nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒12‒18
fourteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  2. Unequal Exchange in International Trade:A General Model. By Andrea Ricci
  3. Randomization of What? Moving from Libertarian to "Democratic Paternalism" By Judith Favereau; Nicolas Brisset
  5. The Continuing Relevance of Keynes's Philosophical Thinking: Reflexivity, Complexity, and Uncertainty By John B. Davis
  6. How green are green economists By Stefano Carattini; Alessandro Tavoni
  7. A Gendered Analysis of Age Discrimination among Older Jobseekers in Australia By Michael McGann; Rachel Ong; Dina Bowman; Alan Duncan; Helen Kimberley; Simon Biggs
  8. Engaging with Economic Sociology for an Enlarged Self-Definition of Economics By Daniyal Khan
  9. Entendiendo la diversificación productiva, un análisis de los factores asociados al vínculo entre productos By Mauro, Lucía Mercedes; Marín, Anabel
  10. Finland in global value chains By Ali-Yrkkö, Jyrki; Rouvinen, Petri; Sinko, Pekka; Tuhkuri, Joonas
  11. Why Assist People Living in Poverty? The ethics of poverty reduction By Armando Barrientos; Richard de Groot; Luigi Peter Ragno; Abdul-Gafaru Abdulai; Daisy Demirag; UNICEF Office of Research - Innocenti
  12. Measuring business profits: economists versus accountants By Hasan, Zubair
  14. What bangs for your bucks? Assessing the design and impact of transformative policy By Matthijs Janssen

  1. By: Kanbur, Ravi
    Abstract: The subject of this essay is formed from three classic pieces of writing: The End of Laissez-Faire by John Maynard Keynes, The End of History? by Francis Fukuyama, and The Structure of Scientific Revolutions by Thomas Kuhn. All three essays were concerned with the evolution of ideas, with Keynes and Fukuyama additionally arguing for the centrality of ideas and consciousness in determining material outcomes and government policy. I wish to argue that neither Kuhn’s nor Fukuyama’s “revolutionary” account fits the bill for the path of change in the ideas of political economy. Rather, despite the title of his essay, the gradual and multilayered process described in Keynes’s account of the emergence and then questioning of laissez-faire is a better guide to the likely path of the evolution of this key doctrine of political economy in the coming decades.
    Keywords: Research and Development/Tech Change/Emerging Technologies,
    Date: 2015–03
  2. By: Andrea Ricci (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    Abstract: Increasing world inequality and mass migration make the topic of unequal exchange ever more important. In literature, two main sources of unequal exchange have been identified: differences in industrial specialization and differences in factors remunerations between countries. Many empirical studies measured the quantitative dimension of value transfers. However, the lack of a coherent theoretical framework limited empirical research. A disaggregated model of world economy with heterogeneous labour and non-specific commodities is presented on the grounds of the New Interpretation of Marx’s LTV. The model is able to explain, within a coherent theoretical framework, all the various forms of international value transfers, without incurring in traditional impasses. The social distribution of benefits/losses of unequal exchange emerges as a pragmatic and historical question rather than a theoretical one. Recent empirical approaches based on the difference between nominal and PPP exchange rates could only partially capture the full extent of unequal exchange in world economy. The operational character of the model provides a consistent theoretical basis for further empirical research on international value transfers deriving from the unfair distribution of value added in trade between countries and between social classes.
    Keywords: International trade, Unequal Exchange, Labour Theory of Value, Exchange rates
    JEL: B51 D46 E11 F10
    Date: 2016
  3. By: Judith Favereau; Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: Esther Du o and Abhijit Banerjee within the J-PAL, promote the use of randomization as an ecient way of ghting poverty. Mainly, JPAL's project aims at testing what can be assimilated to nudging devices through randomization. Nevertheless, Du o recently changed her perspective from a kind of libertarian paternalism toward a stronger paternalistic view. The paper methodologically explains such a shift through the incapacity of J-PAL's use of randomization to give access to the whole process of poverty since it focuses only on the individual decision-making process. Our claim in this paper is that this shift for a stronger paternalism can be explained by a twofold failure of focusing only on the use of randomization: (1) the incapacity to show how individual behaviors are related to poverty, (2) randomization alone does not give access to an important determinant of the decision-making process, namely the social framework that embeds it.
    Keywords: Randomization, Behavioral Economics, Experimental Economics, Causality, Poverty, Paternalism
    JEL: F63 B41 C9 D03
    Date: 2016–12
  4. By: Kanbur, Ravi
    Abstract: Two fundamental attributes of the capability approach are (i) a broadening of the evaluation space from the instrumental means such as income to the intrinsic ends of beings and doings, or functionings; and (ii) the further broadening of evaluation from achievement of ends to opportunity to achieve those ends—from functionings to capabilities. This paper accepts the first broadening but presents a critique of the opportunity perspective in capability theory, using as a platform a critique of recent work on inequality of opportunity. The paper argues that similar critiques of concept and empirical application apply to capability analysis as an analysis and an evaluation of opportunity. Perhaps for this reason, much of the practical implementation of capability theory ends up by in fact focusing only on outcomes in functionings space, with only a loose link to opportunity.
    Keywords: Agricultural and Food Policy,
    Date: 2016–02
  5. By: John B. Davis (Marquette University; University of Amsterdam)
    Abstract: This paper explains the continuing relevance of Keynes’s philosophical thinking in terms of his anticipation of complexity thinking in economics. It argues that that reflexivity is a central feature of the philosophical foundations of complexity theory, and shows that Keynes employed an understanding of reflexivity in both his philosophical and economic thinking. This argument is first developed in terms of his moral science conception of economics and General Theory beauty contest analysis. The paper advances a causal model that distinguishes direct causal relationships and reflexive feedback channels, uses this to distinguish Say’s Law economics and Keynes's economics, and explains the economy as non-ergodic in these terms. Keynes’s policy activism is explained as a complexity view of economic policy that works like self-fulfilling and self-defeating prophecies. The paper closes with a discussion of the ontological foundations of uncertainty in Keynes's thinking, and comments briefly on what a complexity-reflexivity framework implies regarding his thinking about time.
    Keywords: Keynes, complexity, reflexivity, non-ergodic, policy activism, uncertainty, time
    JEL: E12 B41
    Date: 2016–12
  6. By: Stefano Carattini; Alessandro Tavoni
    Abstract: This paper analyzes the decision of “green” economists to participate in the carbon offset market, and how this decision is related with the views that these experts hold on offsets. It also compares the preferences of economists with those of the general public, as emphasized in the literature. The paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We focus on the effect of objecting to the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we suggest that ecological and environmental economists should be more involved in the design and use of carbon offsets.
    JEL: N0
    Date: 2016
  7. By: Michael McGann (School of Social and Political Sciences, University of Melbourne); Rachel Ong (Bankwest Curtin Economic Centre, Curtin University); Dina Bowman (Research and Policy Centre, Brotherhood of St Laurence); Alan Duncan (Bankwest Curtin Economic Centre, Curtin University); Helen Kimberley (Research and Policy Centre, Brotherhood of St Laurence); Simon Biggs (School of Social and Political Sciences, University of Melbourne)
    Abstract: This paper investigates how age and gender interact to shape older jobseekers’ experiences of age discrimination within a mixed methods framework. The analysis reveals that there has been a considerable decline in levels of perceived ageism among older men nationally relative to older women. These findings suggest that the nature of ageism experienced by older women is qualitatively different from men. Hence, policy responses to ageism need to be far more tailored in their approach because present, one-size-fits all, business case approaches rely on an overly narrow concept that obscures the gender and occupational dimensions of ageism.
    Keywords: Age discrimination, ageism, gender, older workers
    JEL: J01 J16 J71
    Date: 2016–05
  8. By: Daniyal Khan (Department of Economics, Seeta Majeed School of Liberal Arts and Social Sciences, Beaconhouse National University)
    Date: 2016–12
  9. By: Mauro, Lucía Mercedes; Marín, Anabel
    Abstract: Para las economías menos desarrolladas, cuya estructura productiva se concentra en pocos productos, los cuales además son generalmente de bajo valor agregado, es importante promover movimientos hacia actividades lejanas a las existentes. Son esos "saltos largos" (diversificación no relacionada), los que permiten a estos países modificar su estructura productiva y conducen al desarrollo (Hidalgo et al., 2007). Por lo tanto, el objetivo principal de este trabajo es aportar al estudio de la diversificación en el contexto de países en desarrollo, a partir de analizar los factores asociados al vínculo entre los productos que ofrecen las empresas. Para alcanzar esta meta general, nos proponemos los siguientes objetivos particulares: (i) elaborar un indicador de cercanía de productos basado en el enfoque de co-ocurrencia; (ii) identificar factores asociados al vínculo entre productos; (iii) explorar diferencias en dichos factores para productos lejanos, cercanos y muy cercanos; y (iv) explorar cualitativamente los factores y las diferencias encontradas desde una perspectiva sectorial.
    Keywords: Diversificación de la Producción; Empresas Industriales;
    Date: 2016–09
  10. By: Ali-Yrkkö, Jyrki; Rouvinen, Petri; Sinko, Pekka; Tuhkuri, Joonas
    Abstract: This report uses an international input-output dataset to present an analysis of Finland’s position in global value chains. The results show that intermediate products account for a larger share – some three-quarters – of Finnish exports than they do in most other countries. The share of foreign value added in Finnish export production is around the international average, but it has grown more rapidly than average. A higher share of foreign value added means that exports, on average, have less capacity to generate economic growth. The share of domestic value added has fallen particularly sharply in the fuel refining industry as well as in metal processing and the manufacture of metal products. The share of domestic value added has decreased more in Finnish than in Swedish industry. A value added based analysis changes the picture of Finland’s most important trade partners and our international economic dependencies. Based on the analysis Finnish economic growth is heavily dependent on Chinese and US final demand. Over 10% of Finland’s value added exports are ultimately destined for China, and almost the same proportion goes to the United States. However, the combined final demand from EU-28 countries still outweighs the demand from these two countries.
    Keywords: Globalisation, value chain, value network, global, value added, intermediate, input-output
    JEL: F14 F6 F62 F68
    Date: 2016–11–30
  11. By: Armando Barrientos; Richard de Groot; Luigi Peter Ragno; Abdul-Gafaru Abdulai; Daisy Demirag; UNICEF Office of Research - Innocenti
    Abstract: The paper provides an examination of the relevance of ethics to poverty reduction. It argues that linking the shared values that define the social arrangements and institutions, which we refer to as ‘ethical perspectives’, to the emerging welfare institutions addressing poverty in developing countries provides a window into these processes of justification at a more fundamental level. By ethics of poverty the authors refer to the most basic arguments and processes used to justify how and why we assist people living in poverty. Given the extent to which poverty reflects injustice, they argue it is appropriate to consider poverty in the context of ethics. Drawing on the recent expansion of social assistance in Brazil, South Africa and Ghana, the paper shows that ethical perspectives are relevant to our understanding of the evolution of anti-poverty policy.
    Keywords: cash transfers; ethics; poverty reduction; social welfare;
    Date: 2016
  12. By: Hasan, Zubair
    Abstract: This paper discusses a topic rarely addressed in the literature on profit theory over the decades. In empirical work on subjects like growth, efficiency and welfare, business profits at times appear as one of the variables. Such studies perforce use profit data reported in the business accounting records. This data is invariably at variance in important ways with the economists’ theoretical view of profit. The cause of divergence is the cosmopolitan forward looking ex ante view of entrepreneurism the economists take as opposed to the narrow conservative ex post focus of the accountants needed to protect the interest of business proprietors who pay them for the job. There is a need to narrow this gap to improve the results of empirical explorations. This paper identifies some areas of divergence like maintenance of capital, evaluation of inventory and the impact of conservatism. It concludes that the economists are obliged more to take cognizance of accounting constraints than the other way round.
    Keywords: Business profits, Efficiency, capital maintenance, inventory evaluation, Conservatism
    JEL: D21 D23 D24
    Date: 2016
  13. By: Kanbur, Ravi
    Abstract: Climate justice requires sharing the burdens and benefits of climate change and its resolution equitably and fairly. It brings together justice between generations and justice within generations. In particular it requires that attempts to address injustice between generations through curbing greenhouse gas emissions do not end up creating injustice in our time by hurting the presently poor and vulnerable. This essay considers the transformative power of education in its many dimensions as one entry point into expanding the scope of policy instruments for climate justice. First, education can change behavior, primarily in rich countries but also in poor countries, and thus help mitigate climate injustice between the generations. Second, resources targeted to the education of the poorest in poor countries can help their development but also help to counter some of the negative spillover effects of interventions to mitigate climate change. Hence the title of this essay — Education for Climate Justice.
    Keywords: Environmental Economics and Policy, Teaching/Communication/Extension/Profession,
    Date: 2015–04
  14. By: Matthijs Janssen
    Abstract: After an era of generic support for economic development and innovation, narrowly targeted transformation policy is back on the table. Recent advances in the fields of new industrial policy and transition thinking converge on the idea that achieving structural change requires governments to take an active role in overcoming inertia. Rather than just leveraging R&D investments and setting framework conditions, policy makers are urged to participate in the development of socio-economic systems around particular technologies. Associated policy support typically involves a diverse portfolio of system-specific interventions. The emergence of transformative policy, in this paper characterized by being selective, process-oriented and multi-instrumental, poses severe challenges to rising standards of public accountability. Evaluation methods for calculating the ‘bang for the buck’ of R&D-leveraging measures are ill-suited when policy mixes are supposed to enact economic transformation. We argue that, in order to see if aptly chosen policy design is bringing about actual change, assessments should gauge policy contributions to building up technological innovation systems (TIS). The TIS-literature provides a concrete but untapped basis for tracking how policy efforts affect conditions favoring the creation and diffusion of new economic activities. This premise leads us to introduce a scheme for structuring analyses concerned with (the links between) the organization, orientation and aggregate impact of transformative policy. We test it in a tentative assessment of the Dutch ‘Topsector approach’. Besides facilitating continuous policy learning, our assessment scheme also serves to strengthen policy maker’s ability to legitimize the adoption of heterodox economic approaches.
    Keywords: economic development, innovation policy, policy mix, technological innovation system, structural change, directionality
    JEL: O25 O38
    Date: 2016–12

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