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on Heterodox Microeconomics |
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Issue of 2015‒02‒05
sixteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Luca Fiorito |
| Abstract: | The aim of this paper is to investigate in some detail the origins of Knight’s antipositism and to assess the main influences that brought him to a change in methodological perspective after 1921. As importantly, what follows is also an attempt to increase our general understanding of the methodological debates taking place during the early decades of the last century and to shed new light on the inherently pluralistic character of US interwar economics. This paper is organized as follows: the first section outlines Knight’s methodological views as presented in his early works; the second section discusses Knight’s “recantation” and his attack on behavioristic social science; the third section analyze Knight’s discussion of the nature and limitations of scientific economics; the fourth section offers a brief digression on Knight’s relationship with American institutionalism; the fifth section deals with the later developments of Knight’s antipositivism; the final section presents some conclusions |
| Keywords: | Knight, Frank; Economic methodology; Economics and physics; American institutionalism |
| JEL: | B31 B41 B40 B21 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:705&r=hme |
| By: | Mariana Mazzucato; Caetano C.R. Penna |
| Abstract: | Recent decades witnessed a trend whereby private markets retreated from financing the real economy, while, simultaneously, the real economy itself became increasingly financialized. This trend resulted in public finance becoming more important for investments in capital development, technical change, and innovation. Within this context, this paper focuses on the roles played by a particular source of public finance: state investment banks (SIBs). It develops a conceptual typology of the different roles that SIBs play in the economy, which together show the market creation/shaping process of SIBs rather than their mere "market fixing" roles. This paper discusses four types of investments, both theoretically and empirically: countercyclical, developmental, venture capitalist, and challenge led. To develop the typology, we first discuss how standard market failure theory justifies the roles of SIBs, the diagnostics and evaluation toolbox associated with it, and resulting criticisms centered on notions of "government failures." We then show the limitations of this approach based on insights from Keynes, Schumpeter, Minsky, and Polanyi, as well as other authors from the evolutionary economics tradition, which help us move toward a framework for public investments that is more about market creating/shaping than market fixing. As frameworks lead to evaluation tools, we use this new lens to discuss the increasingly targeted investments that SIBs are making, and to shed new light on the usual criticisms that are made about such directed activity (e.g., crowding out and picking winners). The paper ends with a proposal of directions for future research. |
| Keywords: | Development Banking; Market Failure; Mission-oriented Finance; Public Finance; State Investment Banks |
| JEL: | G20 L52 O16 O38 P16 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_831&r=hme |
| By: | Bernardo Alves Furtado; Patrícia Alessandra Morita Sakowski |
| Abstract: | Este texto está inserido no projeto Modelagem de Sistemas Complexos para Políticas Públicas e faz uma resenha dos autores clássicos que, em conjunto, contribuíram com os elementos do que seria uma “ciência da complexidade”. Com base no pensamento original destes autores, os conceitos centrais de sistemas complexos são discutidos, a saber: i) a interação entre agentes (homogêneos ou heterogêneos) e o ambiente; ii) as propriedades emergentes e a auto-organização; iii) a importância da não linearidade e das escalas; iv) as regras e seu determinismo; v) a ênfase na dinâmica e retroalimentação; e vi) as noções de adaptação, aprendizado e evolução. Por fim, críticas contemporâneas são apresentadas. Elas sugerem que os argumentos de sistemas complexos não sustentam epistemologicamente a constituição de suposta nova ciência, mas não rejeitam os avanços propostos nos estudos de complexidade. This text was written as part of the project ‘Modelling of Complex Systems for Public Policy’. It reviews the classical authors who jointly contributed to establish the elements of what could constitute a ‘science of complexity’. Based on the original writings of these authors, the text discusses the central concepts of complex systems: i) the interaction between (homogeneous or heterogeneous) agents and the environment; ii) emergence and self-organization; iii) the importance of not nonlinearity and scales; iv) the determinism of rules; v) the emphasis on dynamics and feedback; and vi) the notions of adaptation, learning and evolution. Finally, contemporary critics are presented. They suggest that the arguments of complex systems do not support the establishment of a supposed new science epistemologically, but they do not reject the advances proposed by complexity studies |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2019&r=hme |
| By: | Ian Gough |
| Abstract: | Since climate change threatens human wellbeing across the globe and into the future, we require a concept of wellbeing that encompasses an equivalent ambit. This paper argues that only a concept of human need can do the work required. It compares need theory with three alternative approaches. Preference satisfaction theory is criticised on the grounds of subjectivity, epistemic irrationality, endogenous and adaptive preferences, the limitlessness of wants, the absence of moral evaluation, and the non-specificity of future preferences. The happiness approach is found equally wanting. The main section shows how these deficiencies can be addressed by a coherent theory of need. Human needs are necessary preconditions to avoid serious harm, are universalisable, objective, empirically grounded, non-substitutable and satiable. They are broader than ‘material’ needs since a need for personal autonomy figures in all theoretical accounts. While needs are universal, need satisfiers are most often contextual and relative to institutions and cultures. The satiability and non-substitutability of needs is critical for understanding sustainability. The capability approaches of Sen and Nussbaum are compared but argued to be less fundamental. Finally, human needs provide the only concept that can ground moral obligations across global space and intergenerational time and thus operationalise ‘sustainable welfare’. |
| Keywords: | Human needs; welfare theory; wellbeing; global justice; intergenerational justice; sustainability; preferences; capabilities |
| JEL: | B5 I00 P46 Z13 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58630&r=hme |
| By: | Beata Stepien (Poznañ University of Economics, Poland); Monika Sulimowska-Formowicz (University of Silesia in Katowice) |
| Abstract: | Inter-organizational relations (IORs), complex constructs existing on the verge of companies’ boundaries, are a popular area of managerial and academic investigation, due to their ability to create sustainable competitive advantage. The aim of the article is to show applicability, insights and limitations of economic perspective in IORs analysis. By reviewing advances of selected economic and organizational theories exploring IORs, we will try to answer the following questions: a) can economic thought add any novelty to IOR analysis in the era of dynamic global shifts in competitive environment?, are economic lenses still useful and applicable here?, b) do organizational sciences’ academics take more practical, down to earth approach or have they just moved forward (or blurred the clarity of) their theories by employing advances from social sciences, like sociology and psychology?, c) are these two perspectives contradictory or supplementary? The article is divided into four parts. Firstly, we propose an analytical framework to study inter-organizational relations, secondly we analyze theories focused on IORs as results of rational choices; thirdly we go to theories exploring reasons why IORs are built in a specific way, and then to concepts looking for conditions, methods and key drivers of IORs successful management. In conclusion we give a brief summary of the main findings together with the limitations and open areas of further investigation of inter-organizational relations. |
| Keywords: | inter-organizational relations theory; transaction costs theory; NEI, resource based view; relational view |
| JEL: | D01 D02 D03 D23 D85 L21 L22 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no6&r=hme |
| By: | Ilya Lokshin (National Research University Higher School of Economics) |
| Abstract: | The paper (for the first time, to the best knowledge of the author) applies the Duhem-Quine thesis to conventional quantitative methods in political science. As a result, the discussion of methodological problems associated with these methods is implanted into the epistemological issues highlighted by the Duhem-Quine thesis. Such a link between popular political science methods and philosophy of science could help clarify the difficulties of the former and give impetus to the improved research practices |
| Keywords: | the Duhem-Quine thesis, quantitative methods, methodology, epistemology. |
| JEL: | Y90 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:23/ps/2015&r=hme |
| By: | Eddie Gerba; Waltraud Schelkle |
| Abstract: | The sharp rise in household finance, both in debt and in assets, is one of the striking empirical facts about the US economy of the last two decades. But it is still not clear what caused it. Economists, both mainstream and heterodox, seek an explanation in financial market innovation and liberalization. But it is hard to find systematic evidence for this link. Our paper takes up another line of inquiry. Political economists have started to ask how the restructuring of the welfare state may have affected household finance. We use SVAR analysis to establish whether there is a link between the retrenchment of public social spending and the expansion of tax-‐incentivised private social spending, on the one hand, and household finance variables on the other. More specifically, we ask whether the transformation of the US welfare state over the last 30 years has affected household finances through the channel of debt, leverage, or asset formation. Our findings suggest that the asset channel is empirically the most likely candidate and we point to some welfare state reforms that can support the operation of this channel since the mid-‐1990s |
| Keywords: | balance sheets; social spending; welfare reforms; financialisation; leverage cycles |
| JEL: | E21 E62 G21 H31 H55 |
| Date: | 2014–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:56723&r=hme |
| By: | Damiano de Felice |
| Abstract: | The publication of the Thun Group’s discussion paper The Guiding Principles on Business and Human Rights: An Interpretation for Banks represented a critical step on the way to delineate the relationship between the financial sector and human rights: the document lays the foundations for the adoption of the first ever comprehensive guide on how universal banks should operationalise their responsibility to respect human rights. As the arguments offered by the Thun Group are likely to influence the way in which numerous financial institutions integrate human rights into their operations, this article offers a critical assessment of the discussion paper. Notwithstanding several positive features, the Thun Group relies on a faulty subsidiary approach, avoids fundamental issues like access to effective remedy and downplays the importance of effective engagement with affected stakeholders. |
| Keywords: | banks; finance; Thun Group; Guiding Principles; business and human rights |
| JEL: | F3 G3 |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58796&r=hme |
| By: | Mark Setterfield (Department of Economics, New School for Social Research); Shyam Gouri Suresh (Department of Economics, Davidson College) |
| Abstract: | This paper discusses the concept of path dependence in macrodynamics, and identifies practical difficulties associated with building path-dependent macrodynamic models of the sort that Keynesians and Schumpeterians regard as necessary for the successful study of long-term growth and development. It is suggested that multi-agent systems (MAS) analysis can help address these difficulties, and therefore provides a useful tool for advancing path-dependent macrodynamic analysis. An illustrative example is provided in the form of a MAS model of path-dependent aggregate fluctuations. |
| Keywords: | Multi-agent systems, agent based models, path dependence, macrodynamics |
| JEL: | B41 C63 E12 E32 E37 O41 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1405&r=hme |
| By: | Sara Randall; Ernestina Coast |
| Abstract: | African poverty statistics depend on household-level measurements from survey data, making the definition of household of critical importance. Detailed case studies from Tanzania and Burkina Faso explore (1) understandings of household membership and ambiguities, and (2) how well survey definitions capture households as economic units, and the implications for household size and responses to and mitigation of poverty. We develop an analytic framework of ‘open’ and ‘closed’ households. ‘Open’ households cope with poverty using flexibility, movement and extra-household networks, but are poorly represented by survey data. Closed households are likely to be better described by survey data. |
| JEL: | N0 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59504&r=hme |
| By: | Ernani Teixeira Torres Filho |
| Abstract: | O texto analisa o desenvolvimento do sistema financeiro globalizado contemporâneo, como consequência das inovações introduzidas pelos mercados privados, mas principalmente da estratégia comandada pelos Estados Unidos. Esse novo sistema financeiro global, baseado no dólar flexível, gerou muitas bolhas financeiras desde que se consolidou nos Anos 1980. A crise de 2008 é a mais recente e se tornou a maior delas porque afetou negativamente os principais bancos do mercado financeiro central do sistema, os Estados Unidos. Sua origem está relacionada ao fato de os principais bancos internacionais terem, com a globalização, alterado suas estratégias de negócios, deixando de lado as atividades mais tradicionais de crédito para empresas e famílias em favor de investimentos mais especulativos, baseados em elevada alavancagem, adotando assim um comportamento mais semelhante ao dos fundos de hedge. The paper analyzes the development of the contemporary globalized financial system as a consequence of the innovations introduced by private markets, but mostly the strategy of the governments, particularly the US. This new global financial system, based on the floating dollar, generated many financial bubbles since it was consolidated in the 1980s. The crisis of 2008 is the latest and the greatest of them, because it negatively affected the major banks of the main market of the system, the United States. Its origin is related to the changes that occurred in the business strategies of these banks. They left aside their traditional lending activities to businesses and families in favor of more speculative investments, based on high leverage ratios, thus adopting a behavior similar to what hedge funds do. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2030&r=hme |
| By: | Gabriela Vaceková; Zuzana Prouzová (Department of Public Economics, Masaryk University) |
| Abstract: | The commercialization of nonprofit institutions (NPIs) is a prominent theme in modern multidisciplinary studies. The trend towards nonprofit commercialization has increased significantly in recent years as more and more NPIs explore revenue generating opportunities. To examine nonprofit commercial revenues is thus of both theoretical relevance and practical importance around the world, including post-transitional countries. The aim of the paper is to determine the share and scope of nonprofit commercial revenues in the Czech Republic and to discuss their limitations. We try to show the true character of NPI funding sources based on the motives behind NPI entrepreneurial activities. The NPI funding sources are examined from a business perspective while emphasizing their “quasi” modalities. The paper concludes with suggestions for further research into the commercialization of NPIs in post-transitional countries. |
| Keywords: | Nonprofit institutions; Funding sources; Nonprofit commercial revenues; For-profits-in-disguise; System of National Accounting |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:16&r=hme |
| By: | Chapra, M. Umer (The Islamic Research and Teaching Institute (IRTI)) |
| Abstract: | The generally recognized economic problem of mankind is how best to satisfy the basic needs of all people around the world in spite of the prevailing scarcity of resources. Since this is not happening, the paper argues that the primary reason is the secular worldview which has weakened the social and ethical foundations of human life and placed primary reliance on the market mechanism to ensure efficiency as well as justice in the use of resources. This has inadvertently ended up providing sanctity to the social-Darwinist principles of ‘struggle for existence’ and ‘survival of the fittest’. The result is that the concepts of economic man and the serving of self-interest by maximizing wealth and want satisfaction have gained supremacy. In sharp contrast with this, the worldview of most religions, and particularly that of Islam, emphasizes the concepts of human brotherhood and the well-being of all and provides certain moral restraints on the serving of self-interest. While it recognizes the important role of the market mechanism for this purpose, it does not consider it to be sufficient. It provides a moral orientation to all human activity, including the market mechanism, so that they operate within the framework of moral principles emanating from Divine revelations which treat all human beings as brothers and the resources at their disposal as a trust from God. The whole paper hovers around a discussion of how such a worldview can help solve the economic problem efficiently as well as equitably. |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:irtiwp:1432_001&r=hme |
| By: | Garry Gabison (European Commission – JRC - IPTS); Annarosa Pesole (European Commission – JRC - IPTS) |
| Abstract: | This report discusses models of distributed innovation and how they differ in their nature, effects, and origins. Starting from Open Innovation, the paper analyses its methodological evolution, some of its applications, and the opportunities to apply it in a social context. Open Innovation has gained traction in the last ten years and because of this popularity, Open Innovation has been endowed with numerous meanings. This paper dives into the large literature associated with Open Innovation. First, this paper describes Open Innovation. Second, it explains how Open Innovation has evolved from a linear model of innovation to a model that includes feedback loops. Third, it describes the parallel evolution of Open Innovation and User Innovation, where users are actively involved. This new perspective on the user involvement further contributes to the evolution of Open Innovation into Open Innovation 2.0. Finally, the paper considers the role of Open Innovation in tackling societal challenges and how and if this new innovation process could help Social Innovation to find ways to scale up and reproduce successful results. |
| Keywords: | Ditributed Innovation, Open Innovation, User Innovation |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc93533&r=hme |
| By: | Thomas Kemeny |
| Abstract: | This paper reviews a growing literature investigating how ‘immigrant’ diversity relates to urban economic performance. As distinct from the labor-supply focus of much of the economics of immigration, this paper reviews work that examines how growing heterogeneity in the composition of the workforce may beneficially or harmfully affect the production of goods, services and ideas, especially in regional economies. Taking stock of the existing literature, the paper argues that the low-hanging fruit in this field has now been picked, and lays out a set of open issues that need to be taken up in future research in order to fulfil the promise of this work. |
| Keywords: | diversity; immigration; cities; regional economic performance |
| JEL: | J28 J31 O15 O18 O31 O4 R0 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58458&r=hme |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza) |
| Abstract: | The growth in women's participation in the labor force has attracted attention to the gender differences in commuting behavior, and to their implications. This study analyses the relationship between individual commuting behavior and household responsibilities, with a focus on gender differences in that relationship. Using the Dutch Time Use Surveys for the years 2000 and 2005, we analyze the relationship between commuting time, and the time devoted to home production and childcare. To deal with reverse causality, we use Propenstity Score Matching techniques to obtain imputed data for individuals. After reverse causality is taken into account, we find that the effect of home production on commuting time for women is more than double the effect for men, while childcare time has an effect on women's commuting time behavior only. Our results explain why prior studies have found that women have shorter commutes than men, shedding light on the Household Responsibility Hypothesis (HRH). |
| Keywords: | commuting, home production, childcare, propensity score matching, Multinational Time Use Study |
| JEL: | D13 J16 J22 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8794&r=hme |