nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2015‒01‒31
twenty papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Formal Approaches to Socio Economic Policy Analysis - Past and Perspectives By Gräbner, Claudius
  2. The Dynamics of Exploitation and Class in Accumulation Economies By Cogliano, Jonathan F. ; Veneziani, Roberto ; Yoshihara, Naoki
  3. Cognitive Economics By Miles S. Kimball
  4. An economic network in Nonth America By AROCHE REYES, FIDEL ; MARQUEZ MENDOZA, MARCO ANTONIO
  5. Social psychology and biodiversity conservation in agriculture By Wauters, Erwin ; D'Haene, Karoline ; Lauwers, Ludwig H.
  6. Cooperative social capital - towards a lifecycle perspective By Deng, Wendong ; Hendrikse, George
  7. Economics education: literacy or mind framing? Evidence from a survey on the social building of trust in Portugal By João Carlos Graça ; João Carlos Lopes ; Rita Gomes Correia Abstract. This paper deals on the issue of whether or not studying economics has a relevant effect on molding the values and attitudes characteristic of the trust-building processes prevailing in a democratic society. Mainstream economics teaching, based on the self-interest model of rational, maximizing, individualistic representative agents, may well cause indoctrinating effects, creating or reinforcing both political conservatism and selfishness values and behaviors among economics students. This result is confirmed by most studies in relevant literature, but it may be otherwise explained by a so-called self-selection effect, suggesting that “economists are born, not made”. In this paper a contribution to this literature is made with more empirical evidence, namely the results of a survey entitled “Social Building of Trust in Portugal”, referring to a considerable diversity of samples (economics students, other students, ordinary citizens of two counties, urban and rural) and being applied in three different years: 2006, 2009 and 2012. Keywords. Economics education; indoctrination or self-selection effects; political conservatism and selfishness of economists; trust; social and political values and behaviors; Portugal
  8. The Consequences of the Demographic Transition for Women’s Status in Society By Namasaka, Martin
  9. Development theory and poverty. A review By Francesco Farina
  10. Comportamento fiscal e responsabilidade social das empresas By Manuel Castelo Branco
  11. The two “third ways” of capitalism: macroeconomic versus microeconomic regulation. A critical view. By Giuseppe Conti
  12. Embodiment: Thoughts From An Existential-Analytical Perspective By Elena Stankovskaya
  13. Essentials of Constructive Heterodoxy: The Market By Kakarot-Handtke, Egmont
  14. The Demand Driven and the Supply-Sided Input-Output Models. Notes for the debate By AROCHE REYES, FIDEL ; MARQUEZ MENDOZA, MARCO ANTONIO
  15. Algérie : femmes et familles entre droit et réalité By Zahia Ouadah-Bedidi ; Nourredine Saadi
  16. Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates By Simplice Asongu ; Oasis Kodila-Tedika
  17. Resistance to change in government: risk, inertia and incentives By Felix Ritchie
  18. Institutional determinants of regional diversity of labor market in Poland By Beata Wozniak-Jechorek
  19. Financial Reporting for Varieties of Capitalism: The Case Against a Single Set of International Financial Reporting Standards. By Palea, Vera
  20. "Building the Entrepreneurial State: A New Framework for Envisioning and Evaluating a Mission-oriented Public Sector" By Mariana Mazzucato

  1. By: Gräbner, Claudius
    Abstract: This paper is motivated by the observation that (1) socio economic analysis uses significantly less formalisms than mainstream economics, and (2) that there exist numerous situations in which socio economics could benefit from a more formal analysis. This is particularly the case if institutions play an important role in the system to be investigated. Starting with a broad conception of a formalism, this paper introduces and discusses five different formal approaches regarding their adequateness for socio economic analysis: The Social Fabric Matrix Approach, the Institutional Analysis and Development Framework, System Dynamics, (Evolutionary) Game Theory, and Agent Based Computational Modeling. As a formal analysis always comes up with implicit ontological and epistemological tendencies, that have to be reflected if the formalism should contribute to a better understanding of the system under investigation, this paper pays particular attention to these tendencies of the considered formalisms. In the end, antagonisms and possible convergences among the formalisms are discussed.
    Keywords: Social Economics, Institutional Economics, Methodology, Epistemology, Ontology, System Dynamics, Social Fabric Matrix, (Evolutionary) Game Theory, Agent-Based Computational Economics, Econometrics.
    JEL: B41 B52 C63 C70
    Date: 2015–01–15
  2. By: Cogliano, Jonathan F. (Department of Economics, Dickinson College ); Veneziani, Roberto (School of Economics and Finance, Queen Mary University of London ); Yoshihara, Naoki (The Institute of Economic Research, Hitotsubashi University )
    Abstract: This paper analyses the equilibrium dynamics of exploitation and class in general accumulation economies with population growth, technical change, and bargaining by adopting a novel computational approach. First, the determinants of the emergence and persistence of exploitation and class are investigated, and the role of labour-saving technical change and, even more importantly, power is highlighted. Second, it is shown that the concept of exploitation provides the foundations for a logically coherent and empirically relevant analysis of inequalities and class relations in advanced capitalist economies. An index that identifies the exploitation level, or intensity of each individual can be defined and its empirical distribution studied using the standard tools developed in the theory of inequality measurement.
    Keywords: Exploitation, class, accumulation, simulation.
    JEL: B51 D63 C63
    Date: 2014
  3. By: Miles S. Kimball
    Abstract: Cognitive Economics is the economics of what is in people’s minds. It is a vibrant area of research (much of it within Behavioral Economics, Labor Economics and the Economics of Education) that brings into play novel types of data—especially novel types of survey data. Such data highlight the importance of heterogeneity across individuals and highlight thorny issues for Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called “bounded rationality”), which poses theoretical challenges that call for versatile approaches. Cognitive Economics brings a rich toolbox to the task of understanding a complex world.
    JEL: B4 D03 D6 G02 J24
    Date: 2015–01
    Abstract: Economic structures can be studied as networks of industries linked through flows of commodities that - in turn - the consuming sectors use as inputs. The Input-Output (IO) model is a suitable framework for analysing those structures, because its main target is the study of interdependence between sectors. In this paper we use a North American multi-region IO table in order to identify an economic regional network that results from a subset of the links between sectors in the countries involved. Those are defined by the exchange of goods between industries. Further, a density measure is used as an indicator of the network complexity, explained by the integration level and shape between those economies. Our results show that the US is by far the most integrated economy in North America; it also determines the shape of the network structure. In contrast, Canada and Mexico maintain scarce direct relationships.
    Keywords: Economic structure, economic network, Input-Output model, North America
    JEL: C67 F15 O51
    Date: 2012
  5. By: Wauters, Erwin ; D'Haene, Karoline ; Lauwers, Ludwig H.
    Abstract: We investigate farmers’ intentions to apply biodiversity conservation practices from psychological perspective, using an adapted version of the theory of planned behaviour (TPB), including group norms and putting emphasis on moral norms and self-identity. The study is based on a quantitative survey (n = 106) in Belgium, analyzed using confirmatory factor analyses and path analysis. Results show that the impact of attitudes, social norms and perceived behavioural control on intentions is almost fully mediated through moral norms and self-identity. To have a sustained impact, change actions should strive to embed biodiversity conservation into the social norms and into the good farmer identity of the farming community.
    Keywords: biodiversity conservation, farmers behaviour, theory of planned behaviour, path analysis, Environmental Economics and Policy,
    Date: 2014–08
  6. By: Deng, Wendong ; Hendrikse, George
    Abstract: This study provides a literature review of social capital in cooperatives. We integrate the social capital concept with cooperative lifecycle theory and describe the change of cooperative social capital along the lifecycle. We propose that cooperatives in different stages of the lifecycle are featured with different social capital levels. Cooperatives are supposed to enjoy a large stock of social capital in the early stages of the lifecycle. However, the level of social capital in cooperatives exhibits a trend of declining along the development of the organization. The decrease of social capital will lead to an imbalance of the social and economic attribute of cooperatives. The cooperative’s income rights structure must change accordingly. We argue that it is important for cooperatives to strategically maintain and develop the social capital over time. Otherwise, the comparative advantage of the cooperative form may disappear.
    Keywords: Social Capital, Cooperatives, Lifecycle, Institutional and Behavioral Economics,
    Date: 2014–08
  7. By: João Carlos Graça ; João Carlos Lopes ; Rita Gomes Correia Abstract. This paper deals on the issue of whether or not studying economics has a relevant effect on molding the values and attitudes characteristic of the trust-building processes prevailing in a democratic society. Mainstream economics teaching, based on the self-interest model of rational, maximizing, individualistic representative agents, may well cause indoctrinating effects, creating or reinforcing both political conservatism and selfishness values and behaviors among economics students. This result is confirmed by most studies in relevant literature, but it may be otherwise explained by a so-called self-selection effect, suggesting that “economists are born, not made”. In this paper a contribution to this literature is made with more empirical evidence, namely the results of a survey entitled “Social Building of Trust in Portugal”, referring to a considerable diversity of samples (economics students, other students, ordinary citizens of two counties, urban and rural) and being applied in three different years: 2006, 2009 and 2012. Keywords. Economics education; indoctrination or self-selection effects; political conservatism and selfishness of economists; trust; social and political values and behaviors; Portugal
    JEL: A13 A29 Z13
    Date: 2014–12
  8. By: Namasaka, Martin
    Abstract: The demographic transition is perhaps the most important event to occur in human affairs during the last 250 years, since the time of the enlightenment. It started in the countries of north-western Europe, and it has gone on to affect the rest of the world (Dyson 2009). Signified by the sustained decline in mortality and subsequently fertility, it has major implications for women’s status within the family and in the society as women become less tied to concerns of the domestic domain. Consequently, the process of the transition, presents an interesting reduction in gender differentiation (Davis, Van den Oever, 1982) with women’s lives becoming more like those of men, rather than the reverse. This paper discusses the consequences the transition for women’s status in both high and low fertility populations by presenting evidence that women gain from the process, however this by no means the end of the story in improvements to issues such as gender equality.
    Keywords: Demographic Transition, Women's Status in Society
    JEL: I1 I14 I18 I2 I24 I25 J1 J12 J13 J16 J2 J21
    Date: 2015–01–15
  9. By: Francesco Farina (University of Siena )
    Abstract: This review article presents the evolution of development theory during the XX century, the measurement of poverty, the concept and the indices of multidimensional poverty. A special focus concerns the complex linkages between income inequality, poverty and institutions during the growth process of developing countries.
    Keywords: Development theory,Growth,Poverty,Income inequality
    JEL: I31 I32 O15 O21 O43
    Date: 2015–01
  10. By: Manuel Castelo Branco (FEP-UP; OBEGEF )
    Abstract: This paper explores the relation between the tax behaviour of corporations and their social responsibility. The negative consequences of corporate tax avoidance and evasion are highlighted, namely those affecting nations. The pernicious social consequences of the generalized use of tax minimization strategies by corporations make their tax behaviour a matter of business assumption of social responsibilities. Moreover, whatever the vision of the corporation one upholds, strategies conceived by corporations with the sole purpose of minimizing their tax burden are considered to be incoherent with the notion of corporate social responsibility.
    Date: 2014–09
  11. By: Giuseppe Conti
    Abstract: From the 1930s and 1940s, the main industrial economies explored a "third way" between laissez-faire capitalism and collectivist central planning. In this sense, the "third way" represented a continuum of experiments between two opposite banks: on the one hand macroeconomic regulation of Keynesian type; on the other microeconomic regulation of social market economy (Soziale Marktwirtschaft). The theoretical foundation of social market economy is anti-Keynesian. In this approach, market failures depend on weak competition. In this case, the state intervenes by means of various kinds of incentives with no, or little public expenditure. In Keynesian approaches underemployment equilibria justify state interventions by means of public investments though leaving to the private sector both allocative choices and the related risks. The paper argues, contrary to the premises, that the social market economy, by reintroducing microeconomics solutions based upon bureaucratic rules, violates the main individual liberties, even affecting consumer's choices. The Keynesian welfare state on the contrary follows the liberal tradition of the rule of law, and of the primacy of the civil rights of citizens. The paper discusses the economic and social implications of these two "third ways".
    Keywords: Varieties of capitalism, Welfare state, Macro-micro regulation, Social market economy.
    Date: 2015–01–01
  12. By: Elena Stankovskaya (National Research University Higher School of Economics )
    Abstract: Modern culture has a keen in interest in the embodiment and comprehensive psychological approaches of conceptualizing the human body. Frankl proposed the theory of ‘dimensional ontology’, which included clear analytical models of human body but which were insufficient in many respects. This paper attempts to integrate existential-analytical ideas about embodiment and enrich them with other investigations in this sphere. The central argument is that the theory of four fundamental motivations developed by Langle is a useful way to comprehend the complexity of embodiment. This paper discusses the four levels of embodiment and the way in which the four fundamental existential themes are represented through embodiment.
    Keywords: embodiment, existential analysis and logotherapy, logotherapy, self
    JEL: Z
    Date: 2014
  13. By: Kakarot-Handtke, Egmont
    Abstract: The consensus is that orthodox economics is a failure in three dimensions: conceptual, methodological, and empirical. Heterodoxy has meticulously sorted out the multitude of errors, mistakes, and distortions. Yet, this alone does not help out of stagnation. Economists have now to go into constructive mode. The most urgent task is to replace the misleading supply-demandequilibrium representation of the market. The reconstruction of the centerpiece of the market system from scratch paves the way to the new paradigm. Nobody can talk about the market system without a correct idea of how the market works. Heterodox economists must take the innovative lead.
    Keywords: new framework of concepts; structure-centric; Law of Supply and Demand; market clearing; budget balancing
    JEL: B59 D40
    Date: 2015–01–11
    Abstract: The demand-driven version of the open Input-Output model determines production as a function of final demand, given the production technology. On the contrary, in the supply-sided version, value added determines output and producers must induce sales in order to achieve a desired level of income. This latter version of the model has been criticised and even rejected on the bases of its implausibility, its difficult interpretation and its bizarre implications. This paper argues however that the logic of the supply-side model is not mathematically at odds with Leontief’s arguments. Rejection of the model is a matter of theoretical interpretation
    Keywords: Input-Output model, demand-driven model, supply-driven model, Leontief, Ghosh, balanced growth
    JEL: B23 C67
    Date: 2013–01
  15. By: Zahia Ouadah-Bedidi ; Nourredine Saadi
    Abstract: A number of studies have been published on the deep-seated changes occurring in Algerian families. Fertility is falling, marriages are happening later in life, the Ayla kinship unit has changed and the traditional family has been replaced by the contemporary family, home to a clash between ideological tension and socio-economic change. But the transformations are far from unequivocal, the result being a difficult transition in which the dynamics of sociological differentiation have given rise to the coexistence of several family organisation modes (conjugal, single parent, extended, stepfamily, etc.) and had varying impacts on relationships between men and women and on the real status of women in society. Society has been turned upside down by the radical violence of the 1990s, the economic and social consequences of privatisation and state disengagement, the rise in unemployment, rural exodus, and the new relationships forged by the liberal economy. Yet paradoxically, all matters symbolic (gender roles, patriarchy, cultural norms, etc.) and legal (the Family Code, legal bodies, etc.) remain marked by an anthropology informed by the old, patriarchal and patrilineal model. This article posits a reading of the legal provisions in the Family Code in the light of the multiple variables in demographic and sociological change in Algeria.
    Date: 2014
  16. By: Simplice Asongu (Yaoundé/Cameroun ); Oasis Kodila-Tedika (Kinshasa, Democratic Republic of Congo )
    Abstract: Tebaldi & Mohan (2010, JDS) have established an empirical nexus between institutions and monetary poverty. We first, reflect their findings in light of recent development models, debates and currents in post-2010 literature. We then re-examine their results with a non-monetary and multidimensional poverty indicator first published in 2010. Our findings confirm the negative relationship and the nexus disappears with control for average income. Hence, confirming the conclusions of the underlying study that institutions could have an indirect effect on multidimensional poverty. In other words, the poverty eradication effect of institutions is through income-average as opposed to income-inequality. We discuss the confirmed findings in light of implications to: (1) debates over preferences in economic rights; (2) China’s development/outlook; (3) the Chinese model versus sustainable development; (4) the Fosu conjectures; (5) Piketty’s & Kuznets’ celebrated literatures and (6) future research to ascertain the inequality mechanism.
    Keywords: poverty; institutions
    JEL: O11 P14 P16 I32 O17 O43
    Date: 2014–12
  17. By: Felix Ritchie (University of the West of England, Bristol )
    Abstract: There is a popular impression that governments are resistant to change and innovation, and that this is due to a combination of overly bureaucratic processes and a culture of risk aversion. It is debatable that this is well-founded, theoretically or empirically: government bodies differ from private sectors in their structures and objectives, formalised decision-making processes may aid innovation rather than inhibiting it, and the assumption that governments are excessively risk-averse assumes that private sector decisions on risk are correct - an assumption which is hard to sustain given recent economic history. This paper brings together ideas from public administration, behavioural psychology and economics to ask whether the anti-innovation government has any theoretical or empirical basis. It argues there is some truth in the claim that governments are less likely to innovate; but the paper also argues that a missing piece of the puzzle is provided by incentive structures in government which encourage the status quo irrespective of risk preferences. However, the evidence for these negative incentives is largely anecdotal and derives from those who could be seen to have an interest in this perspective, and so there is a need for more empirical research to explore this idea.
    Keywords: Public sector administration, incentives, risk , innovation, resistance, change
    Date: 2014–01–12
  18. By: Beata Wozniak-Jechorek (Poznañ University of Economics )
    Abstract: The article will focus on regional diversity of the Polish Labor Market from institutional perspective. The Polish Labor Market is geographically diverse in terms of unemployment and employment rates, and also in terms of economic development. At the end of 2013 the difference between the lowest and the highest unemployment rate in the Polish regions was 12.1% (Wielkopolska located in the West Poland has unemployment rate of 9.6% and Warmia - Mazury in the East has unemployment of 21.7%). The question arises whether this difference comes from the structural or institutional sources? The paper will describe the character of Polish Labor Market whereas in the second part, it will trace the impact of institutional variables such as real wage, Kaitz index and Gender gap on the regional unemployment rate in 2002-2012 in Poland.
    Keywords: institutional economics, labor market, institutional unemployment, labor market’s institutions
    JEL: B15 B25 B52 J08
    Date: 2014–12
  19. By: Palea, Vera (University of Turin )
    Abstract: Financial reporting is a powerful practice that shapes social and economic processes. This paper raises several doubts on the wisdom of current attempts to establish a single set of international financial reporting standards, tailored to the needs of stock market - based capitalism, which forces economies to standardize onto a single economic model. It is at time of great uncertainty and change that the advantages of variety can be appreciated. This paper therefore claims that financial reporting regulation should be large enough to accommodate different forms of capitalism and to let them compete on a level playing field.
    Date: 2014–12
  20. By: Mariana Mazzucato
    Abstract: Today, countries around the world are seeking "smart" innovation-led growth, and hoping that this growth is also more "inclusive" and "sustainable" than in the past. This paper argues that such a feat requires rethinking the role of government and public policy in the economy--not only funding the "rate" of innovation, but also envisioning its "direction." It requires a new justification of government intervention that goes beyond the usual one of "fixing market failures." It also requires the shaping and creating of markets. And to render such growth more "inclusive," it requires attention to the ensuing distribution of "risks and rewards." To approach the innovation challenge of the future, we must redirect the discussion, away from the worry about "picking winners" and "crowding out" toward four key questions for the future: 1. Directions: how can public policy be understood in terms of setting the direction and route of change; that is, shaping and creating markets rather than just fixing them? What can be learned from the ways in which directions were set in the past, and how can we stimulate more democratic debate about such directionality? 2. Evaluation: how can an alternative conceptualization of the role of the public sector in the economy (alternative to MFT) translate into new indicators and assessment tools for evaluating public policies beyond the microeconomic cost/benefit analysis? How does this alter the crowding in/out narrative? 3. Organizational change: how should public organizations be structured so they accommodate the risk-taking and explorative capacity, and the capabilities needed to envision and manage contemporary challenges? 4. Risks and Rewards: how can this alternative conceptualization be implemented so that it frames investment tools so that they not only socialize risk, but also have the potential to socialize the rewards that enable "smart growth" to also be "inclusive growth"?
    Keywords: Finance; Industrial Policy; Mission-oriented Innovation
    JEL: L1 L5
    Date: 2015–01

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