nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒05‒31
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Institutional Aspects of Capital in Joan Robinson's 'Rules of the Game': Rentier versus Entrepreneurs in Managerial Capitalism By Yara Zeineddine
  2. John Tomer's Reconceptualization of the Concept of Human Capital By John B. Davis
  3. Mission-Oriented Policies and the "Entrepreneurial State" at Work: An Agent-Based Exploration By Giovanni Dosi; Francesco Lamperti; Mariana Mazzucato; Mauro Napoletano; Andrea Roventini
  4. COVID-19: Estimating impact on the economy and poverty in Pakistan: Using SAM Multiplier Model By Moeen, Muhammad Saad; Haider, Zeeshan; Shikoh, Sania Haider; Rizwan, Noormah; Davies, Stephen; Rana, Abdul Wajid
  5. Universalization and altruism By Jean-François Laslier
  6. How the West is Underdeveloping Itself By Samaha, Amal
  7. Political Institutions and Academic Freedom: Evidence from Across the World By Berggren, Niclas; Bjørnskov, Christian
  8. The concept of Ordnungspolitik: Rule-based economic policy-making from the perspective of the Freiburg School By Schnellenbach, Jan
  9. A discussion regarding the economic and legal rights of women in Classical Athens (508-323 BCE) By Economou, Emmanouel/Marios/Lazaros
  10. The Wellness Economy: A Comprehensive System of National Accounts Approach By Consing III, Rafael Martin M.; Barsabal, Michael John M.; Alvarez, Julian Thomas B.; Mariasingham , Mahinthan J.
  11. Valuing Unpaid Care Work in Bhutan By Suh , Jooyeoun; Dorji, Changa; Mercer-Blackman, Valerie; Hampel-Milagrosa, Aimee
  12. Mutualité et capitalisme entre 1789 et 1947 : de la subversion à l'intégration By Nicolas da Silva
  13. Impact of climate smart agriculture on food security: an agent-based analysis By Bazzana, Davide; Foltz, Jeremy; Zhang, Ying
  14. Inequality, household debt, ageing and bubbles: A model of demand-side Secular Stagnation By Di Bucchianico, Stefano
  15. The Long Recession and the Economic Consequences of the Pandemic By Tsoulfidis, Lefteris; Tsaliki, Persefoni
  16. Do scientific capabilities in specific domains matter for technological diversification in European regions? By Pierre-Alexandre Balland; Ron Boschma;

  1. By: Yara Zeineddine (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne)
    Date: 2021–05–19
  2. By: John B. Davis (Department of Economics Marquette University)
    Abstract: This chapter examines John Tomer’s contributions to our understanding of the concept of human capital. Tomer criticized the standard mainstream view of the concept as narrowly focused on education and training and as seeing investments in human capital as having “an individual, cognitive, and machine-like nature.” A broader concept included attention to the people’s noncognitive development, and employed both social capital and personal capital concepts. This produces a more expansive view of human development, allows for a humanistic psychological perspective, and supports a multi-dimensional, Maslovian understanding of the hierarchy of human needs. Tomer framed his policy thinking regarding investments in human capital in terms of the goal of helping people become ‘smart’ persons. He recognized that a barrier to accomplishing this is high levels of economic inequality. The chapter thus goes on to discuss how socially stratified societies generate economic inequality in regard to human capital investments, and how thinking in terms of people’s capabilities can help us advance progressive economic and social policies agendas.
    Keywords: human capital, human development, social capital, personal capital, inequality, capabilities
    JEL: A12 A13 B31 B55 J24
    Date: 2021–05
  3. By: Giovanni Dosi; Francesco Lamperti; Mariana Mazzucato; Mauro Napoletano; Andrea Roventini
    Abstract: We study the impact of alternative innovation policies on the short- and long-run performance of the economy, as well as on public finances, extending the Schumpeter meeting Keynes agent- based model (Dosi et al., 2010). In particular, we consider market-based innovation policies such as R&D subsidies to firms, tax discount on investment, and direct policies akin to the "Entrepreneurial State" (Mazzucato, 2013), involving the creation of public research-oriented firms diffusing technologies along specific trajectories, and funding a Public Research Lab conducting basic research to achieve radical innovations that enlarge the technological opportunities of the economy. Simulation results show that all policies improve productivity and GDP growth, but the best outcomes are achieved by active discretionary State policies, which are also able to crowd-in private investment and have positive hysteresis effects on growth dynamics. For the same size of public resources allocated to market-based interventions, "Mission" innovation policies deliver significantly better aggregate performance if the government is patient enough and willing to bear the intrinsic risks related to innovative activities.
    Keywords: Innovation policy; mission-oriented R&D; entrepreneurial state; agent-based modelling.
    Date: 2021–05–24
  4. By: Moeen, Muhammad Saad; Haider, Zeeshan; Shikoh, Sania Haider; Rizwan, Noormah; Davies, Stephen; Rana, Abdul Wajid
    Abstract: Social Accounting Matrix (SAM) multiplier analysis has been employed to assess the impacts of COVID-19 on various macroeconomic variables including Gross Domestic Product (GDP), employment, and poverty in Pakistan. SAM multiplier models are well-suited to estimate the direct and indirect effects of unanticipated demand-side shocks and short-term fluctuations on various sectors and agents in the economy, such as those caused by the COVID19 pandemic. The results show that Pakistan’s GDP declined by 26.4 percent from mid-March to the end of June 2020 (14 weeks) compared to a non-COVID scenario. Services were hit the hardest, registering losses of 17.6 percent, followed by industry with losses of 6.7 percent. Agriculture turned out to be resilient and remained relatively unhurt, falling by 2.1 percent. All households witnessed a reduction in incomes, but higher-income quartiles appeared to have lost more than lower-income ones. Our approach for economic impact with mitigation measures is to assess the effectiveness of Emergency Response Packages (ERP) by altering the remittances to levels that reflect the magnitude of the support from the government. The total government expenditures were directed towards different kinds of households of PKR 318.6 billion (USD 2.12 billion). This led to a reduction of about USD 3.1 billion in GDP losses, which, compared to the amount spent implied a multiplier of 1.4 in GDP per PKR spent. The national poverty rate soared to 43 percent and 38.7 percent in April and May respectively. The Government’s cash transfers program proved highly effective and led to 11 percent reduction in poverty rate during the pandemic. The recovery scenarios indicate a cumulative GDP loss of USD 11.8 billion and 11.1 USD billion under slow and fast recovery scenarios, respectively, by December 2020. Our estimates show that Pakistan’s annual GDP (at market prices) will register a decline of 4.6 percent in the year 2020 due to negative effects of the pandemic and sluggish economic recovery. Poverty is expected to stabilize at 27.6 percent and 27.4 percent for the two recovery scenarios by December 2020.
    Keywords: PAKISTAN, SOUTH ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, COVID-19, models, poverty, household income, gross national product, economic impact, Social Accounting Matrix (SAM), lockdown,
    Date: 2020
  5. By: Jean-François Laslier (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: To any normal form game, we associate the symmetric two-stage game in which, in a first stage, the roles to be played in the base game are randomly assigned. We show that any equilibrium of the κ-universalization of this extended game is an equilibrium of the base game played by altruistic players ("ex ante Homo Moralis is altruistic"), and that the converse is false. The paper presents the implications of this remark for the philosophical nature of ethical behavior (Kantianism behind the veil of ignorance implies but is stronger than altruism) and for its evolutionary foundations.
    Keywords: ethics,games,evolution,altruism,universalization,Kant,Homo Moralis ethics,Homo Moralis
    Date: 2021–05
  6. By: Samaha, Amal
    Abstract: This essay deals with the history of development discourse, recurring problems, and its present day manifestations. It argues that the deindustrialisation of the core and concomitant hollowing-out of political institutions belies several truisms of development discourse, and that a new "relational" model of development is required. This relational model recognises two distinct forms of development: autogenous (that which requires the exploitation of domestic workers) and parasitic (that which depends on unequal exchange and export specialisation). Finally it is argued that a socialist development programme must be ambivalent to "growth," and instead the core and periphery must pursue different forms of development together.
    Keywords: Development; Growth; Socialism; Underdevelopment; Walter Rodney; Imperialism
    JEL: B24 F19 N1 O1
    Date: 2021–05–13
  7. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University, Denmark)
    Abstract: There is scant systematic empirical evidence on what explains variation in academic freedom. Making use of a new indicator and panel data covering 64 countries 1960–2017, we investigate how de facto academic freedom is affected by, in particular, political institutions. We find that moving to electoral democracy is positive, as is moving to electoral autocracy from other autocratic systems, suggesting the importance of elections. Communism has a strongly detrimental effect. Legislatures that are bicameral are associated with more academic freedom, while legislatures that become more diverse and more ideologically to the right also seem to stimulate this type of freedom. Presidentialism and coups do not appear to matter much, while more proportional electoral systems strengthen academic freedom. More judicial accountability stimulates academic freedom, and richer countries experience more of it. The results suggest that the political sphere exerts a clear but complex influence on the degree to which scholarly activities are free.
    Keywords: Academic freedom; Politics; Democracy; Institutions; Ideology
    JEL: D72 I23 K40
    Date: 2021–05–19
  8. By: Schnellenbach, Jan
    Abstract: Should economic policy be guided by rules? In this paper, we take the perspective of the Freiburg School and trace its argument for rule-based Ordnungspolitik back to the roots of the concept. In doing so, will not offer a comprehensive review of the literature, but argue closely along the works of Walter Eucken, whose works are central to understanding the founding generation of the Freiburg School. We argue that there are costs of not having rules and therefore that the main thrust of the Freiburg approach is still valid. There are good, empirical arguments for pursuing a rule-based Ordnungspolitik in order to avoid the costs of discretionary policy-making. Furthermore, we argue that a reliance on stable rules does not imply an incapacitation of democratic decision-making. Rules rely on democratic support, and rule-based Ordnungspolitik also leaves substantial material scope for discretionary democratic decision-making.
    Keywords: Ordnungspolitik,Freiburg School,economic orders,economic constitutions
    JEL: B15 B25 B41 H11 P48 P50
    Date: 2021
  9. By: Economou, Emmanouel/Marios/Lazaros
    Abstract: This paper sheds some light to the position of women in Classical Greece regarding their economic and legal rights including property rights and standing in marriage. In essence, the paper cautions against sweeping generalizations about the view of women in Ancient Greece as lower-class citizens and offers a more nuanced view of women.
    Keywords: Women’s economic and legal rights, Classical Athens
    JEL: K40 N0 N20 N23 Z10 Z13
    Date: 2020–03–12
  10. By: Consing III, Rafael Martin M. (Asian Development Bank); Barsabal, Michael John M. (Asian Development Bank); Alvarez, Julian Thomas B. (Asian Development Bank); Mariasingham , Mahinthan J. (Asian Development Bank)
    Abstract: This paper provides a comprehensive discussion on different, interconnected methods of using the system of national accounts to measure the relevance of a country’s wellness sector to its overall economy. Procedures are discussed for using input–output analysis to derive the production and employment linkages between wellness and nonwellness sectors. We also discuss procedures for using the hypothetical extraction method to derive and decompose the production and employment losses that may arise when a country’s wellness sector is removed from the economy. These procedures are then used to provide estimates for ten countries in developing Asia across two time periods which together provide a proxy for the region (Asia-10), along with a discussion on how these wellness economies have grown and how each one's labor productivity and wellness sector structure have evolved between the two periods.
    Keywords: economy; employment; input–output; national accounts; wellness
    JEL: C67 D57 E01 I39 R15
    Date: 2020–12–29
  11. By: Suh , Jooyeoun (American Association of Retired Persons); Dorji, Changa (Independent researcher); Mercer-Blackman, Valerie (World Bank); Hampel-Milagrosa, Aimee (Asian Development Bank)
    Abstract: A growing body of scholarly literature has attempted to measure and value unpaid care work in various countries, but perhaps only the government statistical agencies in the United States and the United Kingdom have seriously undertaken periodic and systematic measures of the time spent on unpaid work at the national level, and partially incorporated those values into their gross domestic product (GDP). One country that has been ahead of its time on aspects of societal welfare measurement is Bhutan, which produces the Gross National Happiness (GNH) Index. However, until the first GNH Survey, in 2008, Bhutan did not have any sense of the size and distribution of unpaid work, despite its strong societal norms about the value of volunteering and community work. This paper is the first to estimate the value of unpaid care work in Bhutan. It shows the pros and cons of various approaches and their equivalent measures of unpaid care work as a share of GDP. As with similar studies on the topic, this paper also finds that women spend more than twice as much time as men performing unpaid care work, regardless of their income, age, residency, or number of people in the household. The paper also provides recommendations for improving the measurement of unpaid care work in Bhutan.
    Keywords: Bhutan; gender; labor productivity; measurement; time use; unpaid care work
    JEL: D13 J16 J22 J39 O53
    Date: 2020–11–09
  12. By: Nicolas da Silva (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Cet article propose une relecture de l'histoire économique de la mutualité entre 1789 et 1947 au prisme de son rapport au capitalisme. Alors qu'après la Révolution française et jusqu'à la Commune de Paris la mutualité est une institution ambiguë, entre subversion et intégration au capitalisme, à partir de 1871 elle s'insère largement au capitalisme. C'est à cette période que se séparent mutualisme et syndicalisme. Initialement, les classes populaires sont contraintes de s'auto-organiser pour survivre au dépérissement des protections de l'Ancien Régime et au libéralisme asymétrique de la bourgeoisie. Toute la finesse de la réglementation de l'État sous le Second Empire et de la IIIème République est d'essayer d'intégrer la mutualité pour en vider le contenu contestataire. Contrairement aux interprétations classiques, on peut alors dire que la Sécurité sociale de 1945 n'est pas la revanche des syndicalistes sur les mutualistes mais celle d'une certaine forme de la mutualité contre une autre.
    Date: 2020–06–06
  13. By: Bazzana, Davide; Foltz, Jeremy; Zhang, Ying
    Abstract: The study proposes an agent-based model to investigate how adoption of climate smart agriculture (CSA) affects food security. The analysis investigates the role of social and ecological pressures (i.e. community network, climate change and environmental externalities) on the adoption of physical water and soil practices as well as crop rotation technique. The findings reveal that CSA may be an effective strategy to improve the rural populations' well-being for farm households with access to capital, strong social networks and access to integrated food markets. The climate scenario simulations indicate that farmers adopting CSA fare better than non-adopters, although CSA adoption does not fully counterbalance the severe climate pressures. In addition, farmers with poor connections to food markets benefit less from CSA due to stronger price oscillations. These results call for an active role for policy makers in encouraging adaptation through CSA adoption by increasing access to capital, improving food market integration and building social networks.
    Keywords: Environmental Economics and Policy
    Date: 2021–05–26
  14. By: Di Bucchianico, Stefano
    Abstract: The mainstream concept of Secular Stagnation provides a comprehensive theoretical picture to explain sluggish economic growth and engenders a renewed role for fiscal policy. For these reasons, it should be praised. Given the difficulties entailed by the theoretical framework in which the theory is located, this paper offers a perspective on US stagnation that is grounded in some of the same foundational elements of the mainstream attempt (inequality, sluggish population growth and ageing, household debt, housing bubble) but relies on a model in which growth is driven by the autonomous components of aggregate demand. Stagnation is the result of the failure to move from a household debt-plus-bubble-led model to a model led by public expenditure. In the course of the analysis, a new treatment of ageing is offered.
    Keywords: Secular Stagnation,natural rate of interest,fiscal policy,aggregate demand,supermultiplier
    JEL: E31 E40 E52 E58
    Date: 2021
  15. By: Tsoulfidis, Lefteris; Tsaliki, Persefoni
    Abstract: ABSTRACT In this article, we argue the rate of profit in combination with the movement of the real net profits determines the phase-change of the economy in its long cyclical pattern. Since WWII, the US and the world economy have experienced two such long cycles. The pandemic COVID-19 has deepened a recession that has been already underway since 2007. The growth rates in the first post-pandemic years are expected to be high; however, soon after, the economies will find themselves back to their old recessionary growth paths. The onset of a new long cycle requires the restoration of profitability, which can be sustained only through the introduction of ‘disruptive’ innovations backed by suitable institutional arrangements Long recession, secular stagnation, pandemic, long cycles, institutional changes, disruptive innovations
    Keywords: Long recession, secular stagnation, pandemic, long cycles, institutional changes, disruptive innovations
    JEL: B5 D33 E1 N12 O51
    Date: 2021–05–18
  16. By: Pierre-Alexandre Balland; Ron Boschma;
    Abstract: Do scientific capabilities in regions translate into technological leadership? This is one of the most pressing questions in academic and policy circles. This paper analyzes the matching of scientific and technological capabilities of 285 European regions. We build on patent and publication records to identify regions that lie both at the scientific and technological frontiers (strongholds), that are pure scientific leaders, pure technological leaders, or just followers in 18 domains. Our regional diversification model shows that local scientific capabilities in a domain are a strong predictor of the development of new technologies in that domain in regions. This finding is particularly relevant for the Smart Specialization policy because it implies that the analysis of domain-specific scientific knowledge can be a powerful tool to identify new diversification opportunities in regions.
    Keywords: science-technology link, regional diversification, relatedness, strongholds, scientific capabilities, technological capabilities, Smart Specialization policy
    JEL: B52 O33 R11
    Date: 2021–05

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