nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒02‒08
twenty papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Linking of credit cooperatives with local societies: the Indian experience By Lakshmi Arakkathara Jayan; Shanmugham Dhanan Jayan
  2. Does Gender Status Translate into Economic Participation of Women? Certain Evidence from Kerala By Kumar B, Pradeep
  3. "The Economic Problem: From Barter to Commodity Money to Electronic Money" By Jan Kregel
  4. Competitive Strategy : a multifaceted Strategy ? By Jules-Alain Ngan
  5. The difficult task of changing while growing By Marwil J. Dávila-Fernández; Serena Sordi
  6. 3EID and Waste IO: the state of environmentally extended Input-Output Analysis in Japan By Shinichiro Nakamura
  7. A socialist price system: answering the Austrians By McMullen, David
  8. Class-crossing wealth circulation, profit rate and monetary remedy — an ideological experiment about capitalism system By Yang, Jinrui
  9. COVID-19 Crisis Economic By Julia M. Puaschunder
  10. Work, wealth, and welfare From Islamic perspective By Hasan, Zubair
  11. La performance di cooperative e società di capitali dal 2008 al 2015 nelle Province di Trento e Bolzano By Eddi Fontanari; Carlo Borzaga; Chiara Carini
  12. How to Identify Investor's types in real financial markets by means of agent based simulation By Filippo Neri
  13. Heterodox Economic Cycles Theories By Julia M. Puaschunder
  14. On the typicality of the representative agent By Teglio, Andrea
  15. Archeologia di comunità : il caso di Schería comunità cooperativa di Tiriolo (CZ) come nuovo modello di riferimento By Germana Scalese; Jacopo Sforzi; Ricardo Stocco
  16. Feasible Institutions of Social Finance: A Taxonomy By Simon Cornée; Marc Jegers; Ariane Szafarz
  17. A Minimal Probabilistic Minsky Model: 3D Continuous-Jump Dynamics By Greg Philip Hannsgen
  18. The financial fragility of European households in the time of COVID-19 By Maria Demertzis; Marta Domínguez-Jiménez; Annamaria Lusardi; Bruegel
  19. Review of Work-Life Balance Theories By Zainab Bello
  20. The Impact Assessment of the EU Pre-Accession Funds on Agriculture and Food Companies: The Croatian Case By Marin Kukoc; Bruno Skrinjaric; Josip Juracak

  1. By: Lakshmi Arakkathara Jayan; Shanmugham Dhanan Jayan
    Abstract: An inclusive involvement of the entirety of the population is the desirable model of development. Each local society and community has its own features and interests and there is a need of organisations that are capable of catering them. The cooperative form of organisation is suited in addressing the needs of local communities and contributing to social and economic aspects of the civil society. The extent of this achievement of cooperatives depends on their efficiency. The organisational structure and the operational model have to be developed taking into consideration the requirements of the local communities. India as a country is characterised by a high diversity in multiple aspects. In such a context, the priority must be to reach out to the local communities and identify their needs. A collective and inclusive development of the local population will contribute to the larger development of the country as a whole. The creation of cooperative forms of organisations and a proper structuring of them is required for achieving this objective of reaching out to the local community. This paper is an attempt to analyse the structure and functioning of credit cooperatives in India and to assess to what extent the same is conducive for connecting the local societies.
    Keywords: Cooperatives, Credit cooperatives, India, Local development
    JEL: Q13 J54 H74
    Date: 2020
  2. By: Kumar B, Pradeep
    Abstract: Many indicators of gender inclusiveness show that Kerala has been much ahead of other states in ensuring the welfare of females. It needs to be reiterated that in the case of both education and health, women in Kerala stand quietly at the receiving ends as the beneficiaries rather than the agents of economic and social change. The women inclusive way of progress does not necessarily confine itself to the widening of education and health opportunities for women, but it largely and more positively depend on the effective participation of women in economic activities. It is disheartening that if we probe into the status of women from these yardsticks of ‘active’ economic participation, the picture of gender equality appears more discouraging in Kerala which has been acclaimed as a ‘model’ for not only other states in the country but also for other countries in the world. A secular decline in Work Participation Rate for women in labour market clearly shows that education does not aid women to add themselves to the labour market. Economists and sociologists offer many plausible explanations for this absconding nature of educated and skilled women from the labour market. The real gender inclusion and women empowerment will be fulfilled only when women start actively engaging in productive fields using their knowledge and entitlements.
    Keywords: Gender status, Women Empowerment, Work Force Participation, Active Agents, Unemployment, Decision Making, Economic Participation
    JEL: A10
    Date: 2020–02–07
  3. By: Jan Kregel
    Abstract: The success of alternative payment systems has led to discussion of various proposals to replace money with a new technology-based system, though many lack a clear idea of what exactly is the "money" they seek to replace. We begin by presenting the explanation of money's role in the economy embraced by most mainstream economists and policy analysts, based on the idea that money evolved out of the process of market exchange. An alternative explanation that looks on money as a part of the organization of production and distribution based on network clearing systems across balance sheets expressed in a common unit of account is then presented, distinguishing between a purely notional unit of account and means of settlement or discharge of debt. The final section addresses the possibility of a fundamentally different modern extension of this alternative approach that is not inspired by digital technology, distributed ledger accounting, or application operating on a mobile/cell phone system, but rather the actually existing system available from an internet telephone service provider that currently offers subsidiary domestic and international payment services whose operating procedures come close to replicating the alternative explanation of money mentioned above, with the potential to provide all the services of the existing payments system at lower costs and greater stability.
    Keywords: Banking Principle; Clearing Union; Imaginary Money; Money; Payment Systems; Unit of Account;
    JEL: B5 E42 E50 G2
    Date: 2021–01
  4. By: Jules-Alain Ngan (UNISTRA - Université de Strasbourg)
    Abstract: This Summary Note focuses on the Analysis of competitive Strategy studied in managerial Economics. This seems to be relevant as a Synthesis of the Strategies drawn from Game Theory and Management. To the substantive Rationality or perfect Rationality highlighted in economic Theory — which consists in referring to the optimal Result to define a Strategy — we prefer the limited Rationality or procedural Rationality according to which Individual uses the Possibilities available to solve the Problems, the Process being as satisfactory and important as the optimal Result which could be obtained in a complex economic Environment.
    Abstract: Cette note de synthèse porte sur l'analyse de la stratégie compétitive étudiée en économie managériale. Celle-ci semble pertinente en tant que synthèse des stratégies tirées de la théorie des jeux et du management. À la rationalité substantive ou rationalité parfaite mise en évidence en théorie économique — qui consiste à se référer au résultat optimal pour définir une stratégie — nous préférons la rationalité limitée ou rationalité procédurale selon laquelle on se sert des possibilités dont on dispose pour résoudre les problèmes auxquels on est confronté, le processus dans lequel on est engagé étant aussi satisfaisant et important que le résultat optimal qu'on pourrait éventuellement obtenir dans un environnement économique complexe.
    Keywords: Strategy,Game Theory,Management,managerial Economics.,stratégie,théorie des jeux,management,économie managériale.
    Date: 2020–01–23
  5. By: Marwil J. Dávila-Fernández; Serena Sordi
    Abstract: This article develops a small-scale agent-based model to investigate the interplay between heterogeneous agents, institutions and technological change. By acknowledging the concept of behavioural dispositions, we di¤erentiate between changers, neutrals, and deniers. Our research question is further motivated using data from the last two waves of the World Values Survey. The composition of the population is endogenously determined taking into account that reasoning is context-dependent. As we increase the degree of interaction between agents, a bi-modal distribution with two different basins of attraction emerges: one around an equilibrium with the majority of the population supporting innovative change, and another with most agents being suspicious of innovation. Neutral agents play an important role as an element of resilience. Conditional on their share in equilibrium, an increase in the response of the respective probability functions to growth results in a super-critical Hopf-bifurcation, followed by the emergence of persistent fluctuations. Numerical experiments on the basin of attraction also reveal the birth of a periodic hidden attractor. The long-run cycles we obtain indicate that economies are more likely to be path-dependent than what conventional approaches usually admit. As the productive structure evolves, the institutional framework is transformed and reinforces technological change in a cumulative way.
    JEL: O11 O33 P11
    Date: 2021–01
  6. By: Shinichiro Nakamura (Faculty of Political Science & Economics, Waseda University)
    Abstract: Japanese IO tables are one of the largest in the world. Taking advantage of this situation, highly original contributions were developed in the area of environmental IOA. This report focuses on 3EID, an IObased database on embodied greenhouse gas GHG emissions developed in the National Institute for Environmental Studies (NIES) and waste IO (WIO) developed by Nakamura and Kondo. Besides its high level of resolution in terms of sectoral disaggregation, the originality of 3EID consists in its explicit consideration of the physical relationships between input structure and emissions, which are mostly neglected in major international IO databases with GHG emissions. WIO has integrated waste generation and recycling within the framework of extended IOA in a highly general and flexible fashion. Recently, the Japanese Ministry of the Environment (MOE) developed and published its official WIO table, the first WIO officially developed and made public.
    Date: 2020–08
  7. By: McMullen, David
    Abstract: According to the Austrian economists, even with everyone’s best efforts, a system based on social ownership of the means of production could not effectively deploy a decentralized price system. An examination of the key writings on the question by Mises, Hayek and Lavoie reveals that this view rests on very shaky ground.
    Date: 2021–01–13
  8. By: Yang, Jinrui
    Abstract: Abstract This paper, assuming the class-crossing wealth circulation in a capitalism economy can process in order, focuses on the influence of the wealth circulation speed on the profit rate in the capitalism system. Taking no account of the influence of the profit rate on the investment incentive or the money needed due to the economic growth, this paper finds, for preserving a desired profit rate the money quantity in the system should be larger when the circulation slows down. If the economic growth rate is positive, a slow wealth circulation will lead to a low equilibrium profit rate. Then for preserving the desired profit rate a large quantity of the increased money per unit time from outside is needed. In the transition period from a fast circulation to a slow circulation, the total money quantity also should jump upward to offset the money short before. If there is no economic growth, in the equilibrium state no increased money is needed, but in the transition period the total money quantity should be increased for preserving the profit rate unchanged. This paper also finds, the increased money per unit time needed for preserving the profit rate increases with the economic growth rate when it is very low but decreases with it when it is large, however the total money needed always decreases with the economic growth rate.
    Keywords: wealth circulation, profit rate, capitalist household, wealth, total money, increased money
    JEL: E11 E12 E2
    Date: 2020–01–01
  9. By: Julia M. Puaschunder (The New School, Department of Economics, School of Public Engagement, New York, USA)
    Abstract: The currently ongoing novel Coronavirus-crisis is an external shock coming down on society with direct impact on societal moods and subsequently connected economic changes. With growing digitalization and quickening of transfer speed, information exchange in the individual involvement to break trends online on a global scale may impose unknown systemic risks in causing social volatility in international economics. Research may explore how human beings’ communication and interaction results in socially constructed volatility that echoes in economic correlates. This paper theoretically covers the history of heterodox economic cycles in order to then propose to explore the role of communication and temporal foci in pandemic communication to create social volatility underlying economic downturns.
    Keywords: Affect, Collective moods, Communication, Consumption, Coronavirus, COVID-19, Digitalization, Economic fundamentals, External shock, Information, Lockdown, News, Pandemic, Social volatility, Socio-Economics, Socio-Psychological Foundations, 2008/09 World Financial Crisis
    Date: 2020–12
  10. By: Hasan, Zubair
    Abstract: Work, wealth, and welfare constitute the divine integrative for keeping humans on road to mundane prosperity and spiritual solace. The instruction is to spread in the land after the morning prayers in search of sustenance as manna no more falls from the heaven. And no one gets more than what he works for unless God wills it. There is no limit on having wealth through permissible means but hoarding of wealt is prohibited to curb its concentration in few hands. Personal gains can be sacrificed if that would improve the lot of the weak and the deprived. Maximization of social welfare is the goal, not of individual or sectarian gains. Such must be the basics of an economic system to be called Islamic. This essay elaborates the three concepts – work, wealth and welfare elaborating their mutual relationships in an Islamic framework It investigates the position on ground in Muslim countries.
    Keywords: Work; wealth; welfare; Basic needs; Income floors, social inequalities
    JEL: J3 O5 P36
    Date: 2020–11
  11. By: Eddi Fontanari; Carlo Borzaga; Chiara Carini
    Abstract: Da qualche tempo i media, gli attori sociali e gli amministratori pubblici stanno dedicando una particolare attenzione alle difficoltà del sistema cooperativo trentino, ma con una tendenza a soffermarsi su specifiche realtà , senza affrontare invece la questione in termini generali, attraverso un’analisi sistematica dell’intero settore e della sua evoluzione. Risulta quindi non solo utile, ma necessario, provare a fare qualche passo avanti nella riflessione, da una parte analizzando i comportamenti di tutte le imprese per capire la portata e la diffusione dei problemi e, dall’altra, articolando l’analisi sia per aree e settori che per forme giuridiche. Il presente articolo intende perciò approfondire il ruolo delle diverse forme di impresa nel sistema economico trentino, per fornire successivamente una valutazione comparata, dapprima, con la vicina provincia di Bolzano e, in seguito, con l’intera economia italiana. Questo approfondimento si tradurrà quindi in un utile esercizio per verificare la tenuta delle evidenze rilevate in questi anni dalle ricerche di Euricse anche rispetto al quadro economico-occupazionale della regione Trentino-Alto Adige.
    Keywords: Cooperative, Società di capitali, Performance
    JEL: L25 P12 P13
    Date: 2020
  12. By: Filippo Neri
    Abstract: The paper proposes a computational adaptation of the principles underlying principal component analysis with agent based simulation in order to produce a novel modeling methodology for financial time series and financial markets. Goal of the proposed methodology is to find a reduced set of investor s models (agents) which is able to approximate or explain a target financial time series. As computational testbed for the study, we choose the learning system L FABS which combines simulated annealing with agent based simulation for approximating financial time series. We will also comment on how L FABS s architecture could exploit parallel computation to scale when dealing with massive agent simulations. Two experimental case studies showing the efficacy of the proposed methodology are reported.
    Date: 2020–12
  13. By: Julia M. Puaschunder (The New School, Department of Economics, School of Public Engagement, New York, USA)
    Abstract: Overall the following article innovatively paints a novel picture of the mass psychological underpinnings of business cycles based on information flows in order to recommend how certain communication strategies could counterweight and alleviate the building of disastrous financial market mass movements. Acknowledging that human beings are connected to and interact with each other in families, ties and larger networks of states, nations and intergovernmental institutions, studying the role of information in building socially-constructed economic correlates promises to explain how market outcomes are developed in the social compound and can be guided by media communication. Addressing problems of the neoclassical assumption of perfect information markets through the lens of ‘real competition,’ the following paper will specifically unravel how contemporary media communication produces certain types of price expectations that form consumption patterns leading to collectively-shared economic outcomes. An introduction to the history of economic cycles will lead to the analysis of the role of information in creating economic booms and busts in the age of globalization. Applying emergent risk theory onto economic fluctuations will serve as an innovative way to explain how and what information represented in the media creates economic ups and downs. Linguistic roots of news about the economy are aimed at shedding light on how media representations and temporal foci echo in economic correlates and shape market outcomes. As business cycles are a collective phenomenon, group interactions’ potential contribution to create business cycles will innovatively be outlined and the role of information flows among groups in creating price expectations unraveled. Business cycles will also be shown to obey some kind of natural complexity, as for being whimsically influenced by socio-historic and political trends. Recommendations how to create more stable economic systems by avoiding emergent risks and communicating market prospects more cautiously will be given in the discussion followed by a prospective future research outlook and conclusion.
    Keywords: Affect, Collective moods, Communication, Consumption, Coronavirus, COVID-19, Digitalization, Economic fundamentals, External shock, Information
    Date: 2020–12
  14. By: Teglio, Andrea
    Abstract: The aim of this paper is to explore under which conditions a representative agent (RA) model is able to correctly approximate the output of a more realistic model based on the "true" assumption of many interacting agents. The starting point is the widespread Keynesian cross diagram, which is compared to an extended versions that explicitly considers a multiplicity of interacting households and firms, and collapses into the original model when the number of agents is one per type. Results show that the RA Keynesian cross diagram model is not a good approximation of the extended model when (i) the network structure of the economy is not symmetric enough, e.g. firms have different sizes, or (ii) the rationality of agents is not high enough. When income inequality is considered, through the introduction of capitalists, the representative agent model is no more a good approximation, even if the agents are rational. A fiscal policy that targets income redistribution improves the prediction of the RA model. In general, all features that increase overall rationality in the economy and decrease its heterogeneity, tend to improve the performance of the RA approximation.
    Keywords: macroeconomics; rationality; inequality; Keynesian cross-diagram; representative agent; agent-based models; networks; simulation; complex adaptive systems
    JEL: C63 E00 E12
    Date: 2020–10–10
  15. By: Germana Scalese; Jacopo Sforzi; Ricardo Stocco
    Abstract: Il lavoro analizza in che modo i beni culturali e, più specificamente, i beni storico-archeologici possano rappresentare un potente driver di sviluppo locale. Se gestiti dalla comunità locale nella quale sono collocati attraverso la partecipazione diretta di tutti i soggetti che la costituiscono - dai cittadini alle amministrazioni locali alle imprese private - è possibile costruire reti di relazione dinamiche funzionali alla creazione di valore socio-economico attorno a questi beni. Nel caso di Schería Comunità Cooperativa di Tiriolo (CZ), qui studiato, l'iniziativa promossa dalla comunità locale si è concretizzata nella realizzazione di un'impresa di comunità . Questa ha portato ad un nuovo approccio verso la gestione pubblico-privata dei beni archeologici, definito "Archeologia di Comunità ", capace di coniugare le esigenze di tutela e di valorizzazione dei beni archeologici in quanto tali e le opportunità di sviluppo socio-economico del territorio.
    Keywords: Archeologia di comunità , Patrimonio culturale, Imprese di comunità , Cooperazione, Beni comuni, Sviluppo locale
    JEL: A14 L31 L32 B55 L83 P13
    Date: 2020
  16. By: Simon Cornée; Marc Jegers; Ariane Szafarz
    Abstract: This paper unpacks the continuum of social finance institutions (SFIs), ranging from foundations offering pure grants to social banks supplying soft loans. The in-between category includes under-researched “quasi-foundations” granting loans requiring partial repayment. We develop a model under which SFIs maximize their social contribution arising from financing successful social projects, under a budget constraint dictated by their funders. Our model determines the feasibility of each SFI category and reveals that quasi-foundations are efficient and adapted to environments with low market rates. Finally, we show that value-based unconditional reciprocity from SFI borrowers can elicit a so-called “hold-up” effect, whereby the SFI maximizing its social contribution charges a high interest rate to its loyal clients.
    Keywords: Social Finance; Philanthropy; Foundations; Social Banks
    JEL: G21 D63 G24 H25
    Date: 2021–01–28
  17. By: Greg Philip Hannsgen (Greg Hannsgen's Economics Blog (US))
    Abstract: This paper proposes a formalization of Hyman P. Minsky’s theory of financial instability. The model includes private-sector borrowing, capacity utilization, and the stock of private-sector debt. The model is based on self-reinforcing borrowing and output dynamics that repeatedly come to a sudden stop, with discontinuous downward jumps in the three variables. The paper treats as endogenous the instantaneous probability of a jump and the size distribution of jump vectors. Formally, the model comprises three ordinary differential equations and a compound Poisson process, with jumps drawn from a heavy-tailed stable distribution. The paper shows it can be stated in three equations in the jump differentials and the usual differentials. A section sketches a nonlinear mechanism that can bound the system. The paper analyzes the dynamics of a simplified version of the main model and a more-SFC model with feedbacks from debt to borrowing and capacity utilization via debt-service effects. The paper reports (1) eigenvalues for the linear parts of both the simplified analytical model and a numerical example of the more-SFC model, (2) a phase diagram for the analytical model, and, (3) analytical stability conditions for the more-SFC model. The model replicates the upward instability and abrupt crises of Minsky’s theory.
    Keywords: Minsky model, paradox of debt, Poisson process, financial crisis, dynamical macroeconomic model, Hyman P. Minsky, stable distribution, stock-flow consistency, theory of financial instability, dynamical systems, cádlág process, John Maynard Keynes
    Date: 2021–01
  18. By: Maria Demertzis; Marta Domínguez-Jiménez; Annamaria Lusardi; Bruegel
    Abstract: • The concept of household financial fragility emerged in the United States after the 2007-2008 financial crisis. It grew out of the need to understand whether households’ lack of capacity to face shocks could itself become a source of financial instability, in addition to risks to the stability of banks and the greater financial system. The concept goes beyond assessing the level of assets and encompasses the state of household...
    Date: 2020–07
  19. By: Zainab Bello (Faculty of Business Management, Alasala University, Dammam, Saudi Arabia Author-2-Name: Garba Ibrahim Tanko Author-2-Workplace-Name: Department of Public Administration, Usmanu Danfodiyo University Sokoto, 840104, Sokoto, Nigeria Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - This paper's objective is to make a comprehensive compilation of the various theories used in studies of work-life balance (WLB) in order to understand their usage. Methodology/Technique - Based on past literature, this paper focused on review of relevant literature from various online data bases as well as manual texts of studies on WLB with particular attention on the theories used. Using descriptive layout, the paper gives adequate review of WLB theories. Finding - This paper found that there are numerous prevailing theories on WLB explaining the relationships in various WLB studies. Such as Overall Appraisal, Structural Functionalism, Enhancement, Facilitation, Segmentation Spill-over, Compensation, Conservation, Conflict, Human Capital, Congruence, Ladder, Instrumental, Resource drain, Ecology, Border, Boundary and Integration Theories. Based on literature, this paper found that Boundary theory and Border theory are the two major foundation theories used in many studies to explain the different aspects of WLB. Novelty - This paper found that there are no universally accepted theories for WLB. Theories used on WLB studies depend on the range of the study's framework, variables or perspectives of the study. This leads to omissions or overlapping in frameworks.
    Keywords: Work-life Balance; WLB Concepts; Work-Life Balance Theories; Family-Work
    JEL: B54 D63 E24 J24
    Date: 2020–12–31
  20. By: Marin Kukoc (University of Zagreb, Faculty of Agriculture); Bruno Skrinjaric (The Institute of Economics, Zagreb); Josip Juracak (University of Zagreb, Faculty of Agriculture)
    Abstract: The EU pre-accession funds available to EU candidate countries play an important role in their adjustment for membership. Croatia, as a candidate country, used the Special Pre-Accession Program for Agriculture and Rural Development and the Instrument for Pre-Accession Assistance - Rural Development, one of the goals of which was to strengthen the competitiveness of businesses in the agriculture and food production sectors. The usage period covered two EU programming periods, as well as a recession period in Croatia that lasted from 2009 to 2014. An insight into the available literature reveals a lack of rigorous research and evaluation of the results of using these funds in Croatia as well as in other beneficiary countries. This paper evaluates the effect of pre-accession EU grants on beneficiaries in the agri-food sector using a quasi-experimental approach on the case of Croatia. The grants were shown to have a positive effect on firm survival, as well as positive effects on obtaining bank loans and increasing turnover, value added, employment, and total factor productivity. Heterogeneous treatment effects show that the grants resulted in the greatest additionality for micro-sized firms located in Central Croatia. Cost-benefit analysis estimates an increase in the value added, which outweighs scheme-induced costs by 120 percent in the short run and 90 percent in the mid run.
    Keywords: public grants, policy evaluation, SAPARD, IPARD
    JEL: B54 J16 H81 L26 L38 H43
    Date: 2020–02

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