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on Heterodox Microeconomics |
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Issue of 2018‒11‒12
nineteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Obregón, Carlos |
| Abstract: | There are two reasons to go beyond Behavioral Economics. The first reason is that humans, as presented by this school, do not explain many critical economic problems. Behavioral Economics is not an alternative paradigm to traditional economics. It is only one of the New Schools of thought, that has risen due to the failure of the contemporary Neoclassical School to show that markets have a unique maximum welfare full employment equilibrium. Therefore, in order to delimit Behavioral Economics ́ contributions we need to look at the whole paradigm in economics, which today includes: the contemporary neoclassical paradigm plus all the New Schools of thought. The second reason is that humans, as described by Behavioral Economics, are not a good representation of mans ́ evolutionary characteristics. For Behavioral Economics, humans are emotional beings which often do not know what is best for them, and need the help of the government to make the choices which are truly convenient; and they display altruistic and social cooperative behavior, even in monetary transactions. But evolutionarily we are neither design to be emotional or rational, nor to be selfish or altruistic and socially cooperative. We are design to be flexible for survival purposes, and to display a wide range of behaviors. |
| Keywords: | Behavioral Economics |
| JEL: | A1 A12 A13 B0 D0 D00 D1 D10 D11 G1 G10 |
| Date: | 2018–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89653&r=hme |
| By: | Jacopo Staccioli (Scuola Superiore Sant'Anna); Mauro Napoletano (Observatoire français des conjonctures économiques) |
| Abstract: | We build an agent-based model of a financial market that is able to jointly reproduce many of the stylized facts at different time-scales. 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 contributions we introduce a strict event scheduling borrowed from the EURONEXT exchange, and an endogenous rule for traders participation. We show that such a rule is crucial to match stylized facts. |
| Keywords: | Intra-day financial dynamics; Stylized facts; Agent-based artificial stock markets; Market microstructure; High frequency trading |
| JEL: | C63 E12 E22 E32 O4 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5mqflt6amg8gab4rlqn6sbko4b&r=hme |
| By: | A\"ileen Lotz (IF); Pierre Gosselin (IF); Marc Wambst (IRMA) |
| Abstract: | This paper presents an analytical treatment of economic systems with an arbitrary number of agents that keeps track of the systems' interactions and agents' complexity. This formalism does not seek to aggregate agents. It rather replaces the standard optimization approach by a probabilistic description of both the entire system and agents'behaviors. This is done in two distinct steps. A first step considers an interacting system involving an arbitrary number of agents, where each agent's utility function is subject to unpredictable shocks. In such a setting, individual optimization problems need not be resolved. Each agent is described by a time-dependent probability distribution centered around his utility optimum. The entire system of agents is thus defined by a composite probability depending on time, agents' interactions and forward-looking behaviors. This dynamic system is described by a path integral formalism in an abstract space-the space of the agents' actions-and is very similar to a statistical physics or quantum mechanics system. We show that this description, applied to the space of agents'actions, reduces to the usual optimization results in simple cases. Compared to a standard optimization, such a description markedly eases the treatment of systems with small number of agents. It becomes however useless for a large number of agents. In a second step therefore, we show that for a large number of agents, the previous description is equivalent to a more compact description in terms of field theory. This yields an analytical though approximate treatment of the system. This field theory does not model the aggregation of a microeconomic system in the usual sense. It rather describes an environment of a large number of interacting agents. From this description, various phases or equilibria may be retrieved, along with individual agents' behaviors and their interactions with the environment. For illustrative purposes, this paper studies a Business Cycle model with a large number of agents. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1810.07178&r=hme |
| By: | Olivier Godechot (Observatoire sociologique du changement) |
| Abstract: | Twenty years ago, Michel Callon edited The Laws of the Markets, a groundbreaking volume that substantially redefined economic sociology by resetting the relationship between sociology and economics (Callon 1998). Many articles in economic sociology at that time started (and still do today) with sharp criticism of neoclassical economics. The latter was censured for being overly simplistic and complex, overly reductionist and irrelevant. [First lines] |
| Keywords: | Laws of economics; Economic devices; Economics; Economists; Making of the economy |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/7vikhakfio8ocolv66e5ua248d&r=hme |
| 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 (Observatoire français des conjonctures économiques) |
| Abstract: | In this work we study the granular origins of business cycles and their possible underlying drivers. As shown by Gabaix (2011), the skewed nature of firm size distributions implies that idiosyncratic (and independent) firm-level shocks may account for a significant portion of aggregate volatility. Yet, we question the original view grounded on “supply granularity”, as proxied by productivity growth shocks – in line with the Real Business Cycle framework–, and we provide empirical evidence of a “demand granularity”, based on investment growth shocks instead. The role of demand in explaining aggregate fluctuations is further corroborated by means of a macroeconomic Agent-Based Model of the “Schumpeter meeting Keynes” family (Dosi et al., 2015). Indeed, the investigation of the possible microfoundation of RBC has led us to the identification of a sort of microfounded Keynesian multiplier. |
| Keywords: | Business cycles; Granular residual; Granularity hypothesis; Agent-based model; Firm dynamics; Productivity growth; Investment growth |
| JEL: | C63 E12 E22 E32 O4 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/21q7rlmakq8ca9c6o2imhini9d&r=hme |
| By: | Mark Setterfield (Department of Economics, New School for Social Research) |
| Abstract: | In the early-mid 1990s, Social Structure of Accumulation (SSA) theorists identified the solidification of a neoliberal SSA that included a capital-citizen accord based on “managing the discontent of the losers”. This created social stability by reconciling working households to material hardships emanating form the neoliberal labour market by means of either coercion or non-economic distraction. This paper argues that there was, in fact, a fundamentally material basis to the neoliberal capital-citizen accord, including the ability of households to accumulate debt in order to limit the growth of consumption inequality in the face of burgeoning income inequality. The material basis of the capital-citizen accord broke down during the financial crisis of 2007-09, destabilizing the accord itself. The result is that an SSA that has resisted top-down reform is now threatened by bottom-up “reform” in the shape of rising populism. The outcomes of this process are highly uncertain – a key characteristic of the periods of inter regnum that separate successful SSAs. |
| Keywords: | Social structure of accumulation, capital-citizen accord, household debt, consumption inequality, populism |
| JEL: | E21 B51 B52 P16 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1816&r=hme |
| By: | Pascal Glémain (LIRIS - Laboratoire interdisciplinaire de recherche en innovations sociétales - UR2 - Université de Rennes 2 - UNIV-RENNES - Université de Rennes) |
| Abstract: | Direct heir of the Italian Mount of piety, the "Credit Municipal" or French pawnshop model was born in Nantes in 1813, a metropole which are located in the west part of France. At this period of time, it was public organization of credit with a social mission: to help people who are in financial difficulty (excluded from access to banking currency). In 1955, the "Credit Municipal" became establishment of Public Welfare, with legal personality and financial autonomy under the governance of the City of Nantes. Credit Institution like "cooperative banks" but with a general purpose since 1984, the "Credit Municipal" is located today in the social and solidarity economy (SSE). With this research paper, we want to demonstrate the historical place of the French pawnshops in the microcredit devises landscape. Indeed, since "social banking" is not yet used as a category in official French banking system, we lack an authoritative definition because, we seem to be without social banking model through the French banking system history. But, we try to show that it's not the case. Indeed, French pawnshops, from Middle-Age to nowadays, have always experimented "social banking devises" in order to straight against usury practices and banking exclusion. Since the beginning of the 19th Century, the pawnshops have been an important element of the French model of social microcredit both through their traditional "pawn loans" system and through their "stability loan" devise. |
| Keywords: | Social enterprise,Banking exclusion,Solidarism,Social movements,Capitalism,Beneficiary,Social Banking,France,Pawnshop,Social microcredit,Pawn loans,Stability,Loan devise,Culture organisationnelle |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01892260&r=hme |
| By: | Stewart-Evans, Michael (UNU-MERIT, Maastricht University); Siegel, Melissa (UNU-MERIT, Maastricht University) |
| Abstract: | The purpose of this paper is to understand the impact of women's migration on the lives of the men left-behind. Based on a qualitative research methodology the study consists of twenty interviews conducted with men across three different areas in Nicaragua. These interviews were used to understand changes to household decision making and how the man perceives his own sense of masculinity. The results suggest that in contrast to previous studies which have shown a reluctance of men to partake in work traditionally associated with women, the men in this study did not avoid partaking in domestic work or childcare. It was also found that none of the men - even those in receipt of remittances - stopped working and instead placed even greater symbolic importance on their work, allowing them to maintain their identity as the main breadwinner in the house. The study proposes that more work needs to be done to better understand the challenges and changes faced by men (an understudied group of the left-behind) as the number of women migrating for work continues to rise. |
| Keywords: | Migration, Gender, Left-behind, Masculinity, Machismo, Nicaragua |
| JEL: | O15 F22 J13 J16 |
| Date: | 2018–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018034&r=hme |
| By: | Minji Kim (Inje University); Euitay Jung (Inje University) |
| Abstract: | Social economy has received attention as an inclusive growth model which solves various social problems and at the same time, responds to structural low growth. Especially, it has appeared as an alternative to solve social problems including the high rate of unemployment, job insecurity, and the gap between the rich and the poor as it was selected as one of 100 national agendas for state affairs government projects since the inauguration of the new government. In Korea, people are growing more and more interested in social economy as the legal bases related to social economy including ?the Social Enterprise Promotion Act? in 2007 and ?the Framework Act on cooperatives? in 2012 were prepared. And it has become increasingly important in Gimhae. Gimhae first enacted an ordinance for revitalizing social economy in Gyeongsangsnam-do to do community projects by supporting social enterprises? foundation and development and will first establish a ?social economy support center? in the Yeongnam area. This study tries to analyze the characteristics and support policies of social economy in Gimhae by doing its theory and the general status of its organizations including social enterprises, cooperatives, community-based enterprises, and self-support companies in it. For current social economy of Gimhae, the number of businesses is lower than that of other local governments and it is still at a rudimentary stage despite great efforts to develop it. Therefore, the study tries to provide basic materials of social economy in Gimhae and seek for solutions to develop and revitalize it in the future. |
| Keywords: | Gimhae-si, social economy, policy |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:8209848&r=hme |
| By: | Mazzocchetti, Andrea; Lauretta, Eliana; Raberto, Marco; Teglio, Andrea; Cincotti, Silvano |
| Abstract: | The paper presents an agent-based model of a credit economy which includes a securitisation process and a bailout mechanism for banks' bankruptcies. Within this model's framework banks are able to sell mortgages to a Financial Vehicle Corporation, which finances its activity by creating Mortgage-Backed Securities and selling them to a mutual fund. In turn, the mutual fund collects liquidity by selling shares to households and remunerating them with a monthly interest rate. The impact of this mechanism is analysed by means of computational experiments for different levels of securitisation propensities of banks. Furthermore, we study a set of systemic risk indicators which have the aim to assess financial imbalances within the financial system. Two of them are the mortgage-to-GDP ratio and the Capital Adequacy Ratio which are constructed to detect only the in-balance sheet changes in banks' credit exposure. We consider two additional indicators, similar to the previous ones with the only difference that they are able to account also for the off-balance sheet items. Moreover, we introduce a novel indicator, the so-called VUC indicator, which also targets the off-balance assets. Results confirm that higher securitisation propensities weaken the financial stability of banks with relevant effects on different sectors of the economy. Most important, the analysis of systemic risk reveals the important issue of designing suitable systemic risk indicators for predicting incoming financial crises, finding that an essential feature of these indicators should be to integrate banks' off-balance sheet assets. |
| Keywords: | sytemic financial risk indicators, securitisation, housing market, agent-based models |
| JEL: | C63 G21 G23 R31 |
| Date: | 2018–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89779&r=hme |
| By: | Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Giovanni Dosi (Laboratory of Economics and Management); Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Laboratory of Economics and Management (LEM)); Sandro Sapio (Universita degli studi di Napoli "Parthenope" [Napoli]) |
| 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 marketbased 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; Transition; Energy policy; Growth |
| JEL: | C63 Q40 Q50 Q54 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5vt1fet9fq9o5pkgj2qh2vn1cm&r=hme |
| By: | Beqiraj, Elton; Fanti, Lucrezia; Zamparelli, Luca |
| Abstract: | In this paper, we look at structural change, and in particular at the shrinking size of manufacturing in favor of the service sector, as one additional source of decline in the wage share. To the purpose, we build on Dutt (1988) to develop a two-sector Kaleckian model of growth and distribution, where the economy consists of the service and manufacturing sectors. The service good is only used for consumption while the manufacturing good is used both for consumption and accumulation of the capital stock. We assume that structural change is exogenous as it arises from a shift in consumers' preferences. We show that, when mark-ups are relatively higher in the service sector, a shift in the sectoral composition of demand in favor of the service sector good generates a rise in the pro |
| Keywords: | structural change, functional income distribution, manufacturing, service |
| JEL: | D33 E11 O14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89558&r=hme |
| By: | Oliver Krebs |
| Abstract: | Despite their importance, little is known about the spatial structure of trade and production networks within Germany and their connection to the international markets. The lack of data is problematic for regional analysis of aggregate shocks such as trade agreements and to analyze network effects of regional policies. This paper takes an in-depth look at this German production structure and trade network at the county level based on a unique data set of county level trade. I find a surprisingly vast heterogeneity with respect to specialization, agglomeration and trade partners. The paper subsequently shows how to adapt recent advances in regionalization of input-output tables to derive an interregional input output table for 402 German counties and 26 foreign partners for 17 sectors that is cell-by-cell compatible with the WIOD tables for national aggregates and can be used for impact analysis and CGE model calibration. |
| Keywords: | Germany, regional trade, input-output tables, proportionality |
| JEL: | R15 R12 F17 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:bav:wpaper:182_krebs&r=hme |
| By: | Bernhard Michel; Caroline Hambÿe; Bart Hertveldt |
| Abstract: | For a finer analysis of global value chain integration and competitiveness, we develop and apply a method for a micro-data based breakdown of manufacturing industries in the 2010 Belgian supply-and-use tables into export-oriented and domestic market firms. The former are defined as those firms that export at least 25% of their turnover. We then derive export-heterogeneous national input-output tables which we integrate into a global table. Our analyses reveal that: a) export-oriented manufacturers have lower value-added in output shares and import proportionally more of the intermediates they use; b) exports of export-oriented manufacturers generate substantial value added in other Belgian firms, in particular providers of services; c) Belgium’s backward participation in global value chains is mainly due to export-oriented manufacturers and its forward participation is due to other firms, d) export-oriented manufacturers participate in value chains that comprise, on average, a greater number of upstream and downstream production stages and of which a greater share is located abroad. |
| JEL: | C67 D22 D57 F14 F15 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25155&r=hme |
| By: | Louise Philomène Mbaye |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tep:tepprr:rr18-04&r=hme |
| By: | Baki Guney Isikara (Department of Economics, New School for Social Research) |
| Abstract: | This paper is interested in the weight of essential goods and services in economic activity. The first measure is concerned with the sphere of production, which makes use of World Input-Output Tables to construct net-product subsystems so as to estimate the total (direct and indirect) share of essentials in aggregate product. The second measure approaches the same question from the sphere of consumption by relying on OECD data on household final consumption expenditures. The results lie roughly in the interval of 45-70% and 50-75% in the spheres of production and consumption, respectively, where the lower and upper bounds are given by essentials in the narrow and broad sense, respectively. Interesting patterns are captured by comparing different groups of countries. Moreover, evidence is found for the aggregate-level counterpart of Engel’s Law. The results have important implications when read in the context of the literature on the welfare state, de(commodification), universal basic income, and the need to adjust consumption and production in response to the looming ecological crisis. |
| Keywords: | Basic needs, essentials, subsystems, decommodification, planning |
| JEL: | B51 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1814&r=hme |
| By: | Laetitia Challe; Yannick L’Horty; Pascale Petit; François-Charles Wolff |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tep:tepprr:rr18-05&r=hme |
| By: | Josué Vladimir Ramírez Tarazona |
| Keywords: | Economía del medio ambiente; ética; responsabilidad social. Administration; Ethics; Social Responsibility |
| JEL: | O3 Q5 M1 M5 |
| Date: | 2017–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000418:016797&r=hme |
| By: | Durnin, Brian |
| Abstract: | James McGill Buchanan (1919-2013) received the Nobel Memorial Prize in 1986 for his work in public choice theory, set out in his The Calculus of Consent (1962), co-authored with Gordon Tullock. The Virginia School of Political Economy can be seen as a product of the work of Buchanan and Tullock, along with Ronald Coase, who published his ground-breaking paper on “The Problem of Social Cost” in 1960 while he was at the University of Virginia. This school of thought is generally thought to be in some ill-defined sense allied to the Austrian school of economics, mainly perhaps because of a shared pro-market policy stance. On the other hand, links between Buchanan and neoclassical economists such as Friedman and Stigler are frequently drawn, again probably with the pro-market policy recommendations of each in mind. It is notable that Buchanan, Hayek, and Friedman were all at various times presidents of the Mont Pelerin Society. Yet the differences between neoclassical and Austrian perspectives are profound. It has often been said that the one can be characterized as “equilibrium always” and the other as “equilibrium never”. The case of Buchanan and the Virginia School is therefore extremely interesting for the historian of economic thought. Significant questions are raised about the scope for reconciliation between schools of thought at the most profound levels of methodology and social philosophy. I posit that, allowing for a slight amount of breathing room, James Buchanan’s economic writings are more Austrian than anything else. From his earliest writings to his last publications, Buchanan clearly had an Austrian-leaning approach. Additionally, many of the criticisms he laid out about the economics profession were directed toward the more neoclassical minded among his peers. While the act of criticizing neoclassical economists does not indicate that Buchanan was an Austrian, it does seem to lay to rest any conclusions that he was a neoclassical economist himself. |
| Keywords: | James M. Buchanan; Virginia School of Political Economy; Austrian school of economics; neoclassical economics; public choice; history of economic thought; |
| JEL: | B30 B53 P16 |
| Date: | 2017–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89629&r=hme |