nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2017‒01‒29
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Chaotic Synchronization in Economic Networks By Ralph Abraham; Michael Nivala
  2. Profitability or Industrial Relations : What Explains Manufacturing Performance Across Indian States? By Anirban Karak; Deepankar Basu
  3. Feminist Challenge to the Mainstream IR By Aydın, Gülşen
  4. The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model By Giovanni Dosi; Manoela Carrera Pereira; Andrea Roventini; Maria Enrica Virgillito
  5. Complexity and the Economics of Climate Change: a Survey and a Look Forward By Tomas Balint; Francesco Lamperti; Mauro Napoletano; Antoine Mandel; Andrea Roventini; Sandro Sapio
  6. Growth, environment and Islam By Hasan, Zubair
  7. Reconsidering Communication Regarding Economic Phenomena. Some Hints from a Complexity Approach. By Piercarlo Frigero
  8. Green Finance: Recent developments, characteristics and important actors By Andreas Welling
  9. Property, Possession and Knowledge By Ugo Pagano
  10. Behavioral Dimensions of Islamic Philanthropy: The Case of Zakat By Obaidullah, Mohammed; Manap, Turkhan Ali Abdul
  11. Saver types: An evolutionary-adaptive approach By Gergely Varga; Janos Vincze
  12. Impacts of the Peruvian Conditional Cash Transfer Program on Women’s Empowerment: A Quantitative and Qualitative Approach By Lorena Alcázar; María Balarin; Karen Espinoza
  13. Composition, interprétation et mémorisation du savoir idiosyncrasique dans la banque solidaire By Amélie Artis; Simon Cornée

  1. By: Ralph Abraham; Michael Nivala
    Abstract: Synchronization, long an important topic in the theory of nonlinear oscillation, has recently become a research frontier in chaos theory as well. Here we introduce the sync phenomenon for forced and coupled R¨ossler attractors, and its role in the context of complex economic systems. And we extend the basic framework developed by the late Richard Goodwin in his book, Chaotic Economic Dynamics, of 1990 to massively complex dynamical systems of chaotic elements. Recent experimental results and speculative applications to economic networks are presented
    Keywords: Chaos theory, Rossler attractor lattice, complex dynamical systems, economic geography, chaos synchronization
    JEL: C3 C6
    Date: 2017–01
  2. By: Anirban Karak (Department of Economics, University of Massachusetts, Amherst); Deepankar Basu (Department of Economics, University of Massachusetts, Amherst)
    Abstract: We use a state-level panel data set for the period 1969-2005 to analyze the relative importance of profitability (rate of profit) and industrial disputes (man-days lost to all industrial disputes per worker) in explaining cross-state variations of manufacturing sector performance in India. Using three different measures of manufacturing performance – net value added, investment and employment – we find that profitability is more significant than industrial disputes in explaining the variation of manufacturing sector performance across Indian states. Classification-JEL: B50, C26, O10
    Keywords: manufacturing performance, profitability, industrial disputes
    Date: 2017–01–24
  3. By: Aydın, Gülşen
    Abstract: This study deals with the Feminist challenge to the Mainstream International Relations Discipline (IR) - rationalist theories, especially Realism - and the mainstream's responses to this challenge. It addresses the issue in five steps. Firstly, it sheds light on how Feminism is related to International Relations. Secondly, it examines how Feminist IR theorists criticize the Mainstream IR due to its state-centric approach and argue that being obsessed with anarchic international system prevented analysis of social relations, including gender relations. Thirdly, the study addresses how Feminism exposes the gender biases in central terms such as power, autonomy, rationality, security, and state. Fourthly, it examines how Feminist writing on IR challenges the dichotomies of the Mainstream IR. Fifthly, the study examines how the Mainstream has responded to that challenge. The conclusion argues that although Feminist challenge to mainstream IR cannot be deemed successful in reconstructing IR, Feminism still enriches our understanding of global politics.
    Keywords: International Relations (IR), Feminism, Realism, state, gender, power.
    JEL: J16 Z00
    Date: 2016–05
  4. By: Giovanni Dosi (Laboratory of Economics and Management); Manoela Carrera Pereira (Universidade Estadual de Campinas); Andrea Roventini (Laboratory of Economics and Management (Pisa) (LEM)); Maria Enrica Virgillito (Scuola Superiore Sant'Anna)
    Abstract: This paper is meant to analyse the e ects of labour market structural reforms by means of an agent-based model. Building on Dosi et al. (2016b) we introduce a policy regime change characterized by a set of structural reforms on the labour market, keeping constant the structure of the capital- and consumption-good markets. Con rming a recent IMF report (Jaumotte and Buitron, 2015), the model shows how labour market structural reforms re- ducing workers' bargaining power and compressing wages tend to increase (i) unemployment, (ii) functional income inequality, and (iii) personal income inequality. We further undertake a global sensitivity analysis on key variables and parameters which con rms the robustness of our findings.
    Keywords: Labor market structural reforms; Income distribution; Inequality; Unemployment; Long run growth
    JEL: C63 E2 E12 E24 O11
    Date: 2016–07
  5. By: Tomas Balint (Université Panthéon-Sorbonne - Paris 1 (UP1)); Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Mauro Napoletano (Observatoire français des conjonctures économiques); Antoine Mandel (Ecole d'Économie de Paris - Paris School of Economics); Andrea Roventini (Laboratory of Economics and Management (Pisa) (LEM)); Sandro Sapio (Università degli Studi di Napoli Parthenope)
    Abstract: We provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks.
    Keywords: Climate change; Climate policy; Climate economics; Complex systems; Agent-based models; Socio-economics networks
    JEL: C63 Q40 Q50 Q54
    Date: 2016–07
  6. By: Hasan, Zubair
    Abstract: The environmental devastation that today confronts not only human-beings but all life forms on the planet earth has brought up the concept of sustainability contextual to growth-oriented development. Western though in origin and understanding, the implications of sustainable development extend to Islam in which, as in the other Abrahimic faiths, one can find an essence of this idea. Several economists have in recent years have examined the debate on the meaning of sustainable development in Islam and attempts to explain the Islamic position on environmental issues the world now faces. This Chapter examines the debate on several interpretations of sustainability and attempts to expound upon a concrete, Islamic definition for sustainable development. It argues that development is intricately linked to the environment as any definition of sustainability ends with environmental concerns. Such linkage assumes importance contextual to Islamic finance as the developmental funding is now being increasingly used to serve environmental ends. Islamic Finance is so far based essentially upon a negative-screen methodology, relying upon averting investments and actions contrary to Islamic law rather than positive investment in socially responsible concerns. While organizations such as the Islamic Development Bank do engage in development projects, positivism, and particularly the environment, is absent in most of the criteria of Islamic financial institutions. The development of a definition for Islamic sustainable development this chapter presents implies another opportunity for convergence between Islamic Finance and other ethical investments. With the growing popularity of socially responsible investment principles in the world of conventional finance, perhaps an Islamic counterpart would provide an opportunity for collaboration, particularly given the great liquidity of the Gulf region, for it could provide the framework for a positive-screen methodology. Finally, we take a brief look at the sort of environmental problems and the solutions suggested to resolve them, especially the viability of the Coase theorem.
    Keywords: Growth; Environment; Sustainability; Finance; War; Coase theorem; Islamic approach.
    JEL: O1
    Date: 2017–01–20
  7. By: Piercarlo Frigero (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: This paper, inspired by the notion of complexity and the use of network analysis, is presented as a short survey on communication in economics when it is addressed to people who approach the subject neither for study nor for professional purposes. Their perception of the economic system has also been shaped by events interpreted by opinion and political leaders. Its main contribution is an attempt to avoid current misunderstandings arising from a mechanical notion of the economic system and a consequent excess of confidence in what political economy can do in pursuing welfare. To do this, after a brief review of useful perceptions of phenomena both at system level and at firm level, we will propose some hints arising from complexity and network theory for an alternative viewpoint on political prescriptions and for a better appreciation of the entrepreneurial function. At the end, we will conclude with some teaching suggestions along with final remarks about understanding economics.
    Keywords: Complexity Economics, Economic Education and Teaching of Economics, Political Economy, Theory of the Firm.
    JEL: A20 B59 P47 L20
    Date: 2017–01
  8. By: Andreas Welling (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: Various so-called green investments are intended to limit the warming of the earth's climate, thus minimizing social, environmental and economic damage. The article introduces into the corresponding research field of Green Finance by providing current data, by showing historical developments, and by forecasting future tasks. Further, the article depicts the major difficulties of research on Green Finance; particularly rapid technological progress, the dependence of governmental support, high uncertainties, and, especially the interactions of so many actors. Finally, the article gives a short review on the research field of Green Finance.
    Date: 2017–01
  9. By: Ugo Pagano
    Abstract: As Hodgson has nicely pointed out, capitalism can be only understood if we accept that, unlike possession, property is a social construction and a relation among individuals. Unlike possession, property does not require a material thing on which it should be applied. Property rights can create fictitious commodities on intangible assets symbolizing the relationships among persons. The commoditization of knowledge and the emergence of contemporary intellectual monopoly capitalism must be understood in this framework. Knowledge is a non-rival good and its possession by others is not incompatible. Since we can all possess the same piece of knowledge, the so-called knowledge economy is often seen as place where capitalist relations should weaken. However this view confuses property with possession. In modern societies, intellectual property is becoming the most important part of capital. In spite of the non-rival possession of knowledge, intellectual property rights can be defined as the exclusive right to a piece of knowledge involving the corresponding restriction of others' liberties to use it. Modern intellectual monopoly capitalism is built on sophisticated property rights that should be not confused with any sort of primitive possession
    JEL: K11 K30 B15 B41
    Date: 2016–12
  10. By: Obaidullah, Mohammed (The Islamic Research and Teaching Institute (IRTI)); Manap, Turkhan Ali Abdul (The Islamic Research and Teaching Institute (IRTI))
    Abstract: This is a study on behavior of individual Islamic donors who make a specific type of religious contribution called zakat. It seeks to provide a fundamental understanding of what governs the behavior of these donors - the triggers and motivators, traits and attributes, and preferences. Based on their responses to a set of statements, that connote a specific motivator or trait or preference, the study uses hierarchical cluster analysis to develop psychographic profiles of individual Islamic donors or groups among them. The study hypothesizes and provides supporting evidence that Islamic donors behave less like tax-paying citizens and more as benevolent servants of their Creator while paying zakat. The study presents interesting contrasts among Islamic donors in terms of their behavioral patterns by reducing the matrix of responses to a set of such factors to three distinct clusters. Interestingly, two of the three clusters closely resemble subsets of the overall sample, when disaggregated on the basis of donor's country of origin, indicating the possibility that Islamic donors from a given country may be displaying a distinct behavioral pattern. This raises a more profound possibility that the national identity of the donor, associated with a unique social, economic, legal and political environment may be a key influencer of the way s/he engages in matters pertaining to faith. The paper produces evidence that would contribute to any policy dialogue in the important area of developing social finance sector in Muslim societies. Zakat constitutes an important component of the global Islamic social finance sector. The evidence in this study highlights the need to give due importance to the observed diversity among zakat donors in any initiative to develop core principles, regulatory standards, institutional infrastructure, and models of governance for the development of this component of the global Islamic social finance sector.
    Keywords: Islamic Philanthropy; Zakat; Behavioral; Development
    JEL: G20 G21 G28
    Date: 2017–01–01
  11. By: Gergely Varga (Corvinus University of Budapest); Janos Vincze (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Corvinus University of Budapest)
    Abstract: We set up an agent-based macromodel focusing on consumption-saving without the assumption of utility maximization, but preserving certain "rational" aspects of human choice based on the idea of ecological rationality Todd et al. (2012). In this framework we address the classical problem of the efficiency of long-run capital accumulation. Three qualitatively different saving strategies are defined: 1. buffer stock saving (prudent and forward looking), 2. permanent income saving (forward looking without prudence), and 3. myopic saving (caring only about immediate consumption, and saving accidentally). In the model these types (that have subtypes depending on continuous parameters) may coexist, and we explore their respective survival chances by conducting simulations. It is found that prudent saving behavior becomes prevalent when the selection pressure is very high, but an economy comprising only prudent households tends to accumulate capital in excess of what is implied by the Golden Rule. As selecion pressure is reduced, myopic consumers appear, and under very low selection pressure the distribution of the main saver types becomes almost random. A seemingly puzzling fact emerges: the economy gets close to the Golden Rule of capital accumulation via endogenous selection of subtypes in a way that can be interpreted as "perverse exploitation", i.e. the exploitation of the rich by the poor. In other words, lowering the intensity of evolutionary forces, that results in more diversity in saver types, may be socially beneficial. Crickets may be useful for society as a whole, including prudent and cautious ants.
    Keywords: agent-based macromodel, bounded rationality, evolutionary learning, savings types
    JEL: C69 E21
    Date: 2017–01
  12. By: Lorena Alcázar; María Balarin; Karen Espinoza
    Abstract: This study aims to identify the effects of Juntos, the conditional cash transfer program in Peru, on women’s empowerment. Although the program does not envisage women’s welfare as an objective per se, women play a key role as they are the main recipients of the cash transfer and are responsible for compliance with the program’s conditions; thus, their empowerment level can be affected by the intervention. The study applies mixed methods complementing quantitative econometrics with qualitative methods to identify the effects of Juntos on six dimensions of empowerment: economic household decision-making, freedom of movement, gender ideology, agency, self-esteem and perceptions of life. Using two data sources for the quantitative approach (ENDES and Young Lives Study), the study finds positive significant effects on women’s empowerment, specifically on economic household decision-making (even when considering large purchases and resources earned by the partner), self-esteem and perceptions of life; the latter of which is found when women have been part of the program for more than three years. These results are strongly reinforced and explained by the findings of a qualitative approach. No significant results were found on agency, freedom of movement or gender ideology, but the qualitative fieldwork results show improvements on agency and freedom of movement mainly because of women’s participation in training sessions and informal socialization, where they are able to exchange ideas that are then incorporated into their daily lives. However, these improvements may be hampered in some cases by local management of the program in which vertical interaction between the government representatives and beneficiaries occur; women appear as the passive subjects who only receive benefits, conditions and instructions from the program.
    Keywords: gender, women empowerment, impact evaluation, transfer payments, CCT.
    JEL: I38 J16
    Date: 2016
  13. By: Amélie Artis (Sciences Po Grenoble, PACTE CNRS, France); Simon Cornée (Université de Rennes 1, CREM CNRS, and CERMi, France)
    Abstract: Idiosyncratic knowledge, defined as the internal knowledge produced by a bank on each of its borrowers, is at the heart of the financial intermediation process. Nonetheless, the way bank managers use information in the credit-granting process remains a black box in the existing econometric studies. On the basis of a statistical textual analysis conducted on prior-to-credit-committee notices of 52 credit files stemming from a social bank, our paper offers three main contributions. First, we show that the social bank under scrutiny produces a rich idiosyncratic knowledge mainly composed of soft information. Second, we reveal how the qualitative and the quantitative dimensions of the idiosyncratic knowledge are used when credit conditions are determined; hierarchy playing a key role in this process of interpretation. Third, our results indicate that the bank relies on an information system as well as on its agents’ cognitive abilities to memorise the idiosyncratic knowledge it produces. In this respect, our research points out deficiencies in the bank’s organisational memory and suggests some directions to remedy them.
    Keywords: Social banking, Idiosyncratic Knowledge, Hierarchy, Organisational Memory, Decision
    JEL: G21 L23 D8
    Date: 2016–10

This nep-hme issue is ©2017 by Carlo D’Ippoliti. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.