nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2019‒11‒18
25 papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. On the Role of Finance in Sraffa’s System By Dvoskin, Ariel; Feldman, Germán David
  2. Natural Resources in the Theory of Production: The Georgescu-Roegen/Daly versus Solow/Stiglitz Controversy By Quentin Couix
  3. Absolute Advantages and Capital Mobility in International Trade Theory By Bellino, Enrico; Fratini, Saverio M.
  4. The Profit Rate in Chile : 1900-2010 By Diego Polanco
  5. Economic Theories of the Household: A Critical Review By Mattila-Wiro, Paivi
  6. Group Functioning and Community Forestry in South Asia: A Gender Analysis and Conceptual Framework By Agarwal, Bina
  7. Gender and the Development Process in a Changing Global Environment By Moghadam, Valentine M.
  8. Eurozone periphery post-crisis - Financialisation and industrialisation in Slovenia and Slovakia By Ana Podvršič; Joachim Becker
  9. Co-production and the third sector: A comparative study of England and France By McMullin, Caitlin
  10. Individual Motivation, Its Nature, Determinants and Consequences for within Group Behaviour By Alkire, Sabina; Deneuluin, Severine
  11. Price Scissors, Rationing, and Coercion An Extended Framework for Understanding Primitive Socialist Accumulation By Sun, Laixiang
  12. Sex Workers in Calcutta and the Dynamics of Collective Action Political Activism, Community Identity and Group Behaviour By Gooptu, Nandini
  13. Pareto Models for Top Incomes By Arthur Charpentier; Emmanuel Flachaire
  14. Bullen, Bären, Krisen. Fatale Folgen idealistischer Wirtschaftstheorien By Stephan Schulmeister
  15. Global value chains and the shipbuilding industry By Karin Gourdon; Christian Steidl
  16. Sniff Tests in Economics: Aggregate Distribution of Their Probability Values and Implications for Publication Bias By Snyder, Christopher; Zhuo, Ran
  17. Social Protection on the Move: a transnational exploration of Nicaraguan migrant women’s engagement with social protection in Spain and Nicaragua By Guharay Gómez, C.G.
  18. Heterogeneity in the Extraction of Labor from Labor Power and Persistence of Wage Inequality By Eduardo Monte Jorge Hey Martins; Jaylson Jair da Silveira, Gilberto Tadeu Lima
  19. Technical Change, Income Distribution, and Profitability in Multisector Linear Economies By Weikai Chen
  20. Emergence of Unorthodox Ownership and Governance Structures in East Asia By Laixiang, Sun
  21. Political acceptability of climate policies : do we need a "just transition" or simply less unequal societies ? By Francesco Vona
  22. Selective publication of findings: Why does it matter, and what should we do about it? By Kasy, Maximilian
  23. Time for a Paradigm Shift: From Economic Growth andPrice-Making Markets to Social Ecological Economics By Spash, Clive L.
  24. Don't fall in common science pitfall! By Moustafa, Khaled
  25. Inequality and Transformation of Social Structures in Transitional Economies By Mikhalev, Vladimir

  1. By: Dvoskin, Ariel (National University of San Martín); Feldman, Germán David (National University of San Martín)
    Abstract: We critically review the previous attempts to introduce money and finance into Sraffa’s price system, whose main difference is, we argue, their conception of the interest rate, either as an opportunity cost or as an effective cost of production. We examine the implications on three different grounds: (i) the formal consistency of the system; (ii) the possibilities to explicitly treat the financial industry as any other productive sector; and (iii) the validity of the so-called “monetary theory of distribution” (MTD). We then suggest a possible route, inspired by Schumpeter’s ideas on economic development, to introduce the banking sector through its role of granting credit to innovation. Unlike previous contributions, this reformulation allows us both to justify the basic nature of the financial sector and simultaneously preserve the validity of MTD.
    Keywords: Banking industry; Innovation; Monetary theory of distribution; Sraffa; Surplus approach.
    JEL: E11 E43 E52
    Date: 2019–10–16
  2. By: Quentin Couix (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)
    Abstract: This paper provides a theoretical and methodological account of an important controversy between neoclassical resources economics and ecological economics, from the early 1970s to the end of the 1990s. It shows that the assumption of unbounded resources productivity in the work of Solow and Stiglitz, and the related concepts of substitution and technical progress, rest on a model-based methodology. On the other hand, Georgescu-Roegen's assumption of thermodynamic limits to production, later revived by Daly, comes from a methodology of interdisciplinary consistency. I conclude that neither side provided a definitive proof of its own claim because both face important conceptual issues.
    Keywords: Nicholas Georgescu-Roegen,Robert Solow,Joseph Stiglitz,natural resources,theory of production
    Date: 2019–10–24
  3. By: Bellino, Enrico (Università Cattolica del Sacro Cuore (Catholic University of the Sacred Heart)); Fratini, Saverio M. (Roma Tre University)
    Abstract: In this paper we will focus upon the role of absolute advantages in international specialization in connection with the phenomenon of capital mobility. We will provide a historical and analytical reconstruction of the main contributions, starting from the contrast between Smith’s and Ricardo’s standpoint on the issue. Two deep-rooted conclusions will be questioned by the analysis of this literature: (a) the unequivocal mutual benefits of opening up to international trade; and (b) the specialization of each country in the production of at least one good. With regard to this point, we will also provide a generalization of a result obtained by Parrinello (2010).
    Keywords: capital mobility; absolute advantage; specialization.
    JEL: B51 D24 F21
    Date: 2019–11–12
  4. By: Diego Polanco (Department of Economics, University of Massachusetts Amherst)
    Abstract: The interest of this paper is to discuss the main features that characterize the accumulation regimes that have taken place during the twentieth century in Chile. Understanding that a set of institutionalized compromises and political conflicts are inherent to any capitalist society, I rely on the body of literature of Marxist political economy, which focuses on the dynamics of profitability to describe its reproductive patterns. In light of this analysis, I argue that the main institutional transformations in Chilean history are better understood. I characterize long-waves of capitalist accumulation as accumulation regimes and identify three stages: early expansion, late expansion, and crisis. Using decomposition analysis, I identify recurrent patterns in each phase and also argue that the distributional conflict is historically contingent. Moreover, I implement a novel method proposed by Shaikh (2016) to identify the utilization rate, which allows me to discuss issues of aggregate demand in the decomposition analysis more accurately. Furthermore, I also discuss the relation of the process of urbanization with technical change relying on the Okishio-Marx debate. Finally, I argue that unlike previous accumulation regimes, the neoliberal period relies on reproductive patterns of profitability that makes it highly stable.
    Date: 2019
  5. By: Mattila-Wiro, Paivi
    Abstract: The aim of this paper is to review the principal assumptions and aspects of the unitary household model and collective models of household behaviour. Empirical studies are presented to assess whether the theories can offer adequate descriptions of household behaviour and to examine the types of policy implications that can be drawn from these. The paper concludes that the models reviewed lack the analytical tools to provide an understanding of the reality of households. Theories are unrealistic and therefore are of little use in the design of policies or projects which endeavour to help people.The review of the theories of the household shows that no particular approach is sufficiently advanced to dominate the field of household economics. Terminology used in household economic theories relies excessively on concepts from theories on consumer choice, or of the firm, and even on the theory of international trade (comparative advantage). These similarities cause problems when these well-known theories are utilized in an effort to understand the complex operations and behaviour of households in various cultures and societies.The neoclassical theories are basically founded on rather simplistic assumptions of human behaviour. They offer an easy way of eluding the intricate and challenging problems posed by households and their economic and social functions.To improve the well-being of the household (including all members) is not dependent on the application of market economy principles only. Non-market behaviour such as security, closeness, humanity, and social connections, is just as important.There is an urgent need to elaborate realistic household economic theories so as to break-out of the boundaries and limits that old theories have confined analysts and practitioners for so long. The development of a new economic theory of the household requires the incorporation of humane aspects of household operations into the theoretical assumptions. A completely new economic viewpoint should be adopted to see the human being and her economic operations through a broader framework which includes the market system as a special case.There is an urgent need - and this should not be underestimated - to design realistic household economic theories so as to overcome the confines imposed by the old theories on analysts and practitioners for so long. The development of a new economic theory of the household requires the brave incorporation of the humane aspects of household operations into theory assumptions. A completely new economic viewpoint should be adopted to see the human being and his economic operations in a broader framework which includes the market system as a special case.
    Keywords: International Development
  6. By: Agarwal, Bina
    Abstract: This paper examines group functioning in the management of common pool resources, such as forests. In recent years community forestry groups have mushroomed in South Asia. But how participative, equitable and efficient are they? Many have done well in the short run in terms of regenerating previously degraded lands. But are they reaping the full potential benefit of their efforts, and will they sustain? Equally, are the benefits and costs being shared equitably between rich and poor households and between women and men? The paper demonstrates that seemingly participative, equitable, and successful groups can reveal significant inequities and inefficiencies when viewed from a gender perspective. The paper also examines the factors that constrain women's (especially but not only poor women's) participation, and those that lead to gender inequitable outcomes. It argues that participation and distributional equity (and associated fallouts for efficiency) depend especially on rules, norms, perceptions, personal endowments and attributes, and household endowments and attributes. Reducing the gender bias embedded in these factors would depend on women's bargaining power with the State, the community and the family. The paper outlines the likely determinants of women's bargaining power in these arenas, and analyses ground experience in terms of progress made and dilemmas encountered.
    Keywords: International Development
  7. By: Moghadam, Valentine M.
    Abstract: Prior to the 1970s, the "problems of women", in the societies where their rights were recognized, were defined and dealt with by various movements and political groups in the context of moderating or eliminating legal and customary forms of discrimination. Another emphasis was on enforcing existing equai-rights legislation. Nevertheless, legal equality, constitutional safeguards for equal opportunities, and efforts towards more law enforcement were not sufficient to change the basic causes of gender inequality. In the industrialized world, the 'gender gap' in wages has narrowed, but only somewhat. In America, full-time female workers earned only 58% of full-time male workers' earnings in 1971, and 69% in 1988. The ratio of female to male hourly wages in the Industrial sector was about 65-70% in the 1980s (it was 50% in Japan, and 80-90% in Australia, Denmark, Norway and Sweden). The gaps are much wider in most of the developing countries not only in wages but also in most areas of life. There are also societies where human rights are not honoured or where the unequal position of women has been determined by cultural traditions. The limitations of the legal instruments and the strength of the cultural roots of gender inequalities reveal that the causes of inequalities are more widespread and much deeper. They are of a systemic nature, rooted in a patriarchal division of labour. The new women's movements have argued that major structural changes are needed in the inter-relationships between cultural, social, economic and institutional factors, and in the gender division of labour. Only those changes can secure the enlargement of women's choices and their full participation in society. The new understandings have also pointed to the need for an integrated framework for the study of gender relations and women's position — a framework that includes families and households, educational systems, employment structures, political institutions, and the world economy. UNU/WIDER's research work on gender issues has been carried out in this integrated framework from its inception. It has been focusing on those regions of the world where the problems were the most difficult and where the great majority of women are locked into the vicious circle of poverty, inequalities, unemployment and segregation. At the same time, it has been investigating changing patterns of female labour force participation, and the impact of economic restructuring on women's work and women's lives in developing countries and in the former state socialist countries.
    Keywords: International Development
  8. By: Ana Podvršič (Centre d'Economie de l'Université de Paris Nord (CEPN)); Joachim Becker (Institute for International Economics and Development, Department of Economics,WU Vienna University of Economics and Business)
    Abstract: The article provides a comparative study of Slovenia and Slovakia to analyse the transformation of dependent accumulation regimes in the Eurozone periphery after 2010. The study of these two economies from CEE is particularly insightful to understand how the Eurozone countries from the industrial periphery coped with the challenges of restructuring after the outbreak of the crisis. The article combines dependency and régulationist approaches to study European asymmetrical accumulation regimes. We argue that the post-crisis economic trajectories in CEE continue to reflect main traits of the pre-crisis asymmetrical relationship with the core. The key vulnerabilities are linked to the on-going reliance on FDI for export industrialisation, the narrow export specialisation, and, particularly in Slovakia, a rapid expansion of household debt. In Slovenia, under the EU supervision, the pre-crisis private debts were shifted to the public sector and henceforth burden public investment. Our findings suggest that financialisation as well the Eurozone monetary constraints should be systemically included in the analysis of post-crisis CEE growth trajectories. In addition, despite economic recovery, the accumulation regimes at Eurozone industrialised periphery continue to exhibit strong anti-labour bias.
    JEL: O11 O19 P16
    Date: 2019–11
  9. By: McMullin, Caitlin
    Abstract: This thesis explores co-production between citizens and third sector professionals in England and France. I focus on five community regeneration organisations in Sheffield, England, and five in Lyon, France, followed by an analysis of comparator organisations in two further sectors of activity – parents’ organisations, and projects to reduce older people’s loneliness. The research is based on 57 semi-structured interviews, as well as event observations and documentary analysis. I employ an analytical framework of institutional logics to explore the ways in which the rules, practices and narratives of the case study organisations are specific to their city and national contexts and how these in turn drive and shape co-production practices. The study finds that while the Sheffield organisations are characterised by an assimilation of the state, community and market logics, the Lyon organisations demonstrate a blend of a ‘Napoleonic state’ logic, and a ‘local solidarity’ (rather than community) logic. These different combinations of logics illuminate two approaches to co-production. In France, co-production is informed by notions of citizenship, solidarity and participative democracy, leading to a greater focus on citizen involvement in organisational governance and greater influence of rules as an enabler and constraint to co-production. In Sheffield, co-production is seen as a way to improve communities, services and outcomes, and we therefore see more pragmatic attention to co-design and co-delivery activities. This thesis provides an important contribution both to co-production theory as well as to policy and practice, by demonstrating some of the cultural and contextual subjectivity of co- production, which has been overlooked in previous studies. In addition, employing institutional theory to study co-production enables me to produce evidence of meso and macro level factors that influence co-production behaviour.
    Date: 2018–05–11
  10. By: Alkire, Sabina; Deneuluin, Severine
    Abstract: The paper deals with evaluating the adequacy of the assumption that in economic transactions people are self-interested insofar as they are motivated solely by the concern of maximizing their own utility, and in particular with assessing how this assumption affects within-group behaviour. Policy and incentive structures based on the assumption of exogenous and self-interest motivation can undermine other sources of motivation and have negative effects both on co-operative behaviour and also on economic efficiency. The paper sketches the motivational assumption of homo aconomicus: in the classical formulation, in rational choice theory and in Becker's later work which introduces personal and social capital into individual utility function. It then challenges the position that homo aconomicus contains an adequate characterization of human motivation for co-operative within-group behaviour. It introduces alternative motivational behaviours: philia and altruism, identity and self-expression, moral rules, intrinsic motivation and social norms. It argues that motivations are complex and multiple; a single assumption of utility maximization is insufficient for policy purposes. As the individual is always a social being, how she behaves will be dependent on the social context in which she is acting. If motivations are endogenous, and if under certain conditions maximizing motivation displaces other sources of motivation, then these indirect effects, and their long-term consequences for efficiency and equity, should be taken into account in framing economic policies.
    Keywords: International Development
  11. By: Sun, Laixiang
    Abstract: This paper re-examines the current debate on price scissors based on an extended framework, in which the production and trade of industrial consumer goods within the rural sector is incorporated. It confirms that in the economy considered by Preobrazhensky, consumer rationing, especially of industrial goods in rural areas, is prevalent. Under the binding rationing the price response of agricultural surplus cannot be determined theoretically. This finding reopens the field for empirical investigation. The paper identifies the conditions that guarantee the validity of Preobrazhensky's two propositions: (1) the state can increase its capital accumulation by moving the terms of trade against peasants, and (2) the urban workers need not necessarily suffer therefrom. It demonstrates that in order to ensure the validity of these two propositions, besides the need to assume positive price response of agricultural surplus and of labour force input, food rationing in urban areas and the rationing of major industrial consumer goods in rural areas are essentially required. As a consequence, the paper suggests that the price- scissors type of regulation would induce the state's coercion on peasants to collect their food surplus.
    Keywords: International Development
  12. By: Gooptu, Nandini
    Abstract: This paper explores the nature of collective action and group behaviour through a case study of a highly successful political organization of poorer sex workers in Calcutta. The paper asks: What stimulated the participation of sex workers in their organization, promoted individual commitment to the group, and engendered co-operative action and group cohesion? What contributed to its success in achieving well being and equity, and in making itself dynamic and sustainable?In answering these questions, three main arguments are highlighted. First, the paper emphasizes collective self-representation and expression of community identity as the motor of group activity, rather than the gratification of individual material needs, or subjective personal satisfaction. The attempt here is to go beyond an understanding of group behaviour based on methodological individualism which seeks to explain the operation of groups in terms of the benefits that individuals within a group derive as individuals from their participation in a collective. The paper argues that individuals cohere in a group from a genuine belief in the normative superiority of the collectivity, even when little direct or immediate benefit accrues to each individual from participating in such a collectivity. Second, the paper underscores how collective action is propelled by political initiatives to reconfigure extant power relations of domination and subordination, and the struggle to interrogate or challenge established norms of social hierarchy and distribution. This is a largely under-emphasized theme in the literature and practice of development, where 'politics' is usually seen in terms of making claims or advocacy in the interest of disadvantaged groups. This paper shows that the success of the DMSC as a dynamic group lies in outstripping precisely such a limited conception of politics. Finally, this paper demonstrates how political activism enabled the recasting of identity, reconstitution of the 'self' and redefinition of subjectivity. It shows how sex workers as political actors came to reconceptualize their own potentials as human subjects, which in turn helped them to sustain collective action and enlarge its scope.
    Keywords: International Development
  13. By: Arthur Charpentier (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, Département de Mathématiques [Montréal] - UQAM - Université du Québec à Montréal); Emmanuel Flachaire (EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Top incomes are often related to Pareto distribution. To date, economists have mostly used Pareto Type I distribution to model the upper tail of income and wealth distribution. It is a parametric distribution, with an attractive property, that can be easily linked to economic theory. In this paper, we first show that modelling top incomes with Pareto Type I distribution can lead to severe over-estimation of inequality, even with millions of observations. Then, we show that the Generalized Pareto distribution and, even more, the Extended Pareto distribution, are much less sensitive to the choice of the threshold. Thus, they provide more reliable results. We discuss different types of bias that could be encountered in empirical studies and, we provide some guidance for practice. To illustrate, two applications are investigated, on the distribution of income in South Africa in 2012 and on the distribution of wealth in the United States in 2013.
    Keywords: Pareto distribution,top incomes,inequality measures
    Date: 2019–05–31
  14. By: Stephan Schulmeister
    Abstract: In den Wirtschaftswissenschaften lassen sich zwei Theorietypen unterscheiden: Die "idealistische Ökonomie" geht von einem Idealzustand aus und untersucht die Bedingungen, unter denen dieser erreicht werden kann wie die Eigenschaften des "homo oeconomicus". Die „realistische Ökonomie“ geht vom Konkreten aus und berücksichtigt (daher) die "Polaritäten" des "homo humanus", der seine Erwartungen unter Unsicherheit bildet. Die Abfolge von Prosperität und Krise ("langer Zyklus") wird durch die Abfolge in der Dominanz realistischer bzw. idealistischer Theorien geprägt. So diente der Keynesianismus im "golden age" der 1950er- und 1960er-Jahre als "Navigationskarte" der Politik, die nachfolgende Krisenphase wurde umgekehrt von der restaurierten Neoklassik geprägt. Sie legitimierte die Liberalisierung der Finanzmärkte, deren "manisch-depressive" Schwankungen die Investitionsbereitschaft der Unternehmer und damit das Wirtschaftswachstum nachhaltig dämpften. Zusätzlich trugen die damit verbundenen Bewertungsänderungen von Vermögen und Verbindlichkeiten wesentlich zum Entstehen von Schulden- und Finanzkrisen bei.
    Date: 2019–11–10
  15. By: Karin Gourdon; Christian Steidl
    Abstract: This paper provides an initial assessment of the shipbuilding industry in the context of global value chains by presenting new descriptive evidence on value added generation and sourcing patterns of intermediate inputs for ship construction of major shipbuilding economies. The findings reveal that shipbuilding relies heavily on intermediate inputs as around 70-80% of the final output value of ship production is generated through supplier sectors. Concerning sourcing activity, China appears to be the most self-sufficient among the four jurisdictions studied, followed by Japan and the EU28, while Korea seems to be more globally integrated. The analysis also explores variations among the four economies in the cost structure of shipbuilding inputs, which might partly be explained by differences in the ship types produced.
    Keywords: global value chains, input output tables, shipbuilding, value added
    JEL: F14 L23 L62
    Date: 2019–11–14
  16. By: Snyder, Christopher; Zhuo, Ran
    Abstract: The increasing demand for rigor in empirical economics has led to the growing use of auxiliary tests (balance, specification, over-identification, placebo, etc.) supporting the credibility of a paper’s main results. We dub these “sniff tests” because standards for passing are subjective and rejection is bad news for the author. Sniff tests offer a new window into publication bias since authors prefer them to be insignificant, the reverse of standard statistical tests. Collecting a sample of nearly 30,000 sniff tests across 60 economics journals, we provide the first estimate of their aggregate probability-value (p-value) distribution. For the subsample of balance tests in randomized controlled trials (for which the distribution of p-values is known to be uniform absent publication bias, allowing reduced-form methods to be employed) estimates suggest that 45% of failed tests remain in the “file drawer” rather than being published. For the remaining sample with an unknown distribution of p-values, structural estimates suggest an even larger file-drawer problem, as high as 91%. Fewer significant sniff tests show up in top-tier journals, smaller tables, and more recent articles. We find no evidence of author manipulation other than a tendency to overly attribute significant sniff tests to bad luck.
    Date: 2018–11–30
  17. By: Guharay Gómez, C.G.
    Abstract: This research paper examines Nicaraguan migrant women’s engagement with transnational social protection (TSP) in Spain and Nicaragua. Although in recent years TSP has emerged as a relevant research agenda in migration studies, not much is known about the ways in which migrants, particularly women, navigate welfare systems and mobilize resources to access and provide social protection across borders. By approaching this study from a gender lens, and by privileging the voices of migrants, this work represents an innovative and original contribution to the growing scholarship on TSP. To grasp the transnational nature of ‘social protection on the move’, I have used a multi-sited methodology to conduct qualitative research Spain and Nicaragua, sequentially. Such a multi-sited approach provides an opportunity to understand the complex transborder processes in which migrants are embedded, and allows for a more holistic understanding of these transnational dynamics. Findings suggest that that Nicaraguan migrant women create assemblages of formal and informal social protection that intermingle state and non-state actors. Nonetheless, due to the exclusion or limited access to formal social protection schemes, participants mostly rely on informal sources of social protection, particularly personal networks and grassroots organizations. Furthermore, Nicaraguan migrant women’s experiences evidence that engagement with TSP is a gendered process, as strategies and practices embedded in social protection are shaped by gender notions in sending and host countries. As this paper evidences, migrants’ transnational lives require new ways of thinking and organizing social protection. Consequently, TSP will remain a relevant matter of contention in the fields of migration, social policy, and development in the foreseeable future. Based on these reflections, I finish by proposing policy recommendations for enhancing Nicaraguan migrant women’s social protection in Spain and Nicaragua, and for providing just, inclusive, and transformative social protection for people on the move.
    Keywords: transnational migration, social protection, migrant women, migratory trajectories, gender, Nicaragua, Spain
    Date: 2019–08–30
  18. By: Eduardo Monte Jorge Hey Martins; Jaylson Jair da Silveira, Gilberto Tadeu Lima
    Abstract: There is evidence that labor intensity is endogenous to wage compensation and that inter- and intra-industry wage differentials are non-negligible and persistent. We explore the implications of firms periodically choosing between alternative wage compensation strategies to extract labor from labor power more effectively. The frequency distribution of labor extraction strategies across firms is endogenously time-varying as driven by satisficing evolutionary dynamics that generate wage inequality as a stable long-run equilibrium under plausible conditions. Firms willing to extract more labor from labor power remunerate workers with a higher wage. Yet a larger proportion of firms following such strategy does not necessarily result in a lower (higher) unit labor cost (profit share) and hence in higher rates of profit and saving-determined output growth. The larger the proportion of firms that attempt to extract more labor from labor power by remunerating workers with a higher wage, the less these firms are successful. This result can be seen as characterizing another contradiction of the capitalist economy.
    Keywords: Labor power; work intensity; wage differential; evolutionary dynamics; income Distribution; output growth
    JEL: E1 O41 J31
    Date: 2019–11–12
  19. By: Weikai Chen (Department of Economics, University of Massachusetts Amherst)
    Abstract: This paper analyzes the effect of technical change on income distribution and profitability by comparing the long-run outcomes defined by a uniform profit rate in a multisector linear economy. We study three scenarios with (i) fixed real wage; (ii) fixed profit rate; or (iii) fixed wage-profit ratio, and show that any viable capital-using and labor-saving technical change itself (in the absence of power change) would bring about a fall in the rate of profit. Profit rate would not rise unless the technical change is so power-biased against the working-class that the wage-profit ratio can not be maintained. Our result conclusively supports the argument of the falling rate of profit due to a rising organic composition of capital as an underlying economic force.
    Keywords: Technical Change; Falling Rate of Profit; Okishio Theorem;
    JEL: B51 D33 D5
    Date: 2019
  20. By: Laixiang, Sun
    Abstract: This paper examines the nature of the unorthodox ownership and governance structures that are emerging among firms and the way these structures are supporting the remarkable economic growth in the transition economies of East Asia, as represented in particular by China and Vietnam. These economies are embarked on a distinctive process of property rights reform that resists widespread privatization in favour of evolutionary transformation. From the perspective that organizational innovation is an adaptive recombination and ownership is a bundle of rights, this paper focuses on an evaluation of the extent and consistency of property rights reform in the state-owned enterprise sector of these economies. It reveals the features of the ownership and governance structures of Chinese township-village-enterprises and their consequences for liability and incentives and justifies the fact that private entrepreneurs are typically willing to include community authority as an ambiguous owner or shelter within the embrace of state-owned enterprises. The paper also explores the conditions which have motivated the reform, the impact of property rights structure and reform on enterprise performance, and the relationship between adaptability and accountability.
    Keywords: International Development
  21. By: Francesco Vona (Observatoire français des conjonctures économiques)
    Abstract: This blog post is partly based on the policy paper published in the journal Climate Policy: ‘Job Losses and the Political Acceptability of Climate Policies: why the job killing argument is so persistent and how to overturn it.’ Concerns for a ‘just transition’ towards a low-carbon economy are now part of mainstream political debates as well as of international negotiations on climate change. Key political concerns centre on the distributional impacts of climate policies. On the one hand, the ‘job killing’ argument has been repeatedly used to undermine the political acceptability of climate policy and to ensure generous exemptions to polluting industries in most countries. On the other hand, the rising populist parties point to carbon taxes as another enhancer of socio-economic inequalities. For instance, the Gilets Jaunes (Yellow vest) movement in France is a classic example of the perceived tension between social justice and environmental sustainability.
    Keywords: Low carbon economy; Climate policy; Social justice; Environmental sustainability
    Date: 2019–10
  22. By: Kasy, Maximilian
    Abstract: This essay argues that different justifiable objectives for scientific institutions lead to contradictory recommendations. We need to be explicit about our objectives in order to discuss the tradeoffs between them. Replicability and the validity of conventional statistical inference constitute one such objective, and they indeed require that publication decisions do not depend on findings. This is what motivates much of current reform efforts. Validity of inference is presumably not the only objective, however -- it could easily be achieved by estimates derived from a random number generator. Relevance of findings might be another objective. If our goal is to inform decision makers or to maximize social learning, there is a strong rationale to selectively publish surprising findings. A third objective could be the plausibility of published findings. If there is some uncertainty about the quality of studies and we want to avoid publishing incorrect results, we might want to selectively publish unsurprising findings. How can we resolve the tension between these contradictory recommendations? I will outline one possibility below, proposing a functionally differentiated publication system, with different outlets focusing on different objectives. Measures that are promoted by current reformers, such as pre-analysis plans and registered reports, would have to play a crucial role in such a system. Following these policy proposals, I will take a step back and argue that these debates raise some fundamental questions for statistical theory. In order to coherently discuss these issues, statistical theory needs a model of the work of empirical research that goes beyond the single-agent model of statistical decision theory. We should understand statistics (quantitative empirical research) as a social process of communication and collective learning that involves many different actors with differences in knowledge and expertise, different objectives, and constraints on their attention and time, who engage in strategic behavior.
    Date: 2019–09–17
  23. By: Spash, Clive L.
    Abstract: Ecological economics has ontological foundations that inform it as a paradigm both biophysically and socially. It stands in strong opposition to mainstream thought on the operations of the economy and society. The core arguments deconstruct and oppose both growth and price-making market paradigms. However, in contradiction of these theoretical foundations, ecological economists can be found who call upon neoclassical economic theory as insightful, price-making and capitalist markets as socially justified means of allocation and economic growth as achieving progress and development. The more radical steady-state and post-growth/degrowth movements are shown to include confused and conflicted stances in relation to the mainstream hegemonic paradigms. Ecological economics personally challenges those trained in mainstream theory to move beyond their orthodox education and leave behind the flawed theories and concepts that contribute to supporting systems that create social, ecological and economic crises. This paper makes explicit the paradigmatic struggle of the past thirty years and the need to wipe away mainstream apologetics, pragmatic conformity and ill-conceived postmodern pluralism. It details the core paradigmatic conflict and specifies the alternative social ecological economic paradigm along with a new research agenda.
    Keywords: Paradigm shift; Economic growth; Markets, Price, Value theory, Social ecological economics, Steady-state economics, Degrowth, Post-Growth, Capitalism, Neoclassical economics, Socialism
    Date: 2019
  24. By: Moustafa, Khaled
    Abstract: The fundamental mission of science in providing knowledge and guidance for solving current and future challenges seems to be changing at accelerated pace, undoubtedly as a result of other economical, technological, and social deep changes. The trend is easily noticeable from an objective and neutral field toward an open, large, and unmerciful business market with many subjective and biased criteria for funding, hiring, promotion, and unscrupulous conducts in many cases. Due to a rubbish “publish-or-perish” mantra, the absence of ethical rules or the ignorance of their existence in a work environment, some scientists weave a kind of intentional or unintentional “tricks” to their way to do or to report science.
    Date: 2018–07–06
  25. By: Mikhalev, Vladimir
    Abstract: The transition to a market economy in Eastern Europe and the Former Soviet Union (FSU) has been associated with greater inequality and social stratification. Living standards have fallen for the majority of people, unemployment and poverty are high, the distribution of assets and earnings has changed radically, and social benefits have fallen. The social distance between the 'winners' and 'losers' of the reforms has widened dramatically. This paper prepared within the UNU-WIDER project on 'Income Distribution and Social Structure during the Transition' analyses trends in social stratification and their causes with the aim of drawing social policy conclusions. Social structures have been deeply affected by macroeconomic and social-sector reforms. Privatization shifted assets towards the wealthy while changes in labour markets have led to the rise in earnings inequality. In the pretransitional socialist societies which were stratified into 'status groups' where social capital rather than economic capital—and social networks rather than market power—determined a person's status. With the transition, people's prospects in life are being increasingly determined by their possession of assets, goods and income opportunities. This study considers emerging social classes and groups—a new elite—the product of rising capitalism, and the new commercial, managerial, and professional middle classes. The large majority of the population, however, consists of blue-collar workers, farmers, and state-sector employees bearing the social costs of the transition. The bottom of the social hierarchy has enlarged due to a considerable number of socially deprived and marginalized people who fell into long-term poverty. The slowly reforming economies of the FSU have particularly high inequality and social polarization. Central Europe's transition countries have shown smaller increases in income inequality. Many professional workers there, especially the young have successfully entered the market economy. In contrast, an extremely wealthy and powerful economic elite has emerged in Russia and some other FSU countries amidst impoverishment and deprivation of a large part of the population. Social polarization has large economic costs. Thus, a more active social policy—promoting better livelihoods and more investment in human capital—could have large economic returns. But there is also a need for more effective public transfers and income redistribution policies to alleviate and reduce poverty. Social cohesion cannot be ignored.
    Keywords: International Development

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