nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒11‒01
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Marx's Rate of Profit and the Theory of Labour values as Conservation Law By Giovanni Scarano
  2. A critical note on the scientific conception of economics: claiming for a methodological pluralism By Rouven Reinke
  3. Multiplicity and not necessarily heterogeneity: implications for the long-run degree of capacity utilization By Lorenzo Di Domenico
  4. Method and scope in Joseph A. Schumpeter's economics: a pluralist perspective By Turan Yay
  5. AgriLOVE: agriculture, land-use and technical change in an evolutionary, agent-based model. By Jonathan Taglialatela; Andrea Mina
  6. A biodiversity-employment framework to protect biodiversity By Jean-François Ruault; Alice Dupré La Tour; André Evette; Sandrine Allain; Jean-Marc Callois
  7. Les ménages au cœur de la financiarisation. Sur Risking Together, de D. Bryan et M. Rafferty By Bruno Tinel
  8. Uneven Development in a Kaldor-Pasinetti-Verspagen Model of Growth and Distribution By Jose Luis Oreiro; Vitor Antonio Ferreira Dotta; João Pedro Heringer Machado
  9. Leverage, Liquidity and Agricultural Cooperative Profitability By Miranda, Mario J.; Chen, Meng-Fen
  10. Germany: Co-Creating Cooperative and Sharing Economies By Zehle, Soenke; Käfer, Hannes; Hartnik, Julia; Schmitz, Michael
  11. What Shapes Cognitions of Climate Change in Europe? Ideology, Morality and the Role of Educational Attainment By Heinz Welsch
  12. The elastic origins of tail asymmetry By Satoshi Nakano; Kazuhiko Nishimura
  13. Neoliberal governmentality, knowledge work, and thumos By Benda Hofmeyr

  1. By: Giovanni Scarano
    Abstract: The paper argues that Ricardo’s concern with determining the rate of profit had no central place in Marx’s analysis. Marx, in fact, utilised his own version of the labour theory of value – very different from that of Smith and Ricardo – not to determine the rate of profit, but to analyse the dynamics of economic aggregates and bring to light the inner social nature of production and distribution processes. The present analysis of the peculiar use of Marx’s labour theory of value is also an attempt to explain the role played by it in his system, for better or worse. The final thesis of the paper is that, in his system, Marx’s version of the labour theory of value plays the same role that conservation laws play in most physics theories, with significant consequences for an understanding of the dynamics of capital accumulation, business cycles and economic crises.
    Keywords: Labour theory of value, prices of production, rate of profit, transformation problem, conservation laws
    JEL: B14 B24 B51 C67
    Date: 2021–10
  2. By: Rouven Reinke (University of Hamburg)
    Abstract: Opponents of mainstream economics have not yet called attention to the lack of in-depth examination of the general scientific conception of modern economics. However, economic science cannot consistently fulfil the epistemological and ontological requirements of the scientific standards underlying this conception. What can be scientifically recognized as true cannot be answered, neither through the actual ontological structure of the object of observation nor through a methodological demarcation. These limitations necessarily lead to the claim for both a pragmatic and a radical methodological pluralism.
    Keywords: pluralism,scientific conception,mainstream economics,methodology
    Date: 2021–11–20
  3. By: Lorenzo Di Domenico (University of Warsaw (PL))
    Abstract: The paper discusses the implications of disaggregation within the theoretical debate on the long-run convergence of the degree of capacity utilization towards the normal one. To this end, we develop an Agent Based – Stock Flow Consistent version of a demand-led growth model based on the capacity adjustment principle, fixed normal rate of capacity utilization and non-capacity creating autonomous component of demand. We show that, once the implicit assumption on the centralized control over the aggregate productive capacity characterizing aggregate models is removed, the economy displays emergent properties: the fluctuations of the business cycle endogenously arise, and the long-run aggregate degree of capacity utilization fluctuates around a level lower than the normal one. These proprieties help to explain some empirical evidence about the tendential under-utilization of productive capacity and confute both the traditional wisdom according to which there is only one degree of capacity utilization (the normal one) compatible with a stable accumulation and the neo-Kaleckian “closure”. To this extent, we point out that the long-run growth path determined within a Supermultiplier model can be somehow characterized by neo-Kaleckian features but, differently from the last one, such “undesired equilibrium” does not present Harrodian Instability: in the quasi-steady state firms keep trying to restore the exogenously given normal degree of capacity utilization without succeeding in that. The emerging phenomena derive, precisely, from considering a multiplicity of firms rather than the aggregate macro firm, and not by their heterogeneity. In particular, for any given distribution of demand across firms, the decentralized control over aggregate productive capacity produces over-investment with respect to the normal growth path.
    Keywords: Post-Keynesian economics; Economic growth; Agent Based – Stock Flow Consistent models
    JEL: C63 E11 E12 O42 P16
    Date: 2021–10
  4. By: Turan Yay (Yeditepe University)
    Abstract: This study aims to evaluate the ideas on the scope and method of economics of Joseph Schumpeter who is one of the important economists of the 20th century. The study consists of four sections: In the first section we underline the interesting points of his life to understand the roots, background, or 'vision' of his thought system. In the second section, we will examine his methodological views that he asserted in his first (but translated into English only in 2010) book. Third section will be concerned with his 'analysis of economics' which refers to his critics of Leon Walras's general equilibrium analysis (as static) and his own alternative (dynamics analysis of capitalist economies) about the central subject matter of economics. In the fourth section we will treat his approach about the development/evolution process of economic thought in time. The study concludes with a brief assessment: Schumpeter is one of the rare economists who can build his own thought system in the history of economics, and he embraced a pluralist perspective in the field of the methodology of economics.
    Keywords: Schumpeter,methodology,economic development,sociology of science
    Date: 2021–11–20
  5. By: Jonathan Taglialatela; Andrea Mina
    Abstract: The paper focuses on the capital structure of firms in their early years of operation. Through the lens of Pecking Order Theory, we study how the pursuit of innovation influences the reliance of firms on different types of internal and external finance. Panel analyses of data on 7,394 German start-ups show that innovation activities are relevant predictors of the start-ups' revealed preferences for finance, and that the nature of these effects on the type and order of financing sources depends on the degree of information asymmetries specific to research and development activities, human capital endowments, and the market introduction of new products and processes.
    Keywords: Innovation; information asymmetries; start-up; pecking order; entrepreneurial finance.
    Date: 2021–10–23
  6. By: Jean-François Ruault (UR LESSEM - Laboratoire des EcoSystèmes et des Sociétés en Montagne - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alice Dupré La Tour (UR LESSEM - Laboratoire des EcoSystèmes et des Sociétés en Montagne - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); André Evette (UR LESSEM - Laboratoire des EcoSystèmes et des Sociétés en Montagne - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sandrine Allain (UR LESSEM - Laboratoire des EcoSystèmes et des Sociétés en Montagne - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jean-Marc Callois
    Abstract: Protecting biodiversity matters for the sustainability transition, but nothing yet seems to be able to halt the rate of biodiversity loss. The promotion of green jobs fuels questionable ideas, among which that there are green vs non-green jobs, and that the latter can be progressively replaced by green jobs. The option of developing jobs that could act to offset environmental damage is also attractive. Based on a social-ecological approach and the "strong sustainability" paradigm, the paper develops and tests a three-dimensional framework to highlight the complex and multifaceted relationship between employment growth and biodiversity enhancement. Three case studies are investigated using field expertise: slope revegetation, soil bioengineering and guided nature tours. The framework includes direct impacts of jobs on biodiversity, indirect impacts on biodiversity and ecological feedback on employment growth with two types of insights. First, it serves a reflexive analysis on the way these jobs, supposedly green, support and respond to biodiversity enhancement. Second, it helps tailor policy instruments adapted to each ideal-type of biodiversityemployment relationship towards a low biodiversity impacting economy. It highlights the various possible actionsfrom regulations to communication instrumentsalong with the types of biodiversity-employment relationships they address the best.
    Keywords: employment policies,avoid-reduceoffset sequence,strong sustainability,ecological transition,social-ecological system,green growth
    Date: 2022–01
  7. By: Bruno Tinel (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In Risking Together, Bryan and Rafferty think in the manner of behavioural finance, but they think against it and invent Marxist behavioural finance. They show how households' subjectivity is reshaped by finance in their daily life, and how they unwittingly have become a key player in the production process of derivatives. Households are now integrated into finance on the supply side, through the securitization of their debt but also of their payments, and on the demand side through their savings. Households have collectively become net risk absorbers. What about the systemic issues of the financial loop in which households are now inserted? Considering the omnipotence of finance that transfers risks to households, the social institutionalization of default risk is now required.
    Abstract: Bryan et M. Rafferty Résumé Dans Risking together, Bryan et Rafferty pensent à la manière de la finance comportementale, mais ils pensent contre elle et inventent la Marxian behavioural finance. Ils montrent en quoi les ménages, amenés à penser à la manière de la finance dans leur vie quotidienne, sont devenus malgré eux un acteur clé du processus de production des produits dérivés. Les ménages sont désormais intégrés à la finance du côté offre, par la titrisation de leur dette mais aussi de leurs paiements, et du côté demande par leur épargne. Il convient alors de préciser les enjeux systémiques de la boucle financière dans laquelle s'insèrent désormais les ménages, devenus collectivement absorbeurs nets de risque. Face à la toute-puissance d'une finance qui transfère les risques aux ménages, s'impose désormais l'institutionnalisation sociale du risque de défaut.
    Keywords: Produits dérivés,titrisation,financiarisation,ménages,transfert du risque Derivatives,securitisation,financialization,households,risk transfer
    Date: 2021–08–12
  8. By: Jose Luis Oreiro; Vitor Antonio Ferreira Dotta; João Pedro Heringer Machado
    Abstract: The main objective of this paper is to incorporate the technological asymmetries between countries in the formal structure of the so-called Kaldor-Pasinetti model of growth and distribution. We will name such a model as Kaldor-Pasinetti-Verspagen Growth-Model. Our basic contribution for the literature of post-Keynesian models of growth and distribution is to redefine Kaldor´s technical progress function to incorporate the technological gap in the determination of the natural rate of growth. Such incorporation will make possible for such class of models to generate uneven development between countries, at least for mature economies, that is, economies where all labor force is employed in the modern or capitalist sector. Since in such models, income distribution is the adjusting variable between natural and warranted rate of growth, one important result of our model is that income distribution between wages and profits is a non-linear function of the level of technological gap: below some threshold level of technological gap, profit-share will be reduced with the reduction of technological gap; above such threshold level, hover, the opposite effect occurs. Another important contribution of this article is to make a general formulation of the saving function, incorporating in the same model the contributions of both Kaldor and Pasinetti. From this general formulation, we can make different closures for the general model, which will allow the analysis of the implications of different assumptions about saving behavior over the income and wealth distribution in the balanced-growth path of mature economies that operate with different levels of technological gap.
    Keywords: Uneven Development, Post Keynesian Economics, Technological progress
    JEL: E12 O11 O14
    Date: 2021–10
  9. By: Miranda, Mario J.; Chen, Meng-Fen
    Keywords: Agricultural Finance, Agribusiness, Marketing
    Date: 2021–08
  10. By: Zehle, Soenke; Käfer, Hannes; Hartnik, Julia; Schmitz, Michael
    Abstract: The chapter describes the sharing economy in Germany as a heterogeneous dynamic, combining local trends and histories with economic forms drawing on experiences mainly from across Europe and North America. Increasingly taken into account by policymakers in the regulation of markets and the redesign of innovation governance frameworks, “sharing” as a complex nexus linking the exercise of citizenship to sustainable consumption and informational self-determination in digital societies will continue to drive and frame the creation of value chains. Of particular interest are linkages between sharing economies and the traditions of cooperativism, currently experiencing a renaissance. The latter is key because it shapes the context in which sharing economy initiatives exist and expand—an opening of definitions and narrative of innovation, of (public) value, and of collaborative agency and cooperative management. M4 - Citavi
    Keywords: Cooperativism; German Sharing Economy; Platform Economy
    JEL: L31 L86
    Date: 2021
  11. By: Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Cognitions about climate change are of critical importance for climate change mitigation as they influence climate-relevant behaviors and the support of climate policy. Using about 30,000 observations from a large-scale representative survey from 23 European countries, this study provides two major findings. First, important policy-relevant climate change cognitions do not only differ by individuals’ ideological identity (left versus right) but – independently – by their moral identity, that is, the pattern of endorsement of the moral foundations: Care, Fairness, Liberty, Loyalty, Authority and Purity/Sanctity. In particular, controlling for ideological position the cognitions that the world climate is changing, that climate change is human-made, and that climate change impacts are bad are significantly negatively related to stronger endorsement of the Authority and Sanctity foundations while being positively related to stronger endorsement of the Loyalty and Fairness foundations. Second, not only the ideology-related cognitive divide but the morality-related divide is larger in individuals with tertiary education, consistent with the idea that individuals with greater science literacy and numeracy use these skills to adjust their cognitions to their group identity. The finding that better education may amplify rather than attenuate the ideology and morality dependence of decision-relevant climate change cognitions sheds doubt on the proposition that better education unambiguously furthers the prospects for climate change mitigation.
    Keywords: climate change cognition; identity-protective cognition; ideological identity; moral identity; moral foundations; educational attainment
    Date: 2021–10
  12. By: Satoshi Nakano; Kazuhiko Nishimura
    Abstract: Based on a multisector general equilibrium framework, we show that the sectoral elasticity of substitution plays the key role in the evolution of robustness and the asymmetric tails in the aggregate macroeconomic fluctuations. Non-unitary elasticity of substitution of the production networks renders a nonlinear Domar aggregation where normal sectoral productivity shocks translates into a non-normal aggregated shocks. We estimate 100 sectoral elasticities of substitution, using the time-series linked input-output tables for Japan, and find that the production economy is elastic overall. Along with the vested assessment of an inelastic production economy for the US, the contrasting tail asymmetry of the distribution of aggregated shocks between the US and Japan is explored.
    Date: 2021–10
  13. By: Benda Hofmeyr (University of Pretoria [South Africa])
    Date: 2021–11–20

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