nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒08‒21
fifteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Walras' law in the context of pre-analytic visions: A note By Heise, Arne
  2. Pledge for a transformative science: A conceptual framework By Schneidewind, Uwe; Singer-Brodowski, Mandy; Augenstein, Karoline; Stelzer, Franziska
  3. Why economics textbooks must, and how they can, be changed into a real-world and pluralist economics. The example of a fundamentally new complexity-economics micro-textbook By Elsner, Wolfram
  4. Heterogeneity, spontaneous coordination and extreme events within large-scale and small-scale agent-based financial market models By Schmitt, Noemi; Westerhoff, Frank
  5. Cascading Failures in Production Networks By David Baqaee
  6. Does personality matter? : The impact of the big five on the migrant and gender wage gaps By Brenzel, Hanna; Laible, Marie-Christine
  7. The Collaborative Economy in Poland and Europe: A Tool for Boosting Female Employment? By Karolina Beaumont
  8. Monetary economics from econophysics perspective By Victor M. Yakovenko
  9. Gender, Institutions, and Economic Development: Findings and Open Research and Policy Issues By Stephan Klasen
  10. Economic discourse and the European integration of financial infrastructures and financial markets By Krarup, Troels
  11. Behavioral economics: Economic Man and Evaluation of the Role of State in this Model By Sheresheva Marina; Kostanyan Ani
  12. Emergent organization in a model market By Avinash Chand Yadav; Kaustubh Manchanda; Ramakrishna Ramaswamy
  13. The distribution of power and household behavior: Evidence from Niger By Wouterse, Fleur Stephanie
  14. Energiesuffizienz - Transformation von Energiebedarf, Versorgungsökonomie, Geschlechterverhältnissen und Suffizienz By Spitzner, Meike; Buchmüller, Sandra
  15. Qualitative methods for gender research in agricultural development By Rubin, Deborah

  1. By: Heise, Arne
    Abstract: Walras' law is central to the formation of economic theory. For mainstream economics, it is a device for testing rigorousness and consistency of model-building; for heterodox economists, the refutation of Walras' law is key to understanding Keynes' revolutionary contribution to a new economic paradigm. The purpose of this short research note is to elaborate on the possibility of a refutation of Walras' law and to inquire into its preconditions. It will be argued that this can only be achieved on the basis of an alternative pre-analytic vision of a genuine monetary economy as forshadowed by John Maynard Keynes.
    Keywords: Walras' law,equilibrium,disequilibrium,heterodoxy,orthodoxy
    JEL: B50 D50 D51 E
    Date: 2016
  2. By: Schneidewind, Uwe; Singer-Brodowski, Mandy; Augenstein, Karoline; Stelzer, Franziska
    Abstract: "Transformative science" is a concept that delineates the new role of science for knowledge societies in the age of reflexive modernity. The paper develops the program of a transformative science, which goes beyond observing and analyzing societal transformations, but rather takes an active role in initiating and catalyzing change processes. The aim of transformative science is to achieve a deeper understanding of ongoing transformations and increased societal capacity for reflexivity with regard to these fundamental change processes. The concept of transformative science is grounded in an experimental paradigm, which has implications for (1) research, (2) education and learning, and (3) institutional structures and change in the science system. The article develops the theoretical foundations of the concept of transformative science and spells out the concrete implications in these three dimensions.
    Abstract: Das Konzept einer "Transformative Wissenschaft" bietet Antworten auf die neue Rolle von Wissenschaft in den Wissensgesellschaften der "Reflexiven Moderne". Das Paper entfaltet das Programm einer "Transformativen Wissenschaft", die gesellschaftliche Transformationsprozesse nicht nur beobachtet und von außen beschreibt, sondern diese Veränderungsprozesse selber mit anstößt und katalysiert. Transformative Wissenschaft zielt dabei auf ein verbessertes Verständnis und eine umfassende gesellschaftliche Reflexion dieser Veränderungsprozesse. Sie folgt einem experimentellen Paradigma und wirkt sowohl auf die (1) Forschungs-, die (2) Lern- und Lehrprozesse als auch auf (3) die institutionelle Weiterentwicklung im Wissenschaftssystems zurück. Das Paper gibt einen Einblick in die Hintergründe und in die Implikationen in allen drei Dimensionen.
    Date: 2016
  3. By: Elsner, Wolfram
    Abstract: We argue that economics must, and can, be taught in fundamentally different ways than the simplistic and ideology-laden “economics of x”. We illustrate this with a fundamentally new textbook, “Microeconomics of Complex Economies” (2015). The mainstream’s ambivalence between some relevant research and its simplistic teaching in terms of “optimum”, “equilibrium”, and “market”, and the resulting textbook structure, incoherent between the static and “optimal” equilibrium and some reference to more recent real-world phenomena, will be characterized. We show how this can be changed by showing the process of getting a “heterodox” complexity textbook published, and by the structure of its content.
    Keywords: microeconomics; textbooks; teaching economics; heterodoxy; complexity economics; evolutionary economics; institutional economics; game theory; computational economics; history of economic thought.
    JEL: A11 A20 B00 C63 C70 D00
    Date: 2016–08–15
  4. By: Schmitt, Noemi; Westerhoff, Frank
    Abstract: We propose a novel agent-based financial market framework in which speculators usually follow their own individual technical and fundamental trading rules to determine their orders. However, there are also sunspot-initiated periods in which their trading behavior is correlated. We are able to convert our (very) simple large-scale agent-based model into a simple small-scale agent-based model and show that our framework is able to produce bubbles and crashes, excess volatility, fattailed return distributions, serially uncorrelated returns and volatility clustering. While lasting volatility outbursts occur if the mass of speculators switches to technical analysis, extreme price changes emerge if sunspots coordinate temporarily the behavior of speculators.
    Keywords: financial markets,stylized facts,agent-based models,technical and fundamental analysis,heterogeneity and coordination,sunspots and extreme events
    JEL: C63 D84 G15
    Date: 2016
  5. By: David Baqaee (London School of Economics and Political Science)
    Abstract: I show how the extensive margin of firm entry and exit can greatly amplify idiosyncratic shocks in an economy with a production network. I show that input-output models with entry and exit behave very differently to models without this margin. In particular, in such models, sales provide a very poor measure of the systemic importance of firms or industries. I derive a new notion of systemic influence called exit centrality that captures how exits in one industry will affect equilibrium output. I show that exit centrality need not be related to an industry’s sales, size, or prices. Unlike the relevant notions of centrality in standard input-output models, exit centrality depends on the industry’s role as both a supplier and as a consumer of inputs, as well as market structure. I show that, unlike competitive models, vanishingly small industries can have arbitrarily large effects on equilibrium outcomes. In this sense, the network can amplify shocks in a way that standard input-output models cannot.
    Date: 2016
  6. By: Brenzel, Hanna (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Laible, Marie-Christine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "We investigate whether the Big Five Personality Dimensions contribute to explaining gender and migrant wage gaps by using a linked employer-employee dataset. We expand the scarce literature concerning personality traits and gender wage gaps in Germany and we provide first evidence for the relationship between the Big Five and the migrant wage gap. Our results reveal that the genders differ in their average personality traits, as do migrants and natives. Further, we find significant associations between the Big Five and wages. The magnitude of this relationship varies across the gender and the migratory status. The results of Oaxaca-Blinder wage decompositions suggest that the Big Five significantly contribute to explaining gender and migrant wage gaps." (Author's abstract, IAB-Doku) ((en))
    JEL: J15 J16 J24 J31
    Date: 2016–08–15
  7. By: Karolina Beaumont
    Abstract: The paper discusses the challenges of the collaborative economy as a system stimulating female social and economic empowerment and assesses the opportunities offered by the collaborative economy in increasing the female labour participation rate amongst Polish women.
    Keywords: collaborative economy, sharing economy, new business models, gender equality, self-employment, female employment
    JEL: J16 J21 J23 J24
    Date: 2016
  8. By: Victor M. Yakovenko
    Abstract: This is an invited article for the Discussion and Debate special issue of The European Physical Journal Special Topics on the subject "Can Economics Be a Physical Science?" The first part of the paper traces the personal path of the author from theoretical physics to economics. It briefly summarizes applications of statistical physics to monetary transactions in an ensemble of economic agents. It shows how a highly unequal probability distribution of money emerges due to irreversible increase of entropy in the system. The second part examines deep conceptual and controversial issues and fallacies in monetary economics from econophysics perspective. These issues include the nature of money, conservation (or not) of money, distinctions between money vs. wealth and money vs. debt, creation of money by the state and debt by the banks, the origins of monetary crises and capitalist profit. Presentation uses plain language understandable to laypeople and may be of interest to both specialists and general public.
    Date: 2016–08
  9. By: Stephan Klasen (Georg-August University Göttingen)
    Abstract: Gender relations are a key institution governing important aspects of production and reproduction of societies. They are guided by formal institutions as well as informal norms and values. As this survey shows, there is great regional heterogeneity in gender inequality in formal and informal social institutions. The literature on long‐term drivers of gender gaps suggests that those gender gaps are related to long‐standing and regularly reproduced gender norms and values related to differences in women's economic opportunities and constraints. The paper also shows that these gender gaps not only affect gender equity but overall development outcomes such as economic growth and reductions in mortality. This is best documented in the case of gender gaps in education but there is also evidence for the negative effects gender of gaps in employment, political and economic empowerment, access to resources, and social institutions on development outcomes. The paper then shows that there has been a large and heterogeneous change in gender gaps. While gender gaps in education (and legal rights) have closed very rapidly, gender gaps in labor force participation, health, political participation, and time use have closed much less rapidly, and there has been virtually progress in reducing occupational and sectoral segregation, unexplained gender pay gaps, and violence against women. The paper presents some hypotheses that might explain this differential performance and also contribute to understanding regional dynamics, before pointing towards a forward‐looking research agenda on better understanding the linkages between institutions and their change, gender inequality, and economic development.
    Keywords: gender; institutions; economic development
    JEL: D63 J71 O15
    Date: 2016–08–09
  10. By: Krarup, Troels
    Abstract: European integration of financial markets appears to repeatedly encounter specific kinds of problems about the substance and limits of the notion of "the market" undergoing integration, and about the status and role of money, market infrastructures, and government within it. Moreover, these problems and the controversies around them parallel classical discussions in economic theory such as that between conceptions of the market as a frictionless space and as a process of competition. A "competitive conception of the market" is identified as producing these parallel problems and controversies in European market integration and economic theory because it implies a contradictory "integration of fragmentation". These themes and parallels can be specifically identified in a recent major project to integrate financial market infrastructures: a pan-European settlement platform - "Target2-Securities (T2S)" - to overcome existing fragmentation between the systems that perform the actual delivery of money and securities from financial transactions. Moreover, a close analysis of T2S answers a question that existing sociological and political economy approaches to European integration - focusing primarily on the interests and ideas of powerful players - struggle with: why T2S will become de facto a monopoly for the European Central Bank when early on in the integration process EU institutions emphasized an industry-led integration. Foucault's notion of "discursive formation" is employed to conceptualize these arguments.
    Keywords: European integration,financial infrastructures,financial markets,money,discourse analysis,Target2-Securities,European Central Bank
    Date: 2016
  11. By: Sheresheva Marina (Department of Economics, Lomonosov Moscow State University); Kostanyan Ani (Department of Economics, Lomonosov Moscow State University)
    Abstract: The article presents an approach to the assessment of the economic man model in the behavioral economics as the one of the latest trends of economic thought development, and discusses the role of state in this model. The evolution of the economic man model is described on the basis of retrospective analysis (from the mercantilism up to the experimental economics). Specific features of human decision-making process in behavioral economics are revealed. A critical view at the phenomenon of paternalism in this framework is given, and the impact of different paternalism types on the human decision-making process in behavioral economics is described.
    Keywords: economic man, behavioral economics, rationality, economic psychology, paternalism.
    JEL: B1 B2
    Date: 2016–08
  12. By: Avinash Chand Yadav; Kaustubh Manchanda; Ramakrishna Ramaswamy
    Abstract: We study the collective behavior of interacting agents in a simple model of market economics originally introduced by N{\o}rrelykke and Bak. A general theoretical framework for interacting traders on an arbitrary network is presented, with the interaction consisting of buying (namely, consumption) and selling (namely, production) of commodities. Extremal dynamics is introduced by having the agent with least profit in the market readjust prices, causing the market to self--organize. We study this model market on regular lattices in two--dimension as well as on random complex networks; in the critical state fluctuations in an activity signal exhibit properties that are characteristic of avalanches observed in models of self-organized criticality, and these can be described by power--law distributions.
    Date: 2016–08
  13. By: Wouterse, Fleur Stephanie
    Abstract: Niger is a landlocked Sahelian country, two-thirds of which is in the Sahara desert. Although only one-eighth of the land considered arable, more than 90 percent of Niger’s labor force is employed in agriculture, which is predominantly subsistence oriented. Food security remains a major challenge in rural areas of Niger, and gender is a significant basis for the inequality among household members with respect to access to land. Access to land, which is a measure of the income-earning potential of an individual, is an important determinant of the distribution of bargaining power within the household. Because households may not act in a unitary manner when making decisions, the power of individuals within the household to exert their own preferences may determine welfare outcomes, such as spending on nutritious foods or healthcare. In this paper, we use new data for Niger and regression analyses to assess the importance of the intrahousehold distribution of power for the behavior of rural households. Our results reveal that men are significantly more empowered than women in rural households in Niger and that social protection programs such as water, sanitation, and hygiene (WASH) and food-for-training contribute significantly to the empowerment of women. Our findings also point to the validity of the collective approach to modeling household behavior, as the distribution of power was shown to affect household behavior. In particular, we found that an increase in power in favor of the adult female significantly increases expenditures on healthcare and reduces spending on vices (cigarettes and alcohol).
    Keywords: NIGER, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, households, gender, assets, smallholders, sociology, decision making, household expenditure, welfare, social protection, distribution of power,
    Date: 2016
  14. By: Spitzner, Meike; Buchmüller, Sandra
    Abstract: Effizienzpolitiken allein werden nicht mehr ausreichen, um Klimaschutzziele zu erreichen. Diese Erkenntnis setzt sich in der aktuellen Nachhaltigkeitsdebatte immer mehr durch, partiell selbst innerhalb der Green Economy-Diskurse. Wir werden um Politiken der Eindämmung struktureller Energiebedarfs-Erzeugung nicht herumkommen. Allerdings besteht die Gefahr, dass die Forderungen nach Suffizienz und "Maß-Halten" nicht die Erwerbsökonomie und Wachstumspolitiken adressieren, sondern die privaten Haushalte: die genderbedingt erwerbsökonomisch und politisch externalisierte Versorgungsökonomie (Haushaltswirtschaft) und persönliches Handeln. Deshalb ist ein emanzipativer Energiesuffizienz-Politikansatz umso wichtiger. Wie aber lässt sich ein Energie-bezogener Suffizienz-Ansatz des "Genug - es reicht!" anwendungsorientiert und methodisch konkret fassen? Auf welches Sichtbarmachen von den in der Energieforschung und -politik fast immer ausgeblendeten Fragen nach dem gutem Leben, Versorgen und Versorgt werden kommt es an? Wie lassen sich dabei implizite Genderverzerrungen, die aus traditionell an Maskulinität als Norm orientiertem Denken stammen, gemeinsam überwinden? Welche Strategien, welche Potenziale, welche Eingriffspunkte für Energiesuffizienz-Politiken und welcher Art Instrumente resultieren daraus? Die im ersten größeren, vom BMBF geförderten Forschungsprojekt zu diesen Fragen erarbeiteten Analysen, Ansätze und Methoden wurden durch genderkompetente ExpertInnen aus den beteiligten Disziplinen in einer Fokusgruppen-Diskussion reflektiert, kritisch gewürdigt, mit Anregungen, disziplinären Wissensbeständen und praktischen Beispielen bereichert. Der Wuppertal Report 8 präsentiert die Auswertung und die Zusammenfassung des emanzipativen Ansatzes und neuen Methode. Er gibt damit einen Einblick in die vielfältigen Ergebnisse des Gesamtprojekts "Strategien und Instrumente für eine technische, systemische und kulturelle Transformation zur nachhaltigen Begrenzung des Energiebedarfs im Konsumfeld Bauen/Wohnen".
    Abstract: Sufficiency actually is debated as a serious topic. Not at least because of the limits and destructive impacts of growth, producing global environmental damages, unsustainable consumption of ressources and climate change, but also economical and social destabilisations and inequalities. Also green economy and efficiency policies turn out to be no match for these problems. But how to design acceptable and effective sustainable sufficiency policies in concrete sectors like energy? Enabling "good life" without growth imperative (cf. the "sustainable livelihood" approach) necessitates adressing politically the structural production of energy needs and demand. Nevertheless there are emerging risks, not hitherto politics and market driven economy will be adressed by sufficiency, but private households: their care economy as well as the personal acting within. The care economy however already is long ago recognised being in an economical, social and ecological crisis: It is economically exploited, but because of gender biases externalised from being (societal the essential) part of economy and its rationality. The dominant societal masculinity model still comprises significant abstinence resulting i.a. in gender unequal chances of being served and provided. And societal nature relationships of caring are undermined by centering independent social security etc. around income from market. After the "feminisation of the environmental responsibility", pointed out for the waste and transport sector, now "feminisation of the energy sufficiency responsibility"? All the more important is an emancipative (energy) sufficiency approach. What methods are nescessary and adequate designing sustainable, i.e. gender responsive political energy sufficiency strategies and modeling potentials? Which political step ins, actions and types of instruments are resulting from an energy sufficiency approach of "Enough already!"? The analysis, approach and methods as well as their evaluation and enrichment by an interdisciplinary expert focus group discussion, done within a first research project on elaborating energy sufficiency policies, are presented by the Wuppertal Report no. 8.
    Date: 2016
  15. By: Rubin, Deborah
    Abstract: The rise of mixed methods approaches to development-oriented research has brought new attention to qualitative research methods. This paper describes the use of qualitative approaches to illuminate gender relations in agricultural development research and project implementation. For gender research, qualitative methods can be particularly helpful in illuminating how men and women view their lives. Drawing on literature about social science methods and linking it to recent examples of qualitative methods employed in research and development projects, the paper argues for greater precision in key concepts of gender research, starting with sex and gender. From the many possible qualitative methods used in development work, the paper focuses on several common observational (both direct and participatory) and interview techniques, the latter including key informant and group interviews and focus group discussions. Researchers use various techniques to gather different types of information, for example, mapping techniques to understand men’s and women’s different types of knowledge about their environment and eliciting in-depth information on a single topic with key informants. In a brief discussion of the analysis of qualitative data, the paper notes that informant responses are not “the truth” but need to be assessed against other sources of data. Finally, there is a short discussion of how qualitative data have been used in comparative work. The paper concludes that the results of good qualitative research on gender relations can help identify the locally specific pathways needed to achieve gender-transformative development approaches.
    Keywords: gender, women, agriculture, qualitative analysis, analytical methods, interviews, qualitative research, mixed methods, informant interviews, group interviews, focus group discussions,
    Date: 2016

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