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on Heterodox Microeconomics |
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Issue of 2018‒06‒11
seventeen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Giovanni Dosi (Laboratory of Economics and Management); Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Laboratory of Economics and Management (LEM)); Tania Treibich (Maastricht University) |
| Abstract: | Abstract This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, J Econ Dyn Control 34 1748–1767 2010, J Econ Dyn Control 37 1598–1625 2013, J Econ Dyn Control 52 166–189 2015) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) |
| Keywords: | Keynes; Schumpeter; Evolutionary models |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/1a9acst1l284eo8kvqrqrnlbl1&r=hme |
| By: | Lucrezia Fanti (Sapienza University of Rome (IT)) |
| Abstract: | This paper introduces the classical idea about the so-called `directed' and `induced' technical change (ITC) within a Keynesian demand-side and evolutionary endogenous growth model in order to analyze the interplay among technical change, long-run economic growth and functional income distribution. An ITC process is analyzed within an Agent-Based Stock-Flow Consistent (AB-SFC) model, wherein credit-constrained heterogeneous firms choose both the intensity and the direction of the innovation towards a labor- or capital-saving choice of technique. In the longrun, the model reproduces the so-called `Kaldor stylized facts' (i.e. with a purely labor-saving technical change), however during the transitional phase the model shows a labor-saving/capitalusing innovation pattern, as the aggregate output-capital ratio decreases until it stabilizes in the long-run, as well as declining labor share for long time periods and we can ascribe these evidences mainly to the directed technical change process. In order to stress the e ective role of the innovation bias on the model dynamics, we compare the baseline scenario with a `counterfactual' scenario wherein a `neutral ' technical progress is at work. |
| Keywords: | Agent-Based Macroeconomics, Stock-Flow Consistent Models, Induced Technical Change, Directed Innovation, Choice of Techniques, Labor Share, Growth and Distribution. |
| JEL: | E24 E25 O30 O41 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:3/18&r=hme |
| By: | Sabien DOBBELAERE; KIYOTA Kozo |
| Abstract: | This paper examines the links between a firm's internationalization status and the type and degree of market imperfections in product and labor markets. We develop a framework for modelling heterogeneity across firms in terms of (i) product market power (price-cost markups), (ii) labor market imperfections (workers' bargaining power during worker-firm negotiations or firm's degree of wage-setting power), and (iii) revenue productivity. We apply this framework to analyze whether the pricing behavior of firms in product and labor markets differs across firms that engage in different forms of internationalization using an unbalanced panel of 7,458 manufacturing firms over the period 1994-2012 in Japan. Engagement in international activities is found to matter for determining not only the type of imperfections in product and labor markets but also the degree of imperfections. Clear differences in behavior between firms that serve the foreign market through either exporting or foreign direct investment (FDI) are observed. Exporters are more likely to be characterized by imperfect competition in the product market whereas the opposite holds for multinationals. Exporters are more likely to share rents based on the bargaining power of workers whereas a firm's wage-setting power seems to generate wage dispersion across firms with foreign subsidiaries. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:18033&r=hme |
| By: | Jackson, Emerson Abraham |
| Abstract: | This research article was championed as a way of providing discourses pertaining to the concept of "Critical Realism (CR)" approach, which is amongst many othe forms of competing postmodern philosophical concepts for the engagement of dialogical discourses in the area of established econometric methodologies for effective policy prescription in the economic science discipline. On the the whole, there is no doubt surrounding the value of empirical endeavours in econometrics to address real world economic problems, but equally so, the heavy weighted use and reliance on mathematical contents as a way of justifying its scientific base seemed to be loosing traction of the intended focus of economics when it comes to confronting real world problems in the domain of social interaction. In this vein, the construction of mixed methods discourse(s), which favour that of CR philosophy is hereby suggested in this article as a way forward in confronting with issues raised by critics of mainstream economics and other professionals in the postmodern era. |
| Keywords: | Theoretical,Methodological Intervention,Critical Realism,Postmodern,Econometrics |
| JEL: | A12 B50 C18 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:178632&r=hme |
| By: | Zaman, Monowaruz |
| Abstract: | The author believes that his concept “Biased Equilibrium” based on information sharing strategies of individual economic agents brings two scientific paradigms of economics, neoclassical economics and institutional economics together from the origin of general equilibrium to provide holistic view of real world economic and social structures. In this article he goes deep into the concept of dynamics of rational behaviors with respect to diverse self-interests of individual economic agents. Our social or economic institutions can be subjectively modeled as an information biasing chain where individuals are positioned in different abstract coalitions according to interdependence of their payoff functions. The upper layer coalitions virtually control the institutions and they have greater influences on our economy that provokes growth by exhausting energy and other natural resources and causes climate change. His model also provides guidelines for transiting from a growth based economy to a sustainable economy, while solving macro and micro-economic challenges in real time. |
| Keywords: | Economic Theory, General Equilibrium, Biased Equilibrium, Neoclassical Economics, Institutional Economics, Information Economics |
| JEL: | B41 B52 B59 C7 D85 P10 |
| Date: | 2018–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86527&r=hme |
| By: | Ravaska Terhi (Faculty of Management, University of Tampere) |
| Abstract: | In this paper I study Finnish top incomes from a gender perspective using the Finnish register-based panel data over the period of 1995-2012. I find that that the under-representation of women at the top has been quite persistent in the overall top but the proportion of women in the top 1% has increased over 18 years. Women’s wage share at the top has increased while the self-employment income has decreased. The top income females more often have an entrepreneurial background and are more often sharing a household with a high-income spouse. The gender-specific income distributions show that female incomes are less dispersed. In this study I also test whether top incomes can be assumed sumed to be Pareto distributed. While the joint and men’s top income distributions can be approximated with Pareto distribution throughout the observation period, the Pareto assumption gets more support for women after the year 2000. The female top income receivers have caught up with top earning men over time but I also show that females are more likely to move downwards from the top than men. |
| Keywords: | income distribution, gender inequality, top incomes, income mobility |
| JEL: | D31 J16 D63 D30 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:tam:wpaper:1822&r=hme |
| By: | Tiago Neves Sequeira (Universidade da Beira Interior and CEFAGE-UBI); Pedro Mazeda Gil (cef.up, FEP, Universidade do Porto); Óscar Afonso (cef.up and FEP, Universidade do Porto, and CEFAGE-UBI) |
| Abstract: | This paper offers novel insights regarding the role of complexity in both the transitional and the long-run dynamics of the economy. We devise an endogenous growth model using the concept of entropy as a state-dependent complexity effect. This allows us to gradually diminish scale effects as the economy develops along the transitional dynamics, which conciliates evidence on the existence of scale effects in history with evidence of no or reduced scale effects in today’s economies. We show that empirical evidence supports entropy as a “first principle” operator of the complexity effect. The model features endogenous growth, with null or small (positive or negative) scale effects, or stagnation, in the long run. These different long-run possibilities have also policy implications. Then, we show that the model can replicate well the take-off after the industrial revolution and the productivity slowdown in the second half of the XXth century. Future scenarios based on in-sample calibration are discussed, and may help to explain (part of) the growth crises affecting the current generation. |
| Keywords: | endogenous economic growth; complexity effects; entropy. |
| JEL: | O10 O30 O40 E22 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:1804&r=hme |
| By: | Susana Santos; Tanya Araújo |
| Abstract: | The networks of nominal flows between industries in a Social Accounting Matrix (SAM) framework are studied. The flows of the SAM submatrices of production (or output of goods and services) and intermediate consumption, are identified, which are constructed from the supply and use tables of the National Accounts. From these flows, the inter-industry networks are induced. The structure of these networks are analysed, as well as, the underlying generation of income. An application to Portugal illustrates the approach. |
| Keywords: | Social Accounting Matrix; Inter-Industries flows; Network Analysis |
| JEL: | C89 D57 E01 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0402018&r=hme |
| By: | Durazzi, Niccolo; Fleckenstein, Timo; Lee, Soohyun Christine |
| Abstract: | Political-economic analyses of trade unions in post-industrial societies have shifted away from traditional class-analytic approaches to embrace insider/outsider and producer coalition arguments based on the assumption that unions hold on to the defence of their core constituencies in the face of labour market deregulation and dualisation. Challenging this conventional wisdom, we provide an analysis of union strategies in Italy and South Korea, two most-different union movements perceived as unlikely cases for the pursuit of broader social solidarity, and we argue that in both countries unions have successively moved away from insider-focussed strategies. We show a movement towards “solidarity for all” in the industrial relations arena as well as in their social policy preferences. Furthermore, unions also explored new avenues of political agency, often in alliance with civil society organisations. We ascribe this convergent trend towards a social model of unionism to a response of unions to a “double crisis”; that is a socio-economic crisis, which takes the form of a growing periphery of the labour market associated with growing social exclusion, and a socio-political crisis, which takes the form of a increasing marginalisation of the unions from the political process pursued by right- and left-wing parties alike. |
| JEL: | J50 |
| Date: | 2018–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87940&r=hme |
| By: | Akhmad A. Susamto (Centre for Research in Islamic Economics and Business (PKEBS) and Department of Economics, Faculty of Economics and Business Universitas Gadjah Mada) |
| Abstract: | The effort to develop Islamic economics as a discipline has not brought about the expected results. Differing from previous diagnoses, in this paper, I argue that it is the absence of a clear notion of what economics can be considered to be Islamic that impedes the development of Islamic economics. Such a clear notion is essential. I therefore propose three main conditions under which an economics can be considered as (and henceforth to be given the prefix) Islamic. I further propose that the scope of Islamic economics consists of four distinguished fields of work, and that the methods used in the development of Islamic economics vary depending on the end sought within each field of work. I finally expand on three implications, which together give rise to a hope that the development of Islamic economics, and its body of knowledge, is likely to be much less complicated than Islamic economists have ever thought. |
| Keywords: | Islamic worldview; Islamic economics; Methodology of Islamic economics |
| JEL: | B49 B59 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ugm:wpaper:2018002&r=hme |
| By: | Jacopo Staccioli; Mauro Napoletano |
| Abstract: | We propose a parsimonious agent-based model of a financial market at the intra-day time scale that is able to jointly reproduce many of the empirically validated stylised facts. These include properties related to returns (leptokurtosis, absence of linear autocorrelation, volatility clustering), trading volumes (volume clustering, correlation between volume and volatility), and timing of trades (number of price changes, autocorrelation of durations between subsequent trades, heavy tail in their distribution, order-side clustering). With respect to previous constributions we introduce a strict event scheduling borrowed from the Euronext exchange, and an endogenous rule for traders' participation. We find that the latter proves crucial for matching our target stylised facts. |
| Keywords: | Intraday financial dynamics, Stylized facts, Agent-based artificial stock markets, Market microstructure, High-Frequency Trading |
| Date: | 2018–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2018/12&r=hme |
| By: | Thomas Masterson; Ajit Zacharias |
| Abstract: | In this policy note, Thomas Masterson and Ajit Zacharias address the nexus between wage employment, consumption poverty, and time deficits in the context of Ghana and Tanzania. Based on a recently completed research project supported by the Hewlett Foundation, the authors apply the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) to estimate whether the jobs that are likely to be available to potential employment-seeking, working-age individuals in consumption-poor households--who are predominantly female in both countries--can serve as vehicles of "economic empowerment." They investigate this question using two indicators of empowerment, asking (1) whether the individual would be able to move their household to at least a minimal level of consumption via the additional earnings from their new job and (2) whether the individual would be deprived of the time required to meet the minimal needs of care for themselves (personal care), their homes, and their dependents. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:18-4&r=hme |
| By: | Susan Randolph (University of Connecticut); Elizabeth Kaletski (Ithaca College) |
| Abstract: | Countries that ratify the International Covenant on Economic, Social and Cultural Rights commit to devote the maximum of available resources to progressively realize the economic and social rights (ESRs) enumerated therein. A question arises as to whether countries that do so necessarily grow more slowly and accordingly whether there exists an inter-temporal trade-off between current and future ESR fulfillment. To address this question, we compare countries’ performance on the Index of Social and Economic Rights Fulfillment (the SERF Index) and component right indices with countries’ per capita income growth. Our analysis allows us to look individually at the rights to education, health, housing, food and work as well as overall ESR performance. The results are consistent with two distinct ideas. First, there exist policy contexts in which ESR and economic growth are mutually reinforcing, and second, the most promising path to realizing these synergies entails prioritizing ESR over economic growth. |
| JEL: | O K I |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:uct:ecriwp:hri26&r=hme |
| By: | Marczak, Martyna (University of Hohenheim); Beissinger, Thomas (University of Hohenheim) |
| Abstract: | We propose the so-called domestic "embodied unit labor costs" (EULC) at the country-sector level as a new cost-related basis for measures of international competitiveness. EULC take into account that a sector's labor costs constitute only a small share of its total cost which to a large extent consist of expenses for intermediate goods from other sectors. In line with a simple Leontief-type model, the proposed measure is constructed as a weighted average of unit labor costs of all domestic sectors contributing to the final goods of a specific sector. The contribution is expressed in value-added terms and takes global supply chains into account. We also show how EULC can be consistently calculated for sectoral aggregates such as the tradable goods sector. Based on EULC we propose the "embodied real effective exchange rate" (EREER) at the country-sector level as a new competitiveness indicator where the relevance of trading partners is quantified by an appropriate value-added measure. The chosen value-added concept replaces gross exports traditionally used as the weight basis in effective exchange rates. Using the World Input-Output Database (WIOD) we employ the proposed indicators to shed new light on changes in cost competitiveness at the sectoral level for Germany, and compare the empirical evidence with selected other euro area countries. |
| Keywords: | unit labor costs, real effective exchange rate, global supply chains, input-output analysis, sectoral analysis, international competitiveness, WIOD, Germany |
| JEL: | J30 C67 E01 F16 F23 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11499&r=hme |
| By: | Giulio Cainelli; Roberto Ganau; Marco Modica |
| Abstract: | The 2008 Great Recession prompted interest in the concept of regional resilience. This paper discusses and empirically investigates the relationship between industrial relatedness and economic resilience across European Union regions over the 2008-2012 crisis period. The analysis focuses on two types of industrial relatedness: technological and vertical (i.e. market-based). The empirical analysis is performed on a sample of 209 NUTS-2 regions in 16 countries. Our results highlight a positive effect of technological relatedness on the probability of resilience in the very short run (i.e. the 2008-2009 period), while the negative effect of vertical relatedness seems to persist for longer. |
| Keywords: | Technological Relatedness; Vertical Relatedness; Regional Resilience; European Union |
| JEL: | B52 C25 O52 R11 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1822&r=hme |
| By: | Bernard Beaudreau (Université Laval) |
| Abstract: | Drawing from the only two known industrial revolutions, this paper present a theory of technological/structural/industrial revolutions based on pull and push factors. Specifically, generalizing from the first industrial revolution (FIR) in Great Britain and the U.S. post-bellum economic growth (1880-1900) and second industrial revolution (SIR), we show that two fundamental conditions appear to be necessary, namely the existence of a set of new market opportunities (pull) as well as the existence of a new set of process innovations/new technologies (push). In other words, the overriding, underlying shock (i.e. the ultimate cause) must induce push and pull factors, without which the revolution in question will not occur. In the case of the first industrial revolution, we argue that the migration of 100,000-140,000 French Huguenot refugees to the shores of England, Ireland and Scotland was among the causes, while in the case of the second industrial revolution, it was the steam engine which ultimately contributed to the opening up of the West, the creation of a national market and the resulting mass production. |
| Keywords: | Industrial Revolution, Networks, Innovation |
| JEL: | O12 B52 N14 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7508525&r=hme |
| By: | Giulio Cainelli; Roberto Ganau; Marco Modica |
| Abstract: | Although several contributions have studied the effect of related variety on the economic performance of firms and regions, its influence on regional resilience ? that is, regions' capacity to adapt to external shocks ? has received little attention. This paper contributes to this debate by analysing empirically the relationship between related variety and regional resilience at the Italian Local Labour Market (LLM) level. The analysis adopts the definition of regional resilience developed by Martin (2012), and employs spatial econometric techniques ? besides standard non-spatial models ? to analyse the role played by related variety as a short-run shock absorber with respect to the 2008 Great Recession. The results obtained from the estimation of Spatial Error Models suggest that LLMs characterised by a higher level of related variety have shown a higher capacity to adapt to an external shock, that is, the Great Recession. This evidence is confirmed with respect to two different short-run time horizons, the one-year period 2012-2013 and the three-year period 2010-2013. |
| Keywords: | Regional Resilience; Related Variety; Local Labour Markets; Italy |
| JEL: | B52 C21 R11 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1823&r=hme |