nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒10‒03
eighteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. One Million Miles to Go: Taking the Axiomatic Road to Defining Exploitation By Veneziani, Roberto; Yoshihara, Naoki
  2. Evolutionary Economics and Household Behavior By Charles Yuji Horioka
  3. There are several ways to incorporate evolutionary concepts into economic thinking. By Christian Cordes
  4. The Marxian and Veblenesque elements in how I do economics By Geoff C. Harcourt
  5. Integrating Input-Output and Life Cycle Assessment: Mathematical Foundations By Randall W. Jackson
  6. de Finetti's Theory of Probability and its Jaynesian Critique By K.Vela Velupillai
  7. Gender, Power and Property: “In my own right”. By Áine Macken-Walsh; Anne Byrne; Nata Duvvury; Tanya Watson
  8. Sociology and political science in the patrimonial society: implications of Piketty's Capital By Francois Bonnet; Clément Théry
  9. The U.S. economy today: between systemic crisis and permanent war By Rémy Herrera
  10. Hellas, Multiplied By Communism By Alexei Gloukhov
  11. Business in Genocide – Understanding the how and why of corporate complicity in genocides By Nora Stel
  12. Habitus Políticos en al Región de Antofagasta: Una propuesta Metodológica By Luis Miguel Rodrigo
  13. A Dynamic Exchange Rate Model with Heterogeneous Agents By Michele Gori; Giorgio Ricchiuti
  14. Defending the municipal electric services against privatization : a case study of Frankfurt am Main during the Weimar period By Mori, Takahito
  15. Financial big data analysis for the estimation of systemic risks By Paola Cerchiello; Paolo Giudici
  16. Behavioral Finance and Agent Based Model: the new evolving discipline of quantitative behavioral finance ? By Concetta Sorropago
  17. Relaciones laborales en Argentina. El caso Camioneros entre 1991-2011 By Pontoni, Gabriela A.
  18. "Can Child-care Subsidies Reduce Poverty? Assessing the Korean Experience Using the Levy Institute Measure of Time and Income Poverty" By Ajit Zacharias; Thomas Masterson; Kijong Kim

  1. By: Veneziani, Roberto; Yoshihara, Naoki
    Abstract: This paper analyses the Marxian theory of exploitation. A general axiomatic approach is developed which is appropriate to study the concept of exploitation - what it is and how it should be captured empirically. Two properties are presented that capture some fundamental Marxian insights. It is shown that, contrary to the received view, there exists a nonempty class of definitions of exploitation that preserve the relation between exploitation and profits - called Profit- Exploitation Correspondence Principle - in general economies with heterogeneous agents, complex class structures, and production technologies with heterogeneous labour inputs. However, among the main approaches, only the so-called ‘New Interpretation’ satisfies the Profit- Exploitation Correspondence Principle in general.
    Keywords: Exploitation, profits, axiomatic analysis
    JEL: B51
    Date: 2014–08
  2. By: Charles Yuji Horioka (School of Economics, University of the Philippines Diliman)
    Abstract: This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded behavioral assumptions and technological innovation and that the goal of the evolutionary theory of household behavior is to improve upon the neoclassical theory of household behavior by replacing the neoclassical assumption of selfish utility maximization with bounded rationality and satisficing and by incorporating the reaction of households to the introduction of new goods and services. The paper concludes with a brief discussion of loss aversion and self-interest vs. altruism.
    Keywords: Altruism, altruistic bequest motive, behavioral assumptions, behavioral economics, bequest motives, bounded rationality, consumption behavior, creative destruction, destructive technologies, dynastic bequest motive, evolution, evolutionary economics
    JEL: A12 B15 B25 B52 D11 D91 E21 O31 O33
    Date: 2014–08
  3. By: Christian Cordes (University of Bremen)
    Abstract: This article reviews the most important transfers of this kind into evolutionary economics. It broadly differentiates between approaches that draw on an analogy construction to the biological sphere, those that make metaphorical use of Darwinian ideas, and avenues that are based on the fact that other forms of – cultural – evolution rest upon foundations laid before by natural selection. It is shown that an evolutionary approach within economics informed by insights from cognitive science, evolutionary biology, and anthropology contributes to more realistic models of human behavior in economic contexts.
    Keywords: evolutionary economics, human behavior, biological evolution, cultural evolution, generalized Darwinism, continuity hypothesis, Neo-Schumpeterians, American Institutionalism, competition
    JEL: B15 B25 B52 D03 Z1
    Date: 2014–09–02
  4. By: Geoff C. Harcourt (School of Economics, Australian School of Business, the University of New South Wales)
  5. By: Randall W. Jackson (Regional Research Institute, West Virginia University)
    Abstract: Input-output (IO) and Life Cycle Assessment (LCA) modeling share a strikingly similar mathematical foundation and formulation, yet melding the two frameworks is not completely straightforward. In particular, the boundaries of the two systems must be brought into alignment carefully, so as to avoid double counting. In this document, the two frameworks and their mathematical foundations are presented in brief, and the salient issues that enter into procedures integrating the two are highlighted.
    Keywords: IO, LCA
    JEL: C67 R15
    Date: 2013–12–17
  6. By: K.Vela Velupillai
    Abstract: For aesthetic, strategic and pragmatic reasons, E. T. Jaynes (2003, Appendix A) objects to Bruno de Finetti’s founding of probability theory on the basis of the notion of coherence. In this paper an attempt is made to diffuse this critique, as well as to point out, briefly, that these, and the remarks on a variety of foundational issues in mathematics and metamathematics (op.cit, Appendix B) are ahistorical, irrelevant and misguided.
    Keywords: Aesthetics, Coherence, Betting, Robot, Turing Machine
    JEL: C02 C11 C18 C44
    Date: 2014
  7. By: Áine Macken-Walsh (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland); Anne Byrne (School of Political Science and Sociology, NUIG); Nata Duvvury (School of Political Science and Sociology, NUIG); Tanya Watson (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland)
    Abstract: Women on farms in Ireland are a subject of feminist analysis for five decades. Salient themes are the constraints of patriarchal agriculture (O'Hara 1997; Shortall, 2004), the invisibility of women's farm work (Viney 1968; O’Hara 1998), gender inequalities in ownership of farm assets (Watson et al. 2009) and increasing professionalisation of farmwomen outside of agriculture (Kelly and Shortall 2002; Hanrahan 2007). Most women enter farming through marriage and family ties. Land ownership is identified by Shortall (2004) as the critical factor underpinning male domination of the occupational category ‘farmer’ and considerable power differentials between men and women in family farming. This is an area that requires further investigation. Our analysis, framed by theoretical models of feminisation and empowerment, explores cases where male farm property ownership in Ireland is disrupted in conventional and non-conventional agricultural settings. Do these cases provide evidence of new opportunities for women to become farm property owners, and in what contexts? What consequences do these opportunities have for farmwomen’s empowerment and agency? How does women’s farm property ownership disturb rural gender relations in the context of the family farm?
    Date: 2014
  8. By: Francois Bonnet (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Clément Théry (Columbia University - Columbia University)
    Abstract: What are the implications of Piketty's Capital for sociology and political science? Capital's argument focuses on the evolution of the r/g ratio (capital returns over growth rate) and outlines two modes of economic inequalities. One is characteristic of affluent (g > r) societies and the other is characteristic of patrimonial (r > g) societies. With the current return to a patrimonial society, corporations become political actors; occupational status and education's relevance are declining; the meaning of poverty is transformed, and welfare and punishment become interdependent means to social order; in politics, elitist theories gain traction; immigration is less about assimilation, and more about transnationalism and nationalist politics. We show that some theories are more relevant in an affluent society, and others are more adequate to a patrimonial society.
    Keywords: inequality; capitalism; corporate governance; education; social structure; power
    Date: 2014–08–11
  9. By: Rémy Herrera (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper studies the U.S. economy from an original point of view: that of the links existing between crisis and war. The first part analyzes the workings of the current crisis, considered to be a "systemic" one. The second part places the U.S. economy at the very heart of this crisis. The third part emphasizes the limitations of the anti-crisis policies that are being implemented, as well as the "currency war" issue. Then, the central focus moves towards U.S. warfare as a permanent feature. In a fifth part, the author examines the control exercized by finance capital on the military sector, including military-industrial complex and privately owned military companies. And finally, it examines how these links between crisis and war exacerbe the current capitalist contradictions.
    Keywords: United States; military sector; defence; war; crisis; finance
    Date: 2013–02
  10. By: Alexei Gloukhov (National Research University Higher School of Economics)
    Abstract: The rebirth of communism, as shown by a new wave of publications (A. Badiou, B. Groys, S. Zizek), disqualifies the historical peculiarity of the Soviet experience in favor of the eternal “idea of communism”, originating in the works of the Ancient Greek philosopher, Plato. It is an ironic reversal of the fates suffered by the studies of Antiquity after the Russian Revolution. Apparently, the present day supra-historical idealism and the old school historical materialism exclude each other. On the other hand, an analysis of Soviet cultural politics from the 1920-30s may demonstrate that those radical theoretical stances were presented as distinct practical phases in the same changing experience of communism. A repudiation of the Soviet past brings for the current rebirth of communism nothing other than the hiding of ugly practical problems behind theoretical purity.
    Keywords: communism, cultural politics, Russian revolution, Soviet experience, Antiquity, Plato
    JEL: Z
    Date: 2014
  11. By: Nora Stel (Maastricht School of Management and Centre for Conflict Studies, University of Utrecht)
    Abstract: A holistic analysis of the implication of businesses in genocides that combines historical evidence with tentative theorization is so far unavailable. This paper aims to contribute to start to fill this gap and, ultimately, to start a process of preventive learning concerning private sector involvement in genocides. Based on a literature review, the paper identifies four main roles – victim, preventer, direct accomplice and indirect accomplice – and three main motivations – profit maximization, economic survival and institutional pragmatism – concerning corporate complicity in genocides. Subsequently, the paper explores the concrete roles that companies played in three of the most uncontested cases of corporate complicity in genocide: the Jewish, Kurdish and Darfurian genocides. The paper compares the ways in which scholars have analyzed the roles of companies in these genocidal processes and the motivations that drove companies to play this particular role. Based on these case illustrations, the most pertinent knowledge gap concerning corporate complicity in genocides is located in the absence of empirical data about the interests and motives driving corporate decision-making throughout genocides. The paper concludes that this knowledge gap needs to be addressed if we are to better understand and potentially prevent corporate complicity in genocide.
    Date: 2014–09
  12. By: Luis Miguel Rodrigo (Departamento de Economía, Universidad Católica del Norte)
    Abstract: Este trabajo estudia la estructuración de la subjetividad política en la Región de Antofagasta, situada en el norte de Chile, en un contexto socioeconómico prototípicamente neoliberal. A partir de una muestra de treinta entrevistas con eje biográfico sometidas un análisis sociológico del discurso se construye un conjunto de tipologías que son denominadas habitus políticos. En el análisis se identifican cuatro experiencias vitales fundamentales en la estructuración de estos habitus políticos: el posicionamiento familiar en el conflicto histórico (golpe de Estado y dictadura miliar); la clase social; la trayectoria social; y la trayectoria espacial. Se concluye que la relación con el orden social es prediscursiva, por lo que resulta necesario sumar al análisis de los discursos políticos (estructuras sociales de subjetividad política) el análisis biográfico de las disposiciones políticas (estructuras individuales de subjetividad política).
    Keywords: Bourdieu, sociología política, neoliberalismo, análisis sociológico del discurso, entrevistas con eje biográfico
  13. By: Michele Gori (Dipartimento di Scienze per l'Economia e l'Impresa); Giorgio Ricchiuti (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: In this paper, we analyze a heterogeneous agent model in which the fundamental exchange rate is endogenously determined by the real markets. The exchange rate market and the real markets are linked through the balance of payments. We have analytically found that there exists at least a steady state in which the exchange rate is at its fundamental value and incomes of both countries are equal to the autonomous components times the over-simplified multiplier (as in the Income-Expenditure model). That steady state can be unique and always unstable when all agents act as contrarians, while when agents act as fundamentalists is unique but its stability depends on the reactivity of actors of the market. Finally, we show that the (in)stability of the economic system depends on both the reactivity of the markets and that of different type of agents involved.
    Keywords: Complex Dynamics; Heterogeneous Agents Models; Financial Markets.
    JEL: C62 D84 E12 E32 G02
    Date: 2014
  14. By: Mori, Takahito
    Abstract: It has been generally assumed in the study of German urban history that the municipal electric services were brought to an end by the growth of regional power networks during the Weimar period. However, municipal electric services were not completely replaced by regional power systems. So, this paper examines, on the basis of a case study of Frankfurt am Main, how the municipal electric services were able to sustain themselves as an autonomous system against the expanding influence of regional power networks based on private capital during the Weimar period. Frankfurt tried not only to enlarge its power stations but also to utilize the waterpower and brown coal obtained nearby the city, with a view to defending its autonomy against the Rheinisch-Westfälisches Elektrizitätswerk AG. These attempts enabled Frankfurt to preserve its autonomous electric services until the second half of the 20th century, though it owed a lot to the assistance from Preussenelektra, the national electric power company of Prussia.
    Keywords: "Electric War", "Electric Peace", Frankfurt am Main, Preußenelektra, RWE
    Date: 2014–09
  15. By: Paola Cerchiello (Department of Economics and Management, University of Pavia); Paolo Giudici (Department of Economics and Management, University of Pavia)
    Abstract: Systemic risk modelling concerns the estimation of the interrelationships between financial institutions, with the aim of establishing which of them are more central and, therefore, more contagious/subject to contagion. The aim of this paper is to develop a novel systemic risk model. A model that, differently from existing ones, employs not only the information contained in financial market prices, but also big data coming from financial tweets. From a methodological viewpoint, the novelty of our paper is the estimation of systemic risk models using two different data sources: financial markets and financial tweets, and a proposal to combine them, using a Bayesian approach. From an applied viewpoint, we present the first systemic risk model based on big data, and show that such a model can shed further light on the interrelationships between financial institutions.
    Keywords: Twitter data analysis, Graphical Gaussian models, Graphical Model selection, Banking and Finance applications, Risk Management
    Date: 2014–09
  16. By: Concetta Sorropago (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")
    Abstract: The financial crisis of recent years has deeply questioned the ability of the traditional economic models to help to govern the complexity of the modern financial world. A growing number of scholars, practitioners, and regulators agree that the recurring financial crisis as well as the overwhelming evidence of market anomalies could be explained only resorting to behavioral finance. Behavioral finance has been able to identify the individual investor irrationality but unable to quantify its total effect on the market in terms of price deviation from fundamental. Quantitative Behavioral Finance (QBF) is an emerging discipline that attempts to model the impact of human cognitive biases over asset prices. The aim of this paper is to provide an overview of its theoretical foundations and its challenges. The paper is divided in two parts. In the first one, we present a much selected literature review of the key theoretical foundations. Why does this new field of study emerge ? What topics does it study ? Which disciplines have contributed the most and why ? In the second part, the paper sketches an outline and provides a preliminary, set of references about the agent-based model approach as one of the most promising line of research in quantitative modeling the behavioral investorsÕ impact on the market. The literature surveyed supports the use of this class of models because of their capability in copying with heterogeneous agentsÕ behaviours either rational or bounded rational without losing the ability to identify and examine how each of them operates separately or in interaction. Taken as a whole, the articles reviewed here indicate that many open issues remains both on the theoretical design of agent based models, due to the large degree of freedom of modelers, and on the empirical use of this class of models for real political economic implications, due to the arduous methods for the model validation, calibration and estimation.
    Keywords: Literature review ; Behavioral Finance ; Agent Computational Economics
    Date: 2014
  17. By: Pontoni, Gabriela A.
    Abstract: La recuperación de la economía y las instituciones laborales en la Argentina post devaluación, impulsaron el empleo registrado, provocando una mayor participación de los sindicatos, las empresas y el Estado en el mundo del trabajo, e imprimiéndole a las relaciones laborales una dinámica renovada (Palomino y Trajtemberg, 2006). Así, retrocedieron los procesos de flexibilización y precarización que marcaron las relaciones de trabajo del país durante los años '90. La evidencia de esta nueva dinámica se plasma en el incremento de la negociación colectiva, la reaparición de los reclamos laborales en reemplazo de los sociales, y la recuperación de la afiliación sindical, e indican un fortalecimiento de los sindicatos que se enmarca en la noción de "revitalización" sindical (Etchemendy y Collier, [2007] 2008; Atzeni y Ghigliani, 2007; Senén González y Haidar, 2009; Senén González y Del Bono, 2013). En esta nueva dinámica, el sindicato de "Camioneros" ha cobrado especial relevancia en el plano político-sindical, transformándose en uno de los actores centrales del sistema de relaciones laborales argentino. Ese protagonismo ha inspirado el objetivo de esta Tesis, la cual se propone investigar y caracterizar las opciones estratégicas que puso en práctica "Camioneros" durante dos subperíodos: 1991-2002 y 2003-2011. Se consideran opciones estratégicas, las decisiones de los actores que afectan el curso y la estructura de las relacionales laborales. De este modo, el interrogante general que orienta la investigación se plantea conocer cuáles fueron las opciones estratégicas adoptadas por Camioneros durante los años '90 y cuáles las desplegadas post 2003, que le permitieron posicionarse como un actor protagónico de las relaciones laborales de la Argentina. Con el fin de responder la pregunta y objetivo señalados, el aporte de la Tesis se sitúa en el campo disciplinario de las relaciones laborales, utilizando las teorías de análisis estratégico que toman como elemento central el concepto de "opciones estratégicas" (Kochan, Katz y Mc Kerise, [1986]; 1993). De acuerdo con ese enfoque, para entender las opciones estratégicas de los actores deben considerarse los marcos institucionales y las estructuras históricas concretas que las restringen o estimulan. Así, una premisa fundamental del enfoque es reconocer que no todas las opciones son estratégicas, sino sólo aquellas que logran modificar los procesos y resultados de los sistemas de relaciones laborales (Locke, Kochan y Piore, 1995, Cedrola Spremolla, 1995; Boxall y Haynes, 1997; Boxall, 2008). Lo que esa literatura destaca es la importancia del contexto o entorno, en tanto cambios en el mercado de trabajo, la tecnología aplicada a los sistemas productivos, la búsqueda de competitividad de las empresas frente a los mercados globalizados, etc., que pueden condicionar la toma de decisiones de los actores. Sin embargo, se sostiene que esto no determina los procesos, las tendencias, ni los resultados de las relaciones industriales, sino que es la interacción entre el entorno y las decisiones de los actores la que moldea el sistema de relaciones laborales (Kochan, Katz, y McKersie, [1986], 1993:163). Al mismo tiempo, se acercó al campo de investigación la conceptualización que ofrecen Lévesque y Murray (2004; 2010) respecto a las distintas capacidades o recursos con que cuentan los sindicatos para adoptar mejores decisiones en determinados contextos; definiendo capacidades como las competencias, habilidades, destrezas y el "saber cómo" (know how) que las organizaciones sindicales pueden desarrollar, transmitir y aprender. Para estos autores, los sindicatos, necesitan, cada vez más, establecer repertorios de acción colectiva y formas organizativas que les permitan responder a las transformaciones del entorno De hecho, en sintonía con el enfoque estratégico, las mutaciones del entorno pueden modificar las llamadas "reglas de juego" a favor o en contra de las empresas o de los sindicatos, pero al mismo tiempo pueden representar oportunidades para implementar opciones estratégicas que les posibiliten afrontar nuevos desafíos. Por lo expuesto, a partir del estudio de "Camioneros", la Tesis reconstruye la dinámica de las relaciones laborales entre 1991-2011. Metodológicamente, se utilizó el estudio de caso, triangulando una mirada cualitativa, que se desprende de entrevistas en profundidad realizadas a actores clave y una observación participante, con datos cuantitativos provenientes de diversas fuentes secundarias. A partir de la aludida articulación, se realizó una comparación diacrónica, contrastando los dos subperíodos de análisis que comprende este estudio (Morlino, [1991], 1994; Stake, 1994; Neiman y Quaranta, 2006; Vasilachis de Gialdino, 2006).
    Keywords: Relaciones Laborales; Sindicatos; Negociación Colectiva; Transporte por Carretera; Transporte de Mercancías; Camiones;
    Date: 2013
  18. By: Ajit Zacharias; Thomas Masterson; Kijong Kim
    Abstract: In partnership with the Korea Employment Information Service, Senior Scholar Ajit Zacharias and Research Scholars Thomas Masterson and Kijong Kim investigate the complex issues of gender, changing labor market conditions, and the public provisioning of child care in Korea using the Levy Institute Measure of Time and Income Poverty (LIMTIP), an alternative measure that factors in both time and income deficits in the assessment of poverty. Since the 1997 Asian financial crisis, lifetime employment and single-breadwinner households have given way to increased job insecurity, flexible work arrangements, and rapid growth in dual-earner households in Korea. Add to these factors rising labor force participation by women but little change in the highly unequal division of household production, and many women effectively face a double shift each day: paid employment followed by a second shift of household production. Recognizing the implications of the heavy burden of care work for women's well-being and employment, Korea introduced public child-care provisioning, via a voucher system for low-income families, in 1992 (the program became universal in 2013). This study analyzes the impact of the voucher program on reducing time and income poverty, and reassesses the overall level of poverty in Korea. While it reveals a much higher level of poverty than official estimates indicate--7.9 percent versus 2.6 percent--due to time deficits, the outsourcing of child-care services reduced the LIMTIP rate from 7.9 percent to 7.5 percent and the number of "hidden poor" individuals from two million to 1.8 million. While these results show that the problem of time poverty in Korea extends beyond child-care needs, the impact of public provisioning through the voucher program clearly has had a positive impact on families with children. The main findings and policy recommendations resulting from this study are presented in detail in the research project report The Measurement of Time and Income Poverty in Korea: The Levy Institute Measure of Time and Income Poverty.
    Date: 2014–08

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