nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2018‒06‒18
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Workers' awareness context in Italian 4.0 factories By Valeria Cirillo; Matteo Rinaldini; Jacopo Staccioli; Maria Enrica Virgillito
  2. The commodities boom and the profit squeeze: output and profit cycles in Brazil (1996-2016) By Guilherme Klein Martins; Fernando Rugitsky
  3. Distribution, wealth and demand regimes in historical perspective. USA, UK, France and Germany, 1855-2010 By Engelbert Stockhammer; Joel Rabinovich; Niall Reddy
  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 zakat in the provision of social protection: a comparison between Jordan, Palestine and Sudan By Charlotte Bilo; Anna Carolina Machado
  6. Replication Studies in Economics: How Many and Which Papers Are Chosen for Replication, and Why? By Frank Mueller-Langer; Benedikt Fecher; Dietmar Harhoff; Gert G. Wagner
  7. Women's Political Participation and Intrahousehold Empowerment: Evidence from the Egyptian Arab Spring By Bargain, Olivier; Boutin, Delphine; Champeaux, Hugues
  8. And Then He Wasnùt a She: Climate Change and Green Transitions in an Agent-Based Integrated Assessment Model By Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
  9. CEO Compensation, Pay Inequality, and the Gender Diversity of Bank Board of Directors By Owen, Ann L.; Temesvary, Judit
  10. From Classes to Copulas: Wages, capital, and top incomes By Rolf Aaberge; Anthony B. Atkinson; Sebastian Königs
  11. Brazilian environmental accounting initiatives By Institute for Applied Economic Research
  12. Destabilizing orders - Understanding the consequences of neoliberalism. Proceedings of the MaxPo Fifth-Anniversary Conference, Paris, January 12-13, 2018 By Andersson, Jenny; Godechot, Olivier
  13. Underdevelopment and unregulated markets: Seven reasons why unregulated markets reproduce underdevelopment By Herr, Hansjörg

  1. By: Valeria Cirillo; Matteo Rinaldini; Jacopo Staccioli; Maria Enrica Virgillito
    Abstract: The study of the co-evolution of processes of technological innovation and the resulting organisational changes has been a topic of interest since the first appearance of the idea of division of labour and specialisation in Adam Smith's works. The major phases of organisational change are in fact the result of 'waves' of technological innovations attributable to the various industrial revolutions. Nowadays, a new potential technological paradigm dubbed 'Industry 4.0' is shaping the manufacturing output of USA, Europe, and China, particularly in the automotive/engineering industry. With reference to the latter, the present research contribution aims at investigating, by means of field-work research activity, the degree of openness of the awareness context of workers and their intervention authority on the production process within three factories in the so-called Italian 'Motor Valley'. Together with state-of-the-art 4.0 technology adoption, these firms exhibit different organisational practices ranging from the Japanese Toyotism (Cesab-Toyota), to a mix of Taylorism and co-determination (Ducati), up to the example most akin to the German 'Mitbestimmung' (Lamborghini). This technological wave is fostering the process of making the production system lean. Our findings corroborate the presence of a hybrid process of Industry 4.0 adoption, reflected into a hybrid process of workforce empowerment.
    Keywords: Industry 4.0, Technological Paradigms, Organisational Change, Lean Systems, Awareness Context
    Date: 2018–06–01
  2. By: Guilherme Klein Martins; Fernando Rugitsky
    Abstract: The aim of the present paper is to contribute to the understanding of the recent Brazilian crisis by arguing that it was related to a cyclical profit squeeze that took place between 2010 and 2014, following the long cyclical expansion that started in 2003. To do so, the cyclical trajectories of output and profit rates in the Brazilian economy, throughout the five business cycles that took place between 1996 and 2016, are examined by resorting to the part of the framework established by Weisskopf (1979) that focuses on cycles. The results indicate that profit squeezes are rare in the Brazilian economy, possibly due to the truncated character and the weakness of the business cycles’ expansions. However, a profit squeeze did took place in the last cycle partly as result of the commodities boom, which attenuated the foreign vulnerability of the economy and allowed for a longer than usual expansion.
    Keywords: cyclical profit squeeze; Brazilian economy; profit rate decomposition; Weisskopf; structuralist Goodwin model
    JEL: B50 B51 E32
    Date: 2018–06–14
  3. 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
  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: Charlotte Bilo (IPC-IG); Anna Carolina Machado (IPC-IG)
    Abstract: "Zakat is one of the five pillars of Islam and considered a religious duty for wealthy people to support those in need. In Muslim-majority countries, zakat has a long tradition of providing income, goods for consumption and other basic services such as health care and education to poor and marginalised populations. A growing body of research has investigated the role of zakat in the provision of social protection and its importance as a poverty reduction mechanism. Although based on the same principles, countries vary significantly in the institutionalisation of zakat, ranging from obligatory to voluntary contributions. The institutional arrangements and benefit provision also differ greatly". (...)
    Keywords: Role, zakat, provision, social protection, comparison, Jordan, Palestine, Sudan
    Date: 2018–05
  6. By: Frank Mueller-Langer (European Commission – JRC); Benedikt Fecher (Alexander von Humboldt Institute for Internet and Society); Dietmar Harhoff (Max Planck Institute for Innovation and Competition); Gert G. Wagner (Max Planck Institute for Human Development; DIW Berlin, German Socio Economic Panel Study (SOEP); Institute of Labor Economics (IZA))
    Abstract: We investigate how often replication studies are published in empirical economics and what types of journal articles are eventually replicated. We find that from 1974 to 2014 0.10% of publications in the Top 50 economics journals were replications. We take into account the results of replication (negating or reinforcing) and the extent of replication: narrow replication studies are typically devoted to mere replication of prior work while scientific replication studies provide a broader analysis. We find evidence that higher-impact articles and articles by authors from leading institutions are more likely to be subject to published replication studies whereas the probability of published replications is lower for articles that appeared in higher-ranked journals. Our analysis also suggests that mandatory data disclosure policies may have a positive effect on the incidence of replication.
    Keywords: Replication, economics of science, science policy, economic methodology
    JEL: A1 B4 C12 C13
    Date: 2018–04
  7. By: Bargain, Olivier (University of Bordeaux); Boutin, Delphine (CERDI, University of Auvergne); Champeaux, Hugues (CERDI, University of Auvergne)
    Abstract: Egyptian women have played an unprecedented role in the Arab Spring democratic movement, possibly changing women's perception about their own rights and role. We question whether these events have translated into better outcomes within Egyptian households. We conjecture that potential changes must have been heterogeneous and depended on the local intensity of protests and women's participation over 2011-13. We exploit the geographical heterogeneity along these two margins to conduct a double difference analysis using data surrounding the period. We find a significant improvement in women's final say regarding decisions on health, socialization and household expenditure, as well as a decline in the acceptation of domestic violence and girls' circumcision, in the regions most affected by the protests. This effect is not due to particular regional patterns or pre-existing trends in empowerment. It is also robust to alternative treatment definitions and confirmed by triple difference estimations. We confront our main interpretation to alternative mechanisms that could have explained this effect.
    Keywords: Arab Spring, revolutions, gender, empowerment, Egypt
    JEL: J12 J16 D74 I14
    Date: 2018–05
  8. By: Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
    Abstract: In this work, we employ an agent-based integrated assessment model to study the likelihood of transition to green, sustainable growth in presence of climate damages. The model comprises heterogeneous fossil-fuel and renewable plants, capital- and consumption-good firms and a climate box linking greenhouse gasses emission to temperature dynamics and microeconomic climate shocks affecting labour productivity and energy demand of firms. Simulation results show that the economy possesses two statistical equilibria: a carbon-intensive lock-in and a sustainable growth path characterized by better macroeconomic performances. Once climate damages are accounted for, the likelihood of a green transition depends on the damage function employed. In particular, aggregate and quadratic damage functions overlook the impact of climate change on the transition to sustainability; to the contrary, more realistic micro-level damages are found to deeply influence the chances of a transition. Finally, we run a series of policy experiments on carbon (fossil fuel) taxes and green subsidies. We find that the effectiveness of such market-based instruments depends on the different channels climate change affects the economy through, and complementary policies might be required to avoid carbon-intensive lock-ins.
    Keywords: climate change; agent based models; transitions; energy policy; growth
    Date: 2018–06–07
  9. By: Owen, Ann L.; Temesvary, Judit
    Abstract: Greater gender diversity on bank board of directors is associated with higher compensation inequality because CEOs at these banks have higher base salary. This effect disappears during the financial crisis, largely due to adjustment of non-salary compensation.
    Keywords: CEO compensation; gender diversity, board of directors
    JEL: G21 G34 J33
    Date: 2018–05
  10. By: Rolf Aaberge (Statistics Norway); Anthony B. Atkinson; Sebastian Königs
    Abstract: Public debates about the rise in top income shares often focus on the growing dispersion in earnings, and the soaring pay for top executives and financial-sector employees. But can the change in the marginal distribution of earnings on its own explain the rise in top income shares? Are top executives replacing capital owners in the group of top-income earners, or are we rather witnessing a fusion of top capital and top earnings? This paper proposes an extension of the copula framework and uses it for exploring the changing composition of top incomes. It illustrates that changes in top income shares can easily be decomposed into respective changes in the marginal distributions of labour and capital income and the changing association between the two types of income. An application using tax record data from Norway shows that the association between top labour and capital incomes grew stronger between 1995 and 2005 in the top half of the wage and capital income distribution, though it declined for the top 1 per cent of capital income receivers. A gender decomposition demonstrates that the association of wage and capital incomes at the top is particularly striking for men, while women are largely under-represented in the top halves of the two marginal distributions.
    Keywords: Top incomes; wages; capital incomes; copula
    JEL: D31 H24 J30
    Date: 2018–06
  11. By: Institute for Applied Economic Research (IPC-IG)
    Abstract: "In a country of continental size and endowed with incredible environmental assets such as Brazil, it is not immediately feasible to coordinate national and climate change accounts, perhaps due to caution. However, recent federal legislation (Law No. 13.493/2017) has mandated the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística?IBGE) to calculate and release?annually, if possible?the countrys green domestic product (Produto Interno Verde?PIV), detailing the nations environmental assets. The greatest challenge to this endeavour will be to determine the methodology that will underpin the national accounting system to be adopted". (?)
    Keywords: Brazilian, environmental, accounting, initiatives
    Date: 2017–12
  12. By: Andersson, Jenny; Godechot, Olivier
    Abstract: Throughout the long postwar period, crisis was a conjectural phenomenon and the exception in a normalcy of growth and social progress. Many key concepts of the social sciences - indeed, our understanding of democracy, embedded markets, enlightened electorates, benevolent political elites, and problem-solving progressive alliances - seem inapt for understanding today's societal upheaval. In the wake of the financial crisis of 2008, we have witnessed the breakdown of majority alliances, the return of populism on a grand scale both in the Western world and globally, and the eruption into chaotic and sometimes violent social protests. The forces that underpinned the framework of welfare capitalism seem obsolete in the face of financial and political elites who are paradoxically both disconnected from national territory and sometimes in direct alliance with nationalist and populist movements. Politics of resentment, politics of place, and new politics of class interact in ways that we do not yet understand. Perhaps the greatest paradox of all is that neoliberalism has spawned authoritarianism. At the same time, these processes are not at all new, but must be put in the context of the socioeconomic and cultural cleavages produced by the shift to neoliberalism since the 1970s. The paper presents arguments by leading scholars in economic history, economic sociology, and political economy in brief thinknotes that were prepared for the MaxPo Fifth-Anniversary Conference on January 12 and 13, 2018, in Paris.
    Keywords: crisis,neoliberalism,elites,political economy,economic sociology
    Date: 2018
  13. By: Herr, Hansjörg
    Abstract: After World War II only a few developing countries were able to catch up to real GDP per capita levels prevailing in developed countries. These successful countries in almost all cases came from Asia and did not follow the free market doctrine in the tradition of the Washington Consensus. There must be theoretical explanations as to why underdevelopment is reproduced and most countries in the world do not catch up. This essay reviews different economic approaches which attempt to explain the lack of convergence. A first group of approaches focuses on the lack of sufficient productivity development (free trade, global value chains, negative terms of trade effects, abundance of scarce resources, premature deindustrialization); the second group focuses on problems to trigger sufficient growth (distorted financial systems, high restrictions on macroeconomic demand management). Countries can suffer from several of these factors, which can explain why development is only possible with the support of comprehensive government policies.
    Keywords: underdevelopment,financial system,free trade,inequality,Keynesian paradigm,Washington Consensus
    JEL: B50 F40 O11
    Date: 2018

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