nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒02‒23
seventeen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The concepts of stock and flow. A revisit of Georgescu-Roegen definitions By Michele Bruni
  2. Monopoly Capital and Capitalist Inequality: Marx after Piketty By Lambert, Thomas
  3. Encadenamientos, Clústeres y Flujos de Trabajo en Economía Colombiana By Julián VILLAMIL S; Gustavo HERNÁNDEZ
  4. A Comparative Study of Views and Role of Labor in Marxian, Mainstream and Islamic Economics By Shaikh, Salman Ahmed
  5. Sustainability objects as performative definitions of sustainability: The case of food waste-based biogas and biofertilizers By Corvellec, Hervé
  6. Renouveau de la décroissance : qu’apportent les auteurs français ? By Assen Slim
  7. HISBAH DAN MEKANISME PASAR: Studi Moralitas Pelaku Pasar Perspektif Ekonomi Islam By Jaelani, Aan
  8. Routines and Networks: Strengthening a Missed Link By Aura Parmentier Cajaiba; Giovany Cajaiba Santana
  9. The Meaning of Failed Replications: A Review and Proposal - Working Paper 399 By Michael Clemens
  10. Identity-driven Cooperation versus Competition By Snower, Dennis J.; Bosworth, Steven J.
  11. New Wine in Old Flasks: the Just Price and Price-Controls in Jewish Law By Makovi, Michael
  12. Эволюция институтов конкуренции, власти и сотрудничества By Polterovich, Victor
  13. When more Flexibility Yields more Fragility: the Microfoundations of Keynesian Aggregate Unemployment By Giovanni Dosi; Marcelo C. Pereira; Andrea Roventini; Maria Enrica Virgillito
  14. The non-economic outcomes of social entrepreneurship in Luxembourg By Sarracino, Francesco; Gosset, Andrea
  15. A review of the economic theories of poverty By Miguel Sanchez-Martinez; Philip Davis
  16. Islamic Approach to Environmental Sustainability: Review of Worldview, Philosophy & Teachings By Shaikh, Salman Ahmed
  17. The crisis of finance-led capitalism in the United States of America By Evans, Trevor

  1. By: Michele Bruni
    Abstract: After recalling the classical definitions of stock and flow introduced by Fisher, the paper briefly summarizes Georgescu-Roegen’s analysis of the production process and his definitions of the concepts of stock and flow, and also of those of fund and services necessary in his approach. The paper does then propose new definitions of the same four concepts and explore their implications for a different and more realistic approach to labor market analysis.
    Keywords: Stock-flow model, production process, labor market
    JEL: B31 B41 J01
    Date: 2016–02
  2. By: Lambert, Thomas
    Abstract: This paper proposes that one major explanation of growing inequality in the United States (US) is through the use of the concept of economic surplus. The economic surplus is a neo-Marxian term which combines the traditional Marxian tenet of surplus value with other ways that surplus value can be invested in a mature, advanced capitalist economy. A rising economic surplus that is not absorbed through growing consumer spending, luxury spending or government spending results in stagnant wages and growing inequality via higher levels of underemployment and greater monopoly and monopsony power among a decreasing number of huge, powerful corporations. Therefore, the politics surrounding the growth of inequality in the US has to be understood first by understanding over accumulation of the economic surplus by those at the top of the US capitalist class. This research note gives estimates of the rising economic surplus over the last several decades in the US as well as how these correlate with the level of inequality. The growth of the economic surplus gives rise and form to the politics of inequality and austerity. As time goes by, the politics of inequality and austerity in the US will be manifested by greater corporate influence in the political system, greater political polarization, less government effectiveness, and more debates about welfare spending, corporate taxation, taxes on upper income households, and taxes on wealth.
    Keywords: alienation, economics, fascism, inequality, monopoly capital, occupy movement, political science, socialism, tea party
    JEL: B51 B59
    Date: 2016–01
  3. By: Julián VILLAMIL S; Gustavo HERNÁNDEZ
    Abstract: Conocer de manera profunda las relaciones de interdependencia de la estructura económica es de gran importancia en el ejercicio de diseño de políticas económicas. Este trabajo usa el modelo insumo-producto para el análisis de impacto. Se aplican dos enfoques no usados tradicionalmente para la economía colombiana: análisis de descomposición espectral (Dietzenbacher, 1992) e identificación de clústeres (Garbellini & Wirkierman, 2014). El resultado es la construcción de indicadores de encadenamientos sin sesgo de sobrestimación o subestimación; y la identificación de clústeres de manera endógena. Adicionalmente se derivan los flujos de trabajo involucrado que se propagan a través de la red productiva. Cada uno de estos flujos se descompone en indicadores que permiten caracterizar los clústeres de acuerdo a: su cercanía con la demanda final, a su grado de cohesión con la red y a su importancia para el resto del sistema
    Keywords: Clústeres, Insumo Producto, Encadenamientos, Descomposición Espectral.
    JEL: C38 C67 E01 Y B51
    Date: 2015–03–13
  4. By: Shaikh, Salman Ahmed
    Abstract: In this paper, we comparatively analyze the views and role of labor in Marxian, mainstream and Islamic economics. We argue that Marxian view of labor undermines the role of entrepreneur. Indeed, the slave trade, industrialization and Colonialism resulted in exploitation of the labor. But, to correct matters, undermining the role of entrepreneur to the extent of abandoning private property rights is not the right solution either as it was also proved in the later part of the twentieth century. Nevertheless, mainstream economics too is unable to create an equitable balance between the capitalists and the labor class, especially in the presence of extractive institutions like interest based earnings on accumulated wealth and incapacitated wealth redistribution mechanisms. These extractive institutions perpetuate the dominance of wealthy capitalists by making their accumulated wealth immune to entrepreneurial risks. This also results in concentration of wealth, increase in income inequality and low levels of capital formation. Indeed, the recent evidence of jobless growth, high youth unemployment despite high per capita income and high income inequality supports this view. In Islamic economic framework, prohibition of interest encourages productive enterprise and capital formation. These factors boost the labor demanded by the firms. In the microeconomic decisions in consumption-leisure choice framework, Islamic institutions positively boost the labor supply. In an Islamic economy, wealth redistribution through Zakat and inheritance laws ensures circulation of wealth. Prohibition of interest closes the door for riskless non-labor income on money capital. This increases the cost of leisure and encourages the person to supply more labor and/or invest money capital in productive enterprise. Finally, we discuss the impact of Islamic work ethics on dealing with the problems of moral hazard, labor shirking and rigidity in the labor market due to efficiency wages and insider-outsider relationships.
    Keywords: Labor Economics, Labor Market, Labor Value, Marxian Economics, Islamic Economics, Wage Inequality
    JEL: J22 J23 J24 J31
    Date: 2015–04–04
  5. By: Corvellec, Hervé (Gothenburg Research Institute)
    Abstract: This article introduces the notion of sustainability objects to label objects that come with a claim to promote a more sustainable mode of living. The purpose is to show that organizations that develop such objects contribute to defining sustainability. A case study of the development of a food waste-based biogas and biofertilizers production facility serves as empirical example of sustainability objects development. The analysis demonstrates that this development has involved situating biogas and biofertilizers socially, entangling them in nets of relations and endowing them with an agency of their own. The study also shows that developing sustainability objects entails constructing performative definitions of sustainability. With sustainability objects embodying local definitions of sustainability, the success or failure of sustainability objects is also the success or failure of these definitions. Asking why sustainability objects gain or lose ground is therefore suggested as a way to understand the state and nature of sustainability transition.
    Keywords: Sustainability objects; Food waste; Biogas; Biofertilizers; Sweden
    Date: 2015–02–16
  6. By: Assen Slim (CEMI - Centre d'Études des Modes d'Industrialisation - EHESS - École des hautes études en sciences sociales)
    Abstract: This article is focused on the work of contemporary French authors on Degrowth. The main idea of these authors is based on the view that all existing growth models are both ecologically unsustainable and socially unjust. French authors are following an older tradition of criticism which was developed since the 1960s. This article presents the French proponents of degrowth and their main ideas, explores the theoretical pillars of their approaches and analyzes their limits.
    Abstract: Cet article s’intéresse aux travaux des auteurs français contemporains en faveur de la décroissance. Ces auteurs défendent l’idée selon laquelle les modèles de croissance de nos sociétés contemporaines sont écologiquement insoutenables et socialement injustes. En cela, ils s’inscrivent dans la continuité d’une tradition critique plus ancienne ayant émergé dès les années 1960. Le présent article se propose de recenser les idées avancées par les auteurs français, d’en repérer les références théoriques plus anciennes mobilisées et d’en exposer les limites.
    Keywords: Degrowth,Growth regime,sustainability,transition,Décroissance,régime de croissance,durabilité
    Date: 2015
  7. By: Jaelani, Aan
    Abstract: Market mechanisms in the era of globalization associated with the paradigm of the market economy along with the development of socialist economy, capitalist, or mixed. The market mechanism is a problem when the inefficient allocation of resources, market imperfections, and the cause of economic backwardness. With the approach of Islamic history of economic thought in reading the "text" and analyze the "context" could find that the institution has historically experienced hisba institutional transformation as a market watchdog agencies and religious institutions that represent the social and economic role in anticipating market problems. This hisba institution or whatever his name to the current context is very significant in creating the equity market.
    Keywords: hisbah, market mechanism, globalization of economic, business ethic
    JEL: B2 B21 B25 D4 D6 D63 N2 N25
    Date: 2011–10–05
  8. By: Aura Parmentier Cajaiba (GREDEG CNRS; University of Nice Sophia Antipolis); Giovany Cajaiba Santana (Kedge Business School)
    Abstract: This paper aims at understanding how and why managers can mobilize networks for creating and modifying organizational routines. We mobilize both routines and social capital corpus associated to structuration theory to deepened understanding on how networks are deployed and further used for elaborating and modifying organizational routines. Our research is based on a 3-year in-depth engaged study in a small firm pertaining to European biopesticide industry confronted to developing a registration capability. This process led to routine creation and modification through managerial agency. This study brings insights on how social capital plays a role in the elaboration and modification of routines related to social structures imposed to the firm. We provide a model that articulates social structure, social system and social capital. It provides a recursive and dialogical perspective of structures and social capital as a carrier for creating and modifying routines conceptualized as a social system. Results show that the modification or creation of routines is oriented by how the manager perceives it as legitimate by specific ties. It also shows that the elaboration of a bundle of routine can be supported by external networks that are not initially part of the firm resources. These networks provide diverse kind of resources such as information, human resources, and procedures. But more important, they are also a medium for legitimating both routines and associated actions.
    Keywords: routine formation, social capital, network
    JEL: M10 B52
    Date: 2014–12
  9. By: Michael Clemens
    Abstract: Economists are increasingly using publicly shared data and code to check each other’s work, an exercise often called ‘replication’ testing. But this much-needed trend has not been accompanied by a consensus about what ‘replication’ means. If a follow-up study does not ‘replicate’ an original result, according to current usage of the term, this can mean anything from an unremarkable disagreement over methods to scientific incompetence or misconduct. This paper proposes an unambiguous definition of replication. Many social scientists already use the term in the way suggested here, but many more do not. The paper contrasts this definition with decades of unsuccessful attempts to standardize terminology, and argues that many prominent results described as replication tests should not be described as such. It argues that professional associations should formally adopt this definition, thereby improving incentives for researchers to conduct more and better replication tests.
    Keywords: replication studies
    JEL: B40 C18 C80
    Date: 2015–04
  10. By: Snower, Dennis J. (Kiel Institute for the World Economy); Bosworth, Steven J. (Kiel Institute for the World Economy)
    Abstract: This paper seeks to extend the domain of identity economics by exploring motivational foundations of in-group cooperation and out-group competition. On this basis, we explore the reflexive interaction between individual economic decisions and social identities in response to technological change in market economies. Our analysis explores how technological change falling on marketable goods and services, rather than nonmarket caring relationships, leads to a restructuring of identities, which increases the scope of individualism and promotes positional competition at the expense of caring activities. Since positional competition generates negative externalities while caring activities create positive ones, these developments have important welfare implications.
    Keywords: motivation, reflexivity, cooperation, identity, technological progress, bowling alone
    JEL: A13 D03 D62 D71 I31 O10
    Date: 2016–02
  11. By: Makovi, Michael
    Abstract: The halakhah (Jewish law) includes legislation aiming at might be called “social justice.” These halakhot (pl.) include the laws of ona'ah and hafka'at she'arim / hayyei nefesh – roughly analogous to the famous Medieval “just price” laws – as well as legal restrictions on middlemen and speculators. In the light of modern economics, these Jewish laws, like all attempts at price-fixing, are shown to be self-defeating; the means conflict with the ends sought. The conflict between religion and science is not limited to cosmology and biology, but may include economics as well. It is proposed that the halakhah be modified in such a way as to preserve – as much as possible – the integrity of both the halakhah and economic science alike; when an ethical system makes certain scientific presuppositions, it is sometimes possible to preserve the ethical system by disentangling it from its non-essential scientific presuppositions.
    Keywords: price controls; price fixing; just price; jewish business ethics; religious economics
    JEL: A12 B11 D00 K20 P00 Z12
    Date: 2016–01–30
  12. By: Polterovich, Victor
    Abstract: It is shown that the evolution of modern developed societies leads to a decrease in the significance of both centralized governance and economic competition, while the role of collaboration mechanisms is being strengthened. This process is supported by cultural changes - by increasing trust, by internalization of the honesty norms, and thus free-rider problem is mitigated. Collectivism and individualism in their extreme forms are being replaced by the culture of constructive interactions and compromises. This cultural transformation creates new institutions and the same time supports them. Thus, both market and state failures are being overcome.
    Keywords: collaboration, competition, collectivism, individualism, bankruptcy laws, institutional evolution, antitrust laws
    JEL: B00 B4 B52 N00 P11
    Date: 2015–05–15
  13. By: Giovanni Dosi; Marcelo C. Pereira; Andrea Roventini; Maria Enrica Virgillito
    Abstract: Wages are an element of cost crucially aecting the competitiveness of individual firms. But the wage bill is also a crucial element of aggregate demand. Hence it could be that more "flexible" and fluid labour markets, while allowing for faster inter-firm reallocation of labour, may also render the whole economic system more fragile, more prone to recession, more volatile. In this work we investigate some conditions under which such a conjecture applies. The paper presents an agent- based model that investigates the effects of two "archetypes of capitalism", in terms of regimes of labour governance - defined by the mechanisms of wage determination, firing, labour protection and productivity gains sharing - upon (i) labour market regularities and (ii) macroeconomic dynamics (long-term rates of growth, GDP uctuations, unemployment rates, inequality, etc..). The model is built upon the "Keynes meets Schumpeter" family of models (Dosi et al., 2010), explicitly incorporating different microfounded labour market regimes. Our results show that seemingly more rigid labour markets and labour relations are conducive to coordination successes with higher and smoother growth.
    Keywords: Involuntary Unemployment, Aggregate Demand, Wage Determination, Labour Market Regimes, Keynesian Coordination Failures, Agent-Based Models
    Date: 2016–02–18
  14. By: Sarracino, Francesco; Gosset, Andrea
    Abstract: We provide a first assessment of the ability of social enterprises to meet their non economic goals. The study takes advantage of unique data on social enterprises and well-being available for Luxembourg. Results suggest that social enterprises contribute to well-being and alleviate the bad-being of most vulnerable people. Such evidence supports policies in favour of social enterprises to promote social integration among socially vulnerable people.
    Keywords: social enterprises; outcomes; subjective well-being; solidarity;
    JEL: D0 D64 I31 L31 M14 M21 Z18
    Date: 2015–06–24
  15. By: Miguel Sanchez-Martinez; Philip Davis
    Abstract: This paper critically analyses the views of poverty adopted by different economic schools of thought which are relevant to the UK, as well as eclectic theories focused on social exclusion and social capital. We contend that each of the economic approaches has an important contribution to make to the understanding of poverty but that no theory is sufficient in itself; a selective synthesis is needed. Furthermore, economics by its nature omits important aspects of the nature and causes of poverty.
    Date: 2014–04
  16. By: Shaikh, Salman Ahmed
    Abstract: 2 Abstract Economic choices influenced by animalistic instincts in an ethically neutral framework have not only resulted in huge disparity in distribution of income, wealth and standard of living, but, as we now realize, it has also resulted in unprecedented loss to ecology and environment with catastrophic consequences for future generations. More than ever, economics as a discipline of knowledge needs an ethical base to rekindle spiritual rationality that can enable us to take into account equity considerations more explicitly in economic choices at the individual and at the societal level. This paper explains how Islamic economics can help in bridging the gap. The paper explains the teachings of Islam on different environmental issues and shows how Islamic worldview and teachings can help in encouraging and reinforcing environmental friendly behavior and choices.
    Keywords: Environmental Economics, Resource Economics, Climate Change, Sustainable Development, Islamic Economics
    JEL: I3 Q2 Q3 Q5
    Date: 2015–10–06
  17. By: Evans, Trevor
    Abstract: This study examines the development of the US economy since the prolonged recession in the early 1980s. This period was characterised by a serious weakening in the bargaining position of waged workers and a major expansion of the financial sector. Most of the economic gains accrued to top earners and economic growth became increasingly dependent on the expansion of credit. This precarious constellation led to short recessions in 1990 and again in 2001, but then in 2007 and 2008 the failure of highly complex securities led to the most serious financial crisis since 1929. The study reviews the development of profitability, income distribution and other key macroeconomic variables in the period leading up to, during and immediately after the crisis. It then identifies the main channels by which the crisis was transmitted form the US to other advanced capitalist economies and concludes with a brief review of the policy measures introduced by the US government in response to the crisis.
    Keywords: United States,finance-led capitalism,financial crisis
    JEL: E25 E32 E44 E58 F44 G01
    Date: 2015

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