nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2018‒02‒19
nine papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Morality Beyond Social Preferences: Smithian Sympathy, Social Neuroscience and the Nature of Social Consciousness By Sylvie Thoron
  2. CO2 Emissions in Beijing: Sectoral Linkages and Demand Drivers By Hua Liao; Celio Andrade; Julio Lumbreras; Jing Tian
  3. Social enterprise in France : at the crossroads of the social economy, solidarity economy and social entrepreneurship ? By Laurent Fraisse; Laurent Gardin; Jean-Louis Laville; Francesca Petrella; Nadine Richez-Battesti
  4. The impact of financialisation on the wage share: a theoretical clarification and empirical test By Karsten Kohler; Alexander Guschanski; Engelbert Stockhammer
  5. The role of natural resources in production: Georgescu-Roegen/Daly versus Solow/Stiglitz By Quentin Couix
  6. The American paradox: ideology of free markets and the hidden practice of directional thrust By Wade, Robert H.
  7. An interdisciplinary model for macroeconomics By haldane, Andrew; Turrell, Arthur
  8. Leadership in Scholarship: A Machine Learning Based Investigation of Editors' Influence on Textual Structure By Onder, Ali Sina; Popov, Sergey V; Schweitzer, Sascha
  9. "Does the United States Face Another Minsky Moment?" By L. Randall Wray

  1. By: Sylvie Thoron (LIPHA - Laboratoire Interdisciplinaire d'Etude du Politique Hannah Arendt Paris-Est - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: The theory of social preferences expanded the definition of the utility function in order to reproduce the pro­social behavior observed in experiments. Does this then mean that this is the route towards a positive theory of morality in economics? We do not think so. Our claim is that there is an epistemic contradiction between methodological individualism which assumes that the economic agent's rationality is autonomous from society, and the nature of social consciousness. Therefore, we argue that a positive theory of morality should rely on social mechanisms that could not fit in this framework. We give two examples of lines of research that go in this direction. The first one is drawn from 18th century moral philosophy, this is the approach adopted by Adam Smith in The Theory of Moral Sentiments. The other one is drawn from a very recent domain of research, that of social neuroscience. We show how, in both cases, the objective is not only to understand how moral judgements shape behavior but also to get an understanding of how people form these moral judgements. Smith's thought and recent developments in social neuroscience seem to be mutually illuminating on this second aspect. Smith's model is an essential model of a moral agent embedded in society. The sympathy operator and the impartial spectator find an echo in the way in which social neuroscience tries to understand how emotional and cognitive empathy intermesh. Furthermore, social neuroscience attempts to go further in the understanding of the complex empathy mechanism, by considering it as a learning process.
    Abstract: La théorie des préférences sociales a élargi la définition de la fonction d'utilité de façon à pouvoir reproduire le comportement prosocial observé dans les expériences. Cela signifie-t-il pour autant que nous sommes sur la bonne voie vers l’élaboration d’une théorie positive de la morale en économie? Nous considérons, au contraire, qu'il existe une contradiction épistémique entre l'individualisme méthodologique, qui suppose que la rationalité de l'agent économique est autonome par rapport à la société, et la nature d’une conscience sociale. Ainsi, nous montrons qu'une théorie positive de la morale doit reposer sur des mécanismes sociaux qui ne pourraient entrer dans ce cadre. Nous donnons deux exemples de lignes de recherche qui vont dans ce sens. Le premier est tiré de la philosophie morale du 18ème siècle, et il s’agit de l'approche adoptée par Adam Smith dans La Théorie des sentiments moraux. L'autre est tiré d'un domaine de recherche très récent, celui des neurosciences sociales. Nous montrons comment, dans les deux cas, l'objectif est de comprendre non seulement comment les jugements moraux modèlent les comportements, mais aussi la façon dont les gens forment ces jugements moraux. La pensée de Smith et les récents développements en neurosciences sociales semblent s’éclairer mutuellement au sujet de ce second aspect. Le modèle de Smith est un modèle essentiel d'un agent moral encastré dans la société. L'opérateur de sympathie et le spectateur impartial trouvent un écho dans la manière dont les neurosciences sociales cherchent à comprendre comment l'empathie émotionnelle et l’empathie cognitive s’articulent. En outre, les neurosciences sociales tentent d'aller plus loin dans la compréhension du mécanisme complexe de l'empathie, en le concevant comme un processus d'apprentissage.
    Date: 2016
  2. By: Hua Liao; Celio Andrade; Julio Lumbreras; Jing Tian
    Abstract: Cities contribute to most of the CO2 emissions. And the economic system at city level is much complex due to various linkaged sectors. This paper aims to analyze the economy-wide contribution of sectors and households to CO2 emissions in Beijing (China) by utilizing a semi-closed input-output model integrated with a modified hypothetical extraction method. Results show that, compared with 2005, in 2012 (1) within the entire economic system, interprovincial export caused the largest amount of CO2 emissions [135.50 million tons (Mt)] with the main contributions arising from manufacturing (42.12 Mt); transportation, storage, and post (TSP in short, 29.13 Mt); and urban households (23.57 Mt); (2) across the intermediate input-output system, real estate activities accounted for the largest amount of embodied CO2 intensity (0.07 kg per yuan) and more sectors outsourced CO2; (3) tracing the integrated sector network, CO2 linkages pointed to manufacturing and TSP dominating the internal linkages, manufacturing prominent in mixed linkages, secondary industry leading the net forward linkages, and tertiary industry dominant in terms of net backward linkages, helping control CO2 according to its origin; (4) CO2 emissions induced by household strikingly affected total CO2 emissions in Beijing, mainly coming from income-oriented affects, with a large rural-urban disparity and a similar sectoral distribution pattern. Finally, we propose suggestions on carbon reduction in terms of technological interlinkages, final demand and household participation.
    Keywords: CO2 emissions; Semi-closed input-output model; Modified hypothetical extraction method; City; Beijing
    JEL: Q54 Q40
    Date: 2018–01–05
  3. By: Laurent Fraisse (LISE - Laboratoire Interdisciplinaire pour la Sociologie Economique - CNAM - Conservatoire National des Arts et Métiers [CNAM] - CNRS - Centre National de la Recherche Scientifique); Laurent Gardin (IDP LARIME - Institut du Développement et de la Prospective - Laboratoire d'Analyses et de Recherches Interdisciplinaires en Management des Entreprises - Université de Valenciennes et du Hainaut-Cambresis - Institut d'Administration des Entreprises (IAE) - Valenciennes); Jean-Louis Laville (LISE - Laboratoire Interdisciplinaire pour la Sociologie Economique - CNAM - Conservatoire National des Arts et Métiers [CNAM] - CNRS - Centre National de la Recherche Scientifique); Francesca Petrella (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique); Nadine Richez-Battesti (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique)
    Keywords: Social entrepreneurship,Économie sociale et solidaire
    Date: 2016
  4. By: Karsten Kohler (None); Alexander Guschanski; Engelbert Stockhammer
    Abstract: It is frequently asserted that financialisation has contributed to the decline in the wage share. This paper provides a theoretical clarification and a systematic empirical investigation. We identify four channels through which financialisation can affect the wage share: (1) enhanced exit options of firms; (2) rising price mark-ups due to financial overhead costs for businesses; (3) increased competition on capital markets and shareholder value orientation; and (4) the role of household debt in increasing workers’ financial vulnerability and undermining their class consciousness. The paper compiles a comprehensive set of empirical measures of financialisation and uses it to test these hypotheses with a panel regression of 14 OECD countries over the 1992-2014 period. We find strong evidence for negative effects of financial liberalisation and financial payments of non-financial corporations on the wage share that are in the same order of magnitude as the effects of globalisation.
    Keywords: financialization, income distribution, political economy
    JEL: E25
    Date: 2018–01
  5. By: Quentin Couix (Centre d'Economie de la Sorbonne)
    Abstract: This paper proposes a historical and epistemological account of one of the key controversy between natural resources economics and ecological economics, lasting from early 1970s to the end of 1990s. It shows that the theoretical disagreement on the scope of the economy's dependence to natural resources, such as energy and minerals, has deep methodological roots. On one hand, Solow's and Stiglitz's works are built on a “model-based methodology”, where the model precedes and supports the conceptual foundations of the theory and in particular the assumption of “unbounded resources productivity”. On the other hand, Georgescu-Roegen's counter-assumption of “thermodynamic limits to production”, later revived by Daly, rest on a methodology of “interdisciplinary consistency” which considers thermodynamics as a relevant scientific referent for economic theory. While antagonistic, these two methodologies face similar issues regarding the conceptual foundations that arise from them, which is a source of confusion and of the difficult dialogue between paradigms
    Keywords: natural resources; thermodynamics; growth; sustainability; model; theory; methodology
    JEL: B22 B41 Q01 Q32 Q43 Q57
    Date: 2018–01
  6. By: Wade, Robert H.
    Abstract: The USA presents a paradox. The US state has practised production-focused industrial policy from the early years of the republic, with benefits that by any plausible measure far exceed costs. But since the 1980s, the exchange-focused idea that ‘the free market is what works, and having the state help it is usually a contradiction in terms’ has been at the normative centre of gravity in public policy discourse. With ‘industrial policy’ rendered toxic, the state has disguised its production-focused practice, to the point where even non-ideological academic researchers claim that the USA does industrial policy not at all, or badly. This essay reviews the history of US industrial policy, with an emphasis on ‘network-building industrial policy’ over the past two decades. At the end, it draws a lesson for policy communities in other countries and interstate development organisations such as the World Bank and IMF.
    Keywords: industrial policy; US developmental state; networks; varieties of capitalism; leading the market; following the market
    JEL: H54 L5 N62 O52
    Date: 2017–02–06
  7. By: haldane, Andrew (Bank of England); Turrell, Arthur (Bank of England)
    Abstract: Macroeconomic modelling has been under intense scrutiny since the Great Financial Crisis, when serious shortcomings were exposed in the methodology used to understand the economy as a whole. Criticism has been levelled at the assumptions employed in the dominant models, particularly that economic agents are homogeneous and optimising and that the economy is equilibrating. This paper seeks to explore an interdisciplinary approach to macroeconomic modelling, with techniques drawn from other (natural and social) sciences. Specifically, it discusses agent-based modelling, which is used across a wide range of disciplines, as an example of such a technique. Agent-based models are complementary to existing approaches and are suited to answering macroeconomic questions where complexity, heterogeneity, networks, and heuristics play an important role.
    Keywords: Macroeconomics; modelling; agent-based model
    JEL: A12 C60 E17 E60
    Date: 2017–11–17
  8. By: Onder, Ali Sina (University of Bayreuth); Popov, Sergey V (Cardiff Business School); Schweitzer, Sascha (University of Bayreuth)
    Abstract: Academic journals disseminate new knowledge, and editors of prominent journals are in a position to affect the direction and composition of research. Using machine learning procedures, we measure the influence of editors of the American Economic Review (AER) on the relative topic structure of papers published in the AER and other top general interest journals. We apply the topic analysis apparatus to the corpus of all publications in the Top 5 journals in Economics between 1976 and 2013, and also to the publications of the AER's editors during the same period. This enables us to observe the changes occurring over time in the relative frequency of topics covered by the AER and other leading general interest journals over time. We .nd that the assignment of a new editor tends to coincide with a change of topics in the AER in favour of a new editor's topics which can not be explained away by shifts in overall research trends that may be observed in other leading general interest journals.
    Keywords: Text Search; Topical Analysis; Academia; Knowledge Dissemination; In- fluence; Journals; Editors
    JEL: A11 A14 O3
    Date: 2018–01
  9. By: L. Randall Wray
    Abstract: It is beginning to look a lot like déjà vu in the United States. According to Senior Scholar L. Randall Wray, the combination of overvalued stocks, overleveraged banks, an undersupervised financial system, high indebtedness across sectors, and growing inequality together should remind one of the conditions of 1929 and 2007. Comparing the situations of the United States and China, where the outgoing central bank governor recently warned of the fragility of China's financial sector, Wray makes the case that the United State is far more likely to "win" the race to the next "Minsky moment." Instead of sustainable growth, we have "bubble-ized" our economy on the back of an overgrown financial sector--and to make matters worse, he concludes, US policymakers are ill-prepared to deal with the coming crisis.
    Date: 2018–02

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