nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒09‒06
fifteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Pluralist Economics as a Democratizing Force: A Review Essay about The Routledge Handbook of Heterodox Economics and Democratizing the Economics Debate: Pluralism and Research Evaluation By Eichacker, Nina
  2. Gender-based occupational segregation: a bit string approach By Joana Passinhas; Tanya Araújo
  3. Employment protection regimes and dismissal of members in worker cooperatives By Tortia, Ermanno C.
  4. Sur l'anthropologie économique de Bourdieu et la sociologie de la consommation de Simon Langlois By François Gardes
  5. Frank Plumpton Ramsey and the Politics of Motherhood By Marouzi, Soroush
  6. Expectations in Past and Modern Economic Theory By Richard Arena; Muriel Dal Pont Legrand; Roger Guesnerie
  7. The Baran Ratio, Investment, and British Economic Growth and Investment By Lambert, Thomas
  8. Modeling the Social Economy of Pandemics in China: An Input-Output Approach By Khan, Haider; Szymanski-Burgos, Adam
  9. Demand Shocks and Supply Chain Resilience: An Agent Based Modelling Approach and Application to the Potato Supply Chain By Liang Lu; Ruby Nguyen; Md Mamunur Rahman; Jason Winfree
  10. Evolution of cooperative networks. By Pandey, Siddhi Gyan
  11. Expectational and Portfolio-Demand Shifts in a Keynesian Model of Monetary Growth Fluctuations By Greg Philip Hannsgen; Tai Young-Taft
  12. When work becomes meaningless. The influence of meaningful work on job mobility, voice and sickness absence: a longitudinal analysis with the Working Conditions Survey 2013-2016 By Thomas Coutrot; Coralie Perez
  13. Reading Keynes’s policy papers through the prism of his Treatise on Probability: information, expectations and revision of probabilities in economic policy By Rivot, Sylvie
  14. The Edifying Discourses of Adam Smith: Focalism, Commerce, and Serving the Common Good By Matson, Erik W.
  15. Buying Security with Charity: Why donors change conditionality By Johnny Flentø; Leonardo Santos Simao

  1. By: Eichacker, Nina
    Abstract: The Routledge Handbook of Heterodox Economics and Democratizing the Economics Debate: Pluralism and Research Evaluation, two recently published books about heterodox economics and its role in broader academic and policy discourses, serve as an antidote to some recent popular narratives equating economics and economists with policies that are inherently pro-market, anti-regulation, and based in neoclassical theories. These texts illuminate challenges in current economic discourse about (1) the place of economic pluralism, (2) the role economics and economists should play in guiding policy relative to other social science disciplines, and (3) the consequences of the reliance of policy-makers on economists that train at the most elite institutions that are likely to recommend a narrow band of policies informed by a restricted range of economic theories. The Routledge Handbook of Heterodox Economics, edited by Tae-Jee Ho, Lynne Chester, and Carlo D’Ippoliti, presents positive visions for new questions that heterodox economists are researching, alternative explanations for global economic dynamics, and a counter-narrative to the notion that economists are bound to propose neoliberal policies based on neoclassical and new classical economic theories, and that economic analysis must demonstrate causality using different statistical methodologies to validate its rigor. Carlo D’Ippoliti’s Democratizing the Economics Debate examines the dialectical process by which economic rankings prioritize economic work informed by a narrow range of theories, and serve as a springboard for economists studying and working at the most elite institutions to land in powerful government advisory positions. D’Ippoliti highlights the stakes for governments that continue to hire economic policymakers from these top-tier programs with limited demonstrated curiosity in theories that might be considered heterodox, and the benefits for the economics discipline as a whole for better engagement with pluralist economics writ large.
    Date: 2021–08–26
  2. By: Joana Passinhas; Tanya Araújo
    Abstract: The systematic differences of gender representation across occupations, gender-based occupational segregation, has been suggested as one of the most important determinants of the still existing gender wage gap. Despite some signs of a decreasing trend, there is evidence that occupational gendered segregation is persistent even though gender dierences in human capital variables have been disappearing. Using an agent-based model we provide a framework that introduces discriminatory behavior based on labour market theories of discrimination where workers and firms can exhibit gendered preferences. The introduction of discriminatory behavior transforms the otherwise random dynamics of occupational choice into a persistent gender-based occupational segregation consistent with empirical evidence.
    Date: 2021–08
  3. By: Tortia, Ermanno C.
    Abstract: This paper discusses the possibility of strong employment protection regimes (EPRs) in worker cooperatives (WCs), a unique organizational form in which employees coincide with members who hold control rights. Worker control is reported by several theoretical and empirical contributions to stabilize employment better than other proprietary forms. We leverage key theoretical insights from evolutionary theory and systems to discuss the possibility (benefits and critical elements) of constraining the dismissal of WC members to further strengthen employment stabilization and enforce member rights. Strong EPRs would be functional to meeting workers' needs for a decent life and job security. While stricter constraints on layoffs can cause short-term inefficiencies (e.g. preventing the dismissal of shirking workers), they also perform an insurance function against unemployment, favor the accumulation and conservation of firm specific human, relational and social capital and improve the equity of distributive patterns. It is also hypothesized that performance would increase in the medium to long run. Voluntary resignation, not involuntary dismissal would be the dominant mechanism allowing for the allocation of work to the most productive occupations.
    Keywords: Worker cooperatives; membership rights; dismissal; minimum wage; rules and routines; systems theory
    JEL: J31 J54 L2 L21
    Date: 2021–08–13
  4. By: François Gardes (Centre d'Economie de la Sorbonne & Université Catholique de l'Ouest)
    Abstract: L'examen critique du cours de Pierre Bourdieu sur les fondements sociaux de l'action économique et sa comparaison à la méthodologie suivie par Simon Langlois dans ses analyses des choix de consommation des ménages, engendrent une discussion des méthodologies de test des hypothèses et des conclusions des analyses théoriques dans les diverses sciences sociales et l'exposé succinct de nouveaux modèles qui élargissent la théorie économique des choix individuels, répondant ainsi partiellement aux critiques de Bourdieu
    Keywords: Don; marché; rationalité; test; consommation
    JEL: A14 C52 C62 D11 D41 J52
    Date: 2021–01
  5. By: Marouzi, Soroush
    Abstract: This paper is an attempt to historicize Frank Plumpton Ramsey’s Apostle talks delivered from 1923 to 1925 within the social and political context of the time. In his talks, Ramsey discusses socialism, psychoanalysis, and feminism. Ramsey’s views on these three intellectual movements were inter-connected, and they all contributed to his take on the then policy debates on the role of women in economy. Drawing on some archival materials, biographical facts, and the historiographical literature on the early inter-war politics of motherhood, I show that Ramsey held a positive view of the feminist campaign for family endowment. He demanded government financial support for motherhood in recognition of the economic significance of women’s domestic works and as what could bring economic independence to them. In addition, he found such economic scheme compatible with the kind of maternalism endorsed by Freudian psychoanalysis – his favorite theory of psychology.
    Date: 2021–08–23
  6. By: Richard Arena (Université Côte d'Azur, France; GREDEG CNRS); Muriel Dal Pont Legrand (Université Côte d'Azur, France; GREDEG CNRS); Roger Guesnerie (Collège de France)
    Date: 2021–08
  7. By: Lambert, Thomas
    Abstract: Investment in capital, new technology, and agricultural techniques has not been considered an endeavor worthwhile in a medieval economy because of a lack of strong property rights and no incentive on the part of lords and barons to lend money to or grant rights to peasant farmers. Therefore, the medieval economy and standards of living at that time often have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. Paul Baran’s concept of the economic surplus is applied to investment patterns during the late medieval, mercantile, and early capitalist stages of economic growth in England and the UK. This paper uses Zhun Xu’s Baran Ratio concept to try to develop general trends to demonstrate and to reinforce other historical accounts of these times that a productive and sufficient level of public and private investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until around the 1600s in Britain. This would also be about the time of capitalism’s ascent as the dominant economic system in England. Even then, dramatic increases in investment and economic growth do not appear until the late 18th Century when investment more consistently becomes more than one hundred percent of the level of economic surplus and takes in government spending. The types of investment, threshold amounts of investment out of profits and rents along with government spending seem to matter when it comes to a growth path raising GDP per capita and national income per capita to higher levels. Although much of this knowledge perhaps is embodied in current historical accounts, the Baran Ratio nicely summarizes and illustrates the importance of levels of investment to economic growth.
    Keywords: Baran Ratio, Baran multiplier, capitalism, feudalism, Keynesian multiplier
    JEL: B51 E11 E12 N13
    Date: 2021–09–01
  8. By: Khan, Haider; Szymanski-Burgos, Adam
    Abstract: COVID-19 impacts have exacerbated socioeconomic inequalities and the threat of hunger and absolute poverty for vulnerable populations globally. China, as the most important Southern engine of growth, is a complex case. In taking countervailing measures for economic recovery and public health protection, the Chinese case is interesting for several reasons. First, from a public health perspective, what was distinctive about the Chinese policy and what have been the consequences so far? Second, what economic policy measures have led to a V-shaped recovery? Finally, what is the further prognosis for the Chinese Economy for the next few years? Our analysis highlights the salience of considering development and the economic and social shocks of pandemics from a Socially Embedded Intersectional Approach (SEICA) perspective. Using an economy-wide modelling methodology, we are able to draw conclusions that may be relevant for the case of other economies in various stages of development, particularly those with sharply uneven development patterns and large rural populations.
    Keywords: Input-output; China; Development; Covid-19; Socially Embedded Intersectional Approach
    JEL: A10 O2 P0 R15
    Date: 2021–08
  9. By: Liang Lu; Ruby Nguyen; Md Mamunur Rahman; Jason Winfree
    Abstract: The food supply chain has experienced major disruptions from both demand and supply sides during the Covid-19 pandemic. While some consequences such as food waste are directly caused by the disruption due to supply chain inefficiency, others are indirectly caused by a change in consumer’s preferences. As a result, evaluating food supply chain resilience is a difficult task. With an attempt to understand impacts of demand on the food supply chain, we developed an agent-based model based on the case of Idaho’s potato supply chain. Results showed that not only the magnitude but also the timing of the demand shock will have different impacts on various stakeholders of the supply chain. Our contribution to the literature is two-fold. First, the model helps explain why food waste and shortages may occur with dramatic shifts in consumer demand. Second, this paper provides a new angle on evaluating the various mitigation strategies and policy responses to disruptions beyond Covid-19.
    JEL: L1 Q11
    Date: 2021–08
  10. By: Pandey, Siddhi Gyan (Jindal School of Liberal Arts and Humanities, O.P. Jindal Global University)
    Abstract: Situations that require individuals to mutually cooperate are often analysed as coordination games. This paper proposes a model of cooperative network formation where the network is formed through the process of the coordination game being played between multiple agents. Additionally, network effects are modelled in by the fact that the benefit to any agent from a mutually cooperative link is enhanced, over a base value, by a factor of her trustworthiness or reputation as observed by her partner in that link. Within this framework, evolution of cooperative networks is analysed in the presence of altruistic agents, through repeated interaction between myopically best responding agents in a finite population. Properties of networks that sustain as Nash equilibrium are also analysed.
    Keywords: coordination game ; network formation ; game theory ; social networks
    Date: 2021–08
  11. By: Greg Philip Hannsgen; Tai Young-Taft
    Abstract: We develop a pair of models to show how non-ad-hoc shifts to expectational variables can be used to model tendencies toward crisis. In the Shackle model, as developed in the book Keynesian Kaleidics (1974), uncertainty can lead to a collapse in the marginal efficiency of investment and a jump in liquidity preference. In the Minsky version of the model, excessive private debt can lead to a financial collapse–again an endogenous breakdown in forces supporting growth. We extend the models to indicate how the dynamics of inflation and distribution affect the dynamics.
    Keywords: Post Keynesian macro model, Poisson model of financial fragility, Keynesian dynamics, Hyman Minsky, G.L.S. Shackle, Keynesian Kaleidics, endogenous MEI and liquidity preference, financial fragility hypothesis
    JEL: E12 E32
    Date: 2021–08
  12. By: Thomas Coutrot (DARES - Direction de l'animation de la recherche, des études et des statistiques - Ministère du Travail, de l'Emploi et de la Santé); Coralie Perez (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Exposed to numerical targets, rigid procedures and frequent reorganisation, employees often feel that their work loses its meaning. How do they react to these difficulties? Do they seek to leave to find a better job, or do they act collectivity to influence management practices? What is the link between changes in the meaninfulness of work and the number of days of sick leave? Economists have only recently begum to address the question of meaningful work, and do not have a consensus definition. After reviewing the literature in economics and management, we propose an original definition of meaningful work with reference to the critical theory of "living work" and the psychodynamics of work. The analysis of the 2013-2016 panel of the Working Conditions survey (which includes nearly 17,000 employees), shows that a meaningless work in 2013 is clearly associated with a change of job (exit) between 2013 and 2016. When endogeneity issues are taken care of meaningless work is also associated with collective voice (joining a union) over the same period. Changes in the meaning of work also have a very significant impact on the variation in the number of days of sickness absence.
    Abstract: Soumis à des objectifs chiffrés, des procédures rigides et des réorganisations fréquentes, les salariés considèrent souvent que leur travail perd son sens. Comment réagissent-ils à ces difficultés ? Cherchent-ils plutôt à partir pour trouver un meilleur emploi, ou bien à agir collectivement pour influencer les pratiques managériales ? Quel est le lien entre l'évolution du sens du travail et le nombre de jours d'absence pour maladie ? Les économistes ne s'intéressent que depuis peu de temps à la question du sens du travail, et n'en ont pas de définition consensuelle. Après avoir examiné la littérature en économie et en gestion, nous proposons une définition originale du sens du travail en référence à la théorie critique du « travail vivant » et à la psychodynamique du travail. L'analyse du panel 2013-2016 de l'enquête Conditions de travail (qui comporte près de 17 000 salariés), montre qu'un faible sens du travail en 2013 est nettement associé à un changement d'emploi (l'exit) entre 2013 et 2016. Quand on corrige les problèmes d'endogénéité, il est également associé à la prise de parole collective (voice, ici l'adhésion à un syndicat) sur la même période. L'évolution du sens du travail a également un impact très significatif sur la variation du nombre de jours d'absence pour maladie.
    Keywords: meaningful work,working conditions,organizational changes,exit,voice,absenteism,psychosocial risks,sens du travail,conditions de travail,changements organisationnels,absentéisme,risques psycho-sociaux
    Date: 2021–07
  13. By: Rivot, Sylvie
    Abstract: When scholars investigate the legacy of Keynes’s Treatise on Probability (1921) for the development of Keynes’s thinking, the attention usually focuses on the connections between Keynes’s probability theory, his conception of decision-making under uncertainty and the theory of the functioning of the macroeconomic system that derives from it - through the marginal efficiency of capital, the preference for liquidity and the self-referential functioning of financial markets. By contrast, the paper aims to investigate the connections between Keynes’s probability theory on the one hand, and his economic policy recommendations on the other. It concentrates on the policy recommendations defended by Keynes during the Great Depression but also after the General Theory. Keynes’s economic policy can be understood as a framework for decision-making in situations of uncertainty: fiscal policy aims to induce private agents to change their “rational” probability statements, while monetary policy aims to allow more weight to these statements.
    Date: 2021–08–24
  14. By: Matson, Erik W.
    Abstract: Smith’s discourses aim to encourage mores, practices, and public policies in service to the common good, or that which a universally benevolent spectator would approve of. The Wealth of Nations illustrates how in pursuing our own happiness within the bounds of prudence and commutative justice we may be said, literally or metaphorically, to cooperate with God in furthering the happiness of humankind. The Theory of Moral Sentiments elaborates an ethic, here called “focalism,” that instructs us to proportion our beneficent efforts to our knowledge and ability. The relationship between political economy and focalism is bidirectionally reinforcing. In one direction, the ethic of focalism contributes to the moral authorization of self-love, thereby invigorating and dignifying honest commercial activities. In the other direction, the insights of political economy reinforce the ethic of focalism by elaborating how through prudent commerce and focal beneficence we cooperate, even if only metaphorically, in a grand social enterprise.
    Date: 2021–08–24
  15. By: Johnny Flentø (University of Copenhagen); Leonardo Santos Simao (Government of Mozambique, Maputo)
    Abstract: This paper explores how relations between donors and sub-Saharan countries have evolved since 1961 when ODA was first defined, what drives the dynamics and how this influences poverty eradication. We argue that ODA is a multi-purpose vehicle which tries to combine poverty alleviation in poor countries with financing of the foreign policy objectives of donor countries. Western security concerns have influenced conditionality for ODA, affecting allocations and delivery of aid, and have altered its definition. OECD countries have been buying security with charity and have been able to align their security considerations with the moral of charity as security threats to Western countries have often also been real threats to Africa. This is not the case for migration to Europe, which is neither a security nor a welfare problem for Africa. African welfare and poverty alleviation objectives cannot be aligned with Western demands to stem the flow of young people out of Africa. While aid can still help, if the overall envelope does not increase, it will be at the expense of other poor people. When Europe cannot justify migration control as charity, and there is no common security agenda, donor governments risk using aid as a bribe to buy African governments’ assistance to control migration, which is not in Africa’s interest. ODA flows are moving to the north of Africa and to Europe’s neighbors. This is because some countries can offer security alliances to the West, which it can buy through aid budgets if there is a degree of misery in those countries. Africa needs unity to undertake well-coordinated trading of services, which Europe is prepared to pay generously for. This would be better for Africa’s welfare than having to accept conditional charity with gratitude and would help European countries to address the real problem and stop treating the symptoms. This would also be the better route to follow for Europe’s children.
    Keywords: foreign aid, donors, conditionality, poverty, security, sub-Saharan Africa,
    JEL: B52 F02 F30 F35 F50
    Date: 2021–08–22

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