nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒11‒07
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Implications of different understandings of financial crises for divergent conclusions on the connections between finance and sustainability By Alessandro Vercelli
  2. Corporate-NGO partnerships in CSR activities: why and how? By Sylvaine Poret
  3. The critical mass approach to achieve a deal on green goods and services : what is on the table? how much to expect ? By de Melo, Jaime; Vijil, Mariana
  4. Reconsidering the nature and effects of habits in urban transportation behavior By Olivier Brette; Thomas Buhler; Nathalie Lazaric; Kevin Maréchal
  5. A note on the granular nature of imports in German manufacturing industries By Joachim Wagner
  6. Why Do Innovative Firms Hold So Much Cash? Evidence from Changes in State R&D Tax Credits By Falato, Antonio; Sim, Jae W.
  7. The Glass Ceiling and the Paper Floor: Gender Differences among Top Earners, 1981–2012 By Guvenen, Fatih; Kaplan, Greg; Song, Jae
  8. The Genealogy of the Labor Hoarding Concept By Jeff E. Biddle
  9. How much of what New Zealanders consume is imported? Estimates from input-output tables By Miles Parker
  10. The quality of work dimensions. Results of a multivariate analysis from the Third Isfol Survey on Quality of work in Italy By Tindara Addabbo; Marco Centra; Maurizio Curtarelli; Marco Fuscaldo; Valentina Gualtieri
  11. Capital, richesse et croissance: de la recherche empirique aux éclairages théoriques By Jean-Luc Gaffard
  12. Studying the informal aspects of the activity of countries with Social Accounting and Socio- Demographic Matrices By Susana Santos
  13. Consumer Behaviour in a Social Context: Implications for Environmental Policy By Partha Dasgupta; Dale Southerton; Alistair Ulph; David Ulph
  14. Multidimensional poverty and inequality By Rolf Aaberge; Andrea Brandolini
  15. De la finance éthique à l'éthique dans la finance By Michel LELART
  16. What dimensions of women’s empowerment in agriculture matter for nutrition-related practices and outcomes in Ghana?: By Malapit, Hazel J.; Quisumbing, Agnes R.

  1. By: Alessandro Vercelli (University of Siena)
    Abstract: The reasons and implications of different understandings of the ongoing financial crisis may be thoroughly assessed by starting the investigation from a taxonomy of the competing visions of the capitalist system and of the approach required to understand it. This paper focuses in particular on the nexus between money/credit/finance (from now on “money”) on one side and the real economy on the other side and is articulated in a sequence of sections grouped in three parts. The first part sketches the historical and conceptual path that leads from the early reflections on money to the recent insights on financialisation, stressing only the basic conceptual options and their implications. The analysis starts from the quantitative aspects of money that have been since long a crucial object of political economy, then economics and finally macroeconomics. Section 2 I sketches a bird’s eye view of the mainstream approach from Hume to Woodford; then section 3 outlines the parallel evolution of the heterodox point of view from Marx to Minsky. Section 4 discusses the main views of orthodox and heterodox economists on money as structure. Section 5 investigates why the different paradigms mentioned above lead to different understandings of the meaning and role of financialisation. The second part sketches the conceptual path that leads from the early reflections on economic crises to different understandings of the great crises and to contrasting views on the sustainability of the economic system. Section 6 I discusses the foundations and implications of different views on business-cycle crises while section 7 I considers the main approaches to the understanding and control of great crises. Finally section 8 examines the concepts of sustainability associated to the paradigms analysed above. The third part investigates the interaction between financialisation and sustainability from the synchronic point of view (section 9), and then from the diachronic point of view (section 10), focusing on their broad policy implications. Section 11 concludes.
    Keywords: financial crises, financialisation, sustainability
    JEL: B10 B20 B E32 E44 G10 G20 Q01
  2. By: Sylvaine Poret (INRA-UR1303 ALISS & Department of Economics, Ecole Polytechnique)
    Abstract: This article describes, analyzes, and explains the emergence of partnerships between corporations and non-governmental organizations (NGOs) and the ways in which corporations use such relationships as part of their corporate social responsibility (CSR) activities. Economics concepts and the management literature are reviewed, and illustrations are provided to describe such alliances and to explain their expansion. The findings show that firms engage in CSR for altruistic, defensive, and strategic reasons. The role of NGOs in these activities, as well as the related risks for both types of partners, is also explained and studied. NGOs are identified to have fundraising, stakeholder, and strategic functions in corporate-NGO partnerships. The findings also show that the main risks for NGOs, namely, a loss of credibility and legitimacy and their consequences, are related to the financial and existential dependency created by corporate-NGO partnerships.
    Keywords: Business Sustainability, Corporate Social Responsibility, Cross-Sector Alliance, Firm Strategy, Non-Governmental Organizations, Sustainability Labels.
    JEL: L21 L31 M14 Q01
  3. By: de Melo, Jaime; Vijil, Mariana
    Abstract: At the Davos forum of January 2014, a group of 14 countries pledged to launch negotiations on liberalizing trade in"green goods"(also known as"environmental"goods), focusing on the elimination of tariffs for an Asia-Pacific Economic Cooperation list of 54 products. The paper shows that the Davos group, with an average tariff of 1.8 percent, has little to offer as countries have avoided submitting products with tariff peaks for tariff reductions. Even if the list were extended to the 411 products on the World Trade Organization list, taking into account tariff dispersion, the tariff structure on environmental goods would be equivalent to a uniform tariff of 3.4 percent, about half the uniform tariff-equivalent for non-environmental goods. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 percent. However, because of the strong complementarities between trade in environmental goods and trade in environmental services, these should also be brought to the negotiation table, although difficulties in reaching agreement on their scope are likely to be great.
    Keywords: Environmental Economics&Policies,Free Trade,Trade Policy,Economic Theory&Research,International Trade and Trade Rules
    Date: 2014–10–01
  4. By: Olivier Brette (EVS - Environnement Ville Société - CNRS : UMR5600 - Université Jean Moulin - Lyon III - Université Lumière - Lyon II - Université Jean Monnet - Saint-Etienne - École Nationale des Travaux Publics de l'État [ENTPE] - Institut National des Sciences Appliquées [INSA] : - LYON - École Normale Supérieure (ENS) - Lyon - École Nationale Supérieure des Mines - Saint-Étienne); Thomas Buhler (Chercheur Indépendant - Aucune); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Kevin Maréchal (ULB - Université Libre de Bruxelles [Bruxelles] - Université Libre de Bruxelles)
    Abstract: This article adds to the growing empirical evidence on the importance of habits in governing human behavior, and sheds new light on individual inertia in relation to transportation behavior. An enriched perspective rooted in Veblenian evolutionary economics (VEE) is used to construct a theoretical framework in order to analyze the processes at play in the formation and reinforcement of habits. The empirical study explores more specifically the synchronic processes strengthening the car-using habit. In addition to underlining the shortcomings of a 'decision theory' perspective to address urban transportation behaviors, we find that synchronic habits can have a significant effect on behavioral inertia. Our results suggest the existence of positive feedback between the development of synchronic habits, qualitative perceptions of driving times, and reinforcement of the car-using habit. The paper points out also that the diachronic dimension of habits would constitute another promising domain for further research on behavioral inertia in transportation
    Keywords: Habits, Transportation Issues, Choice
    Date: 2014
  5. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper uses an approach recently suggested by Gabaix (Eonometrica 2011) to investigate for the first time the role of idiosyncratic shocks to the largest firms in the dynamics of imports by firms from manufacturing industries. For Germany we find evidence that imports are power-law distributed and that the distribution of imports in the industries can be characterised as fat-tailed. Results show that idiosyncratic shocks to very large firms are important for the import dynamics in 2010/2011 but not in 2009/2010.
    Keywords: EImports, power law, granular residual, Germany
    JEL: F14 E32 L60
    Date: 2014–10
  6. By: Falato, Antonio (Board of Governors of the Federal Reserve System (U.S.)); Sim, Jae W. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: This paper uses the staggered changes of R&D tax credits across U.S. states and over time as a quasi-natural experiment to examine the impact of innovation on corporate liquidity. By generating plausibly independent variation in firms' incentive to invest in R&D, we are able to assess the empirical importance of specific theories of the link between innovation and corporate liquidity. Firms increase (decrease) their cash to asset ratios by about one and a half percentage point when their home state increases (cuts) R&D tax credits. These baseline difference-in-differences estimates hold up to a battery of validation, falsification, and robustness checks, which corroborate their internal and external validity. The treatment effect of R&D tax credits increases monotonically with several specific proxies for debt and equity financing frictions. Increases (cuts) in tax credits also lead to increases (decreases) in the ratios of cash to bank lines of credit and to book equity, and to decreases (increases) in bank debt, secured debt, and overall net indebtness, supporting debt and equity financing channels through which innovation impacts the demand for cash. We also find support for a product market competition channel, and assess repatriation and agency explanations. Overall, our analysis offers endogeneity-free evidence that innovation is a first-order driver of corporate liquidity management decisions.
    Keywords: Determinants of corporate cash holdings; financial economics of innovation
    Date: 2014–05–21
  7. By: Guvenen, Fatih (Federal Reserve Bank of Minneapolis); Kaplan, Greg (Princeton University); Song, Jae (Social Security Administration)
    Abstract: We analyze changes in the gender structure at the top of the earnings distribution in the United States over the last 30 years using a 10% sample of individual earnings histories from the Social Security Administration. Despite making large inroads, females still constitute a small proportion of the top percentiles: the glass ceiling, albeit a thinner one, remains. We measure the contribution of changes in labor force participation, changes in the persistence of top earnings, and changes in industry and age composition to the change in the gender composition of top earners. A large proportion of the increased share of females among top earners is accounted for by the mending of, what we refer to as, the paper floor – the phenomenon whereby female top earners were much more likely than male top earners to drop out of the top percentiles. We also provide new evidence at the top of the earnings distribution for both genders: the rising share of top earnings accruing to workers in the Finance and Insurance industry, the relative transitory status of top earners, the emergence of top earnings gender gaps over the life cycle, and gender differences among lifetime top earners.
    Keywords: Top earners; Glass ceiling; Gender gap; Paper floor; Industry
    JEL: E24 G10 J31
    Date: 2014–10–22
  8. By: Jeff E. Biddle
    Abstract: The modern concept of labor hoarding emerged in early 1960s, and soon became a standard part of mainstream economists’ explan ation of the working of labor markets. The concept represents the convergence of three importa nt elements: an empirical fi nding that labor productivity was procyclical; a framing of this fi nding as a “puzzle” or anomaly fo r the basic neoclassical theory of the firm, and a proposed resolu tion of the puzzle based on optimizing behavior of the firm in the presence of costs of hiring, firing, and training workers. Th is paper recounts the history of each of these elements, and how they were woven together into the labor hoarding concept. Each history involves people associated with various research traditions and motivated by an array of questions, many of which were unrelated to the qu estions that the modern labor hoarding concept was ultimately created to address.
    Keywords: labor hoarding, productivity, business cycles
    JEL: B2
    Date: 2014
  9. By: Miles Parker (Reserve Bank of New Zealand)
    Abstract: Imports make up a substantial proportion of what New Zealanders' spend, both directly, and through the imported inputs used in goods and services produced locally. This note uses input-output tables to estimate the total share of imports in the expenditure bases that lie behind two measures of consumer inflation, the CPI and the implicit deflator for household consumption expenditure.
    Date: 2014–09
  10. By: Tindara Addabbo; Marco Centra; Maurizio Curtarelli; Marco Fuscaldo; Valentina Gualtieri
    Abstract: This paper starts with an overview of the theoretical framework on quality of work and identifies five relevant dimensions, in line with Gallino & La Rosa: ergonomic, complexity, autonomy, control and economic dimensions. The above dimensions are described and measured by means of multivariate analysis to detect differences in terms of the factors affecting the level of the quality of work dimensions achieved. The data set that we use for this purpose is the Third Isfol Survey on Quality of Work (IsfolQdL) that has been carried out in 2010 on a sample of 5,000 workers and operationalizes the five dimensions of the quality of work. The results of the multivariate analysis confirm the worse achievements in terms of quality of work by temporary workers and lower skilled workers and lower level of achievements by women in the economic and autonomy dimensions. Women are also more likely to be found in part-time work positions and the latter show an improvement in the ergonomic dimension (that includes also work life balance) at the expenses of the economic and autonomy dimensions.
    Keywords: quality of work, multidimensional perspective, gender, skill
    JEL: J28 J22 J16
    Date: 2013–10
  11. By: Jean-Luc Gaffard (OFCE Sciences Po; University of Nice Sophia Antipolis, France; Skema Business School)
    Abstract: The book of Thomas Piketty "Capital in the XXI Century" is ambivalent. On one hand, too simple theoretical reading, basically a-institutional, considers the growth rate as exogenous, and ignores the heterogeneity of capital, making the distribution of income and wealth a technical data without reverse influence on growth itself. On the other hand, the gathered stylized facts, and insights associated incite to the reflection on the ins and outs of the distribution of income and wealth in the perspective of giving it a central place in economic theory and to restore its social dimension.
    Keywords: capital, distribution, growth, rent, wealth
    JEL: D30 H20 O40
    Date: 2014–10
  12. By: Susana Santos
    Abstract: Social Accounting Matrices (SAMs) and Socio-Demographic Matrices (SDMs) are presented as tools that offer specific features for studying the activity of countries in several different areas, as well as for supporting policy decision processes. Based on methodological principles derived mainly from the works of Richard Stone, emphasis is placed on the desirability of working in a matrix format, which includes not only people (SDM), but also, at the same time, activities, products, factors of production and institutions (SAM). Approaches based on SAMs and SDMs will be presented as a way of capturing the relevant network of linkages and the corresponding multiplier effects, which can then be used for the subsequent modelling of the activity of the countries to be studied. As an example of socio-economic studies that can be undertaken using approaches based on both SAMs and SDMs, the study of the activity of household unincorporated enterprises, also described as informal, will be illustrated with an application to Portugal. In that application, three scenarios will be briefly presented, involving, on the one hand, two changes in incomes and, on the other hand, a change in expenditures. The macroeconomic effects of those changes will be summarised in the form of changes in the macroeconomic aggregates: Gross Domestic Product, Gross National Income and Disposable Income.
    Keywords: Social Accounting Matrix; Socio-Demographic Matrices; Informal Economy.
    JEL: E01 J11
    Date: 2014–09
  13. By: Partha Dasgupta (University of Cambridge and University of Manchester); Dale Southerton (University of Manchester); Alistair Ulph (University of Manchester); David Ulph (University of St Andrews)
    Abstract: In this paper we summarise some of our recent work on consumer behaviour, drawing on recent developments in behavioural economics, in which consumers are embedded in a social context, so their behaviour is shaped by their interactions with other consumers. For the purpose of this paper we also allow consumption to cause environmental damage. Analysing the social context of consumption naturally lends itself to the use of game theoretic tools, and indicates that we seek to develop links between economics and sociology rather than economics and psychology, which has been the more predominant field for work in behavioural economics. We shall be concerned with three sets of issues: conspicuous consumption, consumption norms and altruistic behaviour. Our aim is to show that building links between sociological and economic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic policy prescriptions, especially with respect to environmental policy.
    Keywords: consumer behaviour, social context, environmental policy, game theory, competitive consumption, consumption norms, altruism, moral behaviour, Kantian calculus
    JEL: D1 D6 H2 Q5 Z1
    Date: 2014–01–01
  14. By: Rolf Aaberge (Statistics Norway and University of Oslo); Andrea Brandolini (Bank of Italy)
    Abstract: This paper examines different approaches to the measurement of multidimensional inequality and poverty. First, it outlines three aspects preliminary to any multidimensional study: the selection of the relevant dimensions; the indicators used to measure them; and the procedures for their weighting. It then considers the counting approach and the axiomatic treatment in poverty measurement. Finally, it reviews the axiomatic approach to inequality analysis. The paper provides a selective review of a rapidly growing theoretical literature with the twofold aim of highlighting areas for future research and offering some guidance on how to use multidimensional methods in empirical and policy-oriented applications.
    Keywords: inequality, poverty, deprivation, multidimensional well-being
    JEL: D3 D63 I30 I32
    Date: 2014–09
  15. By: Michel LELART
    Keywords: éthique, finance éthique, finance islamique, finance solidaire, microfinance, finance informelle
    Date: 2014
  16. By: Malapit, Hazel J.; Quisumbing, Agnes R.
    Abstract: This paper investigates linkages between women’s empowerment in agriculture and the nutritional status of women and children using 2012 baseline data from the Feed the Future population-based survey in Ghana. The sample consists of 3,344 children and 3,640 women and is statistically representative of the northernmost regions of Ghana where the Feed the Future programs are operating.
    Keywords: Gender, Women, Nutrition, Empowerment, Agriculture, Indicators,
    Date: 2014

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