nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒11‒22
twenty papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. A Critical Marxist Simple Approach to Capital Theory By Cavalieri, Duccio
  2. La transitoriedad histórica del capital: La tendencia descendente de la tasa de ganancia desde el siglo XIX By Maito, Esteban Ezequiel
  3. Linkages, contagion and resilience: an input-output scope from the demand and supply side By García Muñiz, Ana Salomé; Ramos Carvajal, Carmen
  4. Of railroads and finance: The making of market society in the Pacific Northwest By Green, Mitchell R.
  5. A Physics Solution to the Hardest Problem in Social Science: Physics Foundation of Permanent World Peace By Wayne, James J.
  6. From Micro to Macro via Production Networks By Vasco M. Carvalho
  7. Estimation of China Sectoral Emission Intensity: Based on Input-Output Model By Xueting Zhao
  8. What Have Economists Been Doing for the Last 50 Years? A Text Analysis of Published Academic Research from 1960-2010 By Lea Kosnik
  9. Thinking about Justice By Risse, Mathias
  10. Shareholding Network in the Euro Area Banking Market By Nicolò Pecora; Alessandro Spelta
  11. Should Shariah-compliant investors include commodities in their portfolios? New evidence By Nagayev, Ruslan; Masih, Mansur
  12. Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labor Market Outcomes in Norway. By Bertrand, Marianne; Black, Sandra E.; Jensen, Sissel; Lleras-Muney, Adriana
  13. On the Significance of Humanity's Collective Ownership of the Earth for Immigration By Risse, Mathias
  14. In Tandem or Out of Sync? Academic Economics Research and Public Policy Measures By Lea Kosnik
  15. A Development Consensus reconciling the Beijing Model and Washington Consensus: Views and Agenda By Asongu, Simplice A
  16. Estimating workers bargaining power and firms markup in India: Implications of reforms and labour regulations By Rupayan Pal; Udayan Rathore
  17. Need for Speed? Exchange Latency and Liquidity By Albert J. Menkveld; Marius A. Zoican
  18. Surveys on time use and unpaid work in Latin America and the Caribbean: Experience to date and challenges for the future By NU. CEPAL. División de Asuntos de Género
  19. Financial Stability and Interacting Networks of Financial Institutions and Market Infrastructures By Carlos León; Ron J. Berndsen; Luc Renneboog
  20. How Diverse can Spatial Measures of Cultural Diversity be? Results from Monte Carlo Simulations on an Agent-Based Model By Daniel Arribas-Bel; Peter Nijkamp; Jacques Poot

  1. By: Cavalieri, Duccio
    Abstract: This essay provides a simple, non-technical reformulation of Marx’s theoretical treatment of value and capital. It implies the abandonment of the ‘pure’ labour theory of value and of the ‘new value’ equality between the net product of the economy and the living labour employed in production of gross output, and a development of the different theoretical perspective outlined by the mature Marx. A correct method for converting quantities of labour-time in terms of money, which accounts for both explicit and implicit costs, is proposed.
    Keywords: value forms; labour; capital; money; capital theory; critical Marxism; MEV; MELT.
    JEL: B12 B14 B51 D46 E11
    Date: 2014
  2. By: Maito, Esteban Ezequiel
    Abstract: This paper presents estimates of the rate of profit on fourteen countries in the long run. The performance shows a clear downward trend, although there are periods of partial recovery in both core and peripheral countries. The behavior of the profit rate confirms the predictions made by Marx, about the historical trend of the mode of production. Finally, an estimate of the global rate of profit for the last six decades is done, also highlighting the particular role of China in systemic profitability.
    Keywords: Tasa de ganancia - Capital - Karl Marx - Modo de producción capitalista - Centro/Periferia
    JEL: B14 E0 E22 F21 O5 P10 Y10
    Date: 2013–12
  3. By: García Muñiz, Ana Salomé; Ramos Carvajal, Carmen
    Abstract: The use of linkages to compare productive structures and discover key sectors is an active focus of research in input-output field. In this paper, an extension of the called multilevel indicators (García et al., 2008) to the key sector determination is proposed. The multilevel indicators not only describe industries with a strong influence on the expansion of other sectors in an economy but the immediacy and the transmission capacity of their impacts. The proposal opens a new inquiry about how the relational structure affects the contagion diffusion and the robustness of the economic system. The empirical key sector analysis will focus on the Greek economy. The study deals with the structural change of Greek economy in the last decade (2000-2010). Conclusions about the relevance of some activities for the development of Greek economy are offered.
    Keywords: Input-output analysis, network theory, structural change, resilience, contagion, Greece
    JEL: C67 O2 O5
    Date: 2012–11–24
  4. By: Green, Mitchell R.
    Abstract: This paper examines how the development of railroads in the region established enduring ties with financiers on the East coast and Europe, and how these ties facilitated the exercise of power for certain individuals central in their respective social networks. These men of railroads and finance acted in an institutional capacity to transform the region we now understand as the Pacific Northwest so that it was conducive to the generation of financial flows in the machine age. In doing so, they set in motion a process of cumulative development that would render the old provisioning process unviable. That is, the non-market provisioning process embedded in the complex of tribal social relations was destroyed and the peoples who flourished within it were displaced. However, the two systems shared a common thread: each bore some direct relationship with the Columbia River Basin. Hence, I use the river as my entry point in a framework of analysis that seeks to trace out the many relations that account for such radical change.
    Keywords: Social provisioning process, embeddedness, social network analysis, Henry Villard, Pacific Northwest, institutional economics, heterodox economics
    JEL: B4 B5 L9 N9 N91
    Date: 2014–05–13
  5. By: Wayne, James J.
    Abstract: One problem is standing out above all others in social science: how should humanity govern itself? The problem is so important that all wars of humanity in the past, present, and future, are directly related to this problem. Despite the fact that this problem has attracted interests of some greatest thinkers for thousands of years: Confucius, Plato, Aristotle, Machiavelli, Locke, Washington, Jefferson, Madison, Kant, Marx, Einstein, Hayek, and many others, yet the problem remains unsolved. The latest thinking on this humanity governing problem by mainstream social scientists is represented by views of Friedrich Hayek. In his writings, Hayek repeatedly warned that we must shed the illusion that we can deliberately create the future of mankind. This paper disagrees with Hayek and proves for the first time that this problem is solvable scientifically applying recently-created physics laws of social science, if the problem is formulated in a correct way: what kind of governing political structure of humanity is most stable? Most-stable structure problems appear routinely in the theoretical and experimental condensed matter physics. We show that the humanity governing problem is equivalent to find an equilibrium political structure of a human society, which is a many-body physics problem 100% solvable using the maximum entropy approach widely-used in the condensed matter physics. This paper establishes the framework and methodology of quantum politics and replaces traditional political philosophy with quantum physics as the solid foundation of political science, and analyzes the equilibrium political structure of a human society. The main results are quite surprising: (1) Quantum physics does provide a firm scientific foundation for social science. For the first time, political science, economics, and other social science become branches of quantum physics just like optics and chemistry. (2) Quantum physics says that we can create free, fair, just, peaceful, and prosperous human societies. We prove that there is certainly no better alternative than the equilibrium political structure, which is defined by a set of 16 democratic principles. (3) The existing democratic governments in the world can be improved in significant ways. For example, there are many fundamental design flaws in the US constitution. American civil wars, slavery, epidemic gun violence, and run away government debts are some direct results of design flaws of the US constitution. (4) Quantum physics clearly says that there is a global political equilibrium state, which corresponds to the permanent world peace. This paper provides a theoretically-sound and practical solution to eliminate the nuclear, biological, chemical, robotic, and other forms of weapons of massive destruction. In the long run, humanity can grow up and will put an end to deaths, miseries, and economic destruction caused by wars, which have been plagued us since the dawn of humanity.
    Keywords: quantum politics, physics laws of social science, permanent world peace, democracy theory, free will, fundamental equation of economics, democratic principles, hydrodynamics modes, equilibrium
    JEL: A12 D7 D71 D73 D74 D8 D86
    Date: 2014–10–24
  6. By: Vasco M. Carvalho
    Abstract: A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. In this essay, I argue that this network perspective on production linkages can offer novel insights on the sources of aggregate fluctuations. To do this, I show (i) how production networks can be mapped to a standard general equilibrium setup; (ii) how to approach input-output from this networked perspective and (iii) how theory and data on production networks can be usefully combined to shed light on comovement and aggregate fluctuations.
    Keywords: production networks, comovement, business cycles, input-output linkages
    Date: 2014–10
  7. By: Xueting Zhao (Regional Research Institute, West Virginia University)
    Abstract: With strong economic growth, China’s energy consumption and CO2 emissions grow quickly. The energy shortage and environmental problem have become the bottleneck of further economic growth. The most popular method to estimate the environmental impact is the Environmental input-output analysis, and the most important data support is the sectoral emission intensities. This Resource Document describes the process to estimate the China sectoral CO2 emission intensities based on the Disaggregated Input-Output table (suggest to read the Technical Document: Disaggregating Input-Output Models). This document includes the data sources, calculation process and the procedural notes.The calculation includes both the national China and Shanxi province.
    Keywords: China, Sectoral, Emission Intensity, Input-Output
    JEL: C67 Q53 R15
    Date: 2014–10
  8. By: Lea Kosnik (Department of Economics, University of Missouri-St. Louis)
    Abstract: This paper presents the results of a text based exploratory study of over 20,000 academic articles published in seven top research journals from 1960-2010. The goal is to investigate the general research foci of economists over the last fifty years, how (if at all) they have changed over time, and what trends (if any) can be discerned from a broad body of the top academic research in the field. Of the 19 JEL-code based fields studied in the literature, most have retained a constant level of attention over the time period of this study, however, a notable exception is that of macroeconomics which has undergone a significantly diminishing level of research attention in the last couple of decades, across all the journals under study; at the same time, the “microfoundations” of macroeconomic papers appears to be increasing. Other results are also presented.
    Keywords: Text Analysis, Economics Research, Research Diversity, Topic Analysis.
    JEL: A11 B4
    Date: 2014–09
  9. By: Risse, Mathias (Harvard University)
    Abstract: This paper develops and defends the approach to distributive justice the author presents in his 2012 book On Global Justice. Characteristic of that approach is that the notion of distributive justice is understood as capturing the most stringent moral demands while at the same time being broadly applicable. This is unusual: normally, distributive justice is either understood very stringently, or as broadly applicable, but not both. Immanuel Kant does the former, Ernst Tugendhat does the latter. This paper argues that the author's approach should be preferred to both of those other approaches. One result of this inquiry is also to display the conceptual unity in the author's approach to global justice in terms of different grounds of justice.
    Date: 2014–02
  10. By: Nicolò Pecora (Università Cattolica del Sacro Cuore); Alessandro Spelta (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: Analyzing the topological properties of the network of shareholding relationships among the Euro Area banks we evaluate the relevance of a bank in the ?nancial system respect to ownership and control of other banks. We ?nd that the degree distribution of the European banking network displays power laws in both the binary and the weighted case. We also ?nd that the exponents are linked by a scaling relation revealing a direct connection between an increase of control diversi?cation and an increase of market power. Results also reveal Single Supervisory Mechanism, recently introduced by the European Central Bank and based on banks? total assets is a good proxy for the systemic risk associated to a particular ?nancial institution. Moreover we study how control and wealth are structured and concentrated within the banking system. Interestingly, our analysis reveals that control is highly concentrated at banking level, namely, lying in the hands of very few important shareholders that have weak relationships between them. This means that each main holder controls approximately a separate subset of banks.
    Keywords: Shareholding network, European banking system, Weighted graph, Power law
    JEL: D85 E58 L14
    Date: 2014–06
  11. By: Nagayev, Ruslan; Masih, Mansur
    Abstract: This paper investigates the links between price returns for seven commodities and Shariah-compliant equities (developed and emerging markets) over the period from January 1996 to April 2013. Employing the dynamic conditional correlation (DCC) M-GARCH methodology, we show that the correlations between commodity and stock markets evolve over time and are highly volatile, particularly during the financial crisis, which has played a key role, emphasizing the increased integration between commodity and stock markets, and underlining the financialization of commodity markets. However, in the last couple of years the correlation between commodities and equities seems to be decaying. Hence, Islamic investors hopefully could gain from the diversification benefits by the inclusion of commodities into their portfolios.
    Keywords: financialization of commodities, shariah-compliant equities, MGARCH – DCC technique
    JEL: C22 C58 Q14
    Date: 2013–08–24
  12. By: Bertrand, Marianne (Chicago Booth School of Business); Black, Sandra E. (The University of Texas at Austin); Jensen, Sissel (Dept. of Economics, Norwegian School of Economics and Business Administration); Lleras-Muney, Adriana (UCLA)
    Abstract: In late 2003, Norway passed a law mandating 40 percent representation of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase the representation of women in top positions in the corporate sector and decrease gender disparity in earnings within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved the representation of female employees at the very top of the earnings distribution (top 5 highest earners) within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally; it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernible impact on women in business beyond its direct effect on the newly appointed female board members.
    Keywords: Gender discrimination; board of directors.
    JEL: J01 J13
    Date: 2014–08–29
  13. By: Risse, Mathias (Harvard University)
    Abstract: The author's 2012 book On Global Justice argues that the standpoint of humanity's collective ownership of the earth should be central to reflection on the permissibility of immigration. This standpoint is defended here. A number of political philosophers (Michael Blake, Christopher Wellman, David Miller and others) have recently offered accounts of immigration that tried to do without the kind of global standpoint provided by humanity's collective ownership of the earth. All these attempts fail, and fail because they do not integrate a global standpoint. It has been objected to the author's account that any given generation should be regarded as inheriting both the natural and the societal wealth of humanity. This standpoint is refuted here. We will also engage with Avery Kolers' intriguing approach to territory in terms of ethnogeographic communities.
    Date: 2014–02
  14. By: Lea Kosnik (Department of Economics, University of Missouri-St. Louis)
    Abstract: In this paper we investigate whether academic research attention to certain public policy related measures (including unemployment, inflation, bankruptcies, and GDP) is correlated with empirical measurements of the measures themselves. In other words, when unemployment rises, does academic research attention to the matter increase? Or do economists pursue research interests relatively uninfluenced by policy shocks on the ground, at least in the short run? Text-analysis based results imply that economic attention to key public policy terms does correlate with empirical movements of the terms in certain instances, however, the stronger and more consistent correlation is between use of public policy terms in the academic literature and discussion of them by the broader public.
    Keywords: Text Analysis, Economics Research, Public Policy, GDP, Inflation, Unemployment, Recession.
    JEL: A11 H00
    Date: 2014–11
  15. By: Asongu, Simplice A
    Abstract: Reconciling the two dominant development models of the Washington Consensus (WC) and Beijing Model (BM) remains a critical challenge in the literature. The challenge is even more demanding when emerging development paradigms like the Liberal Institutional Pluralism (LIP) and New Structural Economics (NSE) schools have to be integrated. While the latter has recognized both State and market failures but failed to provide a unified theory, the former has left the challenging concern of how institutional diversity matter in the development process. We synthesize perspectives from over 150 recently published papers on development and Sino-African relations in order to present the relevance of both the WC and BM in the long-term and short-run respectively. While the paper provides a unified theory by reconciling the WC and the BM to complement the NSE, it at the same time presents a case for economic rights and political rights as short-run and long-run development priorities respectively. By reconciling the WC with the BM, the study contributes at the same to macroeconomic NSE literature of unifying a development theory and to the LIP literature on institutional preferences with stages of development. Hence, the proposed reconciliation takes into account the structural and institutional realities of nations at difference stages of the process of development.
    Keywords: Economic thought; Development; Beijing model; Washington Consensus; Africa
    JEL: B10 O11 O19 O55
    Date: 2014–08–14
  16. By: Rupayan Pal (Indira Gandhi Institute of Development Research); Udayan Rathore (Indira Gandhi Institute of Development Research)
    Abstract: We examine implications of industrial deregulations, trade liberalisation and labour regulations on workers' bargaining power and firms' markup in Indian manufacturing industries, using state-wise three-digit industry-level panel data for the period 1980-2007. Results of our econometric analysis suggest that both industrial deregulations and trade liberalisation led to significant declines in workers bargaining power, which was already less than 6.7 on an average during pre-reform era. However, none of these reforms appears to have any significant effect on firms' markup. Our results also suggest that amendments to labour regulation by State governments, which aim to simplify procedures and reduce costs of industrial dispute resolutions, have a significant positive effect on workers' bargaining power. Surprisingly, amendments to Employment Protection Legislations do not appear to have any significant effect on workers' bargaining power. We also document considerable variation in firms' markup and workers' bargaining power across industry-groups and States.
    Keywords: Workers bargaining power, firms markup, industrial deregulations, trade liberalisation, labour regulations, India
    JEL: J50 L13 F16 L60 O14
    Date: 2014–09
  17. By: Albert J. Menkveld (VU University Amsterdam); Marius A. Zoican (VU University Amsterdam)
    Abstract: Speeding up the exchange does not necessarily improve liquidity. The price quotes of high-frequency market makers are more likely to meet speculative high-frequency "bandits", thus less likely to meet liquidity traders. The bid-ask spread is raised in response. The recursive dynamic model reveals that there is an additional spread-widening effect as market makers earn higher rents due to economies of scope from quote monitoring. Analysis of a NASDAQ-OMX speed upgrade provides supportive evidence.
    Keywords: market microstructure, trading speed, information asymmetry, high-frequency trading
    JEL: G11 G12 G14
    Date: 2014–07–28
  18. By: NU. CEPAL. División de Asuntos de Género
    Date: 2013–12
  19. By: Carlos León; Ron J. Berndsen; Luc Renneboog
    Abstract: An interacting network coupling financial institutions’ multiplex (i.e. multi-layer) and financial market infrastructures’ single-layer networks gives an accurate picture of a financial system’s true connective architecture. We examine and compare the main properties of Colombian multiplex and interacting financial networks. Coupling financial institutions’ multiplex networks with financial market infrastructures’ networks removes modularity, which augments financial instability because the network then fails to isolate feedbacks and limit cascades while it retains its robust-yet-fragile features. Moreover, our analysis highlights the relevance of infrastructure-related systemic risk, corresponding to the effects caused by the improper functioning of FMIs or by FMIs acting as conduits for contagion.
    Keywords: Multiplex networks, interacting networks, financial stability, contagion, financial market infrastructures.
    JEL: D85 D53 G20 L14
    Date: 2014–10–14
  20. By: Daniel Arribas-Bel (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (The University of Waikato, New Zealand)
    Abstract: Cultural diversity is a complex and multi-faceted concept. Commonly used quantitative measures of the spatial distribution of culturally-defined groups 'such as segregation, isolation or concentration indexes' are often only capable of identifying just one aspect of this distribution. The strengths or weaknesses of any measure can only be comprehensively assessed empirically. This paper provides evidence on the empirical properties of various spatial measures of cultural diversity by using Monte Carlo replications of agent-based modeling (MC-ABM) simulations with synthetic data assigned to a realistic and detailed geographical context of the city of Amsterdam. Schelling's classical segregation model is used as the theoretical engine to generate patterns of spatial clustering. The data inputs include the initial population, the number and shares of various cultural groups, and their preferences with respect to co-location. Our MC-ABM data generating process generates output maps that enable us to assess the performance of various spatial measures of cultural diversity under a range of demographic compositions and preferences. We find that, as our simulated city becomes more diverse, stable residential location equilibria are only possible when particularly minorities become more tolerant. We test whether observed measures can be interpreted as revealing unobserved preferences for co-location of individuals with their own group and find that the segregation and isolation measures of spatial diversity are shown to be non-decreasing in increasing preference for within-group co-location, but the Gini coefficient and concentration measures are not.
    Keywords: cultural diversity, spatial segregation, agent-based model, Monte Carlo simulation
    JEL: C63 J15 R23 Z13
    Date: 2014–07–03

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