder deutlich überlagern. In der Summe erklären sich aus diesen konzeptionellen und begrifflichen Schwierigkeiten sowohl die Heterogenität der Klassifizierungsansätze als auch der wissenschaftliche Streit, der um sie entbrennt. Hinzu tritt, dass die Klassifizierungsversuche die Nähe zu den Ideen von Thomas S. Kuhn oder Imre Lakatos suchen, die dafür notwendige ideengeschichtliche Erforschung im Grunde genommen aber erst noch aussteht (siehe Abschnitt 1.4). Ein wesentlicher Mangel ist zudem die Eindimensionalität der Klassifizierungen entweder entlang an Axiomen oder fixiert auf das methodische Vorgehen, ohne zu einer erkenntnistheoretischen und prinzipiell offenen Fundierung vorzudringen. Deshalb sind die bisher vorliegenden Klassifizierungsansätze heterogen und strittig sowie in aller Regel durch eine unbefriedigende Fundierung gekennzeichnet. (...) --
    Date: 2013
  2. By: Andreas Karpf (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This article investigates whether the formation of individual inflation expectations is biased towards a consensus and is thus subject to some kind of herding behavior. Basing on the traditional Carlson-Parkin approach to quantify qualitative survey expectations and its extension by Kaiser and Spitz (2002) in an ordered probit context, a method to gain individual level inflation expectations is proposed using a Markov chain Monte Carlo Hierarchical Bayesian estimation method. This method is applied to micro survey data about inflation expectations of households from the monthly French household survey “Enquête mensuelle de conjoncture auprès des ménages - ECAMME” (January 2004 to December 2012). Finally a non-parametric test for herding behavior (Bernardt et al., 2006) is conducted on the cohort-level expectation estimates, showing that the expectation formation is not subject to a bias towards the expectation consensus. In constrast, it exhibits a strong anti-herding tendency which is consistent with the findings of other studies (Rülke and Tillmann, 2011).
    Keywords: Herd behavior, inflation, rational expectations.
    JEL: E31 E37 D12 D82 D84
    Date: 2013–07
  3. By: Antonelli, Cristiano; Gehringer, Agnieszka (University of Turin)
    Abstract: The paper articulates and tests the hypothesis that innovation is a major factor in the reduction of income inequalities. The relationship between the pace of technological change and the dynamics of income inequalities has been first suggested by Kuznets (1955), but found little elaboration and empirical investigation in the subsequent literature. The evidence of a large data set including advanced countries, such as the US, Canada and the members of the European Union, as well as the newly industrializing BRIC members, in the years 1995-2011, confirms the virtuous circle between technological change and income inequalities.
    Date: 2013–05
  4. By: Passarella, Marco; Baron, Hervé
    Abstract: This article aims to shed light on the role played by the ‘rate of turnover’ of capital within the Marxian analysis of the working laws of capitalism. Oddly enough, that concept has been neglected by the most part of Karl Marx’s scholars and exegetes, as is demonstrated proved by the small number of scientific works dealing with it. Yet, the rate of turnover plays a crucial role in Marx’s economic thought, since it allows Marx to address the impact of the improvement in finance, transportation and means of communication on the capitalist process of creation (and realization) of surplus-value. As we are going to show, the new manuscripts from the MEGA2 philological edition of Marx’s writings may provide some useful insights. Against this background, the goal of the paper is twofold: first, to bridge the gap in the literature concerning the economic thought of Marx; second, to provide a rigorous (and general) definition of the notion of the ‘rate of turnover’ of capital. This will also allow us: to redefine the concept of the ‘annual rate of profit’; to define a new linked concept – that is, the ‘temporal composition of capital’; and to add a further element in the debate on the counter-tendencies to the law of the tendential fall in the general rate of profit.
    Keywords: Marxian Economics, Turnover of Capital, Financialization
    JEL: B24 B51 E11
    Date: 2013–05–20
  5. By: Antonelli, Cristiano (University of Turin)
    Abstract: Evolutionary economics has finally recognized the limits of biological analogies and is now able to apply the tools of complexity analysis. A better appreciation of the Schumpeterian legacy can help building better foundations to this new phase of evolutionary economics. The paper uncovers the merits of the essay “The creative response in economic history” published by Joseph Alois Schumpeter in the Journal of Economic History in 1947 and forgotten since then. The correct appreciation of this Schumpeterian contribution is important not only to better understand the evolution of Schumpeter’s thinking but also to elaborate a more inclusive and robust framework able to integrate the contributions of the Classical School and the Marshallian traditions as well as the tools of historical economics so as to implement the new emerging evolutionary complexity.
    Date: 2013–05
  6. By: Diego Comin; Martí Mestieri
    Abstract: This chapter discusses different approaches pursued to explore three broad questions related to technology diffusion: what general patterns characterize the diffusion of technologies, and how have they changed over time; what are the key drivers of technology, and what are the macroeconomic consequences of technology. We prioritize in our discussion unifi ed approaches to these three questions that are based on direct measures of technology.
    Date: 2013–05–08
  7. By: Gilberto Tadeu Lima; Jaylson Jair da Silveira
    Abstract: We provide evolutionary game-theoretic microfoundations to a dynamic complete nominal adjustment in response to a monetary shock. To this end, we develop an approach based on a new analytical notion to which we refer as boundedly rational inattentiveness. We investigate the behavior of the price level in an context in which a firm can either pay a cost to update its information set and establish the optimal price (Nash strategy) or freely use information from the previous period and establish a lagged optimal price (bounded rationality strategy). We devise an evolutionary micro-dynamics that, by interacting to the dynamics of the aggregate variables, determines the co-evolution of the distribution of information-updating strategies in the population of firms and the extent of the nominal adjustment of the general price level to a monetary shock. Although the bounded rationality strategy is the only survivor in the long-run evolutionary equilibrium, money is nonetheless neutral. The evolutionary learning dynamics takes the information-updating process to an equilibrium configuration in which, despite all firms play the bounded rationality strategy, the corresponding price level is the symmetric Nash equilibrium price.
    Keywords: bounded rationality; evolutionary dynamics; monetary neutrality
    JEL: E31 C73 D83
    Date: 2013–02–20
  8. By: Gul, Ejaz
    Abstract: Utility, Rationality and Methodological Individualism (URMI) are the dominant aspects which determine the paradigm of ethics applicable in economic decision making process. Generally, in traditional economics the decision-making process for individuals has no significant space for ethics as individuals are only interested in maximizing their profits. URMI is a very important concept the formulation of which into various combinations determines different functions for ethics in economics. Economists have used different definitions for the constituents of this concept but there can not be sighted noteworthy effort to integrate these multi dimensional phenomena into a framework for ethics in economics. This paper integrates different approaches about URMI and chalk out a framework for incorporating ethics into economics.
    Keywords: Ethics, utility, methodological individualism, framework, economics
    JEL: D6 D71 Z13
    Date: 2013–07–15
  9. By: Gigante, Anna Azzurra
    Abstract: By investigating the connection between mind working and institutional processes, Institutional Cognitive Economics turns out to be the most appropriate in order to overcome some limits in New Institutional Economics. This leads us to develop further this approach. This paper integrates F. Hayek’s theory on knowledge production and A. Bandura’s social cognitive theory with the fertile contributions coming from Self-Organization approach and cognitive path-dependence, by considering also the recent cognitive acquisitions in D. North’s analysis. Then, it proposes a further development. Learning process is broken into smaller sub-processes, each of them is investigated through new analytical tools coming from cognitive psychology and neurobiology. They are T. Higgins’s extension of social cognitive theory and semantic priming concept. These mechanisms clarify well reinforcement and evolution processes of institutional norms, while their genesis finds a convincing explanation in social representations’ theory, as it was formulated by S. Moscovici, which investigates the imaginative dimension ordering perceived data before they are processed into new knowledge.
    Keywords: cognitive path-dependence; institutions; knowledge activation/use; semantic priming; social cognitive theory; social representation.
    JEL: A12 B25
    Date: 2013–07–15
  10. By: Dobrescu, Emilian (Centre for Macroeconomic Modelling, NIER, Romanian Academy)
    Abstract: The capacity of input-output tables to reflect the structural peculiarities of an economy and to forecast, on this basis, its evolution, depends essentially on the characteristics of the matrix A—matrix of I-O (or technical) coefficients. However, the temporal behaviour of these coefficients is yet an open question. In most applications, the stability of matrix A is usually admitted. This is a reasonable assumption only for a short-medium term. In the case of longer intervals, the question is much more complicated. We shall empirically discuss this problem by using Romanian input-output tables. Our statistical option was motivated inter alia by the existence of official annual data for two decades (1989–2009). As an introduction, Sect. 1 characterises the general framework of paper. Section 2—The main characteristics of I-O coefficients as statistical time series—examines the variability of technical coefficients expressed in both volume and value terms. The analysis is convergent to other previous works, confirming that the evolution of these coefficients in real and nominal terms is roughly similar. The main finding of this section is that, on one hand, the I-O coefficients are volatile, but on the other, they are serially correlated. Consequently, Sect. 3—Attractor hypothesis—examines a possible presence of attractors in corresponding statistical series. The paper describes a methodology to approximate these using new indicators obtained by summation—in columns and rows—of the technical coefficients (colsums scaj and rowsums srai). The RAS method is involved as a connecting technique between these indicators and sectoral data. Section 4—Conclusions—presents the main conclusions of the research and outlines several possible future developments. The database and econometric analysis are presented in Statistical and Econometric Appendix.
    Keywords: I-O coefficients; Volatility; Serial correlation; Attractor; RAS technique
    JEL: C12 C32 C43 C67
    Date: 2013–06
  11. By: Geoffrey G. Jones (Harvard Business School, General Management Unit)
    Abstract: This working paper examines the evolution of concepts of the responsibility of business in a historical and global perspective. It shows that from the nineteenth century American, European, Japanese, Indian and other business leaders discussed the responsibilities of business beyond making profits, although until recently such views have not been mainstream. There was also a wide variation concerning the nature of this responsibility. This paper argues that four factors drove such beliefs; spirituality, self-interest; fears of government intervention; and the belief that governments were incapable of addressing major social issues.
    Date: 2013–07
  12. By: Ćwiklicki, Marek; Alcouffe, Alain
    Abstract: The purpose of the paper is to fulfill and to refine the role of consultancy and professional bodies in dissemination of management innovations in the Inter- and Postwar Period that was in these days scientific management in Europe. The proposition is set upon the case of French consultancies and organizing bodies (i.e. professional societies and associations) and their activities to popularize the scientific management movement with a special reference to the Henry Bernaténé’s output.
    Keywords: business history, dissemination, management innovation, consultancy
    JEL: B2 B3 M1
    Date: 2013
  13. By: Sabina Alkire, Ruth Meinzen-Dick, Amber Peterman, Agnes R. Quisumbing, Greg Seymour and Ana Vaz
    Abstract: The Women's Empowerment in Agriculture Index (WEAI) is a new survey-based index designed to measure the empowerment, agency, and inclusion of women in the agricultural sector. The WEAI was initially developed as a tool to reflect women's empowerment that may result from the United States government's Feed the Future Initiative, which commissioned the development of the WEAI. The WEAI can also be used more generally to assess the state of empowerment and gender parity in agriculture, to identify key areas in which empowerment needs to be strengthened, and to track progress over time. The WEAI is an aggregate index, reported at the country or regional level, based on individual-level data collected by interviewing men and women within the same households. The WEAI comprises two subindexes. The first assesses the degree to which women are empowered in five domains of empowerment (5DE) in agriculture. It reflects the percentage of women who are empowered and, among those who are not, the percentage of domains in which women enjoy adequate achievements. These domains are (1) decisions about agricultural production, (2) access to and decision-making power about productive resources, (3) control of use of income, (4) leadership in the community, and (5) time allocation. The second subindex (the Gender Parity Index [GPI]) measures gender parity. The GPI reflects the percentage of women who are empowered or whose achievements are at least as high as the men in their households. For those households that have not achieved gender parity, the GPI shows the empowerment gap that needs to be closed for women to reach the same level of empowerment as men. This technical paper documents the development of the WEAI and presents pilot data from Bangladesh, Guatemala, and Uganda, so that researchers and practitioners seeking to use the index in their own work would understand how the survey questionnaires were developed and piloted, how the qualitative case studies were undertaken, how the index was constructed, how various indicators were validated, and how it can be used in other settings.
    Date: 2013–02
  14. By: Behrooz Hassani-Mahmooei , Behrooz; Vahabi, Mehrdad
    Abstract: Borrowing from public choice literature, while aristocratic civil wars can be regarded as anarchy, and the monopoly of violence by the state as Leviathan, duel of honor is an orderly anarchy. The sudden or gradual withering of duel of honor as an institution marks the transition to the monopoly of violence by the state in Europe. In this paper, we endeavor to capture this transition by introducing a computational model where a simulated agent considers three sets of factors to make its dueling decision: 1) its own characteristics such as dueling skill; 2) its identity such as the reaction received from other members of its own social group; and finally 3) the reaction of the authority such as the possible punishment that could be inflicted by the state against dueler. These factors then interact through a dynamic utility function affected by both optimization and learning processes. The results of our agent-based computational model which are validated against the historical evidence from England, France, and Germany show that a complex, aggregative historical process may be consistently explained on the basis of rational choice of heterogeneous individual agents conditioned by their group identity and authority (organizational) influence.
    Keywords: Agent-based Computational Economics, Conflict theory, Duel of honor, Identity Economics, Orderly anarchy
    JEL: C6 C63 D2 D7 D74 N43 P16
    Date: 2013–01
  15. By: Vitor Castro (University of Coimbra, GEMF and NIPE, Portugal); Megumi Kubota (The World Bank)
    Abstract: Whether the likelihood of a credit boom ending is dependent on its age or not, or whether the respective behavior is smooth or bumpy are important issues to which the economic literature has not given attention yet. This paper tries to fill that gap, exploring those issues with a proper duration analysis. Credit booms are identified considering two criteria well established in the literature: (i) the Mendoza-Terrones criteria and (ii) and the Gourinchas-Valdes-Landarretche criteria. A continuous-time Weibull duration model is employed over a group of 71 countries for the period 1975q1-2010q4 to investigate whether credit booms are duration dependent or not. The findings show that the likelihood of credit booms ending increases over their duration and that these events have become longer over the past decades. In addition, the paper extends the baseline Weibull duration model in order to allow for change-points in the duration dependence parameter. The empirical findings support the presence of a change-point: increasing positive duration dependence is observed in booms that last less than eight to ten quarters, but it becomes decreasing or even irrelevant for longer events. Analogous results are found for those credit boom episodes that are followed by systemic banking crisis (bad credit booms). The findings also show that credit booms are, on average, longer in industrial than in developing countries.
    Keywords: Credit booms, duration analysis, Weibull model, duration dependence, changepoints.
    JEL: C41 E32 E51
    Date: 2013–07

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