nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2022‒07‒25
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Agent-Based Modeling in Economics and Finance: Past, Present, and Future By Farmer, J. Doyne; Axtell, Robert L.
  2. Reinforcement Learning in Macroeconomic Policy Design: A New Frontier? By Callum Tilbury
  3. L'humanité face au réchauffement climatique Le capitalisme en crise Pax Economica By Jacques Fontanel
  4. Biophilic Markets By Beinhocker, Eric
  5. Economic, technological and social drivers of cryptocurrency market evolution and its managerial impact By Holtfort, Thomas; Horsch, Andreas; Schwarz, Joachim
  6. The trickle down from environmental innovation to productive complexity By Francesco de Cunzo; Alberto Petri; Andrea Zaccaria; Angelica Sbardella
  7. Zur ökonomischen Verhaltenstheorie: Grundlagen, Kritik, Alternativen - Eine Orientierung für Studierende By Kapeller, Jakob
  8. “Co-construction” in Deliberative Democracy: Lessons from the French Citizens’ Convention for Climate By Louis-Gaëtan Giraudet; Bénédicte Apouey; Hazem Arab; Simon Baeckelandt; Philippe Begout; Nicolas Berghmans; Nathalie Blanc; Jean-yves Boulin; Eric Buge; Dimitri Courant; Amy Dahan; Adrien Fabre; Jean-Michel Fourniau; Maxime Gaborit; Laurence Granchamp; Hélène Guillemot; Laurent Jeanpierre; Hélène Landemore; Jean-François Laslier; Antonin Macé; Claire Mellier; Sylvain Mounier; Théophile Pénigaud; Ana Povoas; Christiane Rafidinarivo; Bernard Reber; Romane Rozencwajg; Philippe Stamenkovic; Selma Tilikete; Solène Tournus
  9. The Effect of Labor Market Liberalization on Political Behavior and Free Market Norms By Ran Abramitzky; Netanel Ben-Porath; Shahar Lahad; Victor Lavy; Michal Palgi
  10. Pemberdayaan Wakaf Produktif Sebagai Instrumen untuk Kesejahteraan Umat By Astuti, Hepy Kusuma
  11. Regional perspectives on socio-technical transitions: Combining research insights from geography of innovation and transition studies By Hansmeier, Hendrik; Koschatzky, Knut; Zenker, Andrea; Stahlecker, Thomas
  12. Bounded Rationality and Animal Spirits: A Fluctuation-Response Approach to Slutsky Matrices By Jerome Garnier-Brun; Jean-Philippe Bouchaud; Michael Benzaquen
  13. Complex Systems Modeling of Community Inclusion Currencies By Clark, Andrew; Mihailov, Alexander; Zargham, Michael

  1. By: Farmer, J. Doyne; Axtell, Robert L.
    Abstract: Agent-based modeling (ABM) is a novel computational methodology for representing the behavior of individuals in order to study social phenomena. Its use is rapidly growing in many fields. We review ABM in economics and finance and highlight how it can be used to relax conventional assumptions in standard economic models. In economics, ABM has enriched our understanding of markets, industrial organization, labor, macro, development, environmental and resource economics, as well as policy. In financial markets, substantial accomplishments include understanding clustered volatility, market impact, systemic risk and housing markets. We present a vision for how ABMs might be used in the future to build more realistic models of the economy and review some of hurdles that must be overcome to achieve this.
    Keywords: agent-based computational economics, multi-agent systems, agent-based modeling and simulation, distributed systems
    JEL: C00 C63 C69 D00 E00 G00
    Date: 2022–06
  2. By: Callum Tilbury
    Abstract: Agent-based computational macroeconomics is a field with a rich academic history, yet one which has struggled to enter mainstream policy design toolboxes, plagued by the challenges associated with representing a complex and dynamic reality. The field of Reinforcement Learning (RL), too, has a rich history, and has recently been at the centre of several exponential developments. Modern RL implementations have been able to achieve unprecedented levels of sophistication, handling previously-unthinkable degrees of complexity. This review surveys the historical barriers of classical agent-based techniques in macroeconomic modelling, and contemplates whether recent developments in RL can overcome any of them.
    Date: 2022–06
  3. By: Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble)
    Abstract: Le réchauffement de la Terre constitue un danger pour la vie humaine, mais les Etats ne peuvent combattre ce fléau sans l'appui des autres Etats. La catastrophe écologique va modifier les conditions de vie humaine, et limiter les consommations fossiles et les comportements consuméristes. Malgré ces dangers, les hommes politiques et le lobbying restent fondamentalement concentrés sur leurs pouvoirs et leur profits immédiats. Des solutions techniques existent, mais le capitalisme promeut un intérêt individuel aujourd'hui dangereux. Aucune autorité internationale n'a l'autorité pour convaincre les Etats d'éviter la catastrophe à venir. Dans ce cadre, il faut raisonner comme si les hommes vivaient déjà cette crise du réchauffement climatique et se posaient la question « qu'aurait-il fallu faire alors pour éviter cette catastrophe ». Le « catastrophisme éclairé » peut inciter les Etats à mieux valoriser l'intérêt collectif et à empêcher les nuisances de certaines formes spéculatives d'intérêt personnel.
    Keywords: New Green deal Vert,locked assets,capitalism,global warming,digital industry,economic crisis
    Date: 2022–05–11
  4. By: Beinhocker, Eric
    Abstract: Markets must be made "biophilic" (i.e., compatible with life flourishing on Earth). To do so we must abandon prevailing notions of market efficiency and reconceive markets as social evolutionary systems embedded in nature. Such a re-conception enables us to see that constraining markets within biophysical boundaries does not result in zero-sum trade-offs with the economy, but instead would drive market evolution to new forms of prosperity.
    Date: 2022–06
  5. By: Holtfort, Thomas; Horsch, Andreas; Schwarz, Joachim
    Abstract: Cryptocurrencies, such as Bitcoin, have caused intense discussions during recent years among market participants according to new options (such as payment or financing alternatives) and new risks (such as price volatility) involved. Despite being considered by various actors of private households, companies, financial, monetary, and political institutions, a theory-based understanding of this innovation and knowledge of their evolution is still limited. On a basic level, this holds for differences between cryptocurrencies on the one hand and traditional currencies, like paper money, gold or special assets, on the other. On a market level, factors driving the prices of cryptocurrencies appear to be of seminal meaning, in particular against the backdrop of recent market turmoil. Therefore, the paper conducts an empirical analysis of the five biggest cryptocurrencies (measured by market capitalization) with regard to their evolutionary development, price behaviour, and their impact for managers
    Keywords: cryptocurrencies,innovation,evolutionary economics
    JEL: E42 O30
    Date: 2022
  6. By: Francesco de Cunzo; Alberto Petri; Andrea Zaccaria; Angelica Sbardella
    Abstract: We study the empirical relationship between green technologies and industrial production at very fine-grained levels by employing Economic Complexity techniques. Firstly, we use patent data on green technology domains as a proxy for competitive green innovation and data on exported products as a proxy for competitive industrial production. Secondly, with the aim of observing how green technological development trickles down into industrial production, we build a bipartite directed network linking single green technologies at time $t_1$ to single products at time $t_2 \ge t_1$ on the basis of their time-lagged co-occurrences in the technological and industrial specialization profiles of countries. Thirdly we filter the links in the network by employing a maximum entropy null-model. In particular, we find that the industrial sectors most connected to green technologies are related to the processing of raw materials, which we know to be crucial for the development of clean energy innovations. Furthermore, by looking at the evolution of the network over time, we observe that more complex green technological know-how requires more time to be transmitted to industrial production, and is also linked to more complex products.
    Date: 2022–06
  7. By: Kapeller, Jakob
    Abstract: Dieser kurze Text bietet eine kursorische Einführung in die klassische ökonomische Verhaltenstheorie, die auf der Kunstfigur des homo oeconomicus beruht. Es wird versucht die konzeptionellen Grundlagen des Modells darzulegen, die wesentlichen Intuitionen des Modells zu vermitteln und zentrale Kritikpunkte und darauf aufbauend alternative bzw. weiterführende Ansätze zu benennen. Der Text ist vor allem für Studierende aus nicht-ökonomischen Fächern gedacht, die eine kritische Hinführung zur ökonomischen Verhaltenstheorie suchen.
    JEL: A20 D01
    Date: 2022
  8. By: Louis-Gaëtan Giraudet (ENPC - École des Ponts ParisTech); Bénédicte Apouey (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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); Hazem Arab (UP1 - Université Paris 1 Panthéon-Sorbonne); Simon Baeckelandt (Université de Lille); Philippe Begout (GIS DEMOCRATIE ET PARTICIPATION - Partenaires IRSTEA - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture); Nicolas Berghmans (IDDRI - Institut du Développement Durable et des Relations Internationales - Institut d'Études Politiques [IEP] - Paris); Nathalie Blanc (CNRS - Centre National de la Recherche Scientifique); Jean-yves Boulin (Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres, IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Eric Buge (Assemblée Nationale); Dimitri Courant (UNIL - Université de Lausanne); Amy Dahan (CNRS - Centre National de la Recherche Scientifique); Adrien Fabre (ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich]); Jean-Michel Fourniau (Université Gustave Eiffel); Maxime Gaborit (Université Saint-Louis - Bruxelles); Laurence Granchamp (CNRS - Centre National de la Recherche Scientifique); Hélène Guillemot (CNRS - Centre National de la Recherche Scientifique); Laurent Jeanpierre (UP1 - Université Paris 1 Panthéon-Sorbonne); Hélène Landemore (Yale University [New Haven]); Jean-François Laslier (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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); Antonin Macé (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - 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); Claire Mellier; Sylvain Mounier (GIS DEMOCRATIE ET PARTICIPATION - Partenaires IRSTEA - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture); Théophile Pénigaud (ENS Lyon - École normale supérieure - Lyon); Ana Povoas (ULB - Université libre de Bruxelles); Christiane Rafidinarivo (UR - Université de La Réunion); Bernard Reber (CNRS - Centre National de la Recherche Scientifique); Romane Rozencwajg (UP8 - Université Paris 8 Vincennes-Saint-Denis); Philippe Stamenkovic (Université Ben Gourion du Néguev); Selma Tilikete (UP8 - Université Paris 8 Vincennes-Saint-Denis); Solène Tournus (CNRS - Centre National de la Recherche Scientifique)
    Abstract: Launched in 2019, the French Citizens' Convention for Climate (CCC) tasked 150 randomly-chosen citizens with proposing fair and effective measures to fight climate change. This was to be fulfilled through an "innovative co-construction procedure," involving some unspecified external input alongside that from the citizens. Did inputs from the steering bodies undermine the citizens' accountability for the output? Did co-construction help the output resonate with the general public, as is expected from a citizens' assembly? To answer these questions, we build on our unique experience in observing the CCC proceedings and documenting them with qualitative and quantitative data. We find that the steering bodies' input, albeit significant, did not impair the citizens' agency, creativity and freedom of choice. While succeeding in creating consensus among the citizens who were involved, this co-constructive approach however failed to generate significant support among the broader public. These results call for a strengthening of the commitment structure that determines how follow-up on the proposals from a citizens' assembly should be conducted.
    Keywords: Citizens’ assemblies,climate assemblies,deliberative democracy,co-construction,carbon tax,referendum
    Date: 2022
  9. By: Ran Abramitzky; Netanel Ben-Porath; Shahar Lahad; Victor Lavy; Michal Palgi
    Abstract: We study the effects of labor market liberalization on political behavior and attitudes towards free-market capitalism and socialism, exploiting a reform whereby the Israeli socialist communities called kibbutzim shifted from equal sharing to market-based wages. Our identification strategy relies on this reform's sharp and staggered implementation in different kibbutzim. We first examine changes in behavior associated with this labor market liberalization and document that the reform led to a shift in electoral voting patterns, resulting in decreased support for left-wing political parties and increased support for the center and right parties in national elections. Using annual survey data on attitudes over 25 years, we show that the reform led to increased support for free-market policies such as full privatization and differential wages. Moreover, it decreased support for socialist policies such as the joint ownership of production means. Yet, the reform increased support for the safety net to support weak members through mutual guarantee. These effects appear to be driven by an increase in living standards and work ethics that resulted from the reform. We conclude that introducing market-based wages led to a shift in attitudes towards a market economy with compassion, revealing a change in members’ support from their traditional democratic socialist model to a social democratic model.
    JEL: B14 J5
    Date: 2022–06
  10. By: Astuti, Hepy Kusuma (MI Ma'arif Polorejo)
    Abstract: This article discusses the importance of economic empowerment of Indonesian Muslims through waqf productive. Waqf has been understood by the public merely provides a treasure that is not productive in the form of land / soil to be used as a mosque or school by taking donations from the public, it is this which makes the stagnation of waqf in Indonesia, the waqf productive can be a solution to overcome the stagnation of the development of waqf. The Indonesian Ulema Council has ratified cash waqf, it makes people could donating his money to institutions or organizations entity endowments, other problems encountered in the development of waqf in Indonesia is on the development of management of endowment resources, it is because of the lack of of professionalism, commitment and an understanding of cash waqf endowments were converted into productive efforts, thus the productive endowments could be the active solution in poverty alleviation and economic improvement of the people.
    Date: 2022–05–13
  11. By: Hansmeier, Hendrik; Koschatzky, Knut; Zenker, Andrea; Stahlecker, Thomas
    Abstract: While societal challenges are global in nature, solving and addressing them usually tends to take place at smaller spatial scales. As place-specific technological, institutional and actor settings have a decisive influence on the direction, scope and speed of transformative dynamics, regions vary greatly in the generation and application of innovations required for socio-technical transitions. With a broader understanding of regional innovation systems (RIS), on the one hand, and spatial considerations in transition studies, on the other, geographic research has recently contributed to a better understanding of innovation-based structural and systemic change. At the same time, the research findings are still insufficiently linked with one another. We argue that recent theorizing on expanded regional innovation systems provides additional explanatory power in the context of sys-temic transitions by considering similar aspects, e.g. the role of experimentation and different modes of innovation, yet incorporating a more spatial perspective. Against this background, we show that innovation policies at the regional level seem to be particularly effective when they sup-port innovation dynamics aimed at sustainability through the inclusion of various actor groups and the attention to both the production and application side. Given the increasing spatial disparities in innovation dynamics, however, further research is needed on the opportunities and barriers of different regional settings for sustainability transitions.
    Date: 2022
  12. By: Jerome Garnier-Brun; Jean-Philippe Bouchaud; Michael Benzaquen
    Abstract: The Slutsky equation, central in consumer choice theory, is derived from the usual hypotheses underlying most standard models in Economics, such as full rationality, homogeneity, and absence of interactions. We present a statistical physics framework that allows us to relax such assumptions. We first derive a general fluctuation-response formula that relates the Slutsky matrix to spontaneous fluctuations of consumption rather than to response to changing prices and budget. We then show that, within our hypotheses, the symmetry of the Slutsky matrix remains valid even when agents are only boundedly rational but non-interacting. We then propose a model where agents are influenced by the choice of others, leading to a phase transition beyond which consumption is dominated by herding (or `"fashion") effects. In this case, the individual Slutsky matrix is no longer symmetric, even for fully rational agents. The vicinity of the transition features a peak in asymmetry.
    Date: 2022–06
  13. By: Clark, Andrew; Mihailov, Alexander; Zargham, Michael
    Abstract: This paper proposes a complex dynamic system subpopulation model for the construction and validation of a novel form of local complementary currency, namely the Grassroots Economics Foundation’s Community Inclusion Currency (CIC) implemented recently in Kenya. First, we highlight that CICs can act as a local liquidity-provision institutional device in poor or isolated economic regions, thereby serving as a market-based mechanism to alleviate poverty. Second, we elicit 50 heterogeneous utility types according to observed transactions behavior in our rich data set, i.e., via revealed – and recorded – preferences, and build a corresponding model and simulation at a meso-economic level.
    Keywords: Community Inclusion Currencies, Blockchain Technologies, Poverty Alleviation, Eliciting Utility Types, Complex Dynamic Systems, Subpopulation Simulation
    Date: 2022–07–08

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