nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2019‒12‒09
nineteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Technical progress, capital accumulation, and distribution By Naoki Yoshihara; Roberto Veneziani
  2. Keynes Between the Classics and Sraffa: on the Issue of the Numéraire By M. Magnani
  3. The complexity of the intangible digital economy: an agent-based model By Bertani, Filippo; Ponta, Linda; Raberto, Marco; Teglio, Andrea; Cincotti, Silvano
  4. Employment and Wages over the Business Cycle in Worker-Owned Firms: Evidence from Spain By Jose Garcia-Louzao
  5. Journal of History of Economic Thought Preprints- Ricardo and Ricardians on the Order of Culivation By , BIDARD
  6. Gender gap in public good preferences in Africa: Do gender norms matter? By Oulimata Ndiaye
  7. Organizational Hybridity, Dissonance and the Emergence of the US Green Building Council By Duckles, Beth M
  8. Cities, from information to interaction By Netto, Vinicius M.; Brigatti, Edgardo; Meirelles, João; Ribeiro, Fabiano L.; Pace, Bruno; Cacholas, Caio; Sanches, Patricia Mara
  9. How Behavioural Economics Relates to Psychology - Some Bibliographic Evidence By Braesemann, Fabian
  10. 3 enfants, 1 flûte : le choix des principes de justice chez Amartya Sen By Muriel Gilardone
  11. Economic homeostasis through negative feedback in the market using a floating taxation policy: an initial insight By Abramov, Dimitri Marques
  12. Who Said or What Said? Estimating Ideological Bias in Views Among Economists By Javdani, Mohsen; Chang, Ha-Joon
  13. Incorporating Conditional Morality into Economic Decisions By David Masclet; David L. Dickinson
  14. Shortcomings of experimental economics to study human behavior: a reanalysis of Cohn et al. 2014, Nature 516, 86–89, ‘‘Business culture and dishonesty in the banking industry’’ By Hupé, Jean-Michel
  15. American Gothic: How Chicago Economics Distorts `Consumer Welfare` in Antitrust By Mark Glick
  16. Journal of the History of Economic Thought Preprints - The Environmental Turn in Natural Resource Economics: John Krutilla and "Conservation Reconsidered" By Banzhaf, H. Spencer
  17. Focusing economic research on the issues of sustainability and environmental protection By ARTENE, Alin
  18. Le devenir du libéralisme By Jean-Luc Gaffard
  19. Theories of the Causes of Poverty By Brady, David

  1. By: Naoki Yoshihara (School of Management, Kochi University of Technology); Roberto Veneziani (Queen Mary University of London)
    Abstract: We study the effects of innovations on income distribution in capitalist economies characterised by a drive to accumulate. Consistent with the basic intuitions of Marx’s theory of technical change, we show that there is no obvious relation between ex-ante profitable innovations and the income distribution that actually emerges in equilibrium, and individually rational choices of technique do not necessarily lead to optimal outcomes. Innovations may even cause the disappearance of all equilibria. Methodologically, it is not possible to fully understand the ‘creative destruction’ induced by innovations without capturing the dialectic between individual choices and aggregate outcomes, and the complex network of relations typical of capitalist economies.
    Keywords: technical change, income distribution, profit rate
    JEL: O33 D33 B51
    Date: 2019–11
  2. By: M. Magnani
    Abstract: The paper sketches a coherent history of the choice of the measure standard from Adam Smith’s Wealth of Nations to Sraffa’s Production of Commodities. As neither the Smithian labour commanded unit nor the Ricardian-Marxian labour embodied one provide a general solution to the dilemma concerning the finding of an invariable standard, the author shows the shortcomings of both methods in an analytically rigorous way. Several years later, the largely unacknowledged fourth chapter of the General Theory once again tackles the matter of measuring aggregate values adopting a net approach and introducing an ad hoc unit. Concerned by the inherent difficulties of the operation, Keynes starts from an harsh criticism towards Pigou’s notion of national dividend to end up asking himself a number of questions that makes him partially lean towards the later Sraffian approach as presented in Production of Commodities, though his stance is not fully compliant either with the premises or the aims of Piero Sraffa’s theoretical framework. In the final part, a general solution based on net labour productivity is considered.
    JEL: B12 B14 B24 B51
    Date: 2019–11
  3. By: Bertani, Filippo; Ponta, Linda; Raberto, Marco; Teglio, Andrea; Cincotti, Silvano
    Abstract: During the last decades, we have witnessed a strong development of intangible digital technologies. Software, artificial intelligence and algorithms are increasingly affecting both production systems and our lives; economists have started to figure out the long-run complex economic implications of this new technological wave. In this paper, we address this question through the agent-based modelling approach. In particular, we enrich the macroeconomic model Eurace with the concept of intangible digital technology and investigate its effects both at the micro and macro level. Results show the emergence of the relevant stylized facts observed in the business domain, such as increasing returns, winner-take-most phenomena and market lock-in. At the macro level, our main finding is an increasing unemployment level, since the sizeable decrease of the employment rate in the mass-production system, provided by the higher productivity of digital assets, is usually not counterbalanced by the new jobs created in the digital sector.
    Keywords: Intangible assets, Digital transformation, Technological unemployment, Agent-based economics
    JEL: C63 D24 O33
    Date: 2019–11–21
  4. By: Jose Garcia-Louzao (Bank of Lithuania)
    Abstract: This paper compares worker-owned firms and mainstream capital-owned enterprises over the business cycle. Specifically, I study whether conventional employees in worker-owned firms enjoy greater employment stability than similar workers in traditional enterprises over the business cycle, and investigate whether this stability is associated with greater volatility of working-time or wages. Unlike the literature that has compared partners of cooperatives to wage-earners of mainstream firms, I compare wage-earners across both type of organizations along the three margins of adjustment. To perform the econometric analysis, I rely on rich Spanish administrative data and panel data methods to account for composition differences between the two types of organizations. The results show that worker-owned firms offer higher job security because they do not adjust employment levels over the business cycle as much as mainstream enterprises. Wages and working-time, instead, are equally responsive across the two types of firms. The findings can be rationalized by the presence of similar labor regulations and differences in the objectives of the two type of organizations. Namely, both types of firms are constrained by regulations, such as the national Labor Code and collective bargaining, on the adjustments they can impose on wages and working-time. However, the social nature of worker-owned firms mitigates employment volatility in these organizations.
    Keywords: Worker-owned firms, Employment, Wages, Working-time, Cyclicality
    JEL: J21 J31 J54
    Date: 2019–11–29
  5. By: , BIDARD
    Abstract: The Ricardian dynamics are based on the study of the order of cultivation when demand increases. Sraffa criticized Ricardo for having assumed that the incoming method is defined by a natural order and stressed that the law of succession of methods is based on a profitability criterion. Then, in the case of intensive cultivation, the question is whether the incoming method is indeed more productive than the one it replaces. Sraffa’s argument relies on the positivity of rent. However, there is a flaw in his reasoning and a failure of the Ricardian dynamics is possible. Post-Sraffian scholars have misunderstood that construction and have substituted a static approach for it. The critiques they address to Sraffa are better understood by returning to Ricardo and Sraffa's own methodology. Fifty years ago, mathematicians rediscovered Ricardo's approach independently and worked out a powerful algorithm inspired by it.
    Date: 2018–03–14
  6. By: Oulimata Ndiaye (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I present new evidence on how norms and traditions can affect women's public good preferences in Africa. A substantial literature has examined the determinants of gender differences in political attitudes. Existing work has found a gender gap in public good preferences. However, there are few attempts to explain this gap. In this article, I aim to investigate whether the preferences of men and women differ in Africa, and if so, to explore the source of the observed gender differences. The choice of Africa is meaningful as very few works on gender preferences have been done in this region where the weight of tradition is strong regarding the role of men and women in the society. Using Afrobarometer data for 36 African countries, I investigate whether and how the preferences of men and women differ. The results show that norms about the role of women play a role in explaining differences in gender preferences. Women in Africa have systematically a preference for social field (education, health) and less preference for additional investment in infrastructure, regardless of their level of empowerment or the prevailing norm on gender role. However, in countries where gender norms are less favorable to women, women report higher preferences in agriculture, closing the gender gap with men.
    Keywords: Gender gap,Social norms,Tradition,Policy priorities
    Date: 2019–11–15
  7. By: Duckles, Beth M
    Abstract: The emergence of the US Green Building Council’s (USGBC) provides a unique case study into the organizational change strategies of a hybrid organization. As a nonprofit, social movement organization the USGBC seeks to create change in the marketplace by encouraging more sustainable building practices through a voluntary standards. As they have done so, their organizational processes have begun to draw from regulatory agencies and firms to accomplish this aim. Through the use of multiple organizational processes and forms, the USGBC works with stakeholder groups to respond to change and dissonance in a way that is congruent with Stark’s (2009) theory on heterarchy. Heterarchical thinking about the utility of dissonance and the importance of the distribution of intelligence within a hybrid organization has implications for the ability for these organizations to respond quickly as the industry and stakeholder needs change.
    Date: 2018–10–12
  8. By: Netto, Vinicius M.; Brigatti, Edgardo; Meirelles, João; Ribeiro, Fabiano L.; Pace, Bruno; Cacholas, Caio; Sanches, Patricia Mara
    Abstract: From physics to the social sciences, information is now seen as a fundamental component of reality. However, a form of information seems still underestimated, perhaps precisely because it is so pervasive that we take it for granted: the information encoded in the very environment we live in. We still do not fully understand how information takes the form of cities, and how our minds deal with it in order to learn about the world, make daily decisions, and take part in the complex system of interactions we create as we live together. This paper addresses three related problems that need to be solved if we are to understand the role of environmental information: (1) the physical problem: how can we preserve information in the built environment? (2) The semantic problem: how do we make environmental information meaningful? and (3) the pragmatic problem: how do we use environmental information in our daily lives? Attempting to devise a solution to these problems, we introduce a three-layered model of information in cities, namely environmental information in physical space, environmental information in semantic space, and the information enacted by interacting agents. We propose forms of estimating entropy in these different layers, and apply these measures to emblematic urban cases and simulated scenarios. Our results suggest that ordered spatial structures and diverse land use patterns encode information, and that aspects of physical and semantic information affect coordination in interaction systems.
    Date: 2018–07–10
  9. By: Braesemann, Fabian
    Abstract: Whether behavioural economics has a fundamental influence on economics is debated by behavioural and heterodox economists as well as by methodologists and historians of economics. At the core of this debate is the question whether behavioural economics is shaped by large-scale content imports from psychology, or whether these transfers have been too selective to challenge dominant approaches in economics. This study contributes to the debate in analysing a variety of bibliographic data from the disciplinary boundary between economics and psychology. Two datasets from the boundary of behavioural economics and psychology are compared to sets of economic and psychology publications in quantifying the use of mathematics, the share of empirical contributions, the authors’ academic background, and their cross-citations via network analysis. In contrast to proposals made by some methodologists and behavioural economists, the statistical results confirm content transfers from psychology via behavioural economics only to a limited extend. The observed level of interaction provides evidence for a selective import of specific psychological findings by a small number of established investigators in behavioural economics. These findings were then intensively debated as divergences from rationality within the growing, but econ-centered community of behavioural economists.
    Date: 2018–08–22
  10. By: Muriel Gilardone (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)
    Abstract: A travers l'exemple de trois enfants se disputant une flûte, Sen montre que nos conceptions de la justice sont plurielles et souvent contradictoires. Aucun expert ne saurait trancher sur quelle base la société doit choisir. Cette incomplétude ne doit pas empêcher un débat public éclairé.
    Keywords: Théories de la Justice,Amartya Sen,Débat public,Incomplétude,Impartialité ouverte
    Date: 2019–08
  11. By: Abramov, Dimitri Marques
    Abstract: The market economy is contemporaneously considered as a complex adaptive system, chaotic and far from equilibrium. However, there are no feedback mechanisms that provide stability to the system. In this preliminary essay, I outline the fundamental idea of a floating taxation system to compensate for the market oscillations of goods, growth and profit of companies and their socio-environmental impact, promoting the long-term stability of the economic system.
    Date: 2018–10–16
  12. By: Javdani, Mohsen (University of British Columbia, Okanagan); Chang, Ha-Joon (University of Cambridge)
    Abstract: There exists a long-standing debate about the influence of ideology in economics. Surprisingly, however, there is no concrete empirical evidence to examine this critical issue. Using an online randomized controlled experiment involving 2425 economists in 19 countries, we examine the effect of ideological bias on views among economists. Participants were asked to evaluate statements from prominent economists on different topics, while source attribution for each statement was randomized without participants' knowledge. For each statement, participants either received a mainstream source, an ideologically different less-/non-mainstream source, or no source. We find that changing source attributions from mainstream to less-/non-mainstream, or removing them, significantly reduces economists' reported agreement with statements. This contradicts the image economists have of themselves, with 82% of participants reporting that in evaluating a statement one should only pay attention to its content. Using a framework of Bayesian updating we examine two competing hypotheses as potential explanations for these results: unbiased Bayesian updating versus ideologically-/authority-biased Bayesian updating. While we find no evidence in support of unbiased updating, our results are consistent with biased Bayesian updating. More specifically, we find that changing/removing sources (1) has no impact on economists' reported confidence with their evaluations; (2) similarly affects experts/non-experts in relevant areas; and (3) has substantially different impacts on economists with different political orientations. Finally, we find significant heterogeneity in our results by gender, country, PhD completion country, research area, and undergraduate major, with patterns consistent with the existence of ideological bias.
    Keywords: ideology, ideological bias, authority bias, Bayesian updating, views among economists
    JEL: A11 A14
    Date: 2019–10
  13. By: David Masclet; David L. Dickinson
    Abstract: We present a framework that incorporates both moral motivations and fairness considerations into utility. The main idea is that individuals face a preference trade-off between their material individual interest and their desire to follow moral norms. In our model, we assume that moral motivation is conditional and may be influenced by others’ actions. Specifically, in our framework moral obligation is a combination of two main components: an autonomous component and a social influence component that captures the influence of others. Our framework is able to explain many stylized results in the literature and to improve theories of economic behavior. Key Words: Fairness, Ethical Decision Making, Moral Motivation, Behavioral Economics
    JEL: B3 D6 D9
    Date: 2019
  14. By: Hupé, Jean-Michel
    Abstract: In the wake of financial scandals, Cohn and collaborators published a headline-grabber study in the field of behavioral economics. M.C. Villeval (2014) summarized the main message as follows, in News and Views of the Nature issue where the Cohn study was published: the “experiment shows that although bank employees behave honestly on average, their dishonesty increases when they make decisions after having been primed to think about their professional identity.” Cohn et al. thus provide evidence that “the incentives and the business culture developed in the financial sector may undermine the honesty norms of ordinary employees.” This study may have important consequences for policy, since, Villeval continues, “it is crucial to ensure a business culture of honesty in this industry to restore trust in it.” Villeval also argues that “from a scientific perspective, this study […] supports the economic theory of social identity […], links this theory with the economic analysis of lying behavior [… and] shows how behavioural economists can contribute to a broader reflection in science about how people manage their 'multiple selves' ”. Here I show that the use of flawed statistics methods, yet employed routinely in so-called “evidence-based” science, led the authors to distort the “evidence”. I am also using this data-set as an interesting example to explore how we can use modeling and simulations to provide a fair account of the information and uncertainty conveyed by the data, based on Confidence Intervals. I provide the R-code. Based on this paper, I question the contribution of behavioral economics to the understanding of human behavior and conclude with considerations on honesty and science.
    Date: 2018–03–20
  15. By: Mark Glick (University of Utah)
    Abstract: Since the publication of Robert Bork`s The Antitrust Paradox, lawyers, judges, and many economists have defended `Consumer welfare` (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
    Keywords: U.S. Consumer Welfare, Goal of Antitrust Law, New Brandeis School, Chicago School of Economics.
    JEL: K21 L40 N12
  16. By: Banzhaf, H. Spencer
    Abstract: Environmentalism in the United States historically has been divided into its utilitarian and preservationist impulses, represented by Gifford Pinchot and John Muir, respectively. Pinchot advocated conservation of natural resources to be used for human purposes; Muir advocated protection from humans, for nature's own sake. In the first half of the 20th century, natural re-source economics was firmly in Pinchot's side of that schism. That position began to change as the post-war environmental movement gained momentum. In particular, John Krutilla, an economist at Resources for the Future, pushed economics to the point that it could embrace Muir's vision as well as Pinchot's. Krutilla argued that if humans preferred a preserved state to a developed one, then such preferences were every bit as "economic." Either way, there were opportunity costs and an economic choice to be made.
    Date: 2018–05–21
  17. By: ARTENE, Alin
    Abstract: Trying to find solutions for trivalent durability (economic / financial, social and environmental issues) is becoming more and more a preoccupied concerns of many specialists. In this paper we make some references to the Romanian researchers focus on the issue of sustainable development, especially with Professor Ionel Bostan, which operates at the universities of Iasi and Suceava (RO). His work, published in several scientific journals indexed in international databases, addresses issues related to promoting natural capital, the right of future generations to a healthy environment, eco-investments, green tourism, green energy, environmental audit, economy and public health financing and then, because "People are at the forefront of sustainable development”, issues related to the human factor.
    Date: 2018–05–15
  18. By: Jean-Luc Gaffard (OFCE Sciences-Po; Université Côte d'Azur; GREDEG CNRS; Institut Universitaire de France)
    Abstract: Le néo-libéralisme actuel fait figure de résurgence de l'utopie du marché autorégulé. Ses effets destructeurs, aujourd'hui comme hier, sont à l'origine d'un retour du politique oscillant entre nationalisme et autoritarisme, d'un côté, libéralisme social de l'autre. Ce défi, identifié par Polanyi en son temps, nous rappelle qu'aucune société n'est possible sans pouvoir ni obligation. Suivant les néo-libéraux, pour qui le but souhaitable reste une économie de marché mondialisée censée être débarrassée de tout pouvoir, il appartient au pouvoir politique de mettre en œuvre les réformes nécessaires pour que les individus s'adaptent aussi vite que possible à cette donne. Cette recherche de flexibilité et d'adaptabilité tranche avec un libéralisme social qui fait dépendre la viabilité des changements inhérents au capitalisme de l'existence de mécanismes de stabilisation rendant les adaptations lentes et progressives : un libéralisme qui n'exclut ni le pouvoir, ni la contrainte.
    Keywords: autoritarisme, communauté, grande transformation, laissez-faire, libéralisme social, néo-libéralisme, pouvoir, utopie du marché
    JEL: A12 B15 B25 P16
    Date: 2019–11
  19. By: Brady, David
    Abstract: There has been a lack of debate between and frameworks for theories of the causes of poverty. This essay proposes that most theories of poverty can be productively categorized into three broader families of theories: behavioral, structural, and political. Behavioral theories concentrate on individual behaviors as driven by incentives and culture. Structural theories emphasize the demographic and labor market context, which causes both behavior and poverty. Political theories contend that power and institutions cause policy, which causes poverty, and moderates the relationship between behavior and poverty. I review each theory’s arguments, contributions and challenges. Further, I explain how to integrate, classify studies into, and distinguish between theories. Ultimately, I argue that poverty research would benefit from more explicit theory and theoretical debate, as well as greater interdisciplinarity and integration between studies of the U.S., rich democracies, and developing countries.
    Date: 2018–10–15

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