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on Heterodox Microeconomics |
| By: | Philip Du Caju (National Bank of Belgium, Research Department); Theodora Kosma (Bank of Greece); Martina Lawless (Central Bank of Ireland); Julian Messina (World Bank; Universitat de Girona); Tairi Rõõm (Eesti Pank, Estonia) |
| 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: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201312-251&r=hme |
| By: | Rob H., Grieve |
| Abstract: | We investigate Adam Smith’s analysis of the properties of what he called “productive” - as against “unproductive” - labour, a concept which commentators have frequently found problematic. Puzzles have been noted and inconsistency alleged. A question arises – did Smith confuse two different concepts of productive labour? We believe that, despite the apparent problems, a coherent reading of Smith’s account of productive and unproductive labour is in fact possible: if “productive labour” is understood to refer comprehensively to labour which not only maintains but, through producing a net surplus, adds to the community’s stock of wealth – as regards either the financial or the real resources which make possible economic growth – the difficulties with Smith’s treatment largely disappear. |
| Keywords: | Productive/Unproductive Labour, Basic/Non-basic Goods, Surplus Production, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:447&r=hme |
| By: | Kurt Dopfer |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2013-08&r=hme |
| By: | Ulrich Witt |
| Abstract: | The label "evolutionary" is currently used in economics to describe a variety of theories and topics. Far from inspiring the paradigmatic shift envisioned by some of the early proponents of evolutionary economics, the patchwork of theories and topics in this field demonstrates the need of an overarching interpretative frame. In other disciplines, the adoption of the Darwinian theory of evolution extended by hypotheses on cultural evolution has led to such a paradigm shift. This paper explores what can be accomplished by adopting that theory as an interpretative frame also for economics. Attention is directed in particular to the modalities of causal explanations that are germane to such a frame. The relevance of these modalities to the various thematic and theoretical specializations carrying the label "evolutionary" in economics is established to demonstrate the suitability as a common frame. Moreover, these modalities suggest a criterion on the basis of which evolutionary research can be distinguished from non-evolutionary research in economics. The case of institutional economics is used to outline some implications in an exemplary fashion. |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2013-09&r=hme |
| By: | PARYS, Wilfried |
| Abstract: | In the period 1907-1912 the German ‘pure mathematicians’ Oskar Perron and Georg Frobenius developed the fundamental results of the theory of nonnegative matrices. Today Perron-Frobenius mathematics enjoys wide applications in many fields, for example in economics, probability theory, demography and even in Google’s ranking algorithm. In linear economic models of the Leontief-Sraffa type it is often the crucial tool to solve many mathematical economic problems. My paper concentrates on the history of Perron-Frobenius in linear economics, and some related stories. In the 1910s and 1920s, several pioneering publications in linear economics could have benefited from applying Perron-Frobenius results, but failed to do so, even the economic publications authored by the mathematicians Georg Charasoff, Hubert Bray and Robert Remak. Either they didn’t know Perron-Frobenius, or they didn’t realize its usefulness. The only exception was the French Jesuit mathematician Maurice Potron, who used Perron-Frobenius mathematics in the core of his economic model, in many of his writings, as early as 1911. He constructed a sort of disaggregated open input-output system, formulated duality theorems between his quantity system and his price system, and anticipated the Hawkins-Simon conditions. Potron’s economic or mathematical contemporaries didn’t recognize his originality. A general treatment of Charasoff’s economic system needs Perron-Frobenius mathematics, especially Perron’s Limit Lemma. Although some of Charasoff’s mathematical interests (irreducibility, continued fractions) were close to those of Perron or Frobenius, the theory of nonnegative matrices is never explicitly used in Charasoff’s work. It is doubtful whether Charasoff knew the relevant matrix theorems. Probably he just assumed that the properties of his numerical examples with three commodities also hold in the general case with n commodities. Frobenius had been Remak’s doctoral supervisor in 1911. After a forgotten non-mathematical paper in 1918, on the repayment of the national debt, Remak presented his mathematical system of ‘superposed prices’ in 1929, twelve years after Frobenius’ death. With suitable units of measurement, Remak’s system can be handled by Perron-Frobenius tools. However, Remak failed to normalize his units, and provided lengthy proofs of his own. Moreover, he spent most of his mathematical efforts on freak systems in which the most important commodities have zero prices. A few years earlier, in 1922, Bray also had overlooked Perron-Frobenius in a mathematically similar model that studied Cournot’s equations of currency exchange. Contrary to Dorfman’s well-known article on Leontief’s Nobel Prize in 1973, I provide archival evidence that Leontief knew Remak’s results already in the early 1930s, before he submitted a paper containing ideas of input-output theory to Keynes for the Economic Journal in 1933. Keynes quickly rejected Leontief’s paper; a few months later Leontief submitted it to Frisch for Econometrica. Frisch formulated a lot of critical remarks on Leontief’s first and revised version in 1933-34. In the light of this criticism, it is highly probable that Leontief simplified and linearized his mathematics, and a few years later he finally started publishing his Nobel Prize winning empirical and theoretical results in American journals. Just like Leontief, Sraffa started related research in the late 1920s. He didn’t discuss his mathematical problems with competent economic colleagues in Cambridge, nor with the specialists of the Econometric Society, but preferred mathematical help from three non-economists: Ramsey, Watson and especially Besicovitch. I suggest that Besicovitch in his early mathematical research in Russia ‘came close’ to Perron-Frobenius results, but it is well-known that he didn’t know Perron-Frobenius, and tried to invent his own proofs for Sraffa in the 1940s. In the first half of the twentieth century, abstract algebra started to flourish and became a more prestigious and widely researched subject than the ‘old-fashioned’ Perron-Frobenius matrices. In this context, it is less surprising that for many decades even the mathematicians (except Potron) overlooked the usefulness of Perron-Frobenius in linear economics. Results, connections or applications that seem evident after the fact, were not obvious to the original pioneers. |
| Keywords: | Perron-Frobenius, Charasoff, Potron, Bray, Remak, Leontief, Sraffa, Nonnegative matrices, Input-output analysis |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2013030&r=hme |
| By: | Miguel Ramirez (Department of Economics, Trinity College) |
| Abstract: | This brief paper argues that the total turnover period of capital, comprising both its time of production and circulation, has been almost totally ignored in the Marxian literature as an important counteracting factor to the law of the declining rate of profit. It is not mentioned at all by Marx in his famous Chp. XIV, Vol. III of Capital where he discusses other important counteracting forces, nor by Engels [in this particular context] who edited both Vols. II and III. Moreover, this note contends that had Marx lived to re-write Vols. II and III, he would have explicitly connected the expanding role of credit [associated with the development of capitalism] to a significant reduction in the turnover period of capital, thereby boosting the rate of surplus-value, and countering, in an highly erratic and contradictory manner, the fall in the rate of profit. |
| JEL: | B10 B14 B24 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:tri:wpaper:1319&r=hme |
| By: | Malcolm Dunn |
| Abstract: | This book deals with the inner life of the capitalist firm. There we find numerous conflicts, the most important of which concerns the individual employment relationship which is understood as a principal-agent problem between the manager, the principal, who issues orders that are to be followed by the employee, the agent. Whereas economic theory traditionally analyses this relationship from a (normative) perspective of the firm in order to support the manager in finding ways to influence the behavior of the employees, such that the latter – ideally – act on behalf of their superior, this book takes a neutral stance. It focusses on explaining individual behavioral patterns and the resulting interactions between the actors in the firm by taking sociological, institutional, and above all, psychological research into consideration. In doing so, insights are gained which challenge many assertions economists take for granted. |
| Keywords: | Principal Agent Relation, Firm Behaviour, Evolutionary Economics, Transaction Costs, Conflict Management |
| JEL: | D21 D23 L2 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:pot:pestud:01&r=hme |
| By: | Kristinn, Hermannsson |
| Abstract: | It is a well-established fact in the literature on simulating Input-Output tables that mechanical methods for estimating intermediate trade lead to biased results where cross-hauling is underestimated and Type-I multipliers are overstated. Repeated findings to this effect have led to a primary emphasis on advocating the accurate estimation of intermediate trade flows. This paper reviews previous research and argues for a qualification of the consensus view: When simulating IO tables, construction approaches need to consider spill-over effects driven by wage and consumption flows. In particular, for the case of metropolitan economies, wage and consumption flows are important if accurate Type-II multipliers are to be obtained. This is demonstrated by constructing an interregional Input-Output table, which captures interdependencies between a city and its commuter belt, nested within the wider regional economy. In addition to identifying interdependencies caused by interregional intermediate purchases, data on subregional household incomes and commuter flows are used to identify interdependencies from wage payments and household consumption. The construction of the table is varied around a range of assumptions on intermediate trade and household consumption to capture the sensitivity of multipliers. |
| Keywords: | Input-Outpu, Location Quotients, Commuting, Consumption, Glasgow, Scotland, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:451&r=hme |
| By: | Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Christian Le Bas (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Nicolas Poussing (CEPS/INSTEAD - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development) |
| Abstract: | This paper explores the relationship between corporate social responsibility (CSR) and innovation from a firm strategic perspective. Matching Community Innovation Survey data with specific data collected about the CSR behaviour of Luxembourg firms, the authors identify two types of firms (strategic versus responsive) that differ in the intensity of their CSR adoption. A bivariate probit model, estimated to explain the different types of technological innovations (product and/or process), shows that firms with strategic CSR profiles are more likely to innovate in both products and processes. In contrast, adopting responsive CSR practices significantly alters firms' innovation, such that CSR may create barriers to innovation. These results have implications for theory and offer managerial recommendations for firms designing their innovation strategies. |
| Keywords: | Corporate social responsibility; Innovation; Product; Process;Strategic profiles |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00918528&r=hme |
| By: | Neil M., Kay |
| Abstract: | This paper looks at the emergence of what is described here as the QWERTY family of standards (QWERTY and its international adaptations QZERTY, AZERTY, and QWERTZ). QWERTY has been described as an inferior solution and an accident of history. However, the analysis here finds that each member of the family represented highly efficient adaptations to specific user needs and technical challenges encountered in their own environments. These findings may be seen to have wider implications given QWERTY’s role as paradigm case in the literature on increasing returns and path dependence, and these are pursued in the paper |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:468&r=hme |
| By: | Liang, H.; Renneboog, L.D.R. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: We investigate the roles of legal origins and political institutions – believed to be the fundamental determinants of economic outcomes – in corporate social responsibility (CSR). We argue that CSR is an essential path to economic sustainability, and document strong correlations between country-level sustainability ratings and various extensive firm-level CSR ratings with global coverage. We contrast the different views on how legal origins and political institutions affect corporations’ tradeoff between shareholder and stakeholder rights. Our empirical evidence suggest that: (a) Legal origins are more fundamental sources of CSR adoption and performance than firms’ financial and operational performance; (b) Among different legal origins, the English common law – widely believed to be mostly shareholder-oriented – fosters CSR the least, (c) Within the civil law countries, firms of countries with German legal origin outperform their French counterparts in terms of ecological and environmental policy, but the French legal origin firms outperform German legal origin companies in social issues and labor relations. Companies under the Scandinavian legal origin score highest on CSR (and all its subfields); (d) Political institutions – democratic rules and constraints to political executives – are not preconditions for CSR and sustainability, and sometimes even hinder CSR implementation. Our results are robust after controlling for corporate governance, culture, firm-level financial performance and constraints, and different indices of political institutions. |
| Keywords: | Corporate social responsibility;sustainability;legal origins;political institutions;shareholder orientation;stakeholder orientation |
| JEL: | G30 K22 M14 O10 O57 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013070&r=hme |
| By: | Max Albert (University of Gießen) |
| Abstract: | Sugden (2000) offers an answer to the question of how unrealistic models can be used to explain real-world phenomena: by considering a set of unrealistic models, one may conclude that a result common to these models also holds for a realistic model that, however, is too complex to be analyzed, or even just stated, explicitly. This is a kind of robustness argument. Sugden argues that the argument is inductive and that the methodological strategy is inconsistent with received methodological views. This paper argues that Sugden’s argument is in need of improvement, that the improved version is deductive, and that the methodological strategy, if applied with care, fits well into one of the received views dismissed by Sugden, namely, hypothetico-deductivism, or the the testing view of science. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201352&r=hme |
| By: | Moodysson , Jerker (CIRCLE, Lund University); Sack , Lionel (CIRCLE, Lund University) |
| Abstract: | Previous research has shown that firms react differently to the same institutional configurations due to their different backgrounds. This study examines a regional economy in France in which 300 firms are operating under the same framework conditions and have done so over a long period. From observations we argue that even when all previously respected factors and backgrounds are identical between firms, their responses to the institutional configuration will diverge and bring them on different development trajectories. We identify four distinct groups of observed trajectories, and argue for specific endogenous and exogenous factors that make firms from those groups within the institutional configuration react differently. The observed different responses to the established institutional framework are likely to be increasingly visible at times of or around major external change events affecting the industry as a whole (such as global financial crises, emergence or decline of markets etc.) |
| Keywords: | institutions; stability; innovation; transformation; regional development |
| JEL: | D21 D22 L66 O31 |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_040&r=hme |
| By: | Guffarth, Daniel; Barber, Michael J. |
| Abstract: | We describe the development of the European aerospace R&D collaboration network from 1987 to 2013 with the help of the publicly available raw data of the European Framework Programmes and the German Förderkatalog. In line with the sectoral innovation system approach, we describe the evolution of the aerospace R&D network on three levels. First, based on their thematic categories, all projects are inspected and the development of technology used over time is described. Second, the composition of the aerospace R&D network concerning organization type, project composition and the special role of SMEs is analyzed. Third, the geographical distribution is shown on the technological side as well as on the actor level. A more complete view of the European funding structure is achieved by replicating the procedure on the European level to the national level, in our case Germany. -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:842013&r=hme |
| By: | Brandstetter, Laura; Jacob, Martin |
| Abstract: | This paper studies the effect of corporate taxes on investment. Using firm-level data on German corporations, we investigate the 2008 tax reform that cut corporate taxes by 10 percentage points. We expect heterogeneous investment responses across firms, since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms. Using a matching difference-in-differences approach, we show that, following the corporate tax cut, domestically owned firms increased investments to a larger extent than foreign-owned firms. Our results imply that corporate tax changes can increase corporate investment but have heterogeneous investment responses across firms. -- |
| Keywords: | Corporate taxation,Investment |
| JEL: | G31 H24 H25 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:153&r=hme |