nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2015‒07‒25
fourteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The economics of gender equality; a review of the literature in three propositions and two questions By Janneke Plantenga
  2. Relational environment and intellectual roots of 'ecological economics': An orthodox or heterodox field of research? By Teixeira, Aurora A. C.; Castro e Silva, Manuela
  3. Major Defects of the Market Economy By Kakarot-Handtke, Egmont
  4. How does financialisation affect functional income distribution? a theoretical clarification and empirical assessment By Karsten Köhler; Alexander Guschanski; Engelbert Stockhammer
  5. Gender discrimination in 19thc England: Evidence from factory children By Sara Horrell; Deborah Oxley
  6. “Economic development” and gender equality: explaining variations in the gender poverty gap after socialism By Eva Fodor; Daniel Horn
  7. Environmental Impacts of the French Final Consumption By Laurent Meunier; Frédéric Gilbert; Eric Vidalenc
  8. Idealizations of uncertainty, and lessons from artificial intelligence By Smith, Robert Elliott
  9. Can minimum wages close the gender wage gap ? evidence from Indonesia By Hallward-Driemeier,Mary C.; Rijkers,Bob; Waxman,Andrew R.
  10. Can Firms with Political Connections Borrow More Than Those Without? Evidence from firm-level data for Indonesia By FU Jiangtao; SHIMAMOTO Daichi; TODO Yasuyuki
  11. Internationalizing Social Sciences in China: A Study of the Development of Sociology at Tsinghua University By MENG XIE
  12. Représentations sociales de la monnaie : contraste entre les citoyens et les porteurs de monnaies locales By Ariane TICHIT
  13. Disappointment and Public action: Albert Hirschman’s ways of complicating economic theory By Marina Bianchi
  14. Which Way to Go? The Effects of the Great Recession on Economic Thought By HASAN BAKIR; SEVGINAZ ISIK; GORKEM BAHTIYAR

  1. By: Janneke Plantenga
    Abstract: So far, the economic case for gender equality and female empowerment has gained stronger attention in the case of developing countries where women have far less rights and opportunities compared to developed ones. Hence, the grounds supporting gender equality have been much stronger and much more researched in the former. In developed countries, although there are still large differences in labour force participation, income and power, there is at least a growing equality in opportunity, making it less easy to analyse the existing gender inequality in terms of restrictions which need to be lifted in order to reach a fair and efficient division of work. This paper offers a review of the literature on the economics of gender equality by way of organising it along three propositions and two questions. This way it is possible to combine very different strands of literature, ranging from rather formal explorations within theoretical micro-economics, to more empirically oriented macro-economic research on economic growth, and rather heterodox contributions from feminist economics, illustrating the richness of the debate and the different positions that can be taken.
    Date: 2015–07
  2. By: Teixeira, Aurora A. C.; Castro e Silva, Manuela
    Abstract: The way the fields are delineated has been the Achilles' heel of studies analyzing the status and evolution of given scientific areas. Based on van den Besselaar and Leydesdorff's (Mapping change in scientific specialities; a scientometric reconstruction of the development of artificial intelligence, 1996) contribution, the authors propose a systematic and objective method for delineating the field of ecological economics assuming that aggregated journal-journal citation relations is an appropriate indicator for the disciplinary organization of the sciences. They found that the relational scientific backbone of ecological economics comprises 7 main journals: American Journal of Agricultural Economics, Ecological Economics, Environment and Development Economics, Environmental and Resources Economics, Land Economics, Land Use Policy, and Journal of Environmental Economics and Management. From the 3727 articles published between 2005 and 2010 in the ecological economics field, and the corresponding 142 thousand citations two main outcomes emerged: 1) the intellectual frame of reference is overwhelmed by economists and environmental and resources economists with (renowned) ecological economists relatively underrepresented; 2) the building of an integrative knowledge domain is not apparent: on the one hand, ecological economics is seen to be an 'unbound' heterodox and multidisciplinary field, but on the other hand, and somewhat awkwardly, it is (still) heavily 'bound' by quantitative mainstream/ orthodox methodologies.
    Keywords: ecological economics,philosophy of science,bibliometrics
    JEL: C18 C8 Y10 Q57
    Date: 2015
  3. By: Kakarot-Handtke, Egmont
    Abstract: When we characterize an argument that has no sound theoretical foundation as political, then what has been produced by economists so far is political economics. However, since the Classics and Marx all major economic schools have defended the claim that they were doing science. This claim has been convincingly rebutted. So, the task is still before us. The way forward is to move from behavioral to structural economics. In what we should be mostly interested are not so much the behavioral defects of economic agents but the structural defects of the market system and how to repair them.
    Keywords: new framework of concepts; structure-centric; price mechanism; profit mechanism; structural stress; inefficiency mechanism; monetary order; indexation; growth imperative; theory inflicted unemployment; distribution mechanism
    JEL: B49 B59 C63 E10
    Date: 2015–07–17
  4. By: Karsten Köhler (Berlin School of Economics and Law); Alexander Guschanski; Engelbert Stockhammer
    Abstract: While it is frequently asserted that financialisation has contributed to the decline in the wage share there are only few econometric studies, which usually focus on a single aspect of financialisation. This paper provides a theoretical clarification and a systematic empirical investigation. We identify four arguments why financialisation would affect the wage share: (1) a political economy approach focusing on the exit options of firms, (2) a neo-Kaleckian approach stressing the role of financial overhead costs for firms, (3) increased competition on capital markets stressed by neo-Marxian approaches and the critical shareholder value literature, and (4) the role of household debt in increasing workers’ financial vulnerability and undermining their class consciousness. The paper compiles a comprehensive set of empirical measures of financialisation and uses it to test the theoretical hypotheses by a panel regression of 14 OECD countries over the 1989-2011 period. We find strong evidence for negative effects of household debt and evidence for negative effects of financial deregulation.
    Keywords: financialisation, functional income distribution, panel regression.
    JEL: B3 B5 D2 D4 P1
    Date: 2015–07
  5. By: Sara Horrell (University of Cambridge); Deborah Oxley (University of Oxford)
    Abstract: Gender bias against girls in nineteenth-century England has received much interest but establishing its existence has proved difficult. We utilise data on heights of 16,402 children working in northern textile factories in 1837 to examine whether gender bias was evident. Current interpretations argue against any difference. Here our comparisons with modern height standards reveal greater deprivation for girls than for boys. But this result cannot be taken at face value. We query whether modern standards require adjustment to account for the later timing of puberty in historical populations and develop an alternative. Gender discrimination remains, although its absence amongst younger children precludes an indictment of culturally-founded gender bias. The height data must remain mute on the source of this discrimination but we utilise additional information to examine some hypotheses: occupational sorting, differential susceptibility to disease, poorer nutrition for girls, disproportionate stunting from the effects of nutritional deprivation, and type and amount of work undertaken, specifically labour additional to paid work in the domestic sphere. Of these, we favour housework as the main culprit, factory girls undertook more physical labour than factory boys and this was reflected in disproportionate stunting. The ‘double burden’ was, and remains, a form of gender discrimination.
    Date: 2015–02–02
  6. By: Eva Fodor (Central European University); Daniel Horn (Institute of Economics - Centre for Economic and Regional Studies Hungarian Academy of Sciences)
    Abstract: Using the 2008 cross-sectional wave of the survey Statistics on Income and Living Conditions (EU-SILC) and multi-level modeling techniques, this paper explores the macro-level determinants of the gender poverty gap in the ten post-socialist European Union member states. In dialogue with the literature on the impact of economic development on gender inequality in Asia and Latin America, we find that fast-paced, foreign capital led economic growth is associated with a larger gender poverty gap in Central and Eastern Europe, while generous welfare policies, specifically higher levels of spending on pensions and family policies are correlated with women’s lower relative destitution. These findings evaluate the impact of neo-liberal style “economic development” on gender inequality in a geo-politically specific context and suggest that structural adjustment and global market integration may exacerbate women’s vulnerability even when they are well equipped with human capital and other resources to compete with men in the labor market.
    Keywords: economic development, poverty, gender, SILC
    JEL: J16 P36 I32 C21
    Date: 2015–04
  7. By: Laurent Meunier (ADEME); Frédéric Gilbert (ADEME); Eric Vidalenc (ADEME)
    Abstract: In order to fight against climate change, ambitious targets have been set, such as decreasing carbon emissions by 75% in France compared to 1990. Yet, focusing on territorial impacts leads to overlook import-embedded impacts. As a matter of fact, French territorial greenhouse gases (henceforth GHG) emissions have slightly decreased since 1990, whereas consumption-based emissions have been shown to increase. This is why we focus in this paper on consumption-based emissions rather than territorial emissions. Moreover, other environmental impacts are taken into account: air acidification (ACD), photochemical oxidation(PCO) and non-dangerous industrial wastes (NDIW). The contribution of the research presented in this paper is three-fold: first, the quantification of import-embedded impacts of consumption-based emissions is more accurate than previous studies; secondly, we build a scenario of French households final consumption in 2030 aiming at decreasing its environmental impacts; finally, a deep matrix algebra analysis gives us precious hints on the reliability of the results.
    Keywords: input-output analysis, environmental externalities, scenario analysis
    JEL: Q40 Q53 Q54
    Date: 2015–07
  8. By: Smith, Robert Elliott
    Abstract: Making decisions under uncertainty is at the core of human decision-making, particularly economic decision-making. In economics, a distinction is often made between quantifiable uncertainty (risk) and un-quantifiable uncertainty (Knight, Uncertainty and Profit, 1921). However, this distinction is often ignored by, in effect, the quantification of unquantifiable uncertainty, through the assumption of subjective probabilities in the mind of the human decision makers (Savage, The Foundations of Statistics, 1954). This idea is also reflected in developments in artificial intelligence (AI). However, there are serious reasons to doubt this assumption, which are relevant to both AI and economics. Some of the reasons for doubt relate directly to problems that AI has faced historically, that remain unsolved, but little regarded. AI can proceed on a prescriptive agenda, making engineered systems that aid humans in decision-making, despite the fact that these problems may mean that the models involved have serious departures from real human decision-making, particularly under uncertainty. However, in descriptive uses of AI and similar ideas (like the modelling of decision- making agents in economics), it is important to have a clear understanding of what has been learned from AI about these issues. This paper will look at AI history in this light, to illustrate what can be expected from models of human decision-making under uncertainty that proceed from these assumptions. Alternative models of uncertainty are discussed, along with their implications for examining in vivo human decision-making uncertainty in economics.
    Keywords: uncertainty,probability,Bayesian,artificial intelligence
    JEL: B59
    Date: 2015
  9. By: Hallward-Driemeier,Mary C.; Rijkers,Bob; Waxman,Andrew R.
    Abstract: Using manufacturing plant-level census data, this paper demonstrates that minimum wage increases in Indonesia reduced gender wage gaps among production workers, with heterogeneous impacts by level of education and position of the firm in the wage distribution. Paradoxically, educated women appear to have benefitted the most, particularly in the lower half of the firm average earnings distribution. By contrast, women who did not complete primary education did not benefit on average, and even lost ground in the upper end of the earnings distribution. Minimum wage increases were thus associated with exacerbated gender pay gaps among the least educated, and reduced gender gaps among the best educated production workers. Unconditional quantile regression analysis attests to wage compression and lighthouse effects. Changes in relative employment prospects were limited.
    Keywords: Labor Markets,Economic Theory&Research,Wages, Compensation&Benefits,Labor Policies,Gender and Development
    Date: 2015–07–13
  10. By: FU Jiangtao; SHIMAMOTO Daichi; TODO Yasuyuki
    Abstract: Using unique firm-level data for manufacturing sectors in Indonesia, we examine how political and economic connections of firms affect their access to finance. We identify the political connections of a particular firm by whether the government owns its shares, whether politicians are on its board of directors, and whether its highly-ranked manager knows any politician personally. We find that politically connected firms are more likely to be able to borrow from state-owned banks. Moreover, being connected to the government raises the probability of being able to borrow as much as needed without any credit constraint. The financial benefit from political connections is more prominent for small and medium enterprises (SMEs) than for large firms. Furthermore, the benefit mostly comes from personal connections with politicians, rather than more formal connections as measured by government ownership or politicians on the boards of directors.
    Date: 2015–07
  11. By: MENG XIE (The University of Hong Kong)
    Abstract: Social sciences are assuming growing significance against a backdrop of increasing problems within and between societies. While cultural diversity has permeated into various dimensions of our social life, the paradigms of the social science have remained dominated by the West, failing to meet new demands. Major Western societies set standards, provide models, and give directions as the pinnacles for social sciences in the global system. Non-Western societies adopt these standards, models and directions in their social sciences in various ways. In an era of globalization, a more multi-polarized academic system is emerging, enabling non-Western societies to challenge the hegemony of Euro-American models in the social science. In China, modern social sciences are foreign transplants from Western cultures, and their models have been dominated by Western academic systems throughout the 19th and 20th centuries. Social sciences in China have been fragmented throughout the modern period. For China, a fundamental issue to develop social sciences is to integrate Chinese and Western patterns. Although there has been intensive documentation of the internationalization of social sciences, both within the Chinese academic community and in the media, systematic research on the theme is rare, and studies based on empirical data are especially lacking.The study aims to be systematic and empirical. It selects Tsinghua University as its case. Ranked at the top in the Chinese higher education system, the University has historically had the most comprehensive engagement with the West, particularly with the United States. It started to establish modern, Western-style social sciences in the early 20th century. The development has since experienced ups and downs. This study investigates why and how the University has been internationalizing its social sciences using an academic discipline - Sociology as example. One major focus of this research is to look at how Tsinghua’s social scientists are integrating Chinese and Western learning in the process of internationalization. The study is qualitative in nature. Through triangulating various data collection approaches including semi-structured interviews and document analysis, it aims to gain a deep understanding of the dynamics of social science development, with particular focus on possible tensions between internationalization and indigenization. Through the lens of three elements of disciplinary development - knowledge, culture and organization - this research examines the twists and turns, and costs and benefits of China’s social sciences development in a global context of the coexistence of the continuing dominance of Western paradigms and a rising Chinese power.
    Keywords: Social sciences, Internationalization, Tsinghua University
    JEL: I23
  12. By: Ariane TICHIT (Centre d'Etudes et de Recherches sur le Développement International(CERDI))
    Abstract: This article analyzes the social representations of money from survey data. More specifically, it tests how holders of a complementary currency project have a distinct perception of money compared to other citizens. The main results confirm the existence of significant differences between the two groups. The structure of their representations shows that money is less tied to official institutions, the symbol of the sovereign State, to work and wages than for the representative population group. This confirms a number of theoretical works that see these social innovations as protest projects of the standard system, questioning the sovereignty State currency and close to the concepts of unconditional income. Local currencies, by differences in social representations they contain, could well be generators of societal change.
    Keywords: social representations of money, survey data, Abric method, complementary currencies
    JEL: E42 D71
    Date: 2015–06
  13. By: Marina Bianchi (University of Cassino)
    Abstract: In his essay Against Parsimony (1985), Hirschman argued in favor of “complicating” rather that simplifying economic theory. This paper focuses on two of the economic phenomena that, according to Hirschman, are in need of greater complexity. The first refers to the process of choice and preference formation: a change in tastes that is preceded by the formation of meta-preferences is in fact, for Hirschman, a change in values. These autonomous, reflective kinds of changes as opposed to wanton, non-reflective kinds, do not take place simply in response to price changes. Contrary to the standard assumption made by economists, de valoribus est disputandum. The second problem refers to the existence of non-instrumental actions. Striving for truth, love, beauty, common good, justice, liberty, friendship and salvation have non-calculable, non-measurable outcomes. According to instrumental reasoning such actions are inexplicable, “a mystery”. Moreover they are often painful and costly to achieve. Why then are they pursued? According to Hirschman, changes in choice behavior implying changes in values are the expression of a conflict between meta-preferences and preferences, and this, in its turn, is the result of disappointment. If disappointment is with private consumption practices social and public commitments can provide the alternative values; if, vice-versa, disappointment is with public action, private concerns might provide the prevailing values. In discussing these points, I shall show that there are other sources of conflict, besides disappointment, that have both a cognitive and affective dimension and whose effects on preferences might result in altered choices. These contrasts, such as those between the known and the experienced, or between the expected and the realized, belong to a dimension of choice in which exploratory behavior, interest and intrinsic motivation are the positive determinative elements for change. In such cases not only de valoribus, but also de gustibus est disputandum.
    JEL: D11 D12 D61 H4
    Date: 2015–04
    Abstract: Crises have become one of the central concepts in macroeconomic policy issues for almost one century. Because it is crystal clear that the crises’ effects last at least a few years, then the recovery period lags behind. On the other hand, since the existing policies do not respond to the crisis, a new branch of economic school of thought arises or the existing one rises up again. After the Great Depression, Keynesian policies came forward causing the post-World War II era to be known as the ‘Golden Age of Capitalism’. But soon were tides to change. After the oil-price shocks, Monetarist school arose. The 1970s experienced the rise of the neo-liberal transformation, liberalization and rise of financial markets. Financial activity spread eventually everywhere as never before after this liberation movement. In addition to this, technological development occurred in financial services and more sophisticated and new financial instruments were produced in the financial sector. Gains in the financial sector increased and it captured power of industry sector. Neo-classical synthesis and the Efficient Market Hypothesis came to prominence. With all these, however, the global economy experienced another crisis named ‘The Great Recession’. Then, appropriate macroeconomic policy issues came to mind. Therefore, the paper argues that which directions of the economic schools of thought arose or came forward after the Great Recession.
    Keywords: Crises, the great recession, economic schools of thought
    JEL: A10 B22 G01

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