nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒04‒16
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Veiled Repression: Mainstream Economics, Capital Theory,and the Distributions of Income and Wealth By Lance Taylor
  2. A Progress Report on Marxian Economic Theory: On the Controversies in Exploitation Theory since Okishio (1963) By Yoshihara, Naoki
  3. How social enterprise attract public awareness using storytelling By Wan-Tzu Lin; Shyhnan Liou
  4. Impacting on Society: Exploring Common Ground behind the Power of Individual Initiatives By Somnath Ghosh
  5. The Perception of Managers on the importance of a Work Life Balance Strategy: An Exploratory View By Priya Baguant
  6. The Carbon Footprint of European Households and Income Distribution By Mark Sommer; Kurt Kratena
  7. Biophysical limits of current debates on degrowth and the knowledge economy By Jesus Ramos-Martin
  8. Monetary Policy and Large Crises in a Financial Accelerator Agent-Based Model By Giri, Federico; Riccetti, Luca; Russo, Alberto; Gallegati, Mauro
  9. Gender, Social Networks And Performance By Ilse Lindenlaub; Anja Prummer; ;
  10. Herding behavior and volatility clustering in financial markets By Schmitt, Noemi; Westerhoff, Frank
  11. The suburbs as sites of 'within-planning' power relations By Alan Mace
  12. The Italian economic decline in a Kaldorian theoretical perspective By Guglielmo Forges Davanzati; Rosario Patalano; Guido Traficante
  13. Ethical responsibilities of R&D organizations: networking business and society By Olga Dziubaniuk
  14. What drives the geographies of creative industries? From literature review to research agenda By Gong, Huiwen; Hassink, Robert
  15. Wellbeing Evidence for the Assessment of Progress By Anand, Paul; Roope, Laurence; Peichl, Andreas
  16. Key Success Drivers in Public Research Grants: Funding the Seeds of Radical Innovation in Academia? By Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo

  1. By: Lance Taylor (New School for Social Research)
    Abstract: The Cambridge UK vs USA capital theory debates of the 1960s showed that the workhorse mainstream growth model relies on unsustainable assumptions. Its standard interpretation is not consistent with the last four decades of data. Part of an estimated increase in the ratio of personal wealth to income in recent years is due to higher asset prices. The other side of the accounts reveals that financialization and growing business debt partially offset the greater net worth of households. Attempts to interpret growth in wealth principally as a consequence of capitalization of rents are misleading. An alternative growth model based on Cambridge ideas can help correct these misinterpretations.
    Keywords: Income distribution, wealth distribution, Cambridge controversies
    JEL: D3 E1
    Date: 2015–12
  2. By: Yoshihara, Naoki (Department of Economics, University of Massachusetts, Amherst)
    Abstract: This report explores the development of exploitation theory in mathematical Marxian economics by reviewing the main controversies surrounding the proper definition of exploitation since the contribution of Okishio(1963). The report first examines the debates on the Fundamental Marxian Theorem and Class-Exploitation Correspondence Principle, developed mainly in the 1970s and 1980s, followed by the property relation theory of exploitation by Roemer (1982). Then, the more recent exploitation theory proposed by Vrousalis (2013) and Wright (2000) is introduced. Finally, the report introduces and comments on recent axiomatic studies of exploitation by focusing on the work of Veneziani and Yoshihara (2015a).
    Keywords: Proper Definitions of UE Exploitation, Property Relations Definition of Exploitation, Profit-Exploitation Correspondence Principle.
    JEL: D63 D51
    Date: 2016
  3. By: Wan-Tzu Lin (Institute of Creative Industries Design, National Cheng Kung University); Shyhnan Liou (Institute of Creative Industries Design, National Cheng Kung University)
    Abstract: Growing social enterprise seeks for innovation ways to reverse and challenge conventional thoughts in recent years for the purpose to meet the market demand while creating social value and exert influence. To this end, they face not only in property damage but also in positive contribution. However, the stakeholders of the public always are unfamiliar with social enterprise and ready for understand what they promote. They often put a label on them-false welfare, true enrichment with high ethical standards. Thus, how to communicate with the public on the social issues is the critical challenge of this social innovation. We argued that stories are good ways for sharing and convey value for social issues. Stories can represent experience, storytelling can coordinate human past, projects the future, thus resonates in the communication and then recognized with reality consensus. Social enterprise uses storytelling to create value and impress audiences to see, feel it, and then remember it in mind. This study aims to explore how to tell story in order to help social enterprise to convey values and efficiently diffuse its influence to the social dimension. Using cases study and review models of storytelling, the present study first identified the key elements of storytelling in promoting marketing of social enterprise. We found that the fundamental cause of the development of a thing lies in its internal story. The story structure includes the truth, experience, and behavior pattern shape of an organization. We also develop the effect process of storytelling should comprise stages which are control analysis, core spirit of social value, content analysis with adequate data to create deeper insight, just show it in the media, target specific objects, and get the audience involved. The story may have an unspeakably emotional motivation behind each sale in marketing. We propose that using storytelling to express the core of their emotions is not a persuasion but a deep interpersonal link. A good story is touching and borderless, and a culture in the deepest times is common and overall about people. Telling a story is an important and a must-have capability for business with the booming of the Internet and the growth of social media. Last, we examine our proposed model by testing with general audience and experts in marketing and social entrepreneurs.
    Keywords: Social enterprise, Social entrepreneurs, Storytelling, Marketing
  4. By: Somnath Ghosh (Indian Institute of Management Kashipur)
    Abstract: Social and ecological entrepreneurs take initiatives to set up social enterprises. Some endure, some do not; some reach a scale where questions of sustainability or replication become issues. This paper first seeks to explore if there are some common elements behind all the diverse initiatives. Drawing on primary as well secondary sources, this paper identifies four key elements. The first thing that emerges is a deep awareness bordering on engagement with some problematic aspect of social life in which the native is located. It is only then that the second element - what one may call “the churning within†– emerges. This is irrespective of clarity about the nature of change and the desired medium, but have such varying elements as values, restlessness, a missionary zeal to change, questioning life goals, leap of faith or the urge to put in action an executable idea. Interestingly, this “churning within†is quite different from the usually bandied about “passion†and “commitment†. The third element appears to be an alignment of the native’s chosen arena of work with her innate ability (aka KSA). But it is the fourth element - the native’s ability to attract and develop intermediate levels of leadership – that distinguishes whether a social enterprise will flower or remain diminutive, if not squelch. Once this stage is reached, the entrepreneurial organization has morphed into a business organization, even if the profit motivation is not the determining characteristic.
    Keywords: social and ecological entrepreneurs; social life; social entrepreneurs; intermediate leadership
  5. By: Priya Baguant (University of Sharjah)
    Abstract: The concept of Work Life Balance has grown in importance in organizations. The challenges of long working hours, work life conflict and social strains are that employees and employers in modern organizations are trying to strike a balance.Purpose: the purpose of this paper is to investigate the perception of managers on the importance of having a work life balance strategy. The perception of the manager of a start up and that of an established company is analysed.Design: The study carried out was based on in depth interviews and thus of a qualitative nature. The interviews were semi structured and captured the perception of the managers on the types of work life conflict that arose in the organization, the types of policies implemented to restore a work life balance, the extent to which dissatisfaction could be removed by deling with work life balance. Findings: The managers interviewed were very clear on the benefits of having a work life balance strategy, the imbalance is a matter of concern and it leads to high level of dissatisfaction, according to the managers. The younger workers, having less ommitments outside work, have the urge to do well and to move up in their career and are thus more willing to have a work weighting heavier in their life. However the existence of work life balance strategy will regulate their lives in the long term. The older workers are more concern about being able to meet commitments outside work and perceive a work life balance strategy as a must for any organization.Originality: This work is investigating a pertinent human resources issue in organizations. The importance of policies and practices of work life balance have been evaluated and it suggests that there may be a need for regulations. This area of research is still to be fully explored and the work undertaken is a stepping stone for further work.
    Keywords: Perception, Work life conflict, work life balance
  6. By: Mark Sommer; Kurt Kratena
    Abstract: This paper calculates the CO2e (CO2 equivalents) footprint of private consumption in the EU27 by five groups of household income, using a fully fledged macroeconomic input-output model covering 59 industries and five groups of household income for the EU27. Due to macroeconomic feedback mechanisms, this methodology not only takes into account intermediate demand induced by the demand of a household group, but also: (i) private consumption induced in the other household groups, (ii) impacts on other endogenous final demand components, and (iii) negative feedback effects due to output price effects of household demand. Direct household emissions from household energy consumption are taken into account in a non-linear specification. Emissions embodied in imports are calculated using the results of a static MRIO (Multi-Regional Input-Output) model. The footprint is calculated separately for the consumption vector of each of the five income groups. The simulation results yield an income elasticity of direct and indirect emissions at each income level that takes all macroeconomic feedbacks of consumption into account and differs from the ceteris paribus emission elasticity in the literature. The results further reveal that a small structural ‘Kuznet effect’ exists.
    Keywords: Carbon footprint, CGE modeling, income distribution
    JEL: C67 Q52 Q54
    Date: 2016–03
  7. By: Jesus Ramos-Martin (Facultad Latinoamericana de Ciencias Sociales, Ecuador)
    Abstract: New or revived concepts such as degrowth and the knowledge economy represent a necessary criticism to the conventional view on economic growth, especially in regard to their environmental criticism. Both ideas are related as degrowth needs the application of knowledge in order to be operationalised and both share as a desirable outcome the reduction of working time. However, both concepts also bear common flaws in their criticism, due to the lack of attention in their analysis of the biophysical side of the economic process that has been analysed in approaches such as societal metabolism. The document discusses these weaknesses with the aim of stirring the much needed debate on the limits to growth.
    Keywords: Degrowth, knowledge, sustainability, complexity, societal metabolism
    JEL: O11 O44 Q43 Q57
    Date: 2016–03
  8. By: Giri, Federico; Riccetti, Luca; Russo, Alberto; Gallegati, Mauro
    Abstract: An accommodating monetary policy followed by a sudden increase of the short term interest rate often leads to a bubble burst and to an economic slowdown. Two examples are the Great Depression of 1929 and the Great Recession of 2008. Through the implementation of an Agent Based Model with a financial accelerator mechanism we are able to study the relationship between monetary policy and large scale crisis events. The main results can be summarized as follow: a) sudden and sharp increases of the policy rate can generate recessions; b) after a crisis, returning too soon and too quickly to a normal monetary policy regime can generate a "double dip" recession, while c) keeping the short term interest rate anchored to the zero lower bound in the short run can successfully avoid a further slowdown.
    Keywords: Monetary Policy; Large Crises; Agent Based Model; Financial Accelerator; Zero Lower Bound.
    JEL: C63 E32 E44 E58
    Date: 2016–03–30
  9. By: Ilse Lindenlaub; Anja Prummer; ;
    Abstract: This paper documents gender differences in social ties and develops a theory that links them to disparities in men’s and women’s labor market performance. Men’s networks lead to better access to information, women’s to higher peer pressure. Both affect effort in a model of teams, each beneficial in different environments. We find that information is particularly valuable under high uncertainty, whereas peer pressure is more valuable in the opposite case. We therefore expect men to outperform women in jobs that are characterized by high earnings uncertainty, such as the financial sector or film industry – in line with the evidence rationale.
    Keywords: Networks, Peer Pressure, Gender, Labor Market Outcomes
    JEL: D85 Z13 J16
    Date: 2014–07–13
  10. By: Schmitt, Noemi; Westerhoff, Frank
    Abstract: We propose a simple agent-based financial market model in which speculators follow a linear mix of technical and fundamental trading rules to determine their orders. Volatility clustering arises in our model due to speculators' herding behavior. In case of heightened uncertainty, speculators observe other speculators' actions more closely. Since speculators' trading behavior then becomes less heterogeneous, the market maker faces a less balanced excess demand and consequently adjusts prices more strongly. Estimating our model using the method of simulated moments reveals that it is able to explain a number of stylized facts of financial markets quite well. Keywords: Agent-based financial market models, stylized facts of financial markets, technical and fundamental analysis, heterogeneity, herding behavior, method of simulated moments.
    JEL: C63 D84 G15
    Date: 2016
  11. By: Alan Mace
    Abstract: Despite a longstanding and varied body of literature on suburban difference, a simplified narrative of the suburbs persists that is represented by a city–suburb binary. This is damaging as it undermines our understanding of the social dynamics of the places in which, in the United Kingdom, the majority of the population live. This article looks at the reasons for the persistence of a city–suburb binary. It engages with suburban housing as a Bourdieuian field in order to show how simplified characterisations of the suburban serve the interest of particular groups, including within planning. Bourdieu’s field theory offers a powerful means to understand how judgements of the suburbs are naturalised and so become common-sense truths. As field theory indicates ‘within-planning’ power relations that support particular truths, it offers the possibility of challenging these by exposing the taken-for-granted norms of the city-suburb binary.
    Keywords: suburbs; Bourdieu; housing fields; planning culture
    JEL: R14 J01
    Date: 2016
  12. By: Guglielmo Forges Davanzati (University of Salento (IT)); Rosario Patalano; Guido Traficante
    Abstract: This paper analyses the Italian economic decline in a Kaldorian theoretical framework. On the theoretical ground we propose an interpretation of the Italian economic decline based on the continuous decline of domestic demand and the constant reduction of the rate of growth of labour productivity. This interpretation is consistent with the concept of decline, which involves a long-run perspective. We also consider the role of the banking sector as a factor driving aggregate demand and, in turn, labour productivity. We estimate a VAR for the period 2002-2015 to analyse jointly the evolution of public consumption, real GDP, private investments, credit supply, labour compensation and productivity. Our main empirical finding is that aggregate demand and credit supply significantly affect the path of labour productivity, consistently with Kaldor's second law.
    Keywords: Kaldor, Italy, aggregate demand, labour productivity
    JEL: B52 E12 E60
    Date: 2016–03
  13. By: Olga Dziubaniuk (Åbo Akademi University)
    Abstract: This empirical research contributes to the understanding of how actions of networking companies are going beyond their networks picture and impact on society. For the structural analysis of this phenomenon the concept of ethical embeddedness is applied which assumes that business organizations are embedded in a broader social network and have mutual interconnection of their functions. The research proposes that embeddedness of businesses may be exemplified via ethicality of responsibilities that specific business actors employ. Therefore, the research adopts Industrial network approach to investigate ethical embeddedness of business organizations in society and their impact on its current and future development. The “social face†of industrial markets has being extensively discussed in the works of K. Polanyi (e.g. 1968) who collaborated on the concept of social embeddedness of the economic interaction. Granovetter (1985) has developed this idea even further by emphasizing that companies interact in social environment and the social networking is not dividable form the business networks. The concept of ethical embeddedness is adopted for this study (Lindfelt & Törnroos, 2006) which can be explained as ethical values in relations to economic values that are created in a particular business network.Empirically, this framed as a case-study research is grounded on the interviewed representatives of R&D organizations engaged in medical devices R&D activities. They excellently exemplify ethical considerations of embedded ethical responsibilities toward society as their general aim along profit achievement is to improve social welfare. Additionally, those organizations are highly dependent on the network of business partners, governmental and other institutional actors which make them perfectly suitable for this research. The research question of this study is articulated as the following: how embedded ethicality of businesses impact on interconnection between society and business organizations? In general, conceptually, this research paper contributes to the development of the concept of ethical embeddedness and to Industrial network approach theory. From the practical perspective, it aims to illustrate the attractiveness of investment in development technologies that are able to improve social welfare; the ethical value embedded in business activities and its impact on society and business partnership. Current interest to the ethical issues requires filling a research gap in lacking empirical evidences of ethical and, consequently, socially significant managerial practices executed in business networks that influence on general public good.
    Keywords: Business ethics, social responsibility, business networks, industrial marketing, ethical embeddedness
    JEL: L14 O32 M14
  14. By: Gong, Huiwen (Dept. of Geography, Kiel University); Hassink, Robert (Dept. of Geography, Kiel University)
    Abstract: The objective of this review paper is twofold: First, to review and synthesize the literature on the geographies of creative industries embedded in modern paradigms of economic geography; secondly, to reflect upon and identify a promising research agenda on the drivers of the geographical patterns of creative industries. Several deficiencies of current research are identified in this paper, and based on these deficiencies, we suggest some promising avenues for future research. In particular, we develop a comprehensive framework that goes beyond the analysis of individual drivers of the geographies of creative industries.
    Keywords: creative industries; geographical patterns; agglomeration economies; routine replication; institutional environment
    JEL: B52 L82 R11 R12
    Date: 2016–03–17
  15. By: Anand, Paul (The Open University); Roope, Laurence (University of Oxford); Peichl, Andreas (ZEW Mannheim)
    Abstract: In recent years considerable interest has developed in going 'beyond GDP' to develop measures of economic progress which are more explicitly based on human wellbeing. This work has been inspired, in part, by Sen's non-utilitarian approach to welfare economics, but has been constrained by a lack of empirical indicators relating to human potential. In this paper, therefore, we develop a framework for understanding wellbeing, drawing closely on Sen's seminal contributions to welfare economics, as well as the economic literature on life satisfaction, and use it to generate novel data for the USA and UK consistent with all the components of the theory. We use these data to illustrate some of the life quality analyses that might follow. Specifically, we investigate how various indicators of capability are distributed by ethnicity and gender, and compare and contrast the types of capability which appear relatively strong/weak within each country. In addition, we consider the extent to which life satisfaction and daily activities depend on resources and non-cognitive skills. The paper concludes that with an expansion of the scope of routinely collected survey data, it is feasible to empirically implement fully Sen's theory to provide a much richer account of the wellbeing outcomes that derive from economic progress than is currently the case.
    Keywords: wellbeing, stochastic dominance, life satisfaction, Sen
    JEL: D60 I31
    Date: 2016–03
  16. By: Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
    Abstract: We study what makes a research grant application successful in terms of ability, type of research, experience, and demographics of the applicants. But our main objective is to investigate whether public funding organizations support the teams that are most likely to undertake transformative or "radical" research. Making use of the literature on recombinant innovation, we characterize such "radical teams" as those formed by eclectic and non-usual collaborators, and those that are heterogeneous and scientifically diverse. Our results, using data from the UK's Engineering and Physical Sciences Research Council (EPSRC), show that the more able, more basic, and more senior researchers, working in a top university, are more likely to be successful. But, radical teams are less likely to be funded by funding bodies. Our analysis of the research output of the awarded projects suggests that, voluntarily or involuntarily, the evaluation process in these organizations is biased against radical teams.
    Keywords: radical innovation, funding organizations, research grants
    JEL: O32 I23
    Date: 2016–03

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