nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒11‒28
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The Nature and Causes of Profits: The Classical Approach from Smith to Marx By Sean Kimpton
  2. Moving to Greener Societies: Moral Motivation and Green Behaviour By Lorenzo Cerda Planas
  3. A Progressive Report on Marxian Economic Theory: On the Controversies in Exploitation Theory since Okishio (1963) By Yoshihara, Naoki;
  4. Does classical liberalism imply an evolutionary approach to policy-making? By Schnellenbach, Jan
  5. The Glass Ceiling and The Paper Floor: Gender Differences among Top Earners, 1981-2012 By Fatih Guvenen; Greg Kaplan; Jae Song
  6. Methods of Identification in Social Networks By Bryan S. Graham
  7. Bubbles, Crashes and Endogenous Uncertainty in Linked Asset and Product Markets By Erik O. Kimbrough; Taylor Jaworski
  8. Green Growth (for China): A Literature Review By Ho, Mun; Wang, Zhongmin
  9. Notes sur Keynes et la crise By Paulo Nakatani; Rémy Herrera
  10. Are There Gender Differences in the Perceived Impact of Land Security? Evidence from Urban Lesotho By Muraoka, Rie; Maredia, Mywish K.; Jin, Songqing; Schultink, Gerhardus
  11. The deposit financing gap: Another Dutch disease By Meijers H.H.M.; Muysken J.; Sleijpen O.C.H.M.
  12. The Distribution of Lifetime Incomes in the United States By Jae Song; Greg Kaplan; Fatih Guvenen
  13. Does local public ownership matter for the efficiency of water utilities? Evidence from Italy By Meryem Duygun; Silvia Pazzi; Emili Tortosa-Ausina; Simona Zambelli

  1. By: Sean Kimpton (Department of Economics, Faculty of Business and Law, Auckland University of Technology)
    Abstract: The Global Financial Crises has motivated some to rethink the dominance of global capitalism. This has revived an interest in Marxist doctrine and in particular its examination of the notion of exploitation. Marx’s theory of value is central to his examination of exploitation. This paper will show that both these posits of Marx are in error. Further, it will show that Marx draws heavily on Smith’s idea of the primacy of wages. However, this paper will demonstrate that profit, and not wages, are the original source of income. This paper reaffirms the importance of profits and the ability of entrepreneurs and capitalists to pursue them.
    Keywords: Adam Smith; Karl Marx; Profit; Exploitation; Labour Theory of Value; Classical Economics
    Date: 2014–10
  2. By: Lorenzo Cerda Planas (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper intends to provide an alternative explanation of why societies behave differently from an environmental point of view. To do so, I use a Kantian moral approach at a microeconomic level. Under this premise, I show that two identical societies (according to income and political system) might follow different paths with respect to their "green" behaviour. Additionally, I identify tipping points that could nudge a society from a polluting behaviour to a green one. I find that environmental perception as well as how governments are elected can be important factors in this shift.
    Keywords: Environmental motivation; Kantian morale; green behaviour; tipping points
    Date: 2014–01
  3. By: Yoshihara, Naoki (The Institute of Economic Research, Hitotsubashi University);
    Abstract: This report explores the development of exploitation theory in mathematical Marxian economics by reviewing the main controversies surrounding the definition of exploitation since the contribution of Okishio (1963). The report first examines the robustness and economic implications of the debates on the Fundamental Marxian Theorem, developed mainly in the 1970s and 1980s, followed by the property relation theory of exploitation by Roemer (1982). Then, the more recent exploitation theory proposed by Vrousalis (2013) and Wright (2000) is introduced, before examining its economic implications using a simple economic model. Finally, the report introduces and comments on recent axiomatic studies of exploitation by focusing on the work of Veneziani and Yoshihara (2013a).
    Keywords: Fundamental Marxian Theorem; Property Relations Definition of Exploitation; Profit-Exploitation Correspondence Principle.
    JEL: D63 D51
    Date: 2014
  4. By: Schnellenbach, Jan
    Abstract: This paper argues that an evolutionary approach to policy-making, which emphasizes openness to change and political variety, is particularly compatible with the central tenets of classical liberalism. The chief reasons are that classical liberalism acknowledges the ubiquity of uncertainty, as well as heterogeneity in preferences and beliefs, and generally embraces gradual social and economic change that arises from accidental variation rather than deliberate, large-scale planning. In contrast, our arguments cast doubt on a different claim, namely that classical liberalism is particularly compatible with the evolutionary biological heritage of humans.
    Keywords: classical liberalism,evolution,Darwinism,economic policy,cultural evolution,institutional evolution
    Date: 2014
  5. By: Fatih Guvenen; Greg Kaplan; Jae Song
    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.
    JEL: E24 E25 J31
    Date: 2014–10
  6. By: Bryan S. Graham
    Abstract: Social and economic networks are ubiquitous, serving as contexts for job search, technology diffusion, the accumulation of human capital and even the formulation of norms and values. The systematic empirical study of network formation - the process by which agents form, maintain and dissolve links - within economics is recent, is associated with extraordinarily challenging modeling and identification issues, and is an area of exciting new developments, with many open questions. This article reviews prominent research on the empirical analysis of network formation, with an emphasis on contributions made by economists.
    JEL: C23 C25 D85
    Date: 2014–08
  7. By: Erik O. Kimbrough (Simon Fraser University); Taylor Jaworski (Queen's University)
    Abstract: In laboratory asset markets, subjects trade shares of a firm whose profits in a linked product market determine dividends. Treatments vary whether dividend information is revealed once per period or in real-time and whether the firm is controlled by a profit-maximizing robot or human subject. The latter variation induces uncertainty about firm behavior, bridging the gap between laboratory and field markets. Our data replicate well-known features of laboratory asset markets (e.g. bubbles), suggesting these are robust to a market-based dividend process. Compared to a sample of previous experiments, both real-time information revelation and endogenous uncertainty impede the bubble-mitigating impact of experience.
    Keywords: Asset Markets, Uncertainty, Experimental Economics
    JEL: C91 D84
    Date: 2014–10–29
  8. By: Ho, Mun (Resources for the Future); Wang, Zhongmin (Resources for the Future)
    Abstract: This paper has two purposes. The first is to review the emerging literature on green growth, with a focus on the origin and meaning of the concept, as well as the justifications for and criticisms of the concept. The general idea of taking into account the impact of economic growth policies on the environment is not very controversial, but the possibility of simultaneously achieving conventional GDP growth and environmental protection is debated. The second purpose is to consider how China might move on to a green growth path. We summarize a sizable literature that traces China’s rapid economic growth and the associated environmental problems to its unique and fundamental institutions, and discuss the implications of this on how China might grow more sustainably.
    Keywords: green growth, economic development, environmental protection, China
    Date: 2014–08–07
  9. By: Paulo Nakatani (UFES - Université Fédérale de Espirito Santo); Rémy Herrera (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: Ce cahier de recherche propose une analyse - d'un point de vue d'inspiration marxiste - des relations entretenues par John Maynard Keynes avec l'économie dominante à son époque (première partie), puis présente les éléments théoriques sur la crise qu'il développa lui-même (deuxième partie), et s'interroge enfin, dans le contexte de la crise actuelle, sur l'opportunité d'un retour aux politiques dites " keynésiennes " (troisième partie).
    Keywords: Keynes; crise; marxisme; économie dominante; capitalisme
    Date: 2013–05
  10. By: Muraoka, Rie; Maredia, Mywish K.; Jin, Songqing; Schultink, Gerhardus
    Abstract: As part of the Millennium Challenge Corporation Compact Agreement, the Government of Lesotho has implemented an institutional strengthening and land regularization project in the urban and peri-urban areas of the capital city Maseru. The main objective of this project is to strengthen the rights of the legitimate occupiers of the land by a process of formalizing those rights. This formalization process of the rights to land is expected to promote private sector development and stimulate economic growth. The Compact Agreement has also supported training and public awareness to promote increased understanding and acceptance of gender equality and to ensure equal access by women to economic resources and opportunities. This paper explores gender differences in the perceived effects of securing land rights on behavioral outcomes related to household participation in land market and economic investments. It presents descriptive and analytical results of a cross-sectional data based on a household survey conducted in 2013 in four northern municipal councils of greater Maseru. Preliminary results indicate that on many indicators of perceived effect of secured land rights, there are no gender differences. Econometrics analysis to identify factors that determine different behavioral outcomes in terms of market participation and land investment is further explored.
    Keywords: Land rights, women's right, gender equality, Lease, impact evaluation, Lesotho, International Development, Land Economics/Use,
    Date: 2014
  11. By: Meijers H.H.M.; Muysken J.; Sleijpen O.C.H.M. (UNU-MERIT)
    Abstract: In the last two decades the Netherlands have experienced an increase in real-estate prices, accompanied by an increase in mortgages and a marked decline in household savings. As a consequence banks are faced with a large retail funding gap outstanding mortgage debt is insufficiently matched by retail deposits, whereas other funding possibilities of banks have increasingly been constrained - also due to their large foreign exposures. In this paper we argue that traditional macroeconomic models cannot analyse this phenomenon appropriately since they lack a proper model of the financial sector and underestimate the potential for interactions between the monetary and the real sphere. We present a stock-flow consistent approach developed by Godley and Lavoie as a valuable alternative to traditional and new Keynesian macroeconomic models and we use this approach to analyse the deposit financing gap for the Netherlands.
    Keywords: Current Heterodox Approaches: General; Financial Markets and the Macroeconomy; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General; Banks; Depository Institutions; Micro Finance Institutions; Mortgages;
    JEL: E44 B50 E60 G21
    Date: 2014
  12. By: Jae Song (Social Security Administration); Greg Kaplan (Princeton University); Fatih Guvenen (University of Minnesota)
    Abstract: Our investigation reveals four sets of results. First, we find substantial inequality in lifetime earnings, more than double what has been reported in earlier work that relied on much shorter panels and made parametric assumptions. The inequality in lifetime earnings above the median of the distribution alone is comparable to or larger than the total inequality found in earlier work. Second, contrary to some previous papers, we find that most of the rise in cross-sectional income inequality did not get translated into a rise in lifetime inequality. Third we also characterize the gender lifetime inequality gap and racial income gap for lifetime incomes. We find remarkable similarities across the lifetime inequality among men and among women, especially for cohorts that entered the economy in the last 40 years. Fourth, we quantify the lifetime burden of taxes and compare it to the burden of tax distribution estimated from cross-sectional distribution of income (as commonly done in the literature).
    Date: 2014
  13. By: Meryem Duygun (Business School, Hull University, UK); Silvia Pazzi (School of Management, University of Leicester, UK); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universidad Jaume I, Castellón, Spain); Simona Zambelli (Dipartimento di Scienze Aziendali, Università di Bologna, Italy)
    Abstract: This study explores the impact of ownership types on efficiency of Italian water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, a recent study argues that this relationship can be further complicated by the effect of organisational and environmental variables. The current study aims to contribute to the debate about the impact of ownership structure on efficiency by including the effect of size and geographical location combining efficiency (obtained via nonparametric methods) with cluster analysis. The results show that ownership does not have a significant effect on efficiency per se; however the combination of size and geographical location provides interesting insights on the difference observed in the efficiency. Therefore, the paper argues that administrative reforms for institutional settings should consider a set of variables that characterise each organisation.
    Keywords: efficiency, water utilities, ownership, size, geographical location
    JEL: H4 H7 H83
    Date: 2014

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