nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2022‒10‒17
seven papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. How economics can help mitigate climate change - a critical review and conceptual analysis of economic paradigms By Wolf Rogowski; Wolfram Elsner
  2. Personal income distribution and the endogeneity of the demand regime By Tonni, Lorenzo
  3. The Interactions of Social Norms about Climate Change: Science, Institutions and Economics By Antonio Cabrales; Manu García; David Ramos Muñoz; Angel Sánchez
  4. The emergence of a Global Innovation System: an inter-temporal analysis through a network of networks By Leonardo Costa Ribeiro; Jorge Nogueira de Paiva Britto; Eduardo da Motta e Albuquerque
  5. Greening collateral frameworks By Dafermos, Yannis; Gabor, Daniela; Nikolaidi, Maria; van Lerven, Frank
  6. Equilibrium Pricing of Securities in the Co-presence of Cooperative and Non-cooperative Populations By Masaaki Fujii
  7. Débats autour de la désindustrialisation française By Hubert BONIN

  1. By: Wolf Rogowski; Wolfram Elsner
    Abstract: In economic research about climate change mitigation, there is a tension between the objectives to ensure scientific rigor (focusing on orthodox theory) and to illuminate blind spots of relevance (drawing on different "heterodox" theories). Our aim is to develop an economic perspective on climate change mitigation which considers both objectives. We conduct a critical literature review, searching for coherent economic theory lattices, which meet the requirements of research programs, i.e. contain a pre-analytic vision, an analytical core including a concept of rationality, and examples of applications in empirical research. We develop a framework structuring these research programs and associated research fields and search for examples illustrating their applicability to climate change mitigation. We identify several research fields within four major research programs that perceive economic phenomena as (1) individual optimization decisions (neoclassical analysis of efficient and of inefficient equilibria and behavioral economics); (2) a set of institutions (New and Original institutional economics); (3) a complex evolutionary system (Biophysical and Evolutionary economics); and (4) an objective function (which can guide research focusing on the content or the distribution of the normatively defined units of interest). For each research program and its subdivisions, we present theoretical elements and illustrate how they can improve our understanding of how economic activity contributes to climate change and how these impacts can be alleviated. There is a need for more systematic evidence synthesis to validate the contributions of the different economic research fields and to improve their selection and application to climate change.
    Keywords: Climate change, neoclassical economics, behavioral economics, economic heterodoxies, evolutionary economics, institutional economics, objective functions, research programs, policy implications.
    JEL: A11 A12 B5 H41 Q54
    Date: 2021–08
  2. By: Tonni, Lorenzo
    Abstract: This paper deals with two intrinsically linked issues: the endogeneity of the demand regime and the personal distribution impact on aggregate demand. By microfounding the savings function, the aggregate savings rate is an increasing function of the Gini index, which in turn is decomposed as a function of the functional income distribution and the Gini indices for wages and profits. By assuming that saving is a function of personal rather than functional income distribution, an increase of the labour share is effective in boosting consumption and aggregate demand, not per se, but only as long as it reduces personal inequality. As the labour share increases, depending on the distribution of wages and profits, both the demand regime type – the sign of the slope of the demand schedule - and its strength- the size of the slope of the demand schedule - can endogenously change. Concerning the former, there can be a threshold value for the wage share beyond which there is a shift from wage-led to profit-led demand. The analysis shows that, unlike most Kaleckian models, profit inequality is just as important as wage inequality in determining the demand regime type and its strength.
    Keywords: Personal distribution, functional distribution, wage-led, profit-led, non-linear demand, endogenous demand regime
    JEL: B50 D31 D33 E11 E12
    Date: 2021–06
  3. By: Antonio Cabrales; Manu García; David Ramos Muñoz; Angel Sánchez
    Abstract: We study the evolution of interest about climate change between different actors of the population, and how the interest of those actors affect one another. We first document the evolution individually, and then provide a model of cross influences between them, that we then estimate with a VAR. We find large swings over time of said interest for the general public by creating a Climate Change Index for Europe and the US (CCI) using news media mentions, and little interest among economists (measured by publications in top journals of the discipline). The general interest science journals and policymakers have a more steady interest, although policymakers get interested much later.
    Keywords: climate change, social norms, text analysis, social networks
    JEL: Q54 Q58 D85 A13
    Date: 2022
  4. By: Leonardo Costa Ribeiro (CEDEPLAR/UFMG); Jorge Nogueira de Paiva Britto (UFF); Eduardo da Motta e Albuquerque (CEDEPLAR/UFMG)
    Abstract: This paper investigates a structural change: the emergence of a Global Innovation System (GIS). Focusing on international knowledge flows (IKFs) we organize the network in three layers according to the type of IKF that connects the institutions: scientific collaboration, patent citation or article citation in patents. We investigate how those three layers overlap and entangle, figuring out a network of networks. We found that each layer follows a free-scale network structure associated with a self-organized system and creates an intrinsic hierarchy. The subnetwork that connects the three layers is also a free-scale network. The intertemporal analysis shows that those properties persist from 2009 to 2017.Therefore, we identified a complex network structure that is very unlike being created by a random process. This structure shows hierarchy, association with self-organized systems, robustness, and specialization, which are the fundamental aspects necessary to define a system. In the context of this analysis, that is the Global Innovation System.
    Keywords: International knowledge flows; Innovation systems; Networks of networks
    JEL: O32 O34 O39
    Date: 2022–09
  5. By: Dafermos, Yannis; Gabor, Daniela; Nikolaidi, Maria; van Lerven, Frank
    Abstract: Central bank collateral frameworks play a powerful role in contemporary market-based financial systems, affecting demand for financial assets and access to finance. However, existing collateral frameworks suffer from a carbon bias: they create disproportionately better financing conditions for carbon-intensive activities. This paper highlights the need to green the collateral frameworks and explores how central banks can incorporate environmental criteria into these frameworks.
    JEL: F3 G3
    Date: 2022–08–08
  6. By: Masaaki Fujii (Quantitative Finance Course, Graduate School of Economics, The University of Tokyo)
    Abstract: In this work, we develop an equilibrium model for price formation of securities in a market composed of two populations of different types: the first one consists of cooperative agents, while the other one consists of non-cooperative agents. The trading of every cooperative member is assumed to be coordinated by a central planner. In the large population limit, the problem for the central planner is shown to be a conditional extended mean-field control. In addition to the convexity assumptions, if the relative size of the cooperative population is small enough, then we are able to show the existence of a unique equilibrium for both the finite-agent and the mean-field models. The strong convergence to the mean-field model is also proved under the same conditions.
    Date: 2022–09
  7. By: Hubert BONIN
    Abstract: This essay mobilises the critical studies of two historians and a public company manager who have constructed systems for analysing the causes of France's deindustrialisation since the turn of the 1980s. A review of the ten or so themes around which issues concerning the responsibilities of the state's economic apparatus, company managers or experts are articulated allows for discussions about a recent history, admittedly, but which benefits from two dozen testimonies.
    Keywords: Third industrial revolution, delocalisation, competitiveness, industrial decline, economic lucidity
    JEL: B15 B21 D22 F23 F61
    Date: 2022

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