nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒09‒04
ten papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Picking the winner: Measuring urban sustainability in India By B. Sudhakara Reddy; Arpit Tiwari
  2. Black Workers, Unions, and Inequality By Cherrie Bucknor
  3. Home and Market Hours, Human Capital Accumulation and Fertility By Johanna Wallenius; Tobias Laun
  4. Institutions Without Culture. A Critique of Acemoglu and Robinson's Theory of Economic Development By Joanna Dzionek-Kozlowska; Rafal Matera
  5. Is the Market Really a Good Teacher? By Seppecher, P.; Salle, I.; Lang, D.
  6. Позитивное сотрудничество: факторы и механизмы эволюции. By Polterovich, Victor
  7. Ricardo on Machinery: A Textual Analysis By Freni, Giuseppe; Salvadori, Neri
  8. Impact of Green Energy on Global Warming - A Changing Scenario By Aithal, Sreeramana; Acharya, Sridhar
  9. Information Diffusion, Cluster formation and Entropy-based Network Dynamics in Equity and Commodity Markets By Bekiros, Stelios; Nguyen, Duc Khuong; Sandoval Junior, Leonidas; Salah Uddin, Gazi
  10. Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies By Ewa Karwowski; Engelbert Stockhammer

  1. By: B. Sudhakara Reddy (Indira Gandhi Institute of Development Research); Arpit Tiwari (Tata Institute of Social Sciences)
    Abstract: This study provides a snapshot of the sustainability of selected Indian cities by employing 57 indicators in four dimensions to develop an overall city sustainability index. In recent years, its complexity has made 'urban sustainability' a prominent concept. Urban areas propel growth and at the same time pose a lot of ecological, social and infrastructural problems and risks. High population density and continuous in-migration among developing countries created the highest risk in natural and man-made disasters. These issues and the inability of policy-makers in providing basic services make the cities unsustainable. The objective of the paper is to develop a city performance index (CPI) to measure and evaluate the urban regions in terms of sustainable performance. The paper uses benchmark approach to measure the cumulative performance of the 25 largest Indian cities based on economic, environmental social and institutional dimensions. The CPI, consisting of four dimensions disaggregates into 12 categories and ultimately into 53 indicators. The data are obtained from public and non-governmental organizations, as also from city officials and experts. By ranking a sample of diverse cities on a set of specific dimensions the study can serve as a baseline of current conditions and a marker for referencing future results. The benchmarks and indices presented in the study provide a unique resource for the government and the city authorities to learn about the positive and negative attributes of their a city and prepare plans for sustainable urban development.
    Keywords: City, Benchmark, Index, Performance, Sustainability, Urban
    JEL: P28 Q41 Q42 Q48
    Date: 2016–07
  2. By: Cherrie Bucknor
    Abstract: This study uses the most recent Census Bureau data available to examine the trends in unionization for Black workers, focusing on unionization rates as well as the demographic composition of the Black union workforce. This paper also presents data on the impact of unionization on the wages and benefits of Black workers and how these benefits work to reduce racial wage inequality. Unionization rates have been in decline across the board for decades. Despite this fact, Black workers are still more likely than workers of any other race or ethnicity to be unionized. In 2015, 14.2 percent of Black workers and 12.3 percent of the entire workforce were represented by unions, down from 31.7 percent and 23.3 percent, respectively, in 1983. This large decline in unionization has occurred alongside, and contributed to, an increase in overall wage inequality, as well as the widening Black-white wage gap.
    JEL: I I2 I24 J J1 J15 J11
    Date: 2016–08
  3. By: Johanna Wallenius (Stockholm School of Economics); Tobias Laun (Uppsala university)
    Abstract: Sweden boasts high fertility and high female employment. Notably, also women with young children work. However, part-time employment is very prevalent. There is a notable gender gap in both wages and earnings, which widens substantially after women have children. In this paper we study the effect of family policies on female employment, fertility and the gender wage gap. We are particularly interested in understanding why part-time employment is so prevalent in Sweden, despite heavily subsidized daycare, and the effect of this on the widening of the gender wage gap. We are also interested in understanding the role of home production, particularly the unequal division of home work across genders, in shaping women’s career paths. To this end, we develop a structural, life cycle model of heterogenous households which features endogenous labor supply, endogenous human capital accumulation, endogenous fertility and home production.
    Date: 2016
  4. By: Joanna Dzionek-Kozlowska (Institute of Economics, Department of History of Economic Thought and Economic History, University of Lodz); Rafal Matera (Institute of Economics, Department of History of Economic Thought and Economic History, University of Lodz)
    Abstract: Acemoglu and Robinson’s theory presented in their famous Why Nations Fail, and other papers, should be placed among the institutional theories of economic development. Yet the problem is they strongly differentiate their concept from the so-called culture hypothesis, which they reject. This stance is difficult to accept, not only because of the significance of culture-related factors of economic development, but it is also difficult to reconcile with their own model. The aim of this paper is to demonstrate that such a strong rejection of the culture hypothesis is inconsistent with their own analysis, triggers some principal problems with understanding the basic notion of institution, and suggests Acemoglu and Robinson are only focused on considering formal institutions. The article concludes with the statement that, paradoxically, Acemoglu and Robinson’s unconvincing rejection of the culture hypothesis may be regarded as a justification of the importance of culture-related factors.
    Keywords: Institutional Economics, Daron Acemoglu, James Robinson, Institutions vs Culture Controversy, Economic Development
    JEL: B52 O10 Z10
    Date: 2016–08
  5. By: Seppecher, P. (Centre d’Economie de Paris Nord); Salle, I. (University of Amsterdam); Lang, D. (Centre d’Economie de Paris Nord)
    Abstract: This paper proposes to model market mechanisms as a collective learning process for firms in a complex adaptive system, namely Jamel, an agent-based, stock-flow consistent macroeconomic model. Inspired by Alchian’s (1950) “blanketing shotgun process†idea, our learning model is an ever-adapting process that puts a significant weight on exploration vis-à -vis exploitation. We show that decentralized market selection allows firms to collectively adapt their overall debt strategies to the changes in the macroeconomic environment so that the system sustains itself, but at the cost of recurrent deep downturns. We conclude that, in complex evolving economies, market processes do not lead to the selection of optimal behaviors, as the characterization of successful behaviors itself constantly evolves as a result of the market conditions that these behaviors contribute to shape. Heterogeneity in behavior remains essential to adaptation in such an ever-changing environment. We come to an evolutionary characterization of a crisis, as the point where the evolution of the macroeconomic system becomes faster than the adaptation capabilities of the agents that populate it, and the so far selected performing behaviors suddenly cease to be, and become instead undesirable.
    Date: 2016
  6. By: Polterovich, Victor
    Abstract: It is proposed to distinguish between two types of collaboration: a positive (not directed against third parties) and a negative one. I consider the hypothesis that in the process of social development, transaction costs ratio of the three main types of coordination - competition, power, and collaboration - is changing in favor of the latter. The mechanisms responsible for the implementation of this tendency are studied, and an attempt to explain its nonmonotonicity is made. It is shown that the strengthening role of positive collaboration is largely explained by cultural changes: the increase of tolerance culture, the spread of cosmopolitanism and altruism, increasing planning horizon as well as trust radius. I demonstrate the importance of the institutions of positive collaboration in the process of catching-up development; it is shown that shock reforms could lead to the formation of negative collaboration mechanisms. For the further development of these ideas, a program of interdisciplinary researches is outlined. Рассматривается гипотеза о том, что в процессе общественного развития соотношение трансакционных издержек трех основных типов координации – конкуренции, власти и сотрудничества – меняется в пользу последнего. Исследуются механизмы, ответственные за реализацию этой тенденции.
    Keywords: coordination, positive and negative collaboration, Golden rule of morality, transaction costs, tolerance, cosmopolitanism, altruism, radius of trust, catching-up development
    JEL: B00 B4 B52 N00 P11
    Date: 2016–08–29
  7. By: Freni, Giuseppe; Salvadori, Neri
    Abstract: Modern production theory (Kurz and Salvadori, 1995) is utilized to provide a textual analysis of the famous chapter "On Machinery" added by Ricardo in the third edition of his Principles and to reconstruct the examples that are reported there. Two sets of assumptions that rationalize the basic example presented by Ricardo are identified: a) the innovation concerns a non-basic commodity; b) the innovation concerns an agricultural commodity and it does not change the technology applied on the marginal land, which is still marginal after the innovation. Ricardo was aware of these two facts and he seems to have used the latter of the two in his initial example. In effect, the example holds perfectly well if it is assumed that the new machine is specific to a quality of land that is marginal neither in the pre-innovation nor in the post-innovation economy. When the innovation is introduced in the production of an industrial commodity (cloth) that is used by the workers, as in the second example discussed by Ricardo, the rate of profits, and therefore the rate of growth, cannot be the same in the pre-innovation and in the post-innovation economy, unless the innovation is introduced in a switch-point between the technique employed prior to the innovation and that used after the innovation. This is too strong an assumption and can be of some interest only if it provides information about events that occur in the vicinity of a switch point. This “continuity” assumption is what Ricardo seems to have used as the basis for discussion in his second example.
    Keywords: Ricardo, David; Machinery
    JEL: B12 B51 J2 J23 O33
    Date: 2016–08–30
  8. By: Aithal, Sreeramana; Acharya, Sridhar
    Abstract: The climate of the earth is influenced by first six miles above the surface and the gap between the earth's surface and six miles above is considered to be the atmosphere. The atmosphere is maintaining a temperature up to 40 to 45 degree Celsius which is suitable for the living organisms to lead a happy life. Due to increase in the emission of green house gases like CO2 the environmental temperature is gradually increasing. This is called Global warming. The emission of Co2 is increasing day by day due to deforestation or burning fossil fuels. The major contributor for global warming is industries. Conventional energy production system pollutes the environment by emitting poisonous gases. The average increase in the temperature is found to be 0.4 to 0.8 degree Celsius. If the same situation continuous, then during 2100 the average temperature may increase up to 1.4 to 5.8 degree Celsius. The average increase in the temperature year by year brings threat to the living organisms around the globe. Now it is very important to think on this issue and find out the remedy to bring down the global temperature. In energy sector the main electricity production is done using thermal energy system. In this paper the impact of green energy on green house gases is explained. In this paper a comparative study of emission of CO2 by the traditional energy production system and Renewable energy production system. The paper also suggests the methods to bring down the global warming by adopting Renewable energy sources.
    Keywords: Green energy, Green house, Renewable Energy, fossil fuels, Deforestation.
    JEL: Q54 Q55
    Date: 2016–06
  9. By: Bekiros, Stelios; Nguyen, Duc Khuong; Sandoval Junior, Leonidas; Salah Uddin, Gazi
    Abstract: This paper investigates the dynamic causal linkages among U.S. equity and commodity futures markets via the utilization of complex network theory. We make use of rolling estimations of extended matrices and time-varying network topologies to reveal the temporal dimension of correlation and entropy relationships. A simulation analysis using randomized time series is also implemented to assess the impact of de-noising on the data dependence structure. We mainly show evidence of emphasized disparity of correlation and entropy-based centrality measurements for all markets between pre- and post-crisis periods. Our results enable the robust mapping of network influences and contagion effects whilst incorporating agent expectations.
    Keywords: Finance; commodity markets; correlation; transfer entropy; complex network; centrality
    JEL: G1 G15
    Date: 2015–09
  10. By: Ewa Karwowski; Engelbert Stockhammer
    Abstract: Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.
    Keywords: financialisation, emerging markets, financial instability, asset price volatility, heterodox economics
    JEL: B50 E30 F34 G01 G12 G15
    Date: 2016–08

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