nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒10‒25
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Individual environmental preferences and aggregate outcomes: an empirical agent-based model of forest landowner invasive species control By Atallah, Shadi S.
  2. AgriLOVE: agriculture, land-use and technical change in an evolutionary, agent-based model. By Matteo Coronese; Martina OCcelli; Francesco Lamperti; Andrea Roventini
  3. Determining Factors of Loyalty in Brazilian Agricultural Cooperatives By Christiane MARTINEZ; Vilmar MOREIRA; Reginaldo BARREIROS; Alex WEYMER
  4. A Global but not Spontaneous Firm: Co-operatives and the Solidarity Funds in Italy By Andrea BERNARDI; Cécile BERRANGER; Anita MANNELLA; Salvatore MONNI; Alessio REALINI
  5. Analyzing “Innovation” in economics By Kakkar, Shrey
  6. Exploring the theoretical link between profitability and luxury emissions By Stefano Di Bucchianico; Federica Cappelli
  7. The content and structure of reputation domains across human societies: a view from the evolutionary social sciences By Zachary Garfield; Ryan Schacht; Emily Post; Dominique Ingram; Andrea Uehling; Shane Macfarlan
  8. Bridging the short-term and long-term dynamics of economic structural change By James McNerney; Yang Li; Andres Gomez-Lievano; Frank Neffke
  9. The network origins of aggregate fluctuations: a demand-side approach By Emanuele Citera; Shyam Gouri Suresh; Mark Setterfield
  10. Regional The Meaning of MMT By Françoise Drumetz; Christian Pfister
  11. Learning about Unprecedented Events: Agent-Based Modelling and the Stock Market Impact of COVID-19 By Bazzana, Davide; Colturato, Michele; Savona, Roberto
  12. Social and Solidarity Economy perimeter and measurement in France: why we need to foster controversies and co-produce data By Eric BIDET &; Nadine RICHEZ-BATTESTI
  13. Gender identity and relative income within household: Evidence from China By Han Dongcheng; Kong Fanbo; Wang Zixun
  14. Gendered interpretations of job loss and subsequent professional pathways By Rao, Aliya
  15. Revisiting the informal aspects of the activity of countries, studied through Social Accounting and Socio-Demographic Matrices, with an application to Mozambique. By Susana Santos; Mónica Magaua
  16. ‘If p? Then What?’ Thinking Within, With, and From Cases By Morgan, Mary S.

  1. By: Atallah, Shadi S.
    Keywords: Environmental Economics and Policy, Research Methods/Statistical Methods, Community/Rural/Urban Development
    Date: 2021–08
  2. By: Matteo Coronese; Martina OCcelli; Francesco Lamperti; Andrea Roventini
    Abstract: This paper presents a novel agent-based model of land use and technological change in the agricultural sector under environmental boundaries, finite available resources and changing land productivity. In particular, we model a spatially explicit economy populated by boundedly-rational farmers competing and innovating to fulfill an exogenous demand for food, while coping with a changing environment shaped by their production choices. Given the strong technological and environmental uncertainty, farmers learn and adaptively employ heuristics which guide their decisions on engaging in innovation and imitation activities, hiring workers, acquiring new farms, deforesting virgin areas and abandoning unproductive lands. Such activities in turn impact on land productivity, food production, food prices and land use. We firstly show that the model can replicate key stylized facts of the agricultural sector. We then extensively explore its properties across several scenarios featuring different institutional and behavioral settings. Finally, we showcase the properties of model in different applications considering deforestation and land abandonment; soil degradation; and climate impacts.
    Keywords: Land use; Agent-based model; Technological change; Environmental boundaries; Sustainability.
    Date: 2021–10–17
  3. By: Christiane MARTINEZ (Pontifícia Universidade Católica do Paraná, Business School (Brazil)); Vilmar MOREIRA (Pontifícia Universidade Católica do Paraná, Business School (Brazil)); Reginaldo BARREIROS (Pontifícia Universidade Católica do Paraná, Business School; Universidade Estadual de Ponta Grossa (Brazil)); Alex WEYMER (Pontifícia Universidade Católica do Paraná, Business School (Brazil))
    Abstract: An extensive literature review, content analysis of interviews and a survey with cooperative members allowed to identify factors that affect loyalty: culture, price, profit, transparency, relationship and leadership. Among the main findings, the research found that members’ perception of “trust†is more supported on a calculative logic of relationship based on exchanges, prices and payment than on shared meanings with long-term perspectives guided by cooperative principles. The extensive bibliographical reference and emerging factors found can help other researchers to develop deeper understandings on loyalty of members to agricultural coops.
    Keywords: Loyalty, Incentives for cooperation, Cooperativism, Agricultural Cooperatives
    JEL: J54
    Date: 2020
  4. By: Andrea BERNARDI (Oxford Brookes University (United Kingdom)); Cécile BERRANGER (Manchester Metropolitan University (United Kingdom)); Anita MANNELLA (Roma Tre University (Italy)); Salvatore MONNI (Roma Tre University (Italy)); Alessio REALINI (Roma Tre University (Italy))
    Abstract: Cooperatives are increasingly being recognized as important contributors to inclusive, sustainable and fair development. However, the cooperative movement faces a multitude of challenges, including lack of access to credit. The Italian cooperative sector features an important financing tool: the solidarity funds (Fondi Mutualistici in Italian). In 1992, Law 59 established these financial institutions that are owned by the cooperative associations. By law, all co-operatives have to transfer to the mutual funds (or to the Government if they do not belong to any co-operative association) 3% of their profits. In the past 25 years, the solidarity funds have been allocating large resources creating a financial virtuous cycle that could be inspiring for other nations. The solidarity funds promote innovative and inclusive cooperative practices as well as training and university education. Examples of similar initiatives can be found in other countries, mostly where the cooperation culture is more established. In this paper we look at Canada, France and the United Kingdom to further explore the nature and relevance of mutualistic finance.
    Keywords: Non-bank financial institutions; Venture capital; Co-operatives; Labour managed firms; Employee ownership; mutual funds
    JEL: G23 G34 J54 L24 L31 N24 O16 P13
    Date: 2021–01
  5. By: Kakkar, Shrey
    Abstract: This article discusses existing theories on “Innovation” since the 1940s. It differentiates between “Innovation” and “Invention”, and presents examples of innovation that are modelled by theory.
    Keywords: Innovation, Invention
    JEL: B20 B25 O31
    Date: 2021–07–31
  6. By: Stefano Di Bucchianico; Federica Cappelli
    Abstract: Given that the richest 10% of the world population is responsible for more than half of global greenhouse gas emissions between 1990 and 2015, understanding the sources of excessive consumption of wealthier households and the ways to reduce them becomes especially important. Indeed, subsistence emissions are the emissions generated to satisfy basic needs, while luxury emissions are those generated to satisfy non-basic needs and that can, thus, be avoided or reduced. We make use of the ‘integrated wage-commodity sector’ model to study this issue. By using this model, we are able to connect the double role of luxury goods. On the one hand, they are the main reason why profits exist (together with surplus production of other wage-goods), given that profitability stems from surplus production delivered by workers. On the other hand, they are the major constituent of wasteful luxury consumption and, hence, major drivers of CO2 emissions. Three different scenarios (‘green growth’, ‘reformist’, and ‘just transition’) are depicted and connected to the possible policy actions to be undertaken to address social and environmental predicaments. The just transition scenario seems to be the only viable option to respect both social and environmental boundaries.
    Keywords: rate of profit, luxury goods, GHG emissions, decent living standard, climate change
    JEL: B24 Q52 Q57
    Date: 2021–10
  7. By: Zachary Garfield (IAST - Institute for Advanced Study in Toulouse); Ryan Schacht; Emily Post; Dominique Ingram; Andrea Uehling; Shane Macfarlan
    Abstract: Reputations are an essential feature of human sociality and the evolution of cooperation and group living. Much scholarship has focused on reputations, yet typically on a narrow range of domains (e.g. prosociality and aggressiveness), usually in isolation. Humans can develop reputations, however, from any collective information. We conducted exploratory analyses on the content, distribution and structure of reputation domain diversity across cultures, using the Human Relations Area Files ethnographic database. After coding ethnographic texts on reputations from 153 cultures, we used hierarchical modelling, cluster analysis and text analysis to provide an empirical view of reputation domains across societies. Findings suggest: (i) reputational domains vary cross-culturally, yet reputations for cultural conformity, prosociality, social status and neural capital are widespread; (ii) reputation domains are more variable for males than females; and (iii) particular reputation domains are interrelated, demonstrating a structure consistent with dimensions of human uniqueness. We label these features: cultural group unity, dominance, neural capital, sexuality, social and material success and supernatural healing. We highlight the need for future research on the evolution of cooperation and human sociality to consider a wider range of reputation domains, as well as their social, ecological and gender-specific variability.
    Date: 2021–10–04
  8. By: James McNerney; Yang Li; Andres Gomez-Lievano; Frank Neffke
    Abstract: In the short-term, economies shift preferentially into new activities that are related to ones they currently do. Such a tendency should have implications for the nature of an economy's long-term development as well. We explore these implications using a dynamical network model of an economy's movement into new activities. First, we theoretically derive a pair of coordinates that summarize long-term structural change. One coordinate captures overall ability across activities, the other captures an economy's composition. Second, we show empirically how these two measures intuitively summarize a variety of facts of long-term economic development. Third, we observe that our measures resemble complexity metrics, though our route to these metrics differs significantly from previous ones. In total, our framework represents a dynamical approach that bridges short- and long-term descriptions of structural change, and suggests how different branches of economic complexity analysis could potentially fit together in one framework.
    Date: 2021–10
  9. By: Emanuele Citera (Department of Economics, New School for Social Research); Shyam Gouri Suresh (Department of Economics, Davidson College and Department of Economics, FLAME University); Mark Setterfield (Department of Economics, New School for Social Research)
    Abstract: We construct a model of cyclical growth with agent-based features designed to study the network origins of aggregate fluctuations from a demand-side perspective. In our model, aggregate fluctuations result from variations in investment behavior at firm level motivated by endogenously-generated changes in `animal spirits' or the state of long run expectations (SOLE). In addition to being influenced by their own economic conditions, firms pay attention to the performance of first-degree network neighbours, weighted (to differing degrees) by the centrality of these neighbours in the network, when revising their SOLE. This allows us to analyze the effects of the centrality of linked network neighbours on the amplitude of aggregate fluctuations. We show that the amplitude of fluctuations is significantly affected by the eigenvector centrality, and the weight attached to the eigenvector centrality, of linked network neighbours. The dispersion of this effect about its mean is shown to be similarly important, resulting in the possibility that network properties can result in `great moderations' giving way to sudden increases in the volatility of aggregate economic performance.
    Keywords: Aggregate fluctuations, cyclical growth, animal spirits, state of long run expectations, agent-based model, random network, preferential attachment, small world
    JEL: C63 E12 E32 E37 O41
    Date: 2021–10
  10. By: Françoise Drumetz; Christian Pfister
    Abstract: In the last few years in the U.S. and especially since the publication of Stephanie Kelton’s book, The Deficit Myth (Kelton, 2020) in Europe, the so-called Modern Monetary Theory (MMT) has been gaining prominence in the media and the public. This paper exposes the main proposals of MMT in the light of their doctrinal sources, also confronting them with economic facts and with other currents of economic thought. The first part deals with the approach to money and monetary policy developed by MMT, the second part with its recommendations regarding fiscal policy and aggregate demand management, the third part with the structural policies it advocates, the fourth part with the international aspects of MMT. The fifth part concludes. Overall, it appears that MMT is based on an outdated approach to economics and that the meaning of MMT is a more that of a political manifesto than of a genuine economic theory.
    Keywords: Chartalism, Fiscal Policy, Functional Finance, Modern Monetary Theory, Money, Monetary Policy, Structural Policies
    JEL: B52 E12 E42 E43 E51 E52 E62 E63 H39 H62 H63 I38 J68 Q58
    Date: 2021
  11. By: Bazzana, Davide; Colturato, Michele; Savona, Roberto
    Abstract: We model the learning process of market traders during the unprecedented COVID-19 event. We introduce a behavioral heterogeneous agents’ model with bounded rationality by including a correction mechanism through representativeness (Gennaioli et al., 2015). To inspect the market crash induced by the pandemic, we calibrate the STOXX Europe 600 Index, when stock markets suffered from the greatest single-day percentage drop ever. Once the extreme event materializes, agents tend to be more sensitive to all positive and negative news, subsequently moving on to close-to-rational. We find that the deflation mechanism of less representative news seems to disappear after the extreme event.
    Keywords: Farm Management, Risk and Uncertainty
    Date: 2021–10–20
  12. By: Eric BIDET & (Le Mans Université, ArguMANS (France)); Nadine RICHEZ-BATTESTI (Aix Marseille Université, Lest-Cnrs (France))
    Abstract: Over the last two decades, the measurement of the Social and Solidarity Economy (SSE) has raised a growing interest from diverse actors at national and international levels. This interest produced diversified methodologies and frames of reference that are not always clearly identified, nor questioned by those who use them, and that convey sometimes implicit standards. The aim of this working paper is to stress the idea that data should be co-produced and carefully explained in order to be well understood and useful. It first looks at the necessary debate that must accompany the production of figures, then compares the answers provided and the questions raised by the measurement of the SSE at the French national level, and finally concludes by examining the complexity that characterises this issue at the international level due to the diversity of national contexts.
    Keywords: statistics, SSE, perimeter, measure, satellite account
    JEL: A11 B55 L31 O35
    Date: 2021–04
  13. By: Han Dongcheng; Kong Fanbo; Wang Zixun
    Abstract: How does women's obedience to traditional gender roles affect their labour outcomes? To investigate on this question, we employ discontinuity tests and fixed effect regressions with time lag to measure how married women in China diminish their labour outcomes so as to maintain the bread-winning status of their husbands. In the first half of this research, our discontinuity test exhibits a missing mass of married women who just out-earn their husbands, which is interpreted as an evidence showing that these females diminish their earnings under the influence of gender norms. In the second half, we use fixed effect regressions with time lag to assess the change of a female's future labour outcomes if she currently earns more than her husband. Our results suggest that women's future labour participation decisions (whether they still join the workforce) are unaffected, but their yearly incomes and weekly working hours will be reduced in the future. Lastly, heterogeneous studies are conducted, showing that low-income and less educated married women are more susceptible to the influence of gender norms.
    Date: 2021–10
  14. By: Rao, Aliya
    Abstract: While we know that career interruptions shape men’s and women’s professional trajectories, we know less about how job loss may matter for this process. Drawing on interviews with unemployed, college-educated men and women in professional occupations, I show that while both men and women interpret their job loss as due to impersonal “business” decisions, women additionally attribute their job loss as arising from employers’ “personal” decisions. Men’s job loss shapes their subsequent preferred professional pathways, but never in a way that diminishes the importance of their participation in the labor force. For some women in this study, job loss becomes a moment to reflect on their professional pathways, often pulling them back from paid work. This study identifies job loss as an event that, on top of gendered workplace experiences and caregiving obligations, may curtail some women’s participation in paid work.
    Keywords: careers; gender inequality; job loss; professionals; unemployment; 1538951; Sage deal
    JEL: R14 J01
    Date: 2021–09–30
  15. By: Susana Santos; Mónica Magaua
    Abstract: Approaches based on Social Accounting Matrices (SAMs) and Socio-Demographic Matrices (SDMs) will be presented as a way of capturing relevant networks of linkages and the corresponding multiplier effects, which can subsequently be used for modelling the activity of the countries to be studied. Emphasis will be placed on the activity of household unincorporated enterprises that will be identified with the informal sector. Based on methodological principles derived mainly from the works of Richard Stone, a proposal will be made to study the economic activity of Mozambique in 2016 in a matrix format, with special attention to the informal sector in general and, within this, forestry, and logging. Such a proposal includes, on the one hand, people – represented by a SDM – and, on the other hand, activities, products, factors of production and institutions – represented by a SAM. The exposition will mostly be accompanied by an application to the above-mentioned reality. Scenarios, involving changes in functional and institutional distribution of income, will be presented and the macroeconomic effects of these changes, will be summarised in the form of changes in the macroeconomic aggregates, such as, Gross Domestic Product, Gross National Income and Disposable Income.
    Keywords: Social Accounting Matrix; Socio-Demographic Matrices; Informal Economy.
    JEL: E01 E16 J11
    Date: 2021–10
  16. By: Morgan, Mary S.
    Abstract: The provocative paper by John Forrester: ‘If p, Then What? Thinking in Cases’ (1996) opened up the question of case thinking as a separate mode of reasoning in the sciences. Case-based reasoning is certainly endemic across a number of sciences, but it has looked different according to where it has been found. This paper investigates this mode of science - namely thinking in cases - by questioning the different interpretations of ‘If p?’ and exploring the different interpretative responses of what follows in ‘Then What?’. The aim is to characterise how ‘reasoning in, within, with, and from cases’ forms a mode of scientific investigation for single cases, for runs of cases, and for comparative cases, drawing on materials from a range of different fields in which case-based reasoning appears.
    Keywords: single cases; runs of cases; comparative cases; case-based reasoning
    JEL: N0 J1
    Date: 2019–12

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