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on Heterodox Microeconomics |
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Issue of 2018‒03‒19
eighteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Heise, Arne |
| Abstract: | Economics as a discipline is currently in disarray. In the aftermath of the global financial crisis, academic experts, students, commentators, practitioners and politicians all questioned the status of academic economics and many called for a 'new economic thinking'. Nearly a decade later, however, there is little evidence of a transformation in research and teaching. Furthermore, economic policy based on mainstream economics is still prevalent. It is therefore necessary to consider how the discipline needs be transformed and thereby to provide an explanation for the resilience of the current mainstream. The present study first clarifies what is meant by a transformation of economics as a discipline, since this remains an ill-defined term and may be interpreted in very different ways. It then establishes the conditions of a successful transformation of the discipline in terms of intra-disciplinary and extra-disciplinary factors. The paper argues that economics as a discipline cannot be expected to trigger this transformation by itself (i.e. via self-regulation), since the 'market for economic ideas' is prone to market failure. In addition, the influence of external factors and actors on the market may serve to distort the congruence between the individual researcher's utility and societal welfare. External incentives are therefore required to establish constitutional guardrails that ensure fair competition between ideas. |
| Keywords: | pluralism,transformation,mainstream economics,heterodox economics,regulation |
| JEL: | A14 B40 B50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cessdp:67&r=hme |
| By: | Sandro Pereira Silva |
| Abstract: | O paradigma da economia solidária emergiu no fim do século XX como uma proposta de organização autogestionária do trabalho e da produção que envolve um amplo conjunto de práticas coletivas em busca de novas estratégias de inclusão social e desenvolvimento territorial. Desde então, passou a consolidar-se enquanto novo campo de pesquisa em diversas áreas do conhecimento científico, não se restringindo às ciências sociais. O objetivo deste texto foi identificar e caracterizar a publicação científica em periódicos indexados envolvendo o campo da economia solidária, em suas várias dimensões. Buscou-se enfatizar as abordagens metodológicas utilizadas pelos autores, as áreas de conhecimento em que se inserem e os principais objetos de análise observados. Espera-se com isso poder auxiliar na compreensão de um quadro geral sobre o perfil da produção nesse campo de pesquisa, além de instigar novos questionamentos para pesquisas futuras, dada a complexidade de pontos problematizados academicamente relacionados ao tema. The paradigm of solidarity economy emerged at the end of the twentieth century as a proposal of self-management organization of work and production that involves a set of collective practices in search of new strategies of social inclusion and territorial development. Since then, it has become consolidated as a new field of research in several areas of scientific knowledge, not restricted to the social sciences. The purpose of this paper is to identify and characterize a scientific publication in indexed journals involving the field of solidarity economy in its various dimensions. It was tried to emphasize the methodological approaches used by the authors, the areas of knowledge and the main objects of analysis. This article aims at helping to understand a general picture about the production profile in the field of research, as well as new questions for new research, given a complexity of problems related academically related to the theme. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2361&r=hme |
| By: | Quentin Couix (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| 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 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01702401&r=hme |
| By: | Heise, Arne; Pusch, Toralf |
| Abstract: | There has been a long discussion about the employment impact of minimum wages and this discussion has recently been renewed with the introduction of an economy-wide, binding minimum wage in Germany in 2015. In traditional reasoning, based on the allocational approach of modern labour market economics, it has been suggested that the impact is clearly negative on the assumption of a competitive labour market and clearly positive on the assumption of a monopsonistic labour market. Unfortunately, both predictions conflict with the empirical findings, which do not show a clear-cut impact of significant size in any direction. As an alternative, a Post Keynesian twosector model including an employment market is presented here. Its most likely prediction of a negligible employment effect and a sectoral shift is tested against the German case of an introduction of a statutory minimum wage in 2015. Despite substantial wage increases in the low wage sector, our empirical analysis reveals very low overall employment loss of about 33,000 labourers as a result of a small sectoral shift from low wage industries to higher wage industries. |
| Keywords: | Post Keynesianism,minimum wage,aggregate demand,aggregate supply |
| JEL: | B50 E12 E23 J31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cessdp:68&r=hme |
| By: | Roberto Veneziani (Queen Mary University of London); Naoki Yoshihara (University of Massachusetts Amherst, Hitotsubashi University, and Kochi University of Technology) |
| Abstract: | This paper analyses the normative and positive foundations of the theory of exploitation as the unequal exchange of labour (UEL). The key intuitions behind all of the main approaches to UEL exploitation are explicitly analysed as a series of formal claims in a general economic environment. It is then argued that these intuitions can be captured by one fundamental axiom - called Labour Exploitation - which defines the basic domain of all UEL exploitation forms and identifies the formal and theoretical framework for the analysis of the appropriate definition of exploitation. |
| Keywords: | Exploitation, Unequal Exchange of Labour, axiomatic analysis |
| JEL: | D63 B51 |
| Date: | 2017–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:824&r=hme |
| By: | Engelbert Stockhammer; Joel Rabinovich; Niall Reddy |
| Abstract: | Most empirical macroeconomic research limited to the period since World War II. This paper analyses the effects of changes in income distribution and in private wealth on consumption and investment covering a period from as early as 1855 until 2010 for the UK, France, Germany and USA, based on the dataset of Piketty and Zucman (2014). We contribute to the post-Keynesian debate on the nature of demand regimes, mainstream analyses of wealth effects and the financialisation debate. We find that overall domestic demand has been wage-led in the USA, UK and Germany. Total investment responds positively to higher wage shares, which is driven by residential investment. For corporate investment alone, we find a negative relation. Wealth effects are found to be positive and significant for consumption in the USA and UK, but weaker in France and Germany. Investment is negatively affected by private wealth in the USA and the UK, but positively in France and Germany. |
| Keywords: | historical macroeconomics, demand regimes, Bhaduri-Marglin model, wealth effects, financialisation |
| JEL: | B50 E11 E12 E20 E21 N10 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1805&r=hme |
| By: | Pradhan, Rajendra; Meinzen-Dick, Ruth Suseela; Theis, Sophie |
| Abstract: | In this paper, we explore how different norms around property rights affect the empowerment of women of different social positions over the life cycle. We first review the conceptual foundations of property, empowerment, and intersectionality, and then present the methodology and empirical findings from ethnographic field work in Nepal. Going beyond formal ownership of property, we look at changes in property rights over personal and joint property at different stages of women’s lives. Finally, the paper makes recommendations for how research and development projects, especially in South Asia, can avoid misinterpreting asset and empowerment data by incorporating nuance around the concepts of property rights over the household life cycle. |
| Keywords: | gender; property rights; life cycle; empowerment; development policies; assets; land ownership, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1702&r=hme |
| By: | Oliver Braganza |
| Abstract: | In many areas of society we rely on competition to better achieve societal goals. Ideally, competition motivates effort and efficiently allocates resources. However, due to imperfect information, competition generally depends on quantitative proxy measures in order to assess performance. This leads to an increasing use of such quantitative proxies in modern societies. Examples include: in science, the publication count of an author, in healthcare, the number of patients treated or in business, the profit achieved. Importantly, some practices may optimize proxy performance but not the actual societal goal. In such cases, individual decisions and cultural practices may shift away from the societal goal and toward the proxy. Such processes have been described by a law attributed to Charles Goodhart or Donald T. Campbell, most pithily phrased as: 'When a measure becomes a target it ceases to be a good measure.' While the original mentions of this law address policy determination or education respectively, we propose it applies to any competitive societal system: Any proxy measure in a competitive societal system becomes a target for the competing individuals (or groups). Here, we construct an agent based model to explore the basic components and dynamics of such a process. The model combines an effort incentivization mechanism from economic multitasking theory and contest theory with a slower process of cultural evolution. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.00345&r=hme |
| By: | Jaelani, Aan |
| Abstract: | Economic behaviour in the study of Islamic economics is the basis for the government to portray political ethics and ethical economic functions of individuals in functioning as a member of society. Secular ethics and religious ethics, according to al-Mawardi, as the code of conduct in conducting economic practices by the government and every member of society to uphold the principle of goodness. In the context of economic behaviour, the world ethics (adab al-dunya) and the religious ethics (adab al-din) became guidelines for economic actors in conducting business activities including other forms of cooperation or other muamalah practice. |
| Keywords: | Philosophy of economics, behavioral economics, ethics, religion, Islamic Economic |
| JEL: | B31 B41 D01 D1 D6 H1 H5 N01 N25 N3 N35 |
| Date: | 2017–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84488&r=hme |
| By: | Breno Nahuel Freneau (FACE-UFG); Sérgio Fornazier Meyrelles Filho (FACE-UFG) |
| Abstract: | The purpose of this study is to investigate the effects of changes in income distribution on economic growth. First, the post-Keynesian economic approach, associated with this research program, is briefly discussed. Second, a model of income distribution and economic growth based on the proposition of Bhaduri and Marglin (1990) is presented. It leads to the conclusion that the demand regime may be wage-led, profit-led or intermediate, as determined by the system parameters. Third and last, an econometric study of a group of developed countries is carried out with the estimation of generalized least squares estimators. The empirical analysis suggests that all countries in the sample present wage-led demand regimes; that, on the one hand, Finland presents a wage-led accumulation regime and is, therefore, a wage-led economy; and that, on the other hand, France presents a profit-led accumulation regime and is, therefore, an intermediary economy. |
| Keywords: | Income distribution, Economic growth, Demand and accumulation regimes |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:ufb:wpaper:062&r=hme |
| By: | Calzada Olivera, Beatriz (UNU-MERIT); Foster-McGregor, Neil (UNU-MERIT) |
| Abstract: | Several case studies have analysed the potential of natural resource (NR) based industrialisation, a process based on diversification towards high value-added products, in the Latin American region. However, there is limited evidence on how the development of productive linkages - a key aspect of this strategy - behave at the country level. Based on input-output analysis, this paper provides a clearer picture of the extent and evolution of productive linkages of NR sectors across a sample of middle- and high-income countries in Latin America as well as in other developing and developed regions. The paper focuses on the degree to which extractive industries, i.e. oil, gas, and mining, are connected to the rest of the economy by studying both backward and forward linkages using OECD IO data. It also makes a distinction between local and foreign inputs to account for the level of integration that these sectors have into global value chains and/or import dependence. Furthermore, it tries to identify whether the importance of the extractive sectors in exports and total economic output is related to the level of intersectoral linkages. We find that in most countries intersectoral linkages have become smaller despite the expansion of the extractive sector suggesting a higher level of enclaveness as predicted by the resource curse literature. |
| Keywords: | natural resources, Latin America, mining, extractive, resource boom, industrial linkages |
| JEL: | O13 O14 O57 L71 D57 |
| Date: | 2018–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018015&r=hme |
| By: | Nicola Daniele Coniglio (Università degli Studi di Bari "Aldo Moro"); Davide Vurchio (Università di Roma 3); Nicola Cantore (UNIDO); Michele Clara (UNIDO) |
| Abstract: | The diversification of production and trade is considered almost unanimously a fundamental policy goal, particularly for developing economies whose export baskets are heavily concentrated on a few products. In what direction trade diversification ought to take place is, however, subject to fierce debate. The Product Space (PS) framework (Hausmann and Klinger, 2007; Hidalgo et al. 2007) is a recent contribution in the economic literature that has proved very influential in policy circles. It argues that the endowment of production capabilities (technologies, production factors, institutions etc.) determines what countries produce today but it also constrains what they can produce in the future as it is uncommon that countries develop a comparative advantage in goods that do not draw from the same pool of capabilities (unrelated products). Contributions along such line argue that defying the initial comparative advantage can be a risky policy decision with high probability of failure. The main objective of this contribution is to use a novel methodology to investigate whether the patterns of diversification of a sample of 177 countries over the period 1995-2015 conform or not to the prediction of the PS framework. We find evidence of a high degree of path-dependence but our analysis suggests also that a significant number of new products that entered countries’ export baskets were unrelated to the initial productive specialization (path-defying changes). We shed light on the determinants of these ‘radical’ patterns of diversification and show they are associated with higher economic growth. The results of this study have important policy implications in particular for the design of industrial policies aimed at actively shaping countries’ structural transformation. |
| Keywords: | path-dependence; product space; trade diversification; industrial policy |
| JEL: | F1 O1 O3 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:series_wp_01-2018&r=hme |
| By: | Noélie Delahaie (IRES - Institut de Recherches Economiques et Sociales); Coralie Perez (Centre d'Economie de la Sorbonne) |
| Abstract: | Since 2008 in France, the establishments implemented wage, employment and working time adjustments to deal with the effects of the economic crisis. This paper aims at understanding the way social actors have negociated wage and employment adjustments. Did personal representatives influence managerial decisions in terms of adjustment ? Were they involved in concessions bargaining by relying on cross referencing of the REPONSE 2010-2011 survey (provided by French Ministry of Labour) on French industrial relations between 2008 and 2010 and of case studies conducted in French establishments between 2012 and 2014. Our analysis allows underlying different kinds of concession bargaining which depend on the nature of industrial relations and of the impact of economic downturn on companies' activity. We also show that concessions may have some more or less durable effects on the employment relation. Finally, our analysis sheds light on the implications of recent reforms in collective bargaining in France, which may facilitate unbalanced concession bargaining in favour of employer |
| Keywords: | wages; employment; industrial relations; concession bargaining; flexibility; economic crisis |
| JEL: | D22 J51 J53 M54 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:18006&r=hme |
| By: | Alarcón-Rivero, Jorge V.; Ernst, Christoph |
| Abstract: | This study, prepared under EU funding and on request by the Indonesian government,has the ambition to understand the inter-regional dynamics in terms of economics, but also in terms of employment and Decent Work (DW) dimensions. It tries to showcase, with the help of simulations, on how to combine macro policy instruments more effectively with inter-regional characteristics, i.e. by identifying the most important “within” region activities, main natural resources, strategic or privileged location and how each region relates to the other regions. Its ultimate goal is to provide insight into how to enhance different types of regional programmes and investments of certain main regional sectors and how such investments relate to higher region’s growth and regional employment creation for different types of workers. The study uses the Social Accounting Matrix methodology for ex-ante“decent employment” impact assessment of key sectoral policies in Indonesia. Such approach builds on work developed by the ILO, EMPINVEST, on Dynamic SAM and Inter-Regional SAM and the indicators compiled and analyzed in the case of Indonesia. |
| Keywords: | 1, 2, 3, 4 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994974593202676&r=hme |
| By: | Alarcon, J. V.; Ernst, C. |
| Abstract: | Climate change is a challenge world-wide; hence countries must adjust their economies as well as their labour markets. Recently, most economies attempt to shift to more environmentally friendly consumption and production patterns as well as compatible technologies, among others, to improve labour conditions and reduce emissions. The Green Jobs Social Accounting Matrix (GJ- SAM) -based analysis, combined with scenario simulation, has the ambition to provide helpful inputs for policy discussion and decision-making. The results based on the analysis of derived SAM model indicators and two sets of simulations results form the core of this study. The scenario simulations refer to a counter-factual of a fiscal stimulus package that can help test green-jobs sectors performance vis-à-vis brown-jobs sectors, in particular, and hybrid sectors, in general, by providing insights into how to comparatively evaluate policies aimed at shifting towards ecologically friendly technologies. This study shows that shifting towards a green economy may help reducing green-house gas emissions in Indonesia, however, as expected, the process situation is more complex and less straightforward. It also shows clearly the inter-dependencies between the economic, the environmental and the labour spheres; hence a successful sustainable and inclusive development strategy would need to take into account all three spheres simultaneously. |
| Keywords: | 1, 2, 3, 4 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994974593102676&r=hme |
| By: | Otobe, Naoko. |
| Abstract: | This paper reviews concepts of gender and informal economy and the situation of informal employment of women and men, and highlights the key issues and documents on selected country experiences regarding vulnerable groups of workers, such as homeworkers, street vendors, waste pickers, as well as women entrepreneurs. It also presents the overall ILO approach to formalization of informal employment. |
| Keywords: | 1, 2, 3, 4 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994974592902676&r=hme |
| By: | Mazhar Yasin MUGHAL; Rashid JAVED |
| Abstract: | Son preference is common in many Asian countries. Though a growing body of literature examines the drivers and socioeconomic impacts of phenomenon in case of China and India, work on other Asian countries is scarce. This study uses nationally representative survey of over 13 thousand households from Pakistan (PDHS 2012-13) to analyze the effects of observed preference for sons on women‘s participation in intra-household decision-making. Four key intra-household decisions are considered: decisions regarding healthcare, family visits, large household purchases and spending husband's income. These correspond to four categories of household decisions, namely healthcare, social, consumption and financial. Probit and Ordered Probit are employed as the main estimation techniques and other determinants of household decision-making are controlled for. Besides, a number of matching routines are employed to account for the possibility of potential selection bias. We find that women with at least one son have more say in household decisions. Bearing at least one son is associated with 5%, 7% and 5% higher say in decisions involving healthcare, social and consumption matters respectively. Women's role in financial affairs, however, does not differ significantly from women with no sons. Female participation in decisionmaking grows significantly with the number of sons but only up to the third parity. These results are particularly visible among younger, wealthier and educated women, and those who got married earlier. The findings suggest a limited improvement in women's bargaining power at home resulting from the birth of one or more sons. This in part explains higher desire for sons expressed by women compared to men in household surveys. |
| Keywords: | Son preference, Gender bias, Sex selection, Female decision-making, intrahousehold bargaining, Pakistan |
| JEL: | C13 C70 D13 J13 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2017-2018_5&r=hme |
| By: | Nan Zhou; Li Zhang; Shijian Li; Zhijian Wang |
| Abstract: | Algorithmic collusion is an emerging concept in current artificial intelligence age. Whether algorithmic collusion is a creditable threat remains as an argument. In this paper, we propose an algorithm which can extort its human rival to collude in a Cournot duopoly competing market. In experiments, we show that, the algorithm can successfully extorted its human rival and gets higher profit in long run, meanwhile the human rival will fully collude with the algorithm. As a result, the social welfare declines rapidly and stably. Both in theory and in experiment, our work confirms that, algorithmic collusion can be a creditable threat. In application, we hope, the frameworks, the algorithm design as well as the experiment environment illustrated in this work, can be an incubator or a test bed for researchers and policymakers to handle the emerging algorithmic collusion. |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1802.08061&r=hme |