nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒09‒25
nineteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. "Distribution-led Growth in the Long Run" By Michalis Nikiforos
  2. On the Cambridge, England, Critique of the Marginal Productivity Theory of Distribution By Geoff C. Harcourt
  3. Classical Competition and Freedom of Contract in American Laissez Faire Constitutionalism By Nicola Giocoli
  4. European civil societies compared: Typically German? Typically French? By Edith Archambault; Eckhardt Priller; Annette Zimmer
  5. Application of Minsky’s theory to state-dominated economies By Yulia Vymyatnina; Mikhail Pakhnin
  6. The influence of creative industry definitions on subsector typologies By Bruno Pires; Ricardo Morais
  7. Structures and dynamics of transnational cooperation networks: evidence based on Local Action Groups in the Veneto Region By Pisani, Elena; Burighel, Laura
  9. Intentionality and technological and institutional change: Implications for economic development By Muñoz, Félix; Encinar, María Isabel; Fernández-de-Pinedo, Nadia
  10. Alcune riflessioni sul governo tecnico. By Marco Boccaccio
  11. Offshoring and the Shortening of the Quality Ladder: Evidence from Danish Apparel By Valérie Smeets; Sharon Traiberman; Frederic Warzynski
  12. Composite Input-Output Production Functions By Randall W. Jackson
  13. Putting the Blame on Governments: Why Firms and Governments have Failed to Advance the Guiding Principles on Business and Human Rights By Susan Ariel Aaronson; Ian Higham
  14. Sons and Daughters: Parental Beliefs and Child Behaviour (Evidence from the UK Millennium Cohort Study) By Gurleen Popli; Aki Tsuchiya
  15. Who wants the contrat de travail unique ? Social support for labour market flexibilisation in France By Bruno Amable
  16. The Media and Markets: How Systematic Misreporting Inflates Bubbles, Deepens Downturns and Distorts Economic Reality By Theil, Stefan
  17. More facts about prices: France before and during the Great Recession By Nicoletta Berardi; Erwan Gautier; Hervé Le Bihan
  18. La erosión del orden neoliberal del mundo By NU. CEPAL. Subsede de México
  19. Beyond the remittances-driven economy: Notes as if the long run mattered By Felipe M. Medalla; Raul V. Fabella; Emmanuel S. de Dios

  1. By: Michalis Nikiforos
    Abstract: The paper examines the long-run fluctuations in growth and distribution through the prism of wage-and profit-led growth. We argue that the relation between distribution of income and growth changes over time. We propose an endogenous mechanism that leads to fluctuations between wage- and profit-led periods. Our model is a linear version of Goodwin's predator–prey model, but with a reversal of the roles for predator and prey: the growth rate acts as the predator and the distribution of income as the prey. These fluctuations need to be taken into account when someone estimates empirically the effect of a change in distribution on utilization and growth. We also examine our argument in relation to the double movement of Karl Polanyi, the Kuznets curve, and the theories of long swings proposed by Albert Hirschman and Michal Kalecki.
    Keywords: Distribution-led; Long Swings; Oscillations; Predator-prey
    JEL: B22 E11 E12 E21 E22 E32
    Date: 2014–09
  2. By: Geoff C. Harcourt (School of Economics, Australian School of Business, the University of New South Wales)
  3. By: Nicola Giocoli
    Abstract: It is impossible to tell the history of American antitrust law and economics during the so-called formative era (1890- 1915) without a preliminary understanding of the economic rationale underlying that major phase of American constitutional law commonly called laissez faire constitutionalism, or Lochner era. The essay is a preliminary effort to locate such a rationale in the almost perfect overlap between classical political economy, especially the notion of competition as the supreme organizing principle of thriving societies, and classical liberalism, in particular the notion of liberty of contract. It is argued that the well-known Progressive interpretation of the Lochner era fails to recognize the true meaning and extent of this overlap. The protagonists of our story are economists Adam Smith, John Stuart Mill and Francis Wayland, and Supreme Court Justices James Wilson, Oliver Wendell Holmes and Rufus Peckham.
    Date: 2014–06–10
  4. By: Edith Archambault (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Eckhardt Priller (WZB - Wissenschaftszentrum fur Sozialforschung - Forschungsverbund Berlin e.V. (FVB), Institut fur Politikwissenschaft - Ludwig Maximilians Universität München); Annette Zimmer (WZB - Wissenschaftszentrum fur Sozialforschung - Forschungsverbund Berlin e.V. (FVB), Institut fur Politikwissenschaft - Ludwig Maximilians Universität München)
    Abstract: France and Germany rely on different historic, religious, administrative and political traditions. In spite of these fundamental differences which should structure the non profit sector of every country, according to the theory of social origins (Salamon1998), the German and French thirdsectors converged during the last decade. They are closer by their economic weight, their composition, the growth of their volunteers and their relations with public authorities more competitive. Two differences remain however: a higher rate of membership and a more important weight of the foundations in Germany
    Keywords: Civil society ; associations ; foundations ; volunteering ; membership ; social origin theory ; France ; Germany
    Date: 2013–01–25
  5. By: Yulia Vymyatnina; Mikhail Pakhnin
    Abstract: The global financial crisis of 2007–2008, consequences of which continue to adversely affect the world economy, is often called a ‘Minsky crisis’. A prominent American economist Hyman Philip Minsky studied capitalist economic system paying special attention to its major properties, in particular, instability and high importance of money. He developed a consistent way to explain the nature of economic crises, which, according to him, are generated through financial mechanisms. Minsky’s financial instability hypothesis states that the fragility of financial system increases in periods of booms and thus crises arise from the very structure of business cycles. In this paper we give a short review of Minsky’s ideas and show that the last financial crisis could be persuasively explained in the framework of financial instability hypothesis. Moreover, we provide the extension of Minsky’s hypothesis and apply his insights to the ‘state-dominated economies’. Interesting and vivid examples of such economies are modern Russian economy (characterized by weak institutions, resource curse and dominance of state-related companies in the financial as well as non-financial sectors) and planned economy of the Soviet Union. We analyze the financial crisis 2008–2009 in Russia and the breakdown of the USSR and argue that these events could be interpreted along Minsky’s line of argument.
    Keywords: Hyman Minsky, financial crisis, financial instability hypothesis, endogenous money, planned economies, fall of the USSR, theory of money, business cycles, Minsky moment
    JEL: B50 E12 E32 E42 E44 E5 E60 G01 P2
    Date: 2014–08–22
  6. By: Bruno Pires (Escola das Artes, Universidade Católica Portuguesa - Porto); Ricardo Morais (Faculdade de Economia e Gestão, Universidade Católica Portuguesa - Porto)
    Abstract: In this conceptual article we explore the influence of creative industry definitions on subsector typologies. Based on a systematic literature review of the Creative Industries Journal, we examine alternative creative industry definitions, criteria, subsector typologies, and streams of thought. As a corollary of such a literature review, we suggest a theoretical framework – the Value/Scale matrix – which distinguishes four types of creative industries. In particular, we distinguish between creative and cultural activities as well as between creative and cultural industries. Our distinction is based on the degree of value added and the scale of operations. We conclude with a discussion of the theoretical and practical implications of such a framework.
    Keywords: creative industries, cultural industries, literature review, value/scale matrix
    Date: 2014–07
  7. By: Pisani, Elena; Burighel, Laura
    Abstract: The paper assesses the structures and the dynamics of transnational cooperation projects promoted by Local Action Groups (LAGs) in different periods (from LEADER II to LEADER Axis) using Social Network Analysis (SNA) in a specific case study: the Veneto region in Italy. The classical indexes of SNA have been critically examined, moreover the paper presents innovative indexes able to capture the peculiarity of transnational cooperation: disaggregated densities of the network and transnational centrality of the node. These indexes are useful in order to quantify how transnational a network actually is, and to measure the power-information that each actor (LAG) can acquire through its transnational contacts. The methodology can become an instrument for Managing Authorities to implement new forms of evaluation of transnational cooperation of LAGs.
    Keywords: rural, transnational cooperation, LEADER, social network analysis, evaluation, Community/Rural/Urban Development, O22, O18,
    Date: 2014
  8. By: Natalia Mayorova (Modern tradng "North-South" Department - Moscow State University of Food Production)
    Abstract: The article analyses theoretical questions on the formation of new economic relations structures connected with the organization and provision of educational services. It is shown that modern educational functionality has led to the separation of the educational space category as part of social space with the corresponding economic relations and motives which will objectively predetermine the priority trends of the development of an education system. Processes of interaction between a society and an intellectual elite are carried out by means of various mechanisms, and the roots of this interaction lie in society's traditional social institutes.
    Date: 2014
  9. By: Muñoz, Félix (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Encinar, María Isabel (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Fernández-de-Pinedo, Nadia (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: The interactive implementation of agents’ intentional actions generates new combinations that are at the base of structural change and complexity and produce unexpected consequences. An interesting case of study is provided by the absorption of new technology strategies for development. A common hypothesis is that development requires an institutional arrangement that allows for the exploitation of imported technology. However, historical examples (such as Cuba in the nineteenth century) show how the technological choices of highly innovative entrepreneurial élites may generate a trap of development even though institutions are conveniently adapted to accommodate new technology. To understand the nature of this type of development trap, we introduce a micro-meso-macro analytical approach based on Dopfer & Potts (2008). Institutions and technology are meso rule trajectories that coevolve in an emergence-dissemination-retention process that interacts with both micro units (purposeful entrepreneurs) and the emergent macro properties of the system (development). Within this framework, it is shown how such a strategy for development may result in underdevelopment. The explanation is that, under special circumstances, the de-coordination and re-coordination processes of meso trajectories may be unable to generate enough variety to feed the evolutionary process, and they thereby catch agents in such a “techno-institutional trap”.
    Keywords: intentionality; institutional change; techno-institutional traps; development
    JEL: B52 O10 O33 N16 N26
    Date: 2014–09
  10. By: Marco Boccaccio (Università di Perugia)
    Abstract: The appointment of a “technical government” in Italy in 2011 raised many criticism, mostly related to its lack of democratic legitimacy. The peculiar nature of this government has been justified with the risk of default of Italy which the “normal” political processes were assumed unable to avoid. In this article the justification based on emergency is related to Carl Schmitt’s theory of dictatorship. The hypothesis of this article is that technical government(s) are tools of a more comprehensive social and political change towards a society based on the bureaucratisation of wider aspects of social and political life, objective evaluations, meritocracy.
    Keywords: Economia e istituzioni, Teoria delle decisioni politiche, Tecnocrazia.
    JEL: A13 D71 D72
    Date: 2014–09
  11. By: Valérie Smeets; Sharon Traiberman; Frederic Warzynski
    Abstract: Recently a small and growing empirical literature has attempted to analyze the role that quality plays in our understanding of trade. In particular, the recent work of Khandelwal (2010) has brought the insights of structural IO models of demand to bear into trade data. Our work builds on this new structural literature; we use similar demand estimation techniques on a panel of Danish apparel firms from 1997 to 2010 in order to analyze how firms responded to China's entry to the WTO and the dismantling of the Multi-Fibre Agreement. We explore the implications of offshoring and import competition on the distribution of apparel quality within Denmark, and demonstrate the firm-level mechanisms that induced the observed aggregate changes. In particular, we show that the quality ladder tightens in response to trade shocks as initially low quality firms upgrade their quality relative to other firms while initially middle and high quality downgrade their output quality. An important qualification is that the quality of exports from the source country is a key determinant in both the uptake of offshoring and resultant decisions regarding quality. Finally, import competition appears to spur entry of higher quality firms and exit of lower quality producers. Nevertheless, the reallocation pattern is imperfect, suggesting that two sources of heterogeneity – the productivity and the quality margin - are key to understanding these patterns.
    Keywords: Quality;Offshoring;Firm Heterogeneity
    JEL: F14 D24
    Date: 2014–09
  12. By: Randall W. Jackson (Regional Research Institute, West Virginia University)
    Abstract: This document describes the algorithm used for creating an aggregated linear production function for an industry by weighting subsector production functions. The result can be used as a column in an interindustry (IxI) coefficients table or in a standard Use table (CxI) depending on the units (C or I) of the input data.
    Keywords: IO
    JEL: C67 R15
    Date: 2013–08–09
  13. By: Susan Ariel Aaronson (Department of Economics/Institute for International Economic Policy, George Washington University); Ian Higham (EIRIS)
    Date: 2014–06
  14. By: Gurleen Popli (Department of Economics, University of Sheffield); Aki Tsuchiya (Department of Economics, University of Sheffield)
    Abstract: An extensive literature exists exploring the determinants of child behaviour, with increasing interest in its links with parental characteristics and beliefs. In this paper we explore a particular aspect of this relationship by looking at the parents' beliefs regarding how to treat boys and girls. A question in the third wave of the UK Millennium Cohort Study asks both the mother and father of 5-year olds whether they agree to the statement: 'Sons in families should be given more encouragement than daughters to do well at school'. We model both the determinants of parent's beliefs, as captured by this question; and the impact of these beliefs on the behaviour of 7 year old boys and girls, separately. The key findings of the paper suggest that parental agreement to the above statement does not have an impact on boys' behaviour; however, it has a detrimental impact on the behaviour of girls.
    Keywords: non-cognitive outcomes; parental beliefs; gender; ethnicity
    JEL: J13 J16 I31
    Date: 2014–09
  15. By: Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: A policy proposal is to abolish the distinction between regular open-end employment contracts and fixed-term contracts and substitute a unique labour contract with a degree of employment protection increasing with tenure. A question on the desirability of the "contrat unique" was included in the 2012 post-electoral survey. Using the answers to this question, this paper proposens an empirical analysis of the possible social basis for the contrat unique. Insider/outsider theories would predict that insiders would oppose such a reform whereas outsiders would welcome it. Beyond the theoretical and empirical problems associated with the definition and identification of insiders and outsiders, the results of the estimations do not bring an overwhelming support for the insider/outsider theories. The bulk of the social support for the CTU is made of "insiders". The social support for the contrat unique resembles the traditional social base of the Right with the addition of some "outsiders".
    Keywords: Contrat unique/single labour contract; insider/outsider; political economy
    Date: 2013–01
  16. By: Theil, Stefan
    Date: 2014
  17. By: Nicoletta Berardi (Centre de recherche de la Banque de France - Banque de France); Erwan Gautier (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Hervé Le Bihan (Centre de recherche de la Banque de France - Banque de France,)
    Abstract: Using micro price data, we document new facts on price rigidity in France: (i) each month 20.1% of prices are changed, which compares with 24.1% in the United States. Excluding sales, however, the fraction of prices modified each month is about the same in France and in the United States (around 17%); (ii) the distribution of price changes is quite dispersed; (iii) the frequencies of price increases and decreases contribute a lot to inflation variations, and price increases are more frequent in January even when sales are excluded; (iv) sales contribute significantly to the volatility of inflation but are much less sensitive to macroeconomic fluctuations than regular price changes; (v) during the Great Recession patterns of price adjustment were only slightly modified.
    Keywords: Price stickiness; inflation; consumer prices; sales; product substitution
    Date: 2014–09–03
  18. By: NU. CEPAL. Subsede de México
    Date: 2013–08–22
  19. By: Felipe M. Medalla (School of Economics, University of the Philippines Diliman); Raul V. Fabella (School of Economics, University of the Philippines Diliman); Emmanuel S. de Dios (School of Economics, University of the Philippines Diliman)
    Abstract: This paper discusses the causes and consequences of the current trend in which a principal driver of growth is inward remittances by workers deployed overseas. The main benefit of the phenomenon is an easing of the fiscal burden arising from the effectively large transfer from workers to the government. On the other hand, the “Dutch Disease” it causes takes a longterm toll on the tradables sector. The paper concludes that the fiscal payoffs from the phenomenon are best used by reinvesting these in the foundations of domestic competitiveness—particularly education and focused infrastructure—to offset the worst effects of the trend and prepare prudently for the time it ends or reverses.
    Keywords: Philippine economy, labour migration, migrant remittances, remittances-driven economy, services sector, exchange rate, Dutch Disease, “divide-by- N” syndrome, transport infrastructure, political infrastructure cycle, political institutions
    JEL: B52 F22 F24 O24 O53 R42
    Date: 2014–08

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