nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2015‒07‒18
seventeen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Networks in Manuel Castells’ theory of the network society By Anttiroiko, Ari-Veikko
  2. Sraffa and the Labour theory of Value - a note By Anderaos de Araujo, Fabio
  3. Regional Input-Output Analysis of A Mega-Event: Possible Impact of EXPO on Izmir Economy By Aydoğuş, Osman; Deger, Cagacan; Tunalı Çalışkan, Elif; Gürel Günal, Gülçin
  4. Germany's social market economy: A blueprint for Latin American countries? By Sauerland, Dirk
  5. Gender Inequality in New Media: Evidence from Wikipedia By Marit Hinnosaar
  6. The Economics of Trafficking for Sexual Exploitation By Jakobsson, Niklas; Kotsadam, Andreas
  7. The future of agent-based modelling. By Matteo G. Richiardi
  8. The 'stay-at-home' mother, postfeminism and neoliberalism: content analysis of UK news coverage By Shani Orgad; Sara De Benedictis
  9. Examining gender inequalities in land rights indicators in Asia: By Kieran, Caitlin; Sproule, Kathryn; Doss, Cheryl; Quisumbing, Agnes R.; Kim, Sung Mi
  10. Kindleberger and Financial Crises By Piero Pasotti; Alessandro Vercelli
  11. Gender, assets, and agricultural development: Lessons from eight projects: By Johnson, Nancy L.; Kovarik, Chiara; Meinzen-Dick, Ruth Suseela; Njuki, Jemimah; Quisumbing, Agnes R.
  12. Financialisation, financial structures, economic performance and employment. By Malcolm Sawyer
  13. Types of financial institution and their supply of financial services: the case of microfinance in Europe By Sergio Lagoa; Abdul Suleman
  14. We ran one billion agents. Scaling in simulation models By Ross Richardson; Matteo Richiardi; Michael Wolfson
  15. Looking into the future of complex dynamic systems By Baggio, Rodolfo
  16. Avoided “act of vandalism” or “missed opportunity”? Two alternative accounts of the European Financial Transactions Tax proposal By Marco Boffo
  17. Stock market cycles and supply side dynamics By de Grauwe, Paul; Gerba, Eddie

  1. By: Anttiroiko, Ari-Veikko
    Abstract: This paper discusses the conceptualization of network in Manuel Castells’ theory of network society. Castells’ early academic works were built on the structural analysis of capitalism and social movements in response to the contradictions of capitalist society, without any explicit connection to network analysis. Networks gradually appeared in Castells’ works in the late 1980s, when he became interested in the configuration of the relationships between technology, economy, and society. The culmination of this phase was his opus magnum, The Information Age trilogy, which introduced network as a key concept of his macro theory, even though he remained laconic about the concept itself. This is paradoxical, for Castells became possibly the most prominent figure globally in adopting network terminology in macro sociological theory, but at the same time made hardly any empirical, theoretical or methodological contribution to social network analysis or network theory in general. This implies that ‘network’ in Castells’ social theory is not an analytical concept but rather a powerful metaphor that served to capture his idea of the new social morphology of late capitalism.
    Keywords: Manuel Castells, network, network society, The Information Age, social theory, political economy, capitalist society, late capitalism, informational city, social morphology
    JEL: A13 A14 B31 B51 B52 H11 H7 I0 J6 L16 L23 L5 O1 O2 O3 O33 P1 P16
    Date: 2015–07–15
  2. By: Anderaos de Araujo, Fabio
    Abstract: An analysis of the invariable measure of prices proposed by the eminent Italian economist Piero Sraffa, who laid the foundations for a new approach in modern economics. Two mathematical appendices are also provided. The first one shows step by step the construction of the Standard Commodity, which is a consistent solution to the transformation of labour values into prices of production. In Appendix II there is a general numerical example of a price system with two industries which makes the understanding of the distribution of income between wages and profits easier. Using a software spreadsheet, for example, it is possible to make numerical simulations and make comparisons between the results obtained from the Sraffa price system with that obtained from Marx's. This is revised version of the original paper written few years ago.
    Keywords: Sraffa, Standard Commodity, labour values, income distribution
    JEL: A1 B00 B12
    Date: 2015–07–06
  3. By: Aydoğuş, Osman; Deger, Cagacan; Tunalı Çalışkan, Elif; Gürel Günal, Gülçin
    Abstract: Izmir has lost the bid for EXPO 2020. Izmir’s expectations were high, but to the best information of the authors, these expectations were never systematically quantified. This article quantifies the expected expenditures related to a mega event in Izmir due to i) additional hotel constructions, and, ii) arrival of foreign visitors. Then, the effects of these additional expenditures on regional economy are examined through a closed regional I-O model, where closure is due to endogenized consumption expenditures. The calculations are based on a regional I-O table of İzmir, available from İzmir Regional Development Agency IZKA. It is observed that constructions related to a mega event require considerable recycling imports, due to scrap metal dependency of metal production.
    Keywords: EXPO; Mega-Events; Regional Economic Analysis; Input-Output Tables; Impact Analysis
    JEL: C63 L83 R12 R15
    Date: 2015–07–01
  4. By: Sauerland, Dirk
    Abstract: [Introduction ...] This paper tries to answer these questions taking five steps of argumentation. Firstly, the paper briefly sketches the theoretical and empirical background of the modern liberal market economy concept. Secondly, it outlines in more detail the basic ideas of the ordoliberal social market economy concept and some modern amendments to this concept based on institutional economics’ ideas. Thirdly, the paper compares the two concepts and it uses institutional data to describe two prototypes of economies based on those concepts of the United States and Germany. Fourthly, the same databases are used to describe the institutional status quo in five Latin American countries. The fifth and last step of the argumentation discusses the limitations of a simple blueprint idea with regards to economic orders. The paper ends with conclusions on options and limits of taking the liberal or the social market economy concept as a blueprint for Latin American countries.
    Date: 2015
  5. By: Marit Hinnosaar
    Abstract: Media is considered to be critical for gender equality. I analyze Wikipedia, one of the prominent examples of new media. I study why women are less likely to contribute to Wikipedia, the implications of the gender gap, and what can be done about it. I find that: (1) gender differences in the frequency of Wikipedia use and in beliefs about one's competence explain a large share of the gender gap in Wikipedia writing; (2) the gender gap among contributors leads to unequal coverage of topics; (3) providing information about gender inequality has a large effect on contributions.
    Keywords: Gender, Internet, Media, Public goods
    JEL: L86 L82 J16 H41
    Date: 2015
  6. By: Jakobsson, Niklas (Norwegian Social Research and Karlstad University,); Kotsadam, Andreas (Dept. of Economics, University of Oslo)
    Abstract: International human trafficking of women for commercial sexual exploitation (henceforth trafficking) is an economic activity in which organizations try to make profits. Trafficking has been identified as a form of modern-day slavery and is a worldwide problem which has grown rapidly in the last decades. Despite this, the economics literature on trafficking is small, which is somewhat surprising given that the economics of immigration as well as the economics of crime are both large areas of research. We review the existing economics literature on trafficking with a particular focus on the gaps in this literature. We also describe the datasets that have been and can be used in studying trafficking and we point to future areas of research. We believe that economists have a lot to contribute to the knowledge of the determinants of trafficking and, as more and improved data becomes readily available, the possibilities for credible quantitative research in this area will grow.
    Keywords: Law and economics; Prostitution; Sexual exploitation; Sex slavery; Trafficking
    JEL: F22 J16 K14 O15
    Date: 2015–03–11
  7. By: Matteo G. Richiardi
    Abstract: In this paper, I elaborate on the role of agent-based (AB) modelling for macroeconomic research. My main tenet is that the full potential of the AB approach has not been realised yet. This potential lies in the modular nature of the models, which is bought by abandoning the straitjacket of rational expectations and embracing an evolutionary perspective. I envisage the foundation of a Modular Macroeconomic Science, where new models with heterogeneous interacting agents, endowed with partial information and limited computational ability, can be created by recombining and extending existing models in a unified computational framework. This crucially requires the development of appropriate application programming interfaces (APIs), a set of routines, protocols, and tools which define functionalities internally used by the simulated agents (e.g. learning algorithms) or used by the agents to interact with other agents (exchange of information, goods and services) that are independent of their respective implementations.
    Date: 2015
  8. By: Shani Orgad; Sara De Benedictis
    Abstract: This article analyzes the construction in the UK media of the ‘stay-at-home mother’, a maternal figure who received increasing visibility during the recession and its aftermath. Based on a content analysis of UK national newspaper coverage of stay-at-home mothers (2008–2013), this article argues that the stay-at-home mother emerges from its press coverage as a neoliberal postfeminist subject. On the one hand, the coverage complicates claims about antifeminist backlash and women’s harking back to passive femininity. On the other hand, it fails significantly to undermine maternal femininity’s entanglement with neoliberalism, and reinforces the process described by McRobbie as ‘disarticulation’, by separating between middle-class mothers and working-class mothers.
    Keywords: Content analysis; feminist; gender related; maternity; neoliberalism; news coverage; postfeminism
    JEL: L91 L96
    Date: 2015
  9. By: Kieran, Caitlin; Sproule, Kathryn; Doss, Cheryl; Quisumbing, Agnes R.; Kim, Sung Mi
    Abstract: This paper reviews the available data on men’s and women’s land rights, identifies what can and cannot be measured by these data, and uses these measures to assess the gaps in the land rights of women and men. Building on the conceptual framework developed in 2014 by Doss et al., we utilize nationally representative individual- and plot-level data from Bangladesh, Tajikistan, Vietnam, and Timor-Leste to calculate five indicators: incidence of ownership by sex; distribution of ownership by sex; and distribution of plots, mean plot size, and distribution of land area, all by sex of owner. The results show large gender gaps in landownership across countries. However, critical data gaps cloud our understanding of land rights and why women fare better or worse in certain countries. In particular, the limited information on joint and individual ownership indicates that this is an important area for future data collection and analysis.
    Keywords: Gender, Women, Land ownership, assets, Property rights,
    Date: 2015
  10. By: Piero Pasotti (University of Siena); Alessandro Vercelli (University of Siena)
    Abstract: This paper aims to assess to what extent the contributions of Kindleberger to the explanation and control of financial crises may still be a source of valuable insights for the present. Kindleberger had the great merit, to be shared with Minsky, of having resumed in the early 1970s, after an eclipses of more than two decades, the investigation on the intrinsic instability of credit and its impact on financial crises. Though his pure model may be considered less pregnant than that of Minsky, it extends its scope to the international and political aspects of financial crises. In addition Kindleberger provides a powerful support to the model by rooting it in the empirical evidence systematically investigated since the early 18th century. The application of Kindleberger’s model has been successfully extended, with the collaboration of Aliber, also to the financial crises occurred after the publication of his major book (Kindleberger, 1978). This paper argues that Kindleberger’s insights are still invaluable to understand the subprime crisis and the ensuing Great recession and to design the institutions and policies necessary to resume a sustainable path of economic progress.
    Keywords: Kindleberger, Financial Crises, International Lender of Last Resort
    JEL: B26 E52 E58 F33 F34
    Date: 2015–02–01
  11. By: Johnson, Nancy L.; Kovarik, Chiara; Meinzen-Dick, Ruth Suseela; Njuki, Jemimah; Quisumbing, Agnes R.
    Abstract: Ownership of assets is important for poverty alleviation, and women’s control of assets is associated with positive development outcomes at the household and individual levels. This research was undertaken to provide guidance for agricultural development programs on how to incorporate gender and assets in the design, implementation, and evaluation of interventions. This paper synthesizes the findings of eight mixed-method evaluations of the impacts of agricultural development projects on individual and household assets in seven countries in Africa and South Asia. The results show that assets both affect and are affected by projects, indicating that it is both feasible and important to consider assets in the design, implementation, and evaluation of agricultural development projects. All projects were associated with increases in asset levels and other benefits at the household level; however, only four projects documented significant, positive impacts in women’s ownership or control of assets relative to a control group, and of those only one project provided evidence of a reduction in the gender asset gap. The quantitative and qualitative findings suggest ways that greater attention to gender and assets by researchers and development implementers could improve outcomes for women in future projects.
    Keywords: gender, women, property rights, agriculture, ownership, assets, evaluation, households, poverty alleviation, impact evaluation,
    Date: 2015
  12. By: Malcolm Sawyer (University of Leeds)
    Abstract: The first major theme is the trends in the processes of financialisation reviewing quantitative and qualitative features of those trends, covering both industrialised and emerging economies. The ways in which the processes of financialisation impact on and interacts with the real sector are discussed with particular reference to the empirical evidence. In this, the financial development—economic growth relations are explored, and whether positive relationship between the two has declined and perhaps reversed in recent decades. There are other ways through which financialisation (particularly in the guise of ownership by the financial sector of the corporate sector and the pursuit of shareholder value) sets the framework for a wide range of decisions taken by corporations including investment and employment. In section 4 the focus is on the ways in which the financial sector could be changed and developed which could be more conducive to supporting sustainable development and high levels of employment and human development. The thrust of the argument is the need to develop diverse financial institutions with a variety of ownership forms whose primary functions are the savings—investment linkages, and to enable funds to flow in a more socially beneficial manner not solely governed by profit calculations of the financial sector.
    Keywords: financialisation, economic development, human development, employment, financial structures
    JEL: E2 E44 G20 O16
    Date: 2015–02–01
  13. By: Sergio Lagoa (Instituto Universitário de Lisboa – ISCTE and Dinamia’Cet-IUL.); Abdul Suleman (Instituto Universitário de Lisboa – ISCTE and BRU-IUL)
    Abstract: The profit-oriented financial sector has grown in importance and influence, leading some authors to talk about a financialised economy. The question we raise in this paper is what is the role of non-profit oriented financial institutions and public programmes in the microfinance segment. We conclude that in this market there is a large diversity of institutions and non-for profit organisations have a significant role. Our analysis also shows that the diversity of institutional forms is important to foster market dimension, guarantee a good cover of the several vulnerable groups and a diversified offer of other services besides microcredit. Moreover, some specific institutions have an effect on the composition of the market in terms of personal and business loans, on loans terms, loans size, credit to targeted clients, and offer of other financial services. Moreover, we study how financial institutions cluster around some key variables. Finally, we fuzzy cluster microcredit national markets and describe how institutions types differ across the clusters.
    Keywords: microfinance, financial institutions
    JEL: G21
    Date: 2014–11–01
  14. By: Ross Richardson (Institute for New Economic Thinking at the Oxford Martin School; Mathematical Institute, University of Oxford, UK); Matteo Richiardi (Institute for New Economic Thinking and Nuffield College, Oxford, UK; Collegio Carlo Alberto, Moncalieri, Italy Mathematical Institute, University of Oxford); Michael Wolfson (University of Ottawa, Canada)
    Abstract: We provide a clarification of scaling issues in simulation models, distinguishing between sample size determination, discovery of emergent properties involving a qualitative change in the behaviour of the system at an aggregate level, and ‘true’ scaling, the dependence of the quantitative behaviour of the system at any given level of aggregation, to its size. Scaling issues arise because we want to understand what happens when we run one billion agents, without actually having to run one billion agents. We discuss how we can use the Buckingham Pi theorem, a key tool in dimensional analysis, to provide guidance on the nature and structure of scaling relationships in agent-based models.
    Date: 2015–06–30
  15. By: Baggio, Rodolfo
    Abstract: The desire to know and foresee the future is naturally bound to human nature. Traditional forecasting methods have looked after reductionist linear approaches: variables and relationships are monitored in order to foresee future outcomes with simplified models and to derive theoretical and practical implications. The limitations of this attitude have become apparent in many cases, mainly when dealing with dynamic evolving complex systems, that encompass numerous factors and activities which are interdependent and whose relationships might be highly nonlinear, resulting in an inherent unpredictability of their long-term behavior. Complexity science ideas are important interdisciplinary research themes emerged in the last few decades that allow to tackle the issue, at least partially. This paper presents a brief overview of the complexity framework as a means to understand structures, characteristics, relationships, and explores the most important implications and contributions of the literature on the predictability of a complex system. The objective is to allow the reader to gain a deeper appreciation of this approach.
    Keywords: forecasting, predictability, complex systems, nonlinear analysis, time series
    JEL: C00 C65 L83
    Date: 2015–06–30
  16. By: Marco Boffo (University of Leeds)
    Abstract: After the seeming exhaustion of the Tobin tax debates in the early 2000s, the idea of levying a tax on financial transactions has recently resurfaced at the centre stage of European politics. This has been prompted by a concatenation of events which includes the persistence of the current economic crisis and the paucity of the responses to it, the initial European Commission proposal to tax all types of financial instruments, all financial markets and all financial institutions and, ultimately, the subsequent progressive dilution of the application of such prospects in practice. Given such backdrop, this paper reviews closely two distinct accounts of financial transaction taxes in general and of the European Commission proposal in particular: Grahl and Lysandrou’s argument against them (together with their preference for financial activities taxes instead), and Gabor’s alternative account of their rationale. Such a review aims to constitute a preliminary assessment of these two distinct accounts of the material socio-economic relations, processes and structures underpinning the prospects for global financial reform, which is then offered as a base to relate such perspectives to broader issues and debates about financialisation.
    Keywords: financial transactions tax, financial activities tax, regulatory response to the crisis, financialisation
    JEL: F31 G15
    Date: 2015–02–01
  17. By: de Grauwe, Paul; Gerba, Eddie
    Abstract: The agent-based (behavioural) model is extended to include a financial friction on the supply side. Firms finance capital purchases using external financing, but need to pay for it in advance. In addition, firm financing constraint and net worth are determined by stock market prices, which can (and will) deviate from the fundamental value. The result is that production, supply of credit and the share that firms pay to capital producers heavily depends on the stock market cycles. During phases of optimism, credit is abundant, access to production capital is easy, the cash-in-advance constraint is lax, the risks are undervalued, and production is booming. But upon reversal in market sentiment, the contraction in all these parameters is deeper and asymmetric. This is even more evident in the behavioural model since cognitive limitations of economic agents result in exacerbation of the contraction. Lastly, the behavioural model matches much of the data, including the interest rate, inflation, firm credit, firm financing spread, and bank net worth. It is also successful in matching several supply-side relations (capital-firm credit, inflation-interest rate) as well as their autocorrelations. The results from the empirical validation are favourable to the behavioural model.
    Keywords: supply-side,beliefs,financial frictions,model validation
    JEL: B41 C63 C68 E22 E23 E37
    Date: 2015

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