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on Heterodox Microeconomics |
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Issue of 2022‒06‒20
thirteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Corrado Monti; Marco Pangallo; Gianmarco De Francisci Morales; Francesco Bonchi |
| Abstract: | Agent-Based Models (ABMs) are used in several fields to study the evolution of complex systems from micro-level assumptions. However, ABMs typically can not estimate agent-specific (or "micro") variables: this is a major limitation which prevents ABMs from harnessing micro-level data availability and which greatly limits their predictive power. In this paper, we propose a protocol to learn the latent micro-variables of an ABM from data. The first step of our protocol is to reduce an ABM to a probabilistic model, characterized by a computationally tractable likelihood. This reduction follows two general design principles: balance of stochasticity and data availability, and replacement of unobservable discrete choices with differentiable approximations. Then, our protocol proceeds by maximizing the likelihood of the latent variables via a gradient-based expectation maximization algorithm. We demonstrate our protocol by applying it to an ABM of the housing market, in which agents with different incomes bid higher prices to live in high-income neighborhoods. We demonstrate that the obtained model allows accurate estimates of the latent variables, while preserving the general behavior of the ABM. We also show that our estimates can be used for out-of-sample forecasting. Our protocol can be seen as an alternative to black-box data assimilation methods, that forces the modeler to lay bare the assumptions of the model, to think about the inferential process, and to spot potential identification problems. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.05052&r= |
| By: | Esteban Ramon Perez Caldentey; Lorenzo Nalin; Leonardo Rojas |
| Abstract: | This paper provides a critical view of macroprudential regulation/policies found in mainstream and post-Keynesian economics. The paper provides a macroeconomic framework that can be used as a basis for the analysis of macroprudential guidelines and policies. It is based on on five main principles/guidelines: (i) financial fragility is endogenous and results from the normal functioning of market based economies driven by the profit motive; (ii) financial fragility can originate in the financial and real sectors of an economy; (iii) financial cycles are not necessarily driven by boom and busts and financial fragility need not originate in an economic boom; (iv) macroprudential policies should be viewed from a dynamic perspective, that is they must take into account the changes in the international financial architecture/structure and be region/country specific; and (v) macroprudential regulation/guidelines requires a truly macroeconomic framework. These principles are captured in the specification of a baseline stock-flow model for Latin America and the Caribbean with five sectors (government, central bank, financial sector, private sector, and external sector). The model is a tool that can be used for evaluating other macroprudential policies. |
| Keywords: | Debt, external constraint, external financial cycle, financial flows, Latin America and the Caribbean, microprudential and macroprudential regulation, stock-flow |
| JEL: | B59 E32 E52 F21 F41 G15 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2217&r= |
| By: | Riccardo Zolea |
| Abstract: | This paper proposes a functional analysis of input, output and capital of the banking sector in an endogenous money framework with the aim of determining the aggregates on which to calculate the bank profit rate. Although banks create bank money, State money is not producible by banks, which need it as an input. Deposits are the cheapest source of central bank money already in the system, so it can be argued that deposits are inputs to the banking industry. Assuming that loans are the banking output, we investigate what role regulation plays in defining a banking production technique. The framework developed from Basel Accords imposes a level of equity proportional to the level of risk-weighted bank assets. Thus, a bank capital-to-output ratio defined by these rules is conceivable. |
| Keywords: | Bank; deposit; capital; input-output analysis; post-Keynesian approach; MMT. |
| JEL: | E51 E12 G21 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0269&r= |
| By: | Florian Peters; Doris Neuberger; Oliver Reinhardt; Adelinde Uhrmacher |
| Abstract: | In macroeconomics, an emerging discussion of alternative monetary systems addresses the dimensions of systemic risk in advanced financial systems. Monetary regime changes with the aim of achieving a more sustainable financial system have already been discussed in several European parliaments and were the subject of a referendum in Switzerland. However, their effectiveness and efficacy concerning macro-financial stability are not well-known. This paper introduces a macroeconomic agent-based model (MABM) in a novel simulation environment to simulate the current monetary system, which may serve as a basis to implement and analyze monetary regime shifts. In this context, the monetary system affects the lending potential of banks and might impact the dynamics of financial crises. MABMs are predestined to replicate emergent financial crisis dynamics, analyze institutional changes within a financial system, and thus measure macro-financial stability. The used simulation environment makes the model more accessible and facilitates exploring the impact of different hypotheses and mechanisms in a less complex way. The model replicates a wide range of stylized economic facts, including simplifying assumptions to reduce model complexity. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.00752&r= |
| By: | Robert H. Scott (Monmouth University) |
| Abstract: | This paper examines Kenneth Boulding's (1910-1993) religious beliefs and argues he was one of the most prolific religious economists in the 20 th century. He was an enigmatic economist whose career spanned over six decades. He helped to establish the field of general systems and furthered peace studies and conflict and defense. His early work earned him the John Bates Clark medal in 1949. But behind Boulding's theoretical economics was a deep religious ideology. Strongly affected by World War I while growing up in Liverpool, England, Boulding became a lifelong pacifist. Raised Methodist, Boulding discovered Quakerism in high school. While Boulding published widely in the field of economics, he also published almost 100 articles in Quaker journals. Boulding's body of work in economics and Quakerism led to interesting crosspollination. His work on peace and conflict and defense were a direct result of his pacifism. Boulding's work shows deep concern for human betterment and prosperity that is seeped in his religious principles. |
| Keywords: | human betterment,Kenneth Boulding,pacifism,Quakers,Religious Society of Friends |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03541619&r= |
| By: | Osuagwu, Eze Simpson |
| Abstract: | This paper argues that the Christian conception of Natural law is indispensable for the understanding of a coherent moral theory of the State. The paper discusses the Christian conception of Natural Law with a view to understanding a philosophical link with the moral theory of the State. The paper reveals that from the classical era of Plato and Aristotle through the medieval times of Thomas Aquinas, Natural law has been conceived to be divine. However, following the protestant reforms of Martin Luther and Richard Hooker through the early modern natural law theorists inclined to the social contract, the concept of natural law has been interpreted to mean a theory that runs contrary to the existence of written laws and as such needs to be modified to be accepted as a code of conduct for society. The paper concludes that the perceived influence of Natural Law on positive or coded law is rooted in conscience, which as Thomas Aquinas pointed out is based on reason or synderesis. |
| Keywords: | Natural Law; Moral Theory; Public Policy; Christian Kingship; Religious Reformation |
| JEL: | Z1 Z12 Z18 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112999&r= |
| By: | Zolea, Riccardo (Roma Tre University) |
| Abstract: | In this paper we investigate the relationship between interest rate and profit rate. Considering that the bank must obtain on the invested capital a profit rate at least equal to the normal one, the bank interest rate can be calculated as the price of the bank output, i.e. the loan. The profit rate thus determines the interest rate, through the instrument of the price equation. Central to this study is the analysis of the best way to imagine such a price equation, considering the role of the central bank. We then move on to study the structure of interest rates and their relationship to the profit rate. Finally, by introducing the hypothesis of a bank profit rate permanently higher than the normal one, we confirm and better explain from an analytical point of view some insights expressed by Marx in Book III of Capital. |
| Keywords: | bank profitability; interest rate; price equation; Marx; finance |
| JEL: | E11 E43 G21 |
| Date: | 2022–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sraffa:0055&r= |
| By: | Kochetkov, Dmitry |
| Abstract: | Innovation is often perceived as an object of study in economics and management. However, the social and behavioural aspects of innovation acceptance are as important as the economics of the new product development. Based on the interdisciplinary perspective, the authors formulated their own definition of innovation for the purposes of this study. The authors consider innovation as a change in the way social action is conducted, entailing a wide range of social, economic, behavioural, and institutional changes. The variety of approaches gives rise to the need for a typology. J. Sundbo (1998) divided innovation into three groups depending on the aspect of the phenomenon: the theory of entrepreneurship; technological and social aspects; and the strategic aspect. Adopting the Sundbo conceptual framework, the authors supplemented and developed it based on the literature that appeared after 1998. The authors also added new directions at the second level of decomposition and the relationship between different aspects of innovation. In particular, attention was paid to such phenomena as open innovation, agile innovation, “helix” models, etc. Thus, the authors have developed a novel typology of innovations, which expands the theoretical knowledge in this field. |
| Date: | 2022–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:pv4zg&r= |
| By: | Omang Ombolo Messono (University of Douala, Douala, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon) |
| Abstract: | This study examines the effects of the historical prevalence of infectious diseases on contemporary gender equality. Previous studies reveal the persistence of the effects of historical diseases on innovation, through the channel of culture. Drawing on the Parasite-Stress Theory, we propose a framework which argues that historical prevalence of infectious disease reduces contemporary gender equality. Using Ordinary Least Squares (OLS) and Two Stage Least Squares (2SLS) in a cross-section with data from 122 countries between 2000 and 2021, we provide support for the underlying hypothesis. Past diseases reduce gender equality both directly and indirectly. The strongest indirect effects occur through innovation output. Gender equality analysis may take these findings into account and incorporate disease pathogens into the design of international social policy. |
| Keywords: | infectious diseases; gender equality; economic development |
| JEL: | B15 B40 B54 I31 J24 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/027&r= |
| By: | Alicia Lefrançois (CRIISEA - Centre de Recherche sur les Institutions, l'Industrie et les Systèmes Économiques d'Amiens - UR UPJV 3908 - UPJV - Université de Picardie Jules Verne); Sophie Changeur (CRIISEA - Centre de Recherche sur les Institutions, l'Industrie et les Systèmes Économiques d'Amiens - UR UPJV 3908 - UPJV - Université de Picardie Jules Verne) |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03643690&r= |
| By: | Daimer, Stephanie; Havas, Attila; Cuhls, Kerstin; Yorulmaz, Merve; Vrgovic, Petar |
| Abstract: | : We contribute to the Responsible Research and Innovation (RRI) literature in two ways: (i) we consider how societal aspects are taken into account in research and innovation (R&I) activities in four fundamentally different scenarios, as opposed to analysing current practices; and (ii) put the emphasis on the political conditions of the interactions among the actors, as opposed to focussing on RRI principles and instruments. In the Kingdom of RRI citizens participate directly in decision-making processes; Fortress Europe depicts a libertarian system; Failed Democracy is a populist regime; while Benevolent Green Eurocrats describes a technocratically coordinated strong state. The scenarios offer novel insights into the nature and repercussions of possible policy problems, that is, efficacy; efficiency; legitimacy of R&I activities; societal involvement; equity; and freedom of research. Meaningful interactions between lay people and professional actors in an innovation system can be safeguarded even in the harshest ideological and political framework. |
| Keywords: | Responsible Research and Innovation (RRI); Innovation systems; Ideological stances on linkages between society, research, and innovation; Scenarios; Futures of research, innovation, and society |
| JEL: | F50 F52 H10 H11 O20 O25 O3 O30 O31 O32 O33 O38 P11 Q54 Q55 Q56 |
| Date: | 2021–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113098&r= |
| By: | Yannick Fondeur (LISE - Laboratoire interdisciplinaire pour la sociologie économique - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - CNRS - Centre National de la Recherche Scientifique, CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé) |
| Abstract: | L'économie collaborative et le développement de plateformes d'échanges ont conduit à la diffusion de nouvelles pratiques de consommation, de production et de financement. Les formes diverses que peut prendre cette économie sont encore peu appréhendées par la recherche en sciences humaines et sociales. Quelles formes émergentes d'économie collaborative ? Quelles conséquences sur les modalités d'emploi, les conditions de travail et la protection sociale des travailleurs collaboratifs ? La recherche de Yannick Fondeur croise trois champs porteurs d'enjeux majeurs en termes de travail et d'emploi : le freelancing, régulièrement présenté comme la plaque avancée de « l'avenir du travail » (Future of Work) ; la plateformisation et l'« économie collaborative », vecteurs supposés d'une transformation profonde des formes productives et d'emploi ; les métiers du numérique, segment « en tension » du marché du travail et réservoir supposé d'emplois qualifiés pour les années à venir. La focale est portée sur le secteur de la prestation de services intellectuels aux entreprises, et plus particulièrement sur les développeurs indépendants, souvent désignés comme les nouveaux « sublimes » en références aux ouvriers très qualifiés du XIXe siècle, imprimeurs ou mécaniciens, qui pouvaient, dans une configuration de marché qui leur était favorable, maîtriser leurs engagements et leur mobilité, concilier travail et projets personnels. |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03611751&r= |
| By: | Gourdel, Régis; Monasterolo, Irene; Dunz, Nepomuk; Mazzocchetti, Andrea; Parisi, Laura |
| Abstract: | The analysis of the conditions under which, and extent to which climate-adjusted financial risk assessment affects firms’ investment decisions in the low-carbon transition, and the realisation of the climate mitigation trajectories, still represent a knowledge gap. Filling this gap is crucial to assess the “double materiality” of climate-related financial risks. By tailoring the EIRIN Stock-Flow Consistent model, we provide a dynamic balance sheets assessment of climate physical and transition risks for the euro area, using the climate scenarios of the Network for Greening the Financial System (NGFS). We find that an orderly transition achieves important co-benefits already in the mid-term, with respect to carbon emissions abatement, financial stability, and economic output. In contrast, a disorderly transition can harm financial stability, thus limiting firms’ capacity to invest in low-carbon activities that could decrease their exposure to transition risk and help them recover from climate physical shocks. Importantly, investors’ climate sentiments, i.e. their anticipation of the impact of the carbon tax across NGFS scenarios, play a key role for smoothing the transition in the economy and finance. Our results highlight the importance for financial supervisors to consider the role of firms and investors’ expectations in the low-carbon transition, in order to design appropriate macro-prudential policies for tackling climate risks. JEL Classification: B59, Q50 |
| Keywords: | climate physical risk, climate transition risk, double materiality, Network for Greening the Financial System scenarios, Stock-Flow Consistent model |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222665&r= |