nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒09‒06
nine papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Economic Analysis, Sustainability and Environmental Commons By Ignazio Musu
  3. From Sovereigns to Banks: Evidence on Cross-border Contagion (2006-2011) By Alesia Kalbaska
  4. Efficiency of Public Sector Organizations: Perspectives from Theories of Bureaucracy By Erkoc, Taptuk Emre
  5. Innovation and Income Inequality. By Antonelli, Cristiano; Gehringer, Agnieszka
  6. The new economics of the business case for sustainability By Michele Pinelli
  7. The Evolution of Knowledge Organization: The Emergence of Innovation Platform in the Turin Car System. By Patrucco, Pier Paolo
  8. Should I stay or should I go? Former CEOs as monitors By Andres, Christian; Fernau, Erik; Theissen, Erik
  9. Quel pasticciaccio brutto dell’euro By Sergio Cesaratto

  1. By: Ignazio Musu (Department of Economics, University of Venice Cà Foscari)
    Abstract: When confronted with market weaknesses and failures determining sustainability problems for environmental common-pool resources, economic analysis has proposed government intervention as the only alternative available. Elinor Ostrom showed that this dichotomy between market and government is not always helpful, and proposed a more complex approach to institutions focusing on an active role of communities, social norms and a polycentric system of governance. This paper summarizes the main factors at work in determining the role of institutions to deal with sustainability issues and explores the implications of this wider approach in dealing with environmental commons, particularly with global environmental commons, discussing two issues: climate change and biodiversity. Involvement of governments and a reference framework provided by intergovernmental agreements are necessary, but the difficulties of building a successful intergovernmental institutional framework require responsible and convinced actions at the level of consumers and firms, public opinion involvement in individual countries, and coordination between local and national levels of government: provided that some conditions are fulfilled, common resource management can be very helpful in achieving them.
    Keywords: Environment, Sustainability, Common-pool resources, Global environmental problems, Climate Change, Biodiversity
    JEL: B52 H0 H4 Q01 Q2 Q5
    Date: 2013
  2. By: Brian Lucey (Institute for International Integration Studies, Trinity College Dublin); Michael Daly (Institute for International Integration Studies, Trinity College Dublin)
    Abstract: TWe undertake a first benchmark study of economic literacy in Ireland using a panel of 700+ adults to assess the economic knowledge of respondents. Sources of economic information are analysed and ranked in order of usefulness. Accuracy of response in each section is analysed across each demographic variable; variance in performance based on age, gender, education, work background and other factors is analysed thoroughly. A comparative analysis is then undertaken in order to contrast the economic literacy of Ireland established through our representative sample with that already established through similar investigation of other jurisdictions.
    Keywords: economic literacy, economic indicators, surveys, Ireland, economics
    JEL: A20
  3. By: Alesia Kalbaska
    Abstract: This paper analyzes the evolution of the banking system sensitivity to cross-border contagion over the period of 2006-2011. The study is performed on the basis of the BIS data on crossborder exposures and the Bankscope data on Tier 1 capital of 20 banking systems (Australia, Austria, Belgium, Canada, Finland, France, Germany, Greece, India, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Sweden, Switzerland, Turkey, the UK and the US). Since the European sovereign debt crisis took a decisive turn at the end of 2009, markets started looking at its main protagonists - so called PIIGS (Portugal, Ireland, Italy, Greece and Spain) - with a lot of anxiety. However, unexpectedly, the analysis of the data shows that a single failure among PIIGS could be absorbed by the network in 2011. Nevertheless, multiple initial failures (especially combinations including Italy and/or Spain) could be more dangerous. The simulation results reveal that the resilience of banking systems to contagion risks tends to improve over the years. The most systemically important countries are those of the US, the UK, France and Germany. Besides, a shock to the US is capable of destroying the UK banking system already in the ?rst round, whereas the UK would not lead to the failure of the US banking system even after all rounds of contagion. The results also show that the banking systems of the US, Turkey and Finland are completely immune to contagion effects. At the same time, there exist considerable risks for Switzerland and Ireland as their banking systems default also with high recovery rates.
    Keywords: contagion, Furfine algorithm, stress testing, PIIGS
    JEL: F34 F37 G01 G15 G21
    Date: 2013–08
  4. By: Erkoc, Taptuk Emre
    Abstract: Economic insights on the provision of public goods and services by public sector organizations went hand in hand with probing questions on the efficient allocation of resources within them concerning neo-classical assumptions on the theory of firm (Coase, 1937; Alchian and Demsetz, 1972). The rationale behind the unprecedented divergences from the neo-classical firm postulations on the basis of not-to-operate at the efficient production frontier has attracted attentions of researchers working not only on the private firms but also on the public sector. This paper investigates theoretical underpinnings of efficient allocation of resources within public sector organizations on the basis of a variety of arguments. Before examining the (in) efficient usage of resources in the public sector that is mostly based on the theory of bureaucracy, methodological and practical challenges to measure the efficiency performances of public intuitions are visited. Subsequently, institutional framework on the public provision of goods and services is scrutinised referring particularly to the discussion on incentive schemes and efficiency.
    Keywords: Efficiency, Government Output, Public Sector Organizations, Bureaucracy
    JEL: D73 H11
    Date: 2013–08–30
  5. 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
  6. By: Michele Pinelli (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: This paper joins the debate on businessÕ role in the implementation of sustainable development and argues that firms are beginning to run more sustainable practices as these are becoming increasingly profitable. It is also argued that such evolution of the economics of social environmental performance is the result of a three stage dynamics which involves consumer awareness, industrial policies, new cost structures and stakeholdersÕ pressure. Moreover, it is also considered that such a phenomenon implies that corporations can be of huge help to regulations in the implementation of sustainability. Finally, by running analyses of the relevant literature on the business case for sustainability, this paper reconciles the mixed and inconclusive results which the academic research on the economic rationale of sustainability has always produced.
    Keywords: corporate social responsibility, sustainable development, social impact, environment, sustainability.
    JEL: M14 M21
    Date: 2013–09
  7. By: Patrucco, Pier Paolo (University of Turin)
    Abstract: The paper aims at explaining the changes in how economic actors and their organizations acquire and coordinate innovative and productive capabilities. Through the illustrative evidence of organizational change occurred in the automobile industry in the area of Turin over the last 50 years, the paper describes how transformations in the structure of interactions between firms are steered by the modification in the pattern of specialization and differentiation in the capabilities and technological skills of economic actors. The automobile system in Turin is characterized by the emergence of a distributed innovation platform, which is seen as a major innovation in the organization of innovation and technological knowledge in the system.
    Date: 2013–07
  8. By: Andres, Christian; Fernau, Erik; Theissen, Erik
    Abstract: In the German two-tiered system of corporate governance, it is not uncommon for chief executive officers (CEOs) to become the chairman of the supervisory board of the same company upon retirement. This practice has been discussed controversially because of potential conflicts of interest. As a member of the supervisory board the former CEO has to monitor his successor and former colleagues, and he is involved in setting their pay. We analyze a panel covering 150 listed firms over a 10-year period. Consistent with the existence of a leniency bias, we show that firms in which a former CEO serves on the supervisory board pay their executives significantly more. We further find weak evidence that the compensation of the members of the supervisory board is also higher. Short-run event study results indicate that the announcement of the transition of a retiring CEO to the supervisory board is considered as good news. Thus, despite the increases in executive compensation we document, CEO transitions are not a cause of concern for shareholders. --
    Keywords: Executive compensation,board structure,two-tiered board
    JEL: G30 G38
    Date: 2013
  9. By: Sergio Cesaratto
    Abstract: Il saggio illustra la spiegazione Classico-Kaleckiana della crisi dell’Eurozona domandandosi se essa sia un effetto indesiderato o possa, invece, rappresentare il dispiegamento dei veri obiettivi anti-sociali della moneta unica. Si esaminano poi le possibili vie d’uscita, inclusa quella di un massiccio “Piano Marshall” europeo di investimenti recentemente proposta dal sindacato tedesco. Quest’ultima soluzione ci appare inadeguata in quanto non tiene conto della più ampia dimensione della problematica della moneta unica e dei divergenti interessi nazionali in Europa. Altre due soluzioni – la più desiderabile via Keynesiana e quella, più densa di incognite, della rottura dell’euro – ci appaiono per ora non nell’ordine delle cose, a meno di un grave incidente che conduca dritti al secondo esito. Al momento la kossovizzazione della periferia europea appare come la prospettiva più probabile.
    Keywords: Europa, Unione Monetaria Europea, crisi europea, teoria del sovrappiù, Kalecki, Keynes, gold standard, scuola austriaca, Germania, sindacati tedeschi, rottura dell’euro
    JEL: B51 B53 E11 E12 F33 N14 N24
    Date: 2013–08

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