nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2019‒04‒29
twelve papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Karl Marx: An early post-Keynesian? A comparison of Marx's economics with the contributions by Sraffa, Keynes, Kalecki and Minsky By Hein, Eckhard
  2. Addressing urban sprawl from the complexity sciences By Bosch, Martí; Chenal, Jérôme; Joost, Stéphane
  3. Limits to green growth and the dynamics of innovation By Salvador Pueyo
  4. Mechanization in Nepalese agriculture: Potential knowledge gaps and significance By Avinash Gupta
  5. Winter is possibly not coming: Mitigating financial instability in an agent-based model with interbank market By Lilit Popoyan; Mauro Napoletano; Andrea Roventini
  6. Beyond Miracle and Malaise: Social Capability in Côte d’Ivoire and Senegal during the Development Era 1930-1980 By Andersson, Jens; Andersson, Martin
  7. Investment, autonomous demand and long run capacity utilization: An empirical test for the Euro Area By Gallo, Ettore
  8. Making Bicycling Equitable: Lessons from Sociocultural Research By McCullough, Sarah R; Lugo, Adonia; Stokkum, Rebecca van
  9. St. Thomas Aquinas and the Development of Natural Law in Economic Thought By Rashid, Muhammad Mustafa
  10. Karl Polanyi and economics: Polanyi's pendulum in economic science By Kretschmer, Mark
  11. Az altruista viselkedâs modellezâsi lehetâ¹sâgei By Karajz Sándor
  12. The Gender Promotion Gap: Evidence from Central Banking By Hospido, Laura; Laeven, Luc; Lamo, Ana

  1. By: Hein, Eckhard
    Abstract: This paper compares Marx's economics with those by Sraffa, Keynes, Kalecki and Minsky. The paper takes an "ex post" view on the matter and rather looks at the output side of the respective authors, but not at the input side. This means no attempt is made at studying in a systematic way, if and to what extent Sraffa, Keynes, Kalecki and Minsky were individually influenced by Marx's work. First, the relationship between Marx's theory of value and Sraffa's reformulation of the classical theory of prices and distribution is reviewed. Then the relationship between Marx's and Keynes's monetary theory is examined relying on an interpretation of Marx's theory of value as a "monetary theory of value". Next, some light is shed on the Marx-Kalecki connection focusing on Marx's theory of simple and extended reproduction and the built-in, although not fully elaborated "principle of effective demand" and the related theories of distribution and accumulation. Finally, Marx's and Minsky's views on financial instability and crises are scrutinised. It is concluded that Marx should not be considered as an "early post-Keynesian" but rather as an important forerunner of modern post-Keynesianism, with certain similarities, but also some important differences, and several areas of compatibility.
    Keywords: Marx,Kalecki,Keynes,Minsky,Sraffa,comparison of economic theories
    JEL: B14 B24 B50 B51 E11 E12
    Date: 2019
  2. By: Bosch, Martí; Chenal, Jérôme; Joost, Stéphane
    Abstract: Urban sprawl is nowadays a pervasive topic that is subject of a contentious debate among planners and researchers, who still fail to reach consensual solutions. This paper reviews controversies of the sprawl debate and argues that they owe to a failure of the employed methods to appraise its complexity, especially the notion that urban form emerges from multiple overlapping interactions between households, firms and governmental bodies. To address such issues, this review focuses on recent approaches to study urban spatial dynamics. Firstly, spatial metrics from landscape ecology provide means of quantifying urban sprawl in terms of increasing fragmentation and diversity of land use patches. Secondly, cellular automata and agent-based models suggest that the prevalence of urban sprawl and fragmentation at the urban fringe emerge from negative spatial interaction between residential agents, which seem accentuated as the agent’s preferences become more heterogeneous. Then, the review turns to practical applications that employ such models to spatially inform urban planning and assess future scenarios. A concluding discussion summarizes potential contributions to the debate on urban sprawl as well as some epistemological implications.
    Keywords: urban sprawl; complexity; land use change; landscape metrics; spatial pattern; fractals; cellular automata; agent-based models; urban planning
    JEL: C63 O18 R11 R14 R20 R30 R40 R52
    Date: 2019–04–24
  3. By: Salvador Pueyo
    Abstract: Central to the official "green growth" discourse is the conjecture that absolute decoupling can be achieved with certain market instruments. This paper evaluates this claim focusing on the role of technology, while changes in GDP composition are treated elsewhere. Some fundamental difficulties for absolute decoupling, referring specifically to thermodynamic costs, are identified through a stylized model based on empirical knowledge on innovation and learning. Normally, monetary costs decrease more slowly than production grows, and this is unlikely to change should monetary costs align with thermodynamic costs, except, potentially, in the transition after the price reform. Furthermore, thermodynamic efficiency must eventually saturate for physical reasons. While this model, as usual, introduces technological innovation just as a source of efficiency, innovation also creates challenges: therefore, attempts to sustain growth by ever-accelerating innovation collide also with the limited reaction capacity of people and institutions. Information technology could disrupt innovation dynamics in the future, permitting quicker gains in eco-efficiency, but only up to saturation and exacerbating the downsides of innovation. These observations suggest that long-term sustainability requires much deeper transformations than the green growth discourse presumes, exposing the need to rethink scales, tempos and institutions, in line with ecological economics and the degrowth literature.
    Date: 2019–04
  4. By: Avinash Gupta (South Asia Watch on Trade, Economics and Environment)
    Abstract: The essay evidences that while the dominant narrative on mechanization is essentially about large farms, capital intensive equipment and canal irrigation system, a less-highlighted, "heterodox" strand in scholarship provides evidence that there are major differences in the way countries like India and Bangladesh have progressed in mechanization. Although there are overlaps in the two strategies, the paper argues that recognizing the differences has scholarship and policy significance for Nepal and for the rest of the region if an effective mechanization strategy is to be devised. The paper observes that if India’s mechanization is largely explained by the dominant approach, made feasible by its fiscal, institutional and industrial capacity, Bangladesh’s mechanization is based on small, inexpensive and multipurpose equipment. Indeed, Bangladesh achieving significant mechanization despite sustained land fragmentation has especial salience for Nepal. In Nepal, like Bangladesh, smallholders form the bulk of farmer households while fragmentation is on the rise. Moreover, rapid emigration to foreign lands for work has created labour shortages on the farm while, owing to the agriculture sector stagnation and remittance-driven credibly rising consumption capabilities, imports of agricultural goods are soaring. Credible policy support in mechanization is identified as having contributed to Bangladesh’s success. While much of the agriculture mechanization scholarship on Nepal finds that mechanization is low and confined to specific geography such as the Tarai plains, the paper contends, drawing out of some estimation efforts from a less-discussed strand of the literature, that the prevailing narrative may be simplistic, if not erroneous. The argument is that the analytical frame used in much of the existing scholarship is narrow as it does not consider small equipment largely because of ideological and political reasons; indeed, much of the existing knowledge is based on the dominant paradigm. The essay contendsthat, inter alia, this potentially preventsformation of a credible picture which can then be exercised in devising policy interventions for increasing mechanization; considered a potent tool to shore up stagnant agricultural productivity. Upon broadening the analytical frame, i.e., inclusion of small equipment, there is suggestive evidence (quantitative estimates in, for instance, some case- studies) to indicate that rural mechanization, driven by inexpensive small equipment, may well be occurring in Nepal; including in the hills and mountains, areas considered poorly mechanized in the existing literature. Interestingly, much of even the dominant paradigm literature does make some passing references to small equipment-drive mechanization and that this has resulted in efficient agronomic practices in certain pockets. The article contends that to devise a suitable mechanization strategy, there is need for more research on this dimension of farm mechanization, beginning with a credible analysis of rural capital goods that does not equate mechanization with the use of large equipment.
    Keywords: Mechanization dynamics in Nepal, Current understanding and potential knowledge gaps
    Date: 2018–12
  5. By: Lilit Popoyan; Mauro Napoletano; Andrea Roventini
    Abstract: We develop a macroeconomic agent-based model to study how financial instability can emerge from the co-evolution of interbank and credit markets and the policy responses to mitigate its impact on the real economy. The model is populated by heterogenous firms, consumers, and banks that locally interact in different markets. In particular, banks provide credit to firms according to a Basel II or III macro-prudential frameworks and manage their liquidity in the interbank market. The Central Bank performs monetary policy according to different types of Taylor rules. We find that the model endogenously generates market freezes in the interbank market which interact with the financial accelerator possibly leading to firm bankruptcies, bank- ing crises and the emergence of deep downturns. This requires the timely intervention of the Central Bank as a liquidity lender of last resort. Moreover, we find that the joint adoption of a three mandate Taylor rule tackling credit growth and the Basel III macro-prudential frame- work is the best policy mix to stabilize financial and real economic dynamics. However, as the Liquidity Coverage Ratio spurs financial instability by increasing the pro-cyclicality of banksù liquid reserves, a new counter-cyclical liquidity buffer should be added to Basel III to improve its performance further. Finally, we find that the Central Bank can also dampen financial in- stability by employing a new unconventional monetary-policy tool involving active management of the interest-rate corridor in the interbank market.
    Keywords: financial instability; interbank market freezes; monetary policy; macro-prudential policy; Basel III regulation; Tinbergen principle; agent-based models.
    Date: 2019–04–24
  6. By: Andersson, Jens (Department of Economic History, Lund University); Andersson, Martin (Department of Economic History, Lund University)
    Abstract: This paper investigates the outcome of the efforts to economically catch up during the so-called development era in French speaking West Africa. An attempt is made to measure and discuss key elements of social capability over the period 1930-1980 in Côte d'Ivoire and Senegal following Moses Abramovitz' interpretation of social capability. The paper distinguishes between four elements of social capability: degree of structural transformation, social and economic inclusion, the state's autonomy and its accountability. We find that there was significant but uneven progress in social capability in both countries during the development era. Despite their differences in economic performance both countries confronted fundamental shared challenges. Most notably, our analysis highlights how persistent lack of broad-based access to economic opportunities played a significant role in disrupting sustained economic and social progress in the two countries. This gives an opportunity to reflect on similarities and differences between the development era and the recent African growth phase.
    Keywords: Social capability; Africa; Developoment; Transformation; Colonialism
    JEL: N17 O11 O47 O55
    Date: 2019–04–17
  7. By: Gallo, Ettore
    Abstract: In recent years, the role attached to the autonomous components of aggregate demand has attracted rising attention, as testified by the development of the Sraffian Supermulti plier model (SSM) and the attempts to include autonomous demand in the Neo-Kaleckian model. This paper reviews and empirically tests the validity and the policy conclusions of the two models in the Euro Area. First, we theoretically assess whether the SSM may con stitute a complex variant of the Neo-Kaleckian model. In this sense, it is shown that results compatible with the SSM can be obtained by implementing a set of mechanisms in a modified Neo-Kaleckian model, leading to the convergence towards a desired rate of utilization. Furthermore, the chief diffierence between the models is recognized to be the role attached to the rate of capacity utilization in the long run. Second, the paper empirically tests the main implications of the models in the Euro Area, based on Eurostat data. In particular, the discussion outlines the short and long-run relation between autonomous demand and output, by testing both the cointegration and the direction of causality between the two with a VECM model. Moreover, the role accounted by both theories to the actual rate of capacity utilization and its discrepancies from the normal rate is empirically assessed, through a time-series estimation of the Sraffian and Neo-Kaleckian investment functions. While confirming the theoretical relation between autonomous demand and output in the long run, the results show that the dynamics of the rate of capacity utilization still plays a key role in the short-run adjustment mechanism - despite its stationary behaviour in the long term. Therefore, admitting that Keynesian results may hold even after the traverse, our work suggests to be Kaleckian in the short run and Sraffian in the long run.
    Keywords: distribution,effective demand,Eurozone,growth,Neo-Kaleckian,Sraffian,Supermultiplier
    JEL: B51 E11 E12 O41 O47 O52
    Date: 2019
  8. By: McCullough, Sarah R; Lugo, Adonia; Stokkum, Rebecca van
    Abstract: This white paper provides guidance for how planning, policy, and advocacy may better account for complex sociocultural forces, including gender, class, and race. The authors reviewed a large body of sociocultural research on bicycling with complex models capable of addressing an intersectional understanding of identity, the innerworkings of power in society, and the nature of inequity. These findings coalesced into four recommendations for those promoting bicycling as a mode of everyday transportation: (1) Extend what it means to embrace difference; (2) Recognize that the streets are not equally safe for all; (3) Engage in a meaningful way with marginalized communities and share decision-making power; and (4) Understand how local and national histories of injustice influence and relate to current bicycling planning processes. Integrating these recommendations into advocacy, policy, and planning can lead to greater equity in representation, distribution of resources, and decision-making in promoting bicycling. System-wide implementation of these recommendations will create the greatest impact on improving issues of equity, diversity, and inclusion in bicycling. This requires broad-scale interventions, including but not limited to, training, changes to funding and decision-making structures, valuing long-term community engagement and community knowledge, broadening measures to street safety, and considering historic inequality.
    Keywords: Social and Behavioral Sciences, Bicycling, bicycle culture, subjectivity, identity, inequality, sociodemographic
    Date: 2019–04–01
  9. By: Rashid, Muhammad Mustafa
    Abstract: Building on the system of reason provided for by the Greek philosopher and specifically Aristotle, St. Thomas Aquinas built a comprehensive system and theory of natural law which has lasted through the ages. The theory was further developed in the Middle Ages and in the Enlightenment Ages by many a prominent philosopher and economist and has been recognized in the Modern Age. The natural law-theory and system has been repeatedly applied to the spheres of economic thought and has produced many lasting contributions such as private property rights and individual rights. In recent times with the collapses of the financial system and rapid globalization, there has been a renewed interest in the application of natural law theory to economics to counter a certain anthropology and distortion of values created by a modern economic system of self-preservation deriving its insights from the philosophies of Thomas Hobbes and Niccolo Machiavelli.
    Keywords: St. Thomas Aquinas, Natural Law and Economics, Scholasticism, Morality and Markets, Law and Economics
    JEL: B0 B1 K0 K4
    Date: 2019–05–19
  10. By: Kretschmer, Mark
    Abstract: Since the crisis of 2008 the liberal market order has been challenged by several (populist) social movements and has become object of political regulation. Whereas in the late 70s and early 80s politics tend to deregulate the market, nowadays deregulation seem to be a synonym for the negative externalities of a free global market. Following Polanyi (The Great Transformation, 1944), societies with market market economies tend to experience a double movement - the Polanyi's Pendulum - between phases in which the policies are designed to restrict the markets or liberalize them. This paper raises the question if these indicated changes have an impact on the economic research topics. Referring to modern Varieties-of-Capitalism literature bibliometric data of the period between 1950 and 2015 are used to analyze if there is a Polanyi's Pendulum within the economic literature. Looking for specific key words, e.g. liberalization, and using correlation analyses and time-series regressions it is possible to determine changes of the topics economists worked on and to identify those economic macro-forces that have been driven these changes. The political development in recent years can be considered as a new swing of Polanyi's pendulum. Economics itself is part of the double movement. A second look at Polanyi's might be fruitful to face present challenges better equipped.
    Keywords: political economy,double movement,bibliometry,Varieties of Capitalism,economics
    Date: 2019
  11. By: Karajz Sándor (University of Miskolc)
    Abstract: A modern t rsadalmi folyamatokban (t rsadalmi felelâ¹ssâgv llal s, t rsadalmi innov ci¢, stb.) elâ¹târbe ker�l az altruista viselkedâsi forma. A XX. sz zad m sodik felâig a neoklasszikus elvek  ltal domin lt mainstream kâzgazdas gi ir nyzat az ânârdekkâvetâst ârtelmezte alapelvkânt. Az elm£lt 20-30 âvben jelentek meg nagyobb sz mban olyan t¡pus£ kâzgazdas gi elemzâsek, amelyek az eml¡tett, altruista magatart si elvet elfogadt k, beemeltâk az elkâpzelâseik kâzâ. A tanulm nyban âsszefoglaljuk a k�lânbâzâ¹ diszcipl¡n k altruizmus defin¡ci¢j t, majd bemutatjuk az altruizmus legfontosabb modellezâsi form it, âs megvizsg ljuk, hogy a modellek kâvetkeztetâsei mennyire vannak âsszhangban val¢s szitu ci¢kban hozott dântâsekkel.
    Date: 2019–04–09
  12. By: Hospido, Laura; Laeven, Luc; Lamo, Ana
    Abstract: We examine gender differences in career progression and promotions in central banking, a stereotypical male-dominated occupation, using confidential anonymized personnel data from the European Central Bank (ECB) during the period 2003-2017. A wage gap emerges between men and women within a few years of hiring, despite broadly similar entry conditions in terms of salary levels and other observables. We also find that women are less likely to be promoted to a higher salary band up until 2010 when the ECB issued a public statement supporting diversity and took several measures to support gender balance. Following this change, the promotion gap disappears. The gender promotion gap prior to this policy change is partly driven by the presence of children. Using 2012-2017 data on promotion applications and decisions, we explore the promotion process in depth, and confirm that during this most recent period women are as likely to be promoted as men. This results from a lower probability of women to apply for promotion, combined with a higher probability of women to be selected conditional on having applied. Following promotion, women perform better in terms of salary progression, suggesting that the higher probability to be selected is based on merit, not positive discrimination.
    Keywords: central banking; gender gaps; promotions; working histories
    JEL: J16 J31 J41 J63
    Date: 2019–04

This nep-hme issue is ©2019 by Carlo D’Ippoliti. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.