nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2017‒10‒22
eleven papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Capital as a Social Process: A Marxian Perspective. By Miguel D. Ramirez
  2. Gender and Multidimensional Poverty in Nicaragua, An Individual-based Approach By Espinoza-Delgado, Jose; Klasen, Stephan
  3. The Division of Labour Within Households: Fractional Logit Estimates based on the Austrian Time Use Survey By Spitzer, Sonja; Hammer, Bernhard
  4. Validation of Agent-Based Models in Economics and Finance By Giorgio Fagiolo; Mattia Guerini; Francesco Lamperti; Alessio Moneta; Andrea Roventini
  5. Has the Push for Equal Gender Representation Changed the Role of Women on German Supervisory Boards? By Bozhinov, Viktor; Koch, Christopher; Schank, Thorsten
  6. Gravitation of Market Prices towards Normal Prices: Some New Results By Bellino, Enrico; Serrano, Franklin
  7. Moving Beyond Rhetoric: Can Islamic Banking become Mainstream in Pakistan By Mamoon, Dawood
  8. Directed Technological Change in a post-Keynesian Ecological Macromodel By Naqvi, Syed Ali Asjad; Engelbert, Stockhammer
  9. From Political Power to Personal Wealth: Privatization, Elite Opportunity, and Social Stratification in Post-Reform China By Duoduo Xu; Xiaogang Wu
  10. What is a fair profit for social enterprise? Insights from microfinance By Marek Hudon; Marc Labie; Patrick Reichert
  11. How Green Self Image Affects Subjective Well-Being: Pro-Environmental Values as a Social Norm By Heinz Welsch; Jan Kuehling

  1. By: Miguel D. Ramirez (Department of Economics, Trinity College)
    Abstract: This paper analyzes the very important notion of capital from a Marxian perspective as opposed to a neoclassical one. It is argued that when capital is viewed as a historically determined social process (relation), rather than as a thing or a collection of things, it tends to assume certain specific forms more often than others depending on the particular stage of economic history. Capital thus refers simultaneously to social relations and to things. Given this frame of reference, notions such as money and property capital are more easily accommodated and consequently are not written off as financial or fictitious capital—not real capital—because they “produce nothing.” The paper also focuses on Marx’s important analysis of the time of production and the turnover of capital in terms of the production of surplus-value (profit). It then examines Marx’s equally important and prescient analysis of how the turnover speed of capital is affected by the time of circulation of commodities (the realization of surplus-value) and the growing use of credit (in its various forms) in the capitalist system. Finally, the paper turns its attention to the economic role of time as it relates to interest-bearing (loan) capital and Adam Smith’s important distinction between productive and unproductive labor—one whose clear comprehension rests on viewing capital as a social construct.
    Keywords: Capital; commodity capital; credit; crises; exchange-value; interest-bearing capital; money capital; productive capital; productive and unproductive labor; time of production and circulation; turnover speed of capital; rate of surplus-value (profit).
    JEL: B10 B14 B24
    Date: 2017–10
  2. By: Espinoza-Delgado, Jose; Klasen, Stephan
    Abstract: Most existing empirical papers concerned about multidimensional poverty use the household as the unit of analysis, so that the multidimensional poverty status of the household is equated with the multidimensional poverty status of all its members. This assumption ignores intra-household inequalities. Additionally, households containing both a female and a male cannot contribute to a gender gap in poverty, so gender differentials in poverty cannot be estimated. But, the Sustainable Development Goals have put special emphasis on gender equality; therefore, new measures able to capture the gender differences are needed. Consequently, in this paper, we propose an individual-based multidimensional poverty measure in order to estimate the three I’s of multidimensional poverty (incidence, intensity, and inequality) in Nicaragua as well as the gender differentials. We also estimate logit regressions to better understanding the determinants of multidimensional poverty in this country. Overall, we find that there are statistically significant gender differences in multidimensional poverty in Nicaragua; but, they are estimated to be small and lower than 5%. However, the gender differential in inequality is larger than 10%, and it suggests that multi-dimensionally poor women are living in very intense poverty when compared with multi-dimensionally poor men. We also find that the elderly and children are the most vulnerable people in terms of multidimensional poverty in this country; furthermore, when information on employment, domestic work, and social protection is considered in the analysis, the gender gaps become more substantial, and women are more likely to be poor than men.
    Keywords: multidimensional poverty, poverty measurement, intra-household inequality, gender gaps, Latin America, Nicaragua
    JEL: D1 D13 D6 D63 I3 I32 O5 O54
    Date: 2017–09–30
  3. By: Spitzer, Sonja; Hammer, Bernhard
    Abstract: The allocation of paid and unpaid work within households strongly depends on the household members’ individual characteristics. The most important of these characteristics is gender, followed by education and parenthood. Despite the significant increase in women’s labour market participation in the last decades, they still perform 73 percent of housework and 79 percent of childcare in 2008/09. This paper studies the determinants of the persistent division of labour within households with a new approach that combines standard absolute measures of time use with the relative measure of time use shares. This approach allows for a better understanding of the division of labour and the influence of the household member’s characteristics on these allocations. The empirical analysis relies on the Austrian time use survey conducted in 1992 and 2008/09. To appropriately account for the complex structure of time use data, the fractional logit model is applied for predicting shares, and a Poisson-gamma model is introduced for estimating total amounts. Hereby, the complex dynamics of task allocation can be studied in Austria for the first time. The results indicate for the last two decades that there has been an overall increase in the time devoted to market work and childcare, but also that there has been a total decrease in housework. The latter may be explained by an increase in outsourcing work, due to gains in productivity, or because work is simply left undone. The results of the study also show that the higher women are educated, the more balanced paid and unpaid work are within households. On the contrary, parenthood increases female specialisation into unpaid work. Lastly, the results indicate a slight relaxation of gender roles over the last 20 years, however, the segregation of paid and unpaid work still persists.
    Keywords: Division of Labour, Unpaid Work, Female Labour Market Participation, Fractional Logit Model, Poisson-gamma Model, Childcare, Housework, Gender Roles, Time Use
    JEL: D13
    Date: 2016
  4. By: Giorgio Fagiolo; Mattia Guerini; Francesco Lamperti; Alessio Moneta; Andrea Roventini
    Abstract: Since the influential survey by Windrum et al. (2007), research on empirical validation of agent-based models in economics has made substantial advances, thanks to a constant flow of high-quality contributions. This Chapter attempts to take stock of such recent literature to offer an updated critical review of existing validation techniques. We sketch a simple theoretical framework that conceptualizes existing validation approaches, which we discuss along three different dimensions: (i) comparison between artificial and real-world data; (ii) calibration and estimation of model parameters; and (iii) parameter space exploration.
    Keywords: agent based models, validation, calibration, sensitivity analysis, parameter space exploration
    Date: 2017–09–20
  5. By: Bozhinov, Viktor (University of Mainz); Koch, Christopher (University of Mainz); Schank, Thorsten (University of Mainz)
    Abstract: In Germany, an intensive public debate about increasing female participation in leadership positions started in 2009 and proceeded until the beginning of 2015, when the German parliament enacted a board gender quota. In that period, the share of women on supervisory boards for 111 German publicly listed and fully codetermined companies (i.e. those which are affected by the quota law) more than doubled from 10.6 percent in 2009 to 22.6 percent in 2015. In 2016, the first year when the law was effective, the female share increased again by 4.5 percentage points. Using a hand-collected dataset, we investigate whether the rise in female board representation was accompanied by a change in gender differences in board member characteristics and board involvement. We do not find evidence for the "Golden Skirts" phenomenon, i.e., the rise in the female share was not achieved via a few female directors holding multiple board memberships. After controlling for firm heterogeneity, the remuneration of female shareholder (employee) representatives is about 16 (9) percent lower than for males. We interpret this as an overall indication that women are not only underrepresented in German supervisory boards, they are even more underrepresented in important board positions. Indeed, women are less likely to become a chairman and are less often assigned to board committees (except for the nominating committee). Moreover, in 2016 the disadvantage of women (as compared to men) to obtain a committee membership is even larger than in 2009.
    Keywords: gender diversity, women on boards, gender quota, board remuneration, committee membership
    JEL: G34 G38 J16 J30
    Date: 2017–09
  6. By: Bellino, Enrico (Catholic University of the Sacred Heart); Serrano, Franklin (Federal University of Rio de Janeiro)
    Abstract: The gravitation process of market prices towards production prices is here presented by means of an analyti-cal framework where the classical capital mobility principle is coupled with a determination of the deviation of market from normal (natural) prices which closely follows the description provided by Adam Smith: each pe-riod the level of the market price of a commodity will be higher (lower) than its production price if the quanti-ty brought to the market falls short (exceeds) the level of effectual demand. This approach also simplifies the results with respect to those obtained in cross-dual literature. Three versions of the model are here proposed: i) assuming a given level of aggregate employment; ii) assuming a sort of Say’s law; iii) and on the basis of an explicit adjustment of actual outputs to effectual demands. All these cases describe dynamics in which market prices can converge asymptotically towards production prices.
    Keywords: Market prices; normal prices; Classical competition; gravitation; effectual demand
    JEL: B12 D20 E11 E30
    Date: 2017–10
  7. By: Mamoon, Dawood
    Abstract: Challenging economic theory that is developed at micro level is a common practice among macro-economic behaviors of conventional economic system. In this context the paper analyses Islamic banking that tries to bring an interest free financial system. The paper explains the circumstances that may lead to a universal application of Islamic banking in Pakistan. This is done after presenting a detailed discussion on the rational for conventional banking.
    Keywords: Islamic Banking, Capitalism, Islamic Economics, Interest Rates
    JEL: B2 B26 B3
    Date: 2017–10–14
  8. By: Naqvi, Syed Ali Asjad; Engelbert, Stockhammer
    Abstract: This paper presents a post-Keynesian ecological macro model that combines three strands of literature: the directed technological change mechanism developed in mainstream endogenous growth theory models, the ecological economic literature which highlights the role of green innovation and material ows, and the post-Keynesian school which provides a framework to deal with the demand side of the economy, nancial ows, and inter- and intra-sectoral behavioral interactions. The model is stock-fow consistent and introduces research and development (R&D) as a component of GDP funded by private rm investment and public expenditure. The economy uses three complimentary inputs - Labor, Capital, and (non-renewable) Resources. Input productivities depend on R&D expenditures, which are determined by relative changes in their respective prices. Two policy experiments are tested; a Resource tax increase, and an increase in the share of public R&D on Resources. Model results show that policy instruments that are continually increased over a long-time horizon have better chances of achieving a "green" transition than one-off climate policy shocks to the system, that primarily have a short-run affect.
    Keywords: directed technological change, research and development, green transition, ecological economics,post- keynesian ecomomics, stock-flow consistency
    Date: 2017–10–09
  9. By: Duoduo Xu (Division of Social Science, The Hong Kong University of Science and Technology; Institute for Advanced Study, The Hong Kong University of Science and Technology); Xiaogang Wu (Division of Social Science, The Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: The impact of market transition on the changing order of social stratification in post-socialist regimes has been a highly prominent topic in sociology in recent decades. However, the debate has yielded no concrete conclusions, due in part to the lack of substantive institutional analysis. In this article, we aim to provide new answers to this age-old question by specifically examining how the economic opportunities available to former political elites have been shaped by the process of privatization. Based on firm-level data from a national representative survey on Chinese private enterprises, we show that nomenclatures in some regions successfully converted their political power into personal wealth by acquiring privatized firms, and the extent to which they could exploit the opportunities available to them was contingent upon how the privatization process was structured and regulated in a local context. Further analysis reveals important institutionalized inequality among private entrepreneurs, with former nomenclatures at the top of the social hierarchy in post-reform China.
    Date: 2017–08
  10. By: Marek Hudon; Marc Labie; Patrick Reichert
    Abstract: Although microfinance organizations have typically been considered as inherently ethical, recent events have challenged the legitimacy of the sector. High interest rates and the exorbitant profitability of some market leaders have raised the question of what can be considered a fair, or ethical, level of profit for social enterprise. In this article, we construct a fair profit framework for social enterprise based on four dimensions: the level of profitability, the extent to which the organization adheres to its social mission, the pricing and the surplus distribution. We then apply this framework using an empirical sample of 496 microfinance institutions. Results indicate that satisfying all four dimensions is a difficult, although not impossible, task. Based on our framework, 13 MFIs emerge as true double-bottom-line organizations and tend to be relatively young, large MFIs from South Asia. Using our framework, we argue that excessive profits can be better understood relative to pricing, the outreach of the MFI and the organizational commitment to clients in the form of reduced interest rates.
    Keywords: Microfinance; Development Ethics; Exploitation; Institutional Logic
    JEL: F35 G21 G28 L31 M14
    Date: 2017–10–12
  11. By: Heinz Welsch (University of Oldenburg, Department of Economics); Jan Kuehling (University of Oldenburg, Department of Economics)
    Abstract: Recent literature has found that individuals holding a greener self-image display higher levels of life satisfaction. We extend the single-country setting of that research to a transnational perspective and explore whether a relationship exists between green self-image (GSI) and life satisfaction (LS), both European-wide and at the national level. In order to explain differences in the GSI-LS relationship across nations and time, we study the role of pro-environmental values as a shared social norm. We find a significantly positive GSI-LS relationship in a pool of 35 European countries and in the majority of individual countries. In addition, we show that the well-being benefit of holding a green self-image is greater in societies that are less divided with respect to environmental attitudes, that is, where being green is a shared social norm.
    Keywords: green self-image; subjective well-being; life satisfaction; social norm; social division
    Date: 2017–10

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