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on Heterodox Microeconomics |
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Issue of 2016‒04‒23
nineteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Kurose, Kazuhiro (Graduate School of Economics and Management, Tohoku University); Yoshihara, Naoki (Department of Economics, University of Massachusetts, Amherst) |
| Abstract: | This paper examines the validity of the factor price equalisation theorem (FPET) in relation to capital theory. Additionally, it presents a survey of the literature on Heckscher–Ohlin–Samuelson (HOS) models that treat capital as a primary factor, beginning with Samuelson (1953). Furthermore, this paper discusses the Cambridge capital controversy, which contends that marginal productivity theory does not hold when capital is assumed to be as a bundle of reproducible commodities instead of as a primary factor. Consequently, it is shown that under this assumption, the FPET does not hold, even when there is no reversal of capital intensity. This paper also demonstrates that the recent studies on the dynamic HOS trade theory generally ignore the di¢ culties posed by the capital controversies and are thereby able to conclude that the FPET holds even when capital is modelled as a reproducible factor. Our analysis suggests that there is a need for a basic theory of international trade that does not rely on factor price equalisation and a model that formulates capital as a bundle of reproducible commodities. |
| Keywords: | factor price equalisation, capital as the bundle of reproducible commodities, reswitching of techniques, capital reversing. |
| JEL: | B51 D33 F11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2016-05&r=hme |
| By: | Ugo Mattei (UC Hastings, University of Turin & IUC Turin) |
| Abstract: | This document contains the text of the academic 'laudatio' delivered by IUC Academic Coordinator Ugo Mattei, upon appointing Yanis Varoufakis a Honorary Professor of the IUC in March 2016. The address presents an overview of Yanis Varoufakis' intellectual development and trajectory, to demonstrate how the latter fulfils the motivations underpinning his honorary appointment, namely: (i) Varoufakis' denunciation, informed by disciplinary acumen, of the theoretical and practical failure of the current mainstream approach in economics; (i) his deep theoretical contribution to the discipline of Political Economy through the recovery of the humanistic thought of Karl Marx; (iii) his lucid analysis of the reasons for the collapse of austerity policies in Europe and elsewhere; (iv) his vivid demonstration of the fallacy – also theoretical – of the extractive financial policies that victimize the working classes, the poor and the commons in Europe; (v) the clarity, in his theoretical work, about the incompatibility with the democratic ideal of a macroeconomic framework devoid of government instruments able to cushion the shock to the markets imposed by the capitalist mode of production in the absence of regulation and control of financial speculation. |
| Keywords: | Yanis Varoufakis, political economy, heterodox economics, economic uncertainty, Europe, Greece, democracy |
| JEL: | B1 B31 B51 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iuc:rpaper:1-16&r=hme |
| By: | Lizia de Figueirêdo (Cedeplar-UFMG) |
| Abstract: | We claim that there must be and interdisciplinary approach in discussing individual decisions, combining Evolutionary Psychology, Neuroscience and Economics (and other Social Sciences). The new approach requires change in the methodology of Economics and a strong review of decision theory. On the other hand, Economics can help Evolutionary Psychology through the characterization of the environment and to define modern human aims. We propose a method to approach a “microeconomic” problem, considering that the time span is small for environmental changes. |
| Keywords: | rationality, ecological rationality, gene-culture interaction, Economic Methodology |
| JEL: | A12 B4 D01 D03 D87 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td536&r=hme |
| By: | Lance Taylor (New School for Social Research); Armon Rezai (Vienna University of Economics); Rishabh Kumar (New School for Social Research); Nelson Barbosa (São Paulo School of Economics); Laura de Carvalho (São Paulo School of Economics) |
| Abstract: | This paper is based on a social accounting matrix (SAM) which incorporates the size distribution of income based on data from the BEA national accounts, the widely discussed 2012 CBO distribution study, and BLS consumer surveys. Sources and uses of incomes are disaggregated by household groups including the top 1%. Their importance (including saving rates) differs markedly across households. The SAM reveals two transfer flows exceeding 10% of GDP via fiscal (broadly progressive) and financial (regressive) channels. A third major flow over time has been a ten percentage point increase in the GDP share of the top 1%. A simulation model is used to illustrate how “reasonable†modifications to tax/transfer programs and increasing low wages cannot offset the historical redistribution toward the well-to-do. |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:11&r=hme |
| By: | Elsner, Wolfram |
| Abstract: | This paper critically reviews the leading microeconomic textbooks of Varian, Pindyck/Rubinfeld, and Schumann/Meyer/Stroebele, with a focus on their theoretical inconsistencies and their lack of an institutional perspective. |
| Keywords: | microeconomics; economic teaching; textbooks; institutions |
| JEL: | A20 A22 A23 |
| Date: | 2016–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70471&r=hme |
| By: | Zhong, Sheng (UNU-MERIT) |
| Abstract: | Using more than 68 million data points from the newly introduced World Input-Output Database (WIOD) over 1995 to 2009, this study investigates the historical dynamics of energy consumption, aggregate energy intensity, total emissions and total emission intensity at sectoral level by decomposing their relative changes in the input-output framework into five influencing factors: intensity effect, inter-industry structural effect, trade effect in intermediate inputs, structural change effect in final demand and total final demand effect. It identifies crucial empirical patterns that support UNIDO’s ISID initiative: increases in energy consumption and total emissions at sectoral level driven by economic growth can be partially or even largely offset by the efficiency technology related intensity effect and the intensity effect within sectors contributes the most to reductions in aggregate energy intensity and total emission intensity. |
| Keywords: | Structural decomposition, input-output model, energy, emissions, sustainable development |
| JEL: | C67 O13 R15 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016015&r=hme |
| By: | Andrzej Toroj |
| Abstract: | We propose a novel method of constructing multisector-multiregion input-output tables, based on the standard multisector tables and the tools of spatial econometrics. Voivodship-level (NUTS-2) and subregion-level data (NUTS-3) on sectoral value added is used to fit a spatial model, based on a modication of the Durbin model. The structural coefficients are calibrated, based on I-O multipliers, while the spatial weight matrices are estimated as parsimoniously parametrised functions of physical distance and limited supply in certain regions. We incorporate additional restrictions to derive proportions in which every cross-sectoral ow should be interpolated into cross-regional ow matrix. All calculations are based on publicly available data. The method is illustrated with an example of regional economic impact assessment for a generic construction company located in Eastern Poland. |
| Keywords: | input-output model, spatial econometrics, Durbin model, multiregion analysis, regional economic impact assessment |
| JEL: | C21 C31 C67 D57 R12 R15 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:sgh:kaewps:2016004&r=hme |
| By: | Giovanni Razzu (Department of Economics, University of Reading); Carl Singleton (University of Edinburgh) |
| Abstract: | Gender gaps in work respond to the business cycle. Although there are many potential explanations, this paper tests the simplest. Is this because of the extent of gender segregation in work? A counterfactual-type analysis is constructed which can account for the specific role of combined gender segregation across industry sectors and occupations that existed at the onset of the Great Recession in the UK. Gaps in employment, pay and hours worked are all studied. After accounting for the gender segregation of work at the broad sector and occupation group level, the results contradict the existing narrative that men’s employment has been more harshly affected by the recession than women’s employment: gender segregation accounts for over two and a half times the actual fall in the gender gap between 2007 and 2011. Results for pay and hours are more mixed. Gender segregation accounts for some of the fall in the pay gap, but does not explain the decline in the hours gap, nor the relatively greater rise in part-time work among men since 2007. |
| Keywords: | gender, employment, hours, gender pay gap, gender segregation, business cycle |
| Date: | 2016–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2015-02&r=hme |
| By: | Kabir, Humayun |
| Abstract: | India's Muslim community, which accounts for 14.4 percent of India’s vast population and is thus the largest of all religious minorities, has been the subject of considerable development discourse as Muslims have the lowest level of educational attainment and standard of living among socio-religious groups in the country. This study addresses the meaning of education and career opportunities for Muslim youths in relation to their educational credentials and social position in the hierarchy of Muslim class and caste groups, with particular reference to a community in Uttar Pradesh. The author contends that the career opportunities, possibilities, and strategies of Muslim youths in Indian society depend on multiple factors: social hierarchy, opportunities to utilize economic resources, social networks, cultural capital, and the wider structural disparities within which the Muslims are situated and wherein they question the value of higher education in gaining them admission to socially recognized and established employment sectors. |
| Keywords: | Education, Islam, Employment, Youth, Muslim General, Muslim OBC, Social Inequality, Social Network |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper572&r=hme |
| By: | Benedikt Fecher; Mathis Fräßdorf; Gert G. Wagner |
| Abstract: | We live in a time of increasing publication rates and specialization of scientific disciplines. More and more, the research community is facing the challenge of assuring the quality of research and maintaining trust in the scientific enterprise. Replication studies are necessary to detect erroneous research. Thus, the replicability of research is considered a hallmark of good scientific practice and it has lately become a key concern for research communities and science policy makers alike. In this case study we analyze perceptions and practices regarding replication studies in the social and behavioral sciences. Our analyses are based on a survey of almost 300 researchers that use data from the German Socio-Economic Panel Study (SOEP), a multidisciplinary longitudinal multicohort study. We find that more than two thirds of respondents disagree with the statement that replications are not worthwhile, because major mistakes will be found at some point anyway. Nevertheless, most respondents are not willing to spend their time to conduct replication studies. This situation can be characterized as a “tragedy of the commons”: everybody knows that replications are useful, but almost everybody counts on others to conduct them. Our most important finding concerning practical consequences is that among the few replications that are reported, a large majority is conducted in the context of teaching. In our view, this is a promising detail: in order to foster replicability, one avenue may be to make replication studies a mandatory part of curricula as well as of doctoral theses. Furthermore, we argue that replication studies need to be more attractive for researchers. For example, successful replications could be listed in the publication lists of replicated authors. Vice versa, data sharing needs to receive more recognition, for example by considering data production and subsequent data sharing as scientific output. |
| Keywords: | Replicability, good science, data sharing, research policy |
| JEL: | A13 A20 C81 D02 D23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1572&r=hme |
| By: | Lei, Lei |
| Abstract: | The paper reviews relevant literature studying the environmental impacts of food supply chain from production to each stage throughout the supply chain. With limited data and information, to better understand these impacts, a concrete example of the tea supply chain in China is provided. The tea supply chain is analyzed from the environmental prospective, with potential pollutants being identified at each stage of the supply chain. As an example of the food supply chain in a developing country, some unique features of the developing economies are taken into consideration when concluding the implications. |
| Keywords: | China, International trade, Food industry, Tea, Environment, Supply chain analysis, Development |
| JEL: | F18 Q01 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper573&r=hme |
| By: | Kornai, János |
| Abstract: | This study was inspired by Piketty’s excellent and important book. Its title and numerous statements in it arouse in readers expectations of a comprehensive analysis of capitalism. By comparison the author of this paper felt important aspects were lacking. The capitalist system has numerous immanent traits and innate tendencies, of which the paper takes a closer look at three properties. 1. One basic feature is dynamism, innovation, and creative destruction. No picture of capitalism can be full if this basic aspect is ignored. 2. Capitalism inevitably brings about a high degree of inequality; this must be eased by reforms, but cannot be entirely overcome. 3. The basic characteristics of capitalism – private ownership and the dominance of market coordination – give rise to strong incentive mechanisms that encourage but owners and enterprise executives to innovate and to cooperate effectively. One of the main incentives is competition, especially oligopolistic competition. There are strong mutual effects among these three important tendencies. It is impossible to understand well Piketty’s main subject, the distribution of income and wealth, if it is divorced from the other two tendencies. The study ends with its author’s own value judgements on the favourable and harmful, unjust attributes of the capitalist system. |
| Keywords: | capitalism, comparative approach, innovation, income distribution, incentives, sources of top income |
| JEL: | D21 D30 D60 N10 O31 P10 P51 |
| Date: | 2016–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:cvh:coecwp:2016/09&r=hme |
| By: | Phoebe Gardner |
| Abstract: | The tools designed to analyse a globalising world ought to be specifically designed to address problems presented by that global world, rather than settling for those engineered for the century prior. The study of International Relations (IR) is dominated by mainstream problem-solving International Relations Theory (IRT), which tends to describe rather than explain phenomena. Analysis is hindered by dependence upon rigid concepts such as the nation-state and the balance of power. However, IR has witnessed an analytical shift toward concepts that utilise culture by engaging with the discipline’s strength: its interdisciplinary nature. Unfortunately, recruiting non-Western and alternative perspectives has become equated to an exercise designed to simply tickoff a certain amount of nation-states from a quota. In this sense, IRT ought to aspire to be transnational in nature, in order to effectively engage with problems presented by the global world in which it exists. Therefore, as this article suggests, in pursuing alternative cultural perspectives, it is the integrity of the theory itself that matters, rather than the geographical origin. |
| Keywords: | International Relations Theory, Critical Theory, Transnational Approach, Non-Western Approach, Cultural Perspectives, Power-Knowledge Relations. |
| JEL: | Y8 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:gpr:journl:1&r=hme |
| By: | Vonyo, Tamas (Bocconi University); Klein, Alexander (University of Kent) |
| Abstract: | We present revised growth accounts for three socialist economies between 1950 and 1989. Government statistics reported distorted measures for both the rate and trajectory of productivity growth in Czechoslovakia, Hungary, and Poland. Researchers have benefited from revised output data, but continued to use official statistics on capital input, or estimated capital stock from official investment data. Investment levels and rates of capital accumulations were, in fact, much lower than officially claimed and over-reporting worsened over time. Sluggish factor accumulation, specifically declining equipment investment and labor input, contributed much more to the socialist growth failure of the 1980s than previously thought. |
| Keywords: | growth accounting, capital accumulation, Socialism, Eastern Europe JEL Classification: N14, N64, O47, P27 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:276&r=hme |
| By: | Mattia Guerini; Alessio Moneta |
| Abstract: | This paper proposes a new method for empirically validate simulation models that generate artificial time series data comparable with real-world data. The approach is based on comparing structures of vector autoregression models which are estimated from both artificial and real-world data by means of causal search algorithms. This relatively simple procedure is able to tackle both the problem of confronting theoretical simulation models with the data and the problem of comparing different models in terms of their empirical reliability. Moreover the paper provides an application of the validation procedure to the Dosi et al. (2015) macro-model. |
| Keywords: | Models validation; Agent-Based models; Causality; Structural Vector Autoregressions |
| Date: | 2016–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/16&r=hme |
| By: | Stefan Liebig; Sebastian Hülle; Meike May |
| Abstract: | The paper introduces a short scale for measuring attitudes to four fundamental principles of the just distribution of benefits and burdens in a society. The Basic Social Justice Orientations (BSJO) scale is an eight-item scale that measures agreement with the equality, equity, need, and entitlement principle. In contrast to comparable other scales that have been used in justice research in the past, the BSJO scale is consistent with the current state of empirical justice research andallows for the study of the constructs distinguished by studies in that area and, more specifically, in the context of population surveys and with respect to societal distribution conflicts. The paper reports the methodological aspects of the construction and use of the scale in population surveys, as well as results concerning reliability and construct validation. The study uses data from three general social surveys that have been conducted in Germany: LINOS-1, SOEP Innovation Sample 2012, and ALLBUS 2014. The analysis of these three data sets confirms the assumed four-factorial structure of the justice dimensions, and the validation of the construct confirms the hypothesized relationships between the dimensions of the BSJO scale and socio-structural characteristics, political attitudes, and other justice related attitudes. |
| Keywords: | Social justice, justice attitudes, distributive justice, justice ideologies, attitude measurement, survey research, equity, equality, entitlement, need |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp831&r=hme |
| By: | Matthias Göcke (University of Giessen); Jolita Matulaityte (University of Giessen) |
| Abstract: | Transition from one economic equilibrium to another as a consequence of shocks is often associated with sunk adjustment costs. Firm specific sunk market entry investments (or sunk market exit costs) in case of a reaction to price shocks are an example. These adjustment costs lead to a dynamic supply pattern similar to hysteresis. In analogy to “hysteresis losses” in ferromagnetism, we explicitly model dynamic adjustment losses in the course of market entry and exit cycles. We start from the micro level of a single firm and use explicit aggregation tools from hysteresis theory in mathematics and physics to calculate dynamic losses. We show that strong market fluctuations generate disproportionately large hysteresis losses for producers. This could give a reason for the implementation of stabilizing measures and policies to prevent strong (price) variations or, alternatively, to reduce the sunk entry and exit costs. However, the explicit inclusion of uncertainty (associated with an option value of waiting) is shown to reduce economic hysteresis losses. |
| Keywords: | sunk-cost hysteresis, adjustment costs, dynamic losses, path-dependence, persistence, option value of waiting |
| JEL: | B59 C61 D21 D69 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201536&r=hme |
| By: | Luigi Russi (International University College of Turin); John D. Haskell (Mississippi College School of Law) |
| Abstract: | Consumption-oriented models of governance dominate the contemporary global legal architecture. The financial crisis beginning in 2008, however, poses fundamental questions about the future viability of these approaches to economics and law. This paper attempts to first, evaluate consumption's salient historical development and themes from the post World War II era to more recent legislative innovation, and second, introduce seven heterodox vignettes that challenge the hegemony of consumption in legislative policy. The paper concludes with some brief reflections upon potential opportunities and limitations of these heterodox traditions within future scholarship and policy addressing the interplay of law and consumption in global governance. |
| Keywords: | political economy, ordoliberalism, critical legal theory, deep ecology, consumerism |
| JEL: | N30 P16 P46 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iuc:rpaper:3-15&r=hme |
| By: | Makovi, Michael |
| Abstract: | Andrei Shleifer and Robert W. Vishny (1994) have used Public Choice analysis to criticize market socialism. Peter J. Boettke (1995) and Peter T. Leeson and Boettke (2002) have argued that F. A. Hayek's Road to Serfdom (2007 [1944]) constituted a form of Public Choice analysis as well. Boettke and Leeson say that Hayek adumbrated a form of Arrow's Impossibility Theorem. This essay shows that Hayek was joined by John Jewkes in presaging a form of the Arrow theorem. In addition, this essay expands on the analysis by Boettke and Leeson, elucidating the broader implications which the Arrow theorem has for democratic socialism in particular. Democratic socialism is demonstrated to be impossible, in the sense that it cannot successfully accomplish the goals of its advocates. This is because the Arrow theorem implies that democratic political institutions are fundamentally incompatible with socialist economics. |
| Keywords: | Hayek; Road to Serfdom; democratic socialism; market socialism; economic democracy; totalitarianism; public choice; government failure; arrow; impossibility; rent seeking; rent-seeking |
| JEL: | A12 B24 B25 B51 B53 D70 P10 P20 P30 P50 |
| Date: | 2016–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70173&r=hme |