nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2017‒08‒06
nineteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The political economy of income distribution: industry level evidence from 14 OECD countries By Guschanski, Alexander; Onaran, Özlem
  2. "The Neoclassicals' Conundrum: If Adam Smith Is the Father of Economics, It Is a Bastard Child" By Oscar Valdes Viera
  3. Gendered Effects of the Personal Income Tax: Evidence from a Schedular System with Individual Filing in a Developing Country By Marisa Bucheli; Cecilia Olivieri
  4. Curriculum reform in UK economics: a critique By Andrew Mearman; Sebastian Berger; Danielle Guizzo
  5. Inequality, poverty and the intra-household allocation of consumption in Senegal By Sylvie Lambert; Philippe De Vreyer
  6. Organization and Governance in Social Economy Enterprises: an Introduction By Kopel, Michael; Marini, Marco A.
  7. How to relate models to reality? An epistemological framework for the validation and verification of computational models By Claudius Graebner
  8. Política cambial, conflito de classes e desenvolvimento econômico na perspectiva de Celso Furtado By Lúcio Otávio Seixas Barbosa; Frederico G. Jayme Jr; Fabrício J. Missio
  9. Gender: An Historical Perspective By Paola Giuliano
  10. Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions By Victor Stango; Joanne Yoong; Jonathan Zinman
  11. "Capital in Banking" (in Japanese) The purpose of this paper is to clarify the concept of capital in banking as the foundation for understanding our financial system. Though Japanese Marxian economists have accumulated theoretical studies on credit system, we do not yet have a clear-cut idea of what capital is in banking. Nevertheless, we must identify it if we are to properly analyse recent financial expansion and unconventional monetary policies. K. Marx’s Capital gives us a hint to solve this issue. In section 1, we read the text of Capital Vol.3 to grasp the points of argument. While Marx mainly discusses “fictitious capital†, we cannot miss his notice on a net worth of banks. In section 2, we develop the latter concept on capital of Marx as reserves for non-performing loans. Banks try to maintain and reinforce their credibility on the basis of the capital, thereby enlarging the scale of their asset under the competition. The growth of the asset leads to more profit even if the interest rate is constant. Financial booms boost the growth of the asset of banks without maintaining their credibility, consequently making the banking asset fairly vulnerable. By Kei Ehara
  12. El sujeto de cambio social en la teoría de la dependencia en América Latina By Nelson Alemán Sánchez
  13. Estimating Market Power: Evidence from the US Brewing Industry By Paul Scott
  14. Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement By Tim Conley; Nirav Mehta; Ralph Stinebrickner; Todd Stinebrickner
  15. The Power of Scientometrics and the Development of Economics By Jakob Kapeller; Matthias Aistleitner; Stefan Steinerberger
  16. Is there a case for intergenerational transmission of female labour force participation and educational attainment? Evidence from Greece during the crisis By Evangelia Papapetrou; Pinelopi Tsalaporta
  17. Are higher wages good for business? An assessment under alternative innovation and investment scenarios By Caiani, Alessandro; Russo, Alberto; Gallegati, Mauro
  18. Networks, Frictions, and Price Dispersion By Pablo Schenone; Gregory Veramendi; Javier Donna
  19. Human Needs and the Measurement of Welfare By Wolfgang Fellner; Benedikt Goehmann

  1. By: Guschanski, Alexander; Onaran, Özlem
    Abstract: This article presents an econometric estimation of the determinants of the wage share, using sectoral data for 14 OECD countries for the period 1970- 2014. We present estimations for the wage share of high- and low-skilled workers and within manufacturing and service industries. We augment sectoral data with input-output tables and union density data to obtain detailed estimations of the effect of technological change, globalisation and bargaining power on the wage share. We find a significant negative effect of globalisation and we discover offshoring to emerging markets to be a robust driver of this process. Technological change had an impact which differs by skill group, but theoretical issues and lack of robustness of the results cast doubt on the hypothesis of skill-biased technological change as a key factor in the overall decline in the wage share. Furthermore, we find a robust effect of institutional factors such as union density and minimum wages on the wage share, lending strong support to the political economy approach to functional income distribution.
    Keywords: wage share; income distribution; union density; technology; offshoring
    JEL: E25 J50
    Date: 2017–07–31
  2. By: Oscar Valdes Viera
    Abstract: Neoclassical economists of the current era frequently pay lip service to Adam Smith's theories to certify the validity of natural-laws-based, laissez-faire policies. However, neoclassical theories are fundamentally disconnected from Adam Smith's notion of value, his understanding of the economic individual and their interactions in society, his methodology, and the field of study he afforded to political economy. Instead, early neoclassical economists parted ways with the theories of Adam Smith in an effort to construct economic laws that would validate the existing capitalist order as universal, natural, and harmonious.
    Keywords: Economic Thought; Classical School; Neoclassical Economics; Adam Smith; Economists
    JEL: A11 A13 B12 B13 B16 B20 B31
    Date: 2017–07
  3. By: Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Cecilia Olivieri (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This article analyzes the gender differences in the Personal Income Tax (PIT)-to-income ratio in Uruguay. Although the tax code does not explicitly specify gender differences, the tax burden varies among households types. When analyzing these differences, our findings suggest that the PIT serves as somewhat of an incentive towards equal gender time allocation within the family, which is consistent with gender equity. In turn, this pattern is reinforced by non-desirable aspects such as higher levels of informality among women and a higher level of non-taxable sources of income among single female households. The above conclusion relies on the assumption of individual filing. Our analysis also observes that the strengths of the PIT system from the gender perspective are eroded by the possibility to opt for a (rarely used) joint filing. The empirical strategy was assessed through the estimation of a zero-one inflated beta model (ZOIB). This model properly addresses the fact that the PIT-to-income ratio includes many zero data points.
    Keywords: economics of gender, family economics, income tax, tax incidence
    JEL: B54 J16 H22 H24 H31
    Date: 2017–02
  4. By: Andrew Mearman (University of the West of England, Bristol); Sebastian Berger (University of the West of England, Bristol); Danielle Guizzo (University of the West of England, Bristol)
    Abstract: This paper offers a multi-dimensional critique of recent reforms to UK Economics curricular frameworks. The paper assesses the reforms in terms of their extent and the positions taken within them on their approach to economics, treatment of politics, and, crucially, educational philosophy. Despite claims of innovation and new epistemological caution in the wake of the global financial crisis, the reforms are found to be minor and superficial. The CORE programme and the revised Subject Benchmark Statement document for Economics still ignore educational philosophy; yet they are implicitly educationally instrumental and remain limitedly pluralist. Our conclusions are buttressed by contrasts made between UK reforms and the curriculum architecture found in the Brazilian system.
    Keywords: curriculum reform, economics, pluralism, educational philosophy
    JEL: A14 A20 B50
    Date: 2016–01–11
  5. By: Sylvie Lambert (Paris School of Economics, INRA); Philippe De Vreyer (Université Paris-Dauphine, PSL Research University,IRD, LEDa, DIAL)
    Abstract: This paper uses a novel survey to re-examine inequality levels in Senegal. Using consumption data collected at a relatively disaggregated level within households, it first underlines that consumption inequality in this country is likely to be much higher that what is commonly thought, with a Gini index reaching 0.54. This paper also reveals the extent of within household consumption inequalities. We show that within household inequality accounts for nearly 16% of total inequality in Senegal. One of the consequences of such unequal repartition of resources within households is the potential existence of “invisible poor” in households classified as non-poor. Our assessment is that as many as 12.5% of the poor individuals live in non-poor households. In total, our results suggest that the more complex the household structure, the bigger the household size, the more inequality is likely to be underestimated when computed using standard consumption surveys.
    Date: 2017–04
  6. By: Kopel, Michael; Marini, Marco A.
    Abstract: In this introduction, we briefly overview the topics covered by the contributions included in this special issue which, from different angles, deal with the organization and governance of social economy enterprises. Three different approaches are taken by the contributions to the special issue: one is theoretical, another is empirical and the last one is a case- based, qualitative perspective.
    Keywords: Social Economy; Social Enterprises; Governance; Cooperatives; Nonprofits.
    JEL: D18 D2 D22 D4 D43 D6 D64 J5 J54 L0 L1 L2 L21 L23 L31 L32 L33 L38
    Date: 2016–09–01
  7. By: Claudius Graebner (Institute for Institutional and Innovation Economics (iino), University of Bremen, Germany)
    Abstract: Agent-based simulations have become increasingly prominent in various disciplines. This trend is to be appreciated, but it comes with challenges: while there are more and more standards for design, verification, validation, and presentation of the models, the various meta-theoretical strategies of how the models should be related to reality often remain implicit. Differences in the epistemological foundations of models makes it, however, difficult to relate distinct models to each other. This paper suggests an epistemological framework that helps to make explicit how one wishes to generate knowledge about reality by the means of one's model and that helps to relate models to each other. Because the interpretation of a model is strongly connected to the activities of model verification and validation, I embed these two activities into the framework and clarify their respective epistemological roles. Finally, I show how this meta-theoretical framework aligns well with recently proposed framework for model presentation and evaluation.
    Keywords: Agent-based modelling, epistemology, models, validation, verification
    Date: 2017–06
  8. By: Lúcio Otávio Seixas Barbosa (Planning Department of Minas Gerais (SEPLAG-MG)); Frederico G. Jayme Jr (Cedeplar-UFMG); Fabrício J. Missio (Cedeplar-UFMG)
    Abstract: The aim of this paper is to analyze the contributions of Celso Furtado regarding the role of exchange rate policy and its relation with social conflict in the economic growth of peripheral economies. For that, we regain Furtado’s analyses about the Venezuelan case and in The Economic Formation of Brazil. We highlight two main conclusions from such works: i) exchange rate appreciation due to natural resources curse harms economic growth; ii) exchange rate policy is mainly a phenomenon associated with political economy, in which social conflict emerges. Hence, we claim that Furtado’s thought is still actual.
    Keywords: Development, exchange rate policy, social conflict.
    JEL: B1 B5
    Date: 2017–07
  9. By: Paola Giuliano
    Abstract: Social attitudes toward women vary significantly across societies. This chapter reviews recent empirical research on various historical determinants of contemporary differences in gender roles and gender gaps across societies, and how these differences are transmitted from parents to children and therefore persist until today. We review work on the historical origin of differences in female labor-force participation, fertility, education, marriage arrangements, competitive attitudes, domestic violence, and other forms of difference in gender norms. Most of the research illustrates that differences in cultural norms regarding gender roles emerge in response to specific historical situations, but tend to persist even after the historical conditions have changed. We also discuss the conditions under which gender norms either tend to be stable or change more quickly.
    JEL: N0 Z1
    Date: 2017–07
  10. By: Victor Stango; Joanne Yoong; Jonathan Zinman
    Abstract: Behavioral economics lacks empirical evidence on some foundational empirical questions. We adapt standard elicitation methods to measure multiple behavioral factors per person in a representative U.S. sample, along with financial condition, cognitive skills, financial literacy, classical preferences and demographics. Individually, B-factors are prevalent, distinct from other decision inputs, and correlate negatively with financial outcomes in richly-conditioned regressions. Conditioning further on other B-factors does not change the results, validating common practice of modeling B-factors separately. Corrections for low task/survey effort modestly strengthen the results. Our findings provide bedrock empirical foundations for behavioral economics, and offer methodological guidance for research designs.
    JEL: D03 D14 D8 D9 G02
    Date: 2017–07
  11. By: Kei Ehara (Faculty of Economics, University of Tokyo)
    Date: 2017–08
  12. By: Nelson Alemán Sánchez (Universidad Autónoma Gabriel René Moreno)
    Abstract: Constituye una reflexión teórica crítica, en el ámbito de la teoría del desarrollo latinoamericano, desde la perspectiva de la teoría de la dependencia, en sus dos vertientes: la nacionalista burguesa y la marxista revolucionaria, y al interior de esta última, se analiza la metodología empleada por los dependentistas, en el estudio del subdesarrollo y la dependencia; el rol que jugado el pueblo latinoamericano como sujeto de cambio social, y la manera valida, de hacer una sociología crítica, auténtica, combativa y comprometida con la causa del cambio social en América Latina.
    Keywords: Desarrollo, subdesarrollo, dependencia, sujeto de cambio social, sociología crítica, auténtica y combativa con la causa del cambio social.
    Date: 2017–07
  13. By: Paul Scott (Toulouse School of Economics)
    Abstract: While inferring markups from demand data is common practice, estimation relies on difficult-to-test assumptions, including a specific model of how firms compete. Alternatively, markups can be inferred from production data, again relying on a set of difficult-to-test assumptions, but a wholly different set, including the assumption that firms minimize costs using a variable input. Relying on data from the US brewing industry, we directly compare markup estimates from the two approaches. After implementing each approach for a broad set of assumptions and specifications, we find that both approaches provide similar and plausible markup estimates in most cases. The results illustrate how using the two strategies together can allow researchers to evaluate structural models and identify problematic assumptions.
    Date: 2017
  14. By: Tim Conley (University of Western Ontario); Nirav Mehta (University of Western Ontario); Ralph Stinebrickner (Berea College); Todd Stinebrickner (University of Western Ontario)
    Abstract: We develop and estimate a model of study time choices of students on a social network. The model is designed to exploit unique data collected in the Berea Panel Study. Study time data allow us to quantify an intuitive mechanism for academic social interactions: own study time may depend on friend study time. Social network data allow study time choices and resulting academic achievement to be embedded in an estimable equilibrium framework. New data on study propensities allow us to directly address potential sorting into friendships based on typically unobserved determinants of study time. We develop a speci?cation test that exploits the equilibrium nature of social interactions and use it to show that our study propensity measures substantially address endogeneity concerns. We ?nd friend study time strongly a?ects own study time, and, therefore, student achievement. We examine how network structure interacts with student characteristics to affect academic achievement. Sorting on friend characteristics appears important in explaining variation across students in study time and achievement, and determines the aggregate achievement level.
    Keywords: Social Networks; Peer Effects; Homophily; Time-use
    Date: 2017
  15. By: Jakob Kapeller; Matthias Aistleitner; Stefan Steinerberger (Yale University, Department of Mathematics)
    Abstract: Citation metrics as well as related indices and rankings become increasingly important in the quantitative evaluation of research. Such indices are part of a more general tendency where one hopes to simplify complex and interconnected phenomena through quantification. The purpose of our contribution is to analyze the impact of such quantitative indices on the further development of science with a special emphasis on economics. In this case we observe a multitude of interesting effects on both the level of individual scientists as well as the global development of the discipline.
    Date: 2016–03
  16. By: Evangelia Papapetrou (Bank of Greece); Pinelopi Tsalaporta (Bank of Greece)
    Abstract: Using logit regressions techniques for binary response models, fit by maximum likelihood with robust standard errors, the analysis investigates the intergenerational transmission of female labour force participation and the intergenerational transmission of educational outcomes in Greece. To conduct this study, we pioneer in the utilization of a unique dataset, the European Union Statistics on Income and Living Conditions (EU-SILC) for Greece. Data refer to 2011 when the first elements of the economic adjustment programme were being put into place. Most importantly, the EU-SILC 2011 wave is the latest one to include an ad hoc module on the intergenerational transmission of disadvantages. Results show that a wife’s labour force participation decision is related to her husband’s mother’s and mother’s participation, and even more strongly related to her own level of educational achievement along with the number of children in the household. The labour force participation of the mother of the husband is more important than that of the woman’s own mother, indicating a strong transmission of the husband’s cultural model. Concerning educational attainment, parental educational background, and especially maternal, is identified as a key determinant of women’s high level of educational achievement.
    Keywords: female labour supply; educational attainment; intergenerational mobility; preferences; Greece
    JEL: J22 J62 I21 D10 J21
    Date: 2017–04
  17. By: Caiani, Alessandro; Russo, Alberto; Gallegati, Mauro
    Abstract: This paper aims at investigating the interplay between inequality, innovation dynamics, and investment behaviors in shaping the long-run patterns of development of a closed economy. By extending the analysis proposed in Caiani et al. (2017) we explore the effects of alternative wage regimes under different investment and technological change scenarios. Experiments results seem to de-emphasize the role of technological progress as a possible source of greater inequality. Overall, simulation results are consistent with the predominance of a wage-led growth regime in most of the scenarios analyzed: a faster growth of low and middle level workers’ wages, relative to managers’, generally exert beneficial effects on the economy and allows to counteract the labor-saving effects of technological progress. Furthermore, contrary to what is sometimes argued in the academic and political debate, a distribution more favorable to workers does not compromise firms’ profitability, but rather strengthen it creating a more favorable macroeconomic environment which encourages further innovations, stimulates investment, and sustains economic growth.
    Keywords: Innovation; Investment; Inequality; Agent-Based Macroeconomics; Stock Flow Consistent Models
    JEL: E22 E64 O41
    Date: 2017–01–31
  18. By: Pablo Schenone (Arizona State University); Gregory Veramendi (Arizona State University); Javier Donna
    Abstract: This paper studies price dispersion in buyer-seller markets using networks to model frictions, where buyers are linked with a subset of sellers and sellers are linked with a subset of buyers. Our approach allows for indirect competition, where a buyer who is not directly linked with a seller affects the price obtained by that seller. Indirect competition generates the central finding of our paper: price dispersion depends on both the number of links in the network and the structure of the network (how links are distributed). Networks with very few links can have no price dispersion, while networks with many links can still support significant price dispersion. We develop a decomposition of the network that characterizes which links are redundant (i.e. have no effect on prices). We show that a particular network structure (Hamiltonian Cycle) with only two links per node has no price dispersion. We then use a theorem from Frieze (1985) to show that this network structure arises asymptotically with probability one in a randomly drawn network, even as the probability of an individual link goes to zero. We also show the finite sample properties of this relationship and find that even small sparse networks can have very little price dispersion. In an application to eBay, we show that our model reproduces the price dispersion seen in the data quite well, and that 35-45 percent of the price dispersion at eBay can be explained by the network structure alone.
    Date: 2017
  19. By: Wolfgang Fellner; Benedikt Goehmann
    Date: 2017

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.
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