nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2022‒08‒15
nineteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Assessing a pay-for-performance conservation program using an agent-based modeling framework By Lee, Seungyub; Heberling, Matthew T.; Nietch, Christopher; Safwat, Amr
  2. Change in and Changing Economics By Davis, John B.
  3. Have We Passed Peak Capitalism? By Fix, Blair
  4. Financialization Historically Contemplated By Tsaliki, Persefoni; Tsoulfidis, Lefteris
  5. An Agent-Based Model With Realistic Financial Time Series: A Method for Agent-Based Models Validation By Luis Goncalves de Faria
  6. Theories of value in the history of economic thought, from objective theory of value to the subjective one : Analysis and diagnostic By Aniss Mennoune
  7. A Skills Gap Analysis in Farmer Directors of Midwest Agricultural Cooperatives By Wendt, Jody S.; Briggeman, Brian C.; Bergtold, Jason S.; Shanoyan, Aleksan; Low, Sarah A.
  8. Input-Output Analysis: New Results From Markov Chain Theory By Nizar Riane; Claire David
  9. Evolutionary rationality of risk preference By Songjia Fan; Yi Tao; Cong Li
  10. The Economy as a Nonlinear Complex System: In Search of a New Paradigm By Leiashvily, Paata
  11. Gender Budgeting Practices Concepts and Evidence By Elva Bova; Joana Jerosch Herold da Costa Reis
  12. Girl Power: Creating More with Less By Sonja Radas; Bruno Skrinjaric
  13. Aligning financial and monetary policies with the concept of double materiality: rationales, proposals and challenges By Boissinot, Jean; Goulard, Sylvie; Salin, Mathilde; Svartzman, Romain; Weber, Pierre-François
  14. Power Laws and Symmetries in a Minimal Model of Financial Market Economy By Liu Ziyin; Katsuya Ito; Kentaro Imajo; Kentaro Minami
  15. Underrepresentation of Developing Country Researchers in Development Research By Gahssan Mehmood
  16. Don't reduce Amartya Sen to a single identity! By Antoinette Baujard
  17. A strong sustainability approach to development trajectories By Antoine GODIN; Anda DAVID; Oskar LECUYER; Stéphanie LEYRONAS
  18. Life and debt: a view from the South By James, Deborah
  19. Industrial sources and unevenness of regional employment resilience in Japan By Nishi, Hiroshi

  1. By: Lee, Seungyub; Heberling, Matthew T.; Nietch, Christopher; Safwat, Amr
    Keywords: Environmental Economics and Policy, Agricultural and Food Policy, Institutional and Behavioral Economics
    Date: 2022–08
  2. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: Change in economics has likely always been a subject of discussion in economics and political economy. That discussion may have languished in the first post-World War II decades when neoclassicism was ascendent and dominated economics, but the emergence of game theory, more recently behavioral economics, and a variety of other new fields and approaches in economics since the 1980s has re-invigorated interest in the subject so that now there are many views on it. Yet systematic investigation of what change in economics involves has advanced little. Change is clearly always on-going in any discipline, but when it is said there is or is not ‘change in economics’ something more significant beyond this is usually intended. How, then, can this more significant sort of change be identified and explained? I begin by discussing the issue of method for analyzing change in economics.
    Keywords: change, boundaries, interdisciplinary, core-periphery, research practices, world values survey, open-closed systems
    JEL: A12 A13 A14 B20 B41 B50
    Date: 2022–06
  3. By: Fix, Blair
    Abstract: Among leftists, predicting the end of capitalism is a favorite parlor game. For example, as a graduate student in the 2010s, I remember discovering the 1976 edition of Marx’s Capital and being struck by the introduction. Written by the Belgian Marxist Ernest Mandel, the foreword concluded that it was ‘most unlikely’ that capitalism would survive another half-century. This prediction (and many like it) did not age well. What capitalism’s critics often misunderstand is that social orders rarely ‘die’. More often, they fade into irrelevance. Just as no one can point to the end-date of feudalism, it seems unlikely that capitalism will have a decisive ‘finish’. But what it may have is a peak. The goal of this post is to chart the rise (and potential peak) of ‘capitalism’ … as I understand it. This caveat is key. To study a social system, we must first define it. To many people, capitalism is a ‘mode of production’ (a definition inherited from Marx). The view that I take here, however, is that capitalism is primarily an ideology — or what Jonathan Nitzan and Shimshon Bichler call a ‘mode of power’. Capitalism is a set of ideas that justify the modern social order. Although there are many ways to chart the rise of capitalism, what interests me here is that it was the first major ideology to have spread during the era of mass publication. That means capitalism’s rise (and potential peak) should be visible in the word frequency of written language. For example, as capitalism spread, we’d expect that capitalist jargon — words like ‘market’ and ‘price’ — should become more common. And feudal jargon — words like ‘fief’ and ‘vassal’ — should become less common. Now, I’ve chosen these specific words as an illustration. But for my actual analysis, I do not ‘choose’ the jargon words. Instead, I choose a corpus of text that I believe encapsulates the ideology in question (capitalism or feudalism). And from there, I let the jargon of the text speak for itself. The basic idea is that jargon words are those that are both frequently used in a text corpus and overused relative to mainstream English. The first step of the analysis, then, is to select a corpus of ideological texts. To capture feudal ideology, I use a sample of 22 modern English bibles. I use modern translations because I don’t want text that contains archaic words (like ‘thou’). And I use the Bible because christian theology formed the backbone of European feudalism.1 To capture capitalist ideology, I use a sample of 43 introductory economics textbooks. My claim is that these textbooks deal mostly in capitalist metaphysics; they describe a fantasy world of self-equilibrating markets in which each person earns what they produce.2 With my sample of biblical and economics text, I first isolate the jargon words of each corpus. Then I use the Google English corpus to measure how the frequency of this jargon has changed over time. (As a consistency check, I also analyze the text in paper titles on the Sci-Hub database and book titles in Library Genesis.) I find that over the last several centuries, biblical jargon became less popular and was slowly replaced by economics jargon. I also find evidence that the popularity of economics language peaked during the 1980s, and has since declined. Ominously, this peak coincides with an uptick in the popularity of biblical language. In simple terms, it seems that we (anglophones) are in the midst of an ideological transition.
    Keywords: capitalism,economics,idelology,language,religion
    JEL: Z12 P16 Z13 Z1 A
    Date: 2022
  4. By: Tsaliki, Persefoni; Tsoulfidis, Lefteris
    Abstract: This article examines the extent to which financialization is a new phase of capital accumulation characterized by its own economic laws in which the real (production) economy adjusts accordingly. In order to examine this hypothesis, we invoke the share of the financial sector in the GDP of the USA, as the best meaningful metric to approximate the expansion of the financialization over time. Our findings suggest that the financialization phenomena of the post-1982 years are comparable to those of the “roaring 1920s”. The observed differences are quantitative, in the main, and although they suggest the presence of regularities; nevertheless, they do not suggest an altogether different stage of a finance-led capitalism.
    Keywords: Financialization, profit rate, interest rate, long-cycles, financial fragility
    JEL: B50 G20 G30 N12 O15 O16
    Date: 2021–12–11
  5. By: Luis Goncalves de Faria
    Abstract: This paper proposes a methodology to empirically validate an agent-based model (ABM) that generates artificial financial time series data comparable with real-world financial data. The approach is based on comparing the results of the ABM against the stylised facts -- the statistical properties of the empirical time-series of financial data. The stylised facts appear to be universal and are observed across different markets, financial instruments and time periods, hence they can serve to validate models of financial markets. If a given model does not consistently replicate these stylised facts, then we can reject it as being empirically inadequate. We discuss each stylised fact, the empirical evidence for it, and introduce appropriate metrics for testing the presence of these in model generated data. Moreover we investigate the ability of our model to correctly reproduce these stylised facts. We validate our model against a comprehensive list of empirical phenomena that qualify as a stylised fact, of both low and high frequency financial data that can be addressed by means of a relatively simple ABM of financial markets. This procedure is able to show whether the model, as an abstraction of reality, has a meaningful empirical counterpart and the significance of this analysis for the purposes of ABM validation and their empirical reliability.
    Date: 2022–06
  6. By: Aniss Mennoune (Université Mohammed V)
    Date: 2022–06–22
  7. By: Wendt, Jody S.; Briggeman, Brian C.; Bergtold, Jason S.; Shanoyan, Aleksan; Low, Sarah A.
    Keywords: Agribusiness, Marketing, Teaching, Communication, and Extension
    Date: 2022–08
  8. By: Nizar Riane (Université Mohammed V de Rabat [Agdal]); Claire David (LJLL (UMR_7598) - Laboratoire Jacques-Louis Lions - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UPC - Université Paris Cité)
    Abstract: In this work, we propose a new lecture of input-output model reconciliation Markov chain and the dominance theory, in the field of interindustrial poles interactions. A deeper lecture of Leontief table in term of Markov chain is given, exploiting spectral properties and time to absorption to characterize production processes, then the dualities local-global/dominance-Sensitivity analysis are established, allowing a better understanding of economic poles arrangement. An application to the Moroccan economy is given.
    Keywords: Graph - Markov chain - Leontief matrix - Dominance theory,05C20 -15A15 -60J10 JEL Classification,C65 -C67 -L00
    Date: 2022–02–26
  9. By: Songjia Fan; Yi Tao; Cong Li
    Abstract: Selection shapes all kinds of behaviors, including how we make decisions under uncertainty. The risk attitude reflected from it should be simple, flexible, yet consistent. In this paper we engaged evolutionary dynamics to find the decision making rule concerning risk that is evolutionarily superior, and developed the theory of evolutionary rationality. We highlight the importance of selection intensity and fitness, as well as their equivalents in the human mind, named as attention degree and meta-fitness, in the decision making process. Evolutionary rationality targets the maximization of the geometric mean of meta-fitness (or fitness), and attention degree (or selection intensity) holds the key in the change of attitude of the same individual towards different events and under varied situations. Then as an example, the Allais paradox is presented to show the application of evolutionary rationality, in which the anomalous choices made by the majority of people can be well justified by a simple change in the attention degree.
    Date: 2022–06
  10. By: Leiashvily, Paata
    Abstract: On the basis of a dialectical analysis of expedient activity, a decentralized economy is presented as a complex non-linear system organized according to a network principle, like many other systems of animate and inanimate nature. In such an economy, the general laws of the universe, which are studied by synergetics, are manifested in a specific form. This allows us to see many well-known economic phenomena in an unusual light and to discover in them what cannot be detected by standard methods of orthodox theory. The monograph presents a system of concepts, on the basis of which a fundamentally new interpretation of how the market economy functions and how it evolves from its inception to the present is given. It is shown that behind the external chaos of economic life hiding surprisingly ordered, symmetrical, deep structures that provide self-regulation of competitive market economy. Like all living systems, the economy evolves, resulting in the monopolization and financialization of the economy, and over time it loses the ability to self-regulate. Regulation becomes necessary, as a result of which the role of centralization of the economy increases. The search for new methods of regulating such an economy becomes inevitable.
    Keywords: economics, microeconomics, macroeconomics, methodology, economic equilibrium, cost, pricing, non-linear complex system, monopolization, financialization
    JEL: A10 C00 D24 D33 D42 D46 D47 D50 E32 E5 E58
    Date: 2022–06–20
  11. By: Elva Bova; Joana Jerosch Herold da Costa Reis
    Abstract: This paper reviews gender budgeting concepts and approaches in some EU and non-EU countries. It provides a definition of gender budgeting within the larger context of equality budgeting, based on the relevant literature. It then zooms into the various tools used for gender budgeting and delves into the various institutional set-ups of a selection of countries, and provides specific examples from Austria, Belgium, Canada, Germany and Italy, among others. Overall, the practices show insightful approaches and ways for making public finances and particularly budgets more gender-equality friendly.
    JEL: H61 H50 J16
    Date: 2022–06
  12. By: Sonja Radas (The Institute of Economics, Zagreb); Bruno Skrinjaric (The Institute of Economics, Zagreb)
    Abstract: Studies show that women are very productive employees, but that as business owners, compared to their male counterparts, they run companies that earn less, grow at a lesser rate, and employ a smaller number of employees. One of the explanations for this discrepancy argues that indicators such as sales, turnover or profit do not measure performance adequately because they are dependent on the size of the firm. Since women often make a conscious decision to keep their companies small, these performance measures may not adequately represent women-owned businesses. We study a panel of micro firms across all industries, from three EU countries of comparable size (Croatia, Slovenia, and Slovakia) in the period 2010 – 2019. Results indicate that female-owned firms have higher values of both turnover per asset and value added per asset. Additionally, results suggest that during recession years, female-led firms show a degree of resilience to these adverse effects, and they manage to increase their turnover per asset by 3 to 4 percent on average, compared to male-led firms. We conclude that although women-owned micro firms tend to have less resources compared to men’s, women can create larger output per asset, suggesting capability to combine those resources in a very effective way.
    Keywords: women entrepreneurship; firm performance; effectuation effect; recession
    JEL: B54 J16 L26
    Date: 2022–04
  13. By: Boissinot, Jean; Goulard, Sylvie; Salin, Mathilde; Svartzman, Romain; Weber, Pierre-François
    Abstract: The concept of double materiality is developing rapidly, with potential implications for monetary and financial policies. Double materiality builds on the historical accounting and auditing convention of materiality and expands it by considering that non-financial and financial corporations are not only materially vulnerable to environment-related events and risks, but also materially contribute to enabling dirty activities and environmental degradation. Three rationales that support the use of double materiality are distinguished in this paper, each with different policy implications: i) an idiosyncratic perspective – closely connected to the concept of dynamic materiality – which considers that an entity’s environmental impacts are relevant as they provide information on the institution’s own risks; ii) a systemic risk perspective – closely connected to the concept of endogeneity of financial risks – which seeks to reduce financial institutions’ contribution to negative environmental externalities because of the systemic financial risks that could result from them; and iii) a transformative perspective seeking to reshape financial and corporate practices and values in order to make them more inclusive of different stakeholders’ interests and compatible with the actions needed for an ecological transition. Each of these rationales has potential implications for monetary and financial policies, as well as possible theoretical and practical challenges. While the adoption of a double materiality perspective remains an open question, the concept proposes the opportunity to think more comprehensively about the role of the financial system in urgently addressing the ecological challenges of our times.
    JEL: F3 G3 J1
    Date: 2022–06–09
  14. By: Liu Ziyin; Katsuya Ito; Kentaro Imajo; Kentaro Minami
    Abstract: A financial market is a system resulting from the complex interaction between participants in a closed economy. We propose a minimal microscopic model of the financial market economy based on the real economy's symmetry constraint and minimality requirement. We solve the proposed model analytically in the mean-field regime, which shows that various kinds of universal power-law-like behaviors in the financial market may depend on one another, just like the critical exponents in physics. We then discuss the parameters in the proposed model, and we show that each parameter in our model can be related to measurable quantities in the real market, which enables us to discuss the cause of a few kinds of social and economic phenomena.
    Date: 2022–06
  15. By: Gahssan Mehmood (Pakistan Institute of Development Economics)
    Abstract: Economic research in developing nations is nearly entirely conducted by researchers based in the United States and Europe, rather than in these countries. There is a growing acknowledgment that a researcher’s knowledge of a nation and long-term residence in the country are likely to provide unique insights into the formulation of research questions, the application of the methodology, and the interpretation of results. Lately, the merits of diversity in the economics profession, as well as the negative consequences of minorities’ low participation have been acknowledged.
    Date: 2022
  16. By: Antoinette Baujard (UJM - Université Jean Monnet [Saint-Étienne], GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper reviews Amartya's Sen autobiography, Home in the World. A Memoir (Penguin Press, published08/07/2021, 480 pages. ISBN: 9781846144868), focused on his thirty first years of life. I show that the book emphasizes how Sen values discussions and reason, the voice of each human being in their plurality, and their capacity to act in and on the world. I also support that, in this memoir, Sen succeeds in circumventing the standard misunderstandings of his major contributions, by taking seriously the different potential interpretations of the thinkers who influenced his line of thinking, and defending the one he considers valid. I illustrate this claim with five cases which, by highlighting his multiple identities, avoid associating Sen to a misguided tag.
    Keywords: Amartya Sen,Welfare,Discussion,Reason,Identities,Memoir
    Date: 2022–02
  17. By: Antoine GODIN; Anda DAVID; Oskar LECUYER; Stéphanie LEYRONAS
    Abstract: Sustainable development trajectories are at the heart of many policy debates: CDN and Net Zero trajectories, just transition, climate justice, biodiversity inclusion, etc. These trajectories mostly propose a nexus approach combining climate, ecological, social, technological, economic and political aspects. In this paper, we propose a suite of three guiding principle, inspired by a strong sustainability approach, to construct sustainable trajectories: (i) the a priori refutation of substitutability, (ii) the need to construct multidimensional diagnostics and analyses highlighting synergies and tensions between different indicators, and (iii) the recognition of the importance of building a social construct on the desirable “good condition” and on the trajectories to reach it. We then show how these principles can be applied in different disciplines and help policymakers in constructing development trajectories.
    JEL: Q
    Date: 2022–06–20
  18. By: James, Deborah
    Abstract: This paper explores how, in countries in the global south where sharp rises in indebtedness have accompanied the financialization of the economy, debt factors into other relationships and meanings in the life of the family and household. Using ethnographic material from South Africa, it explores local concepts of householding, obligation and saving (asking whether relations of commodified debt nullify those of longstanding social commitment), investigates how people convert between cash-based or short term imperatives and moral or longer-term ones, and shows how barriers are sometimes erected between these separate spheres thus making them incommensurable. The paper challenges some accounts of the “financialization of daily life” which imply a one-way, top-down intrusion by the market—with state backing—into people’s intimate relations, commitments and aspirations, and maintains that we need to explore the complicity of participants’ engagement with these processes rather than seeing them as imposed on unwilling victims.
    Keywords: aspiration; debt; family; financialisation; household; South Africa; RES-062-23-1290; UKRI block grant
    JEL: N0 F3 G3
    Date: 2021–02–05
  19. By: Nishi, Hiroshi
    Abstract: Given the increase in the importance of measuring the degree and source of resilience after great shocks, resilience has garnered researchers’ attention. However, there is no generally agreed-upon measurement for resilience; the existing approach holds few industrial assessments for resilience. This study provides a structural sensitivity index to measure the industrial sources of regional employment resilience and applies it to the Japanese economy between 1980 and 2012. It presents a novel formula that quantifies the sources of regional resilience by within-sector and structural change effects and extracts how unevenly different local industries con-tribute to regional resilience. Exploring the industrial and quantitative aspects of employment resilience chronally and geographically reveals that Japanese prefectures gradually became resilient after the 1990s, increasing the regional heterogeneity. Moreover, the structural change effect has constantly hurt the regional resilience, offsetting some favourable within-sector effects. Finally, the increasing regional heterogeneity behind improvements in resilience accompanies industrial unevenness from different time horizons, but the overall relationship between industrial unevenness and resilience is not unique from a different spatial perspective.
    Keywords: Resilience, sensitivity index, employment, industrial structural change, Japan
    JEL: B52 E24 J21 R11 R12
    Date: 2022–06–23

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