nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2022‒11‒28
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Heterogeneity in Macroeconomics: The Compositional Inequality Perspective By Ranaldi, Marco; Palagi, Elisa
  2. Exploration of the Parameter Space in Macroeconomic Models By Karl Naumann-Woleske; Max Sina Knicker; Michael Benzaquen; Jean-Philippe Bouchaud
  3. British Public Investment, Government Spending, Housing, and the Industrial Revolution: A Study of Governmental and Social Surplus Absorption By Lambert, Thomas
  4. Ecological Accounting : How to organize information for biodiversity conservation decision and action at the national, business and ecosystem levels? By C. Feger; Harold Levrel; Alexandre Rambaud
  5. The Business of Strategic Sabotage By Bichler, Shimshon; Nitzan, Jonathan
  6. Motivate the crowd or crowd- them out? The impact of local government spending on the voluntary provision of a green public good By Bartels, Lara; Kesternich, Martin
  7. Memo Writing Procedures in Grounded Theory Research Methodology By Mohajan, Devajit; Mohajan, Haradhan
  8. A degrowth scenario for biodiversity? Some methodological avenues and a call for collaboration By Otero, Iago; Rigal, Stanislas; Pereira, Laura M.; Kim, HyeJin; Grêt-Regamey, Adrienne
  9. Business Cycles, Inflation and Unemployment: An MMT perspective By M S, Navaneeth
  10. Kantian Epistemology in Examination of the Axiomatic Principles of Economics: the Synthetic a Priori in the Economic Structure of Society By Adil Ahmad Mughal
  11. Worker power, rent-seeking and income inequality in Canada: A sector-level analysis By Silas Xuereb
  12. Survey of Non-Walrasian Disequilibrium Economic Theory By Ogawa, Shogo
  13. A Prolonged Divorce between Economists and Politicians By POP, NAPOLEON; IOAN-FRANC, VALERIU
  14. Vínculos ineludibles entre la autonomía física y económica de las mujeres: una propuesta de marco conceptual By González Vélez, Ana Cristina
  15. Goodwin, Baumol & Lewis: How structural change can lead to inequality and stagnation By Günseli Berik, Haimanti Bhattacharya, Tejinder Pal Singh, Aashima Sinha, Jacqueline Strenio,Sharin Shajahan Naomi, Sharon Talboys
  16. Is Southeast Asia falling into a Latin American style “middle-income trap†? By Palma, J.; Pincus, J.

  1. By: Ranaldi, Marco; Palagi, Elisa
    Abstract: This work presents a framework to jointly study individuals’ heterogeneity in terms of their capital and labor endowments (endowment heterogeneity) and of their saving and consumption behaviors (behavioral heterogeneity), from an empirical perspective. By adopting a newly developed synthetic measure of compositional inequality, this work classifies more than 20 economies across over two decades on the basis of their heterogeneity characteristics. Modern economies are far from being characterized by agents with same propensities to save and consume and same endowments (Representative Agent systems), or by the existence of rich capital-abundant savers and poor hand-to-mouth consumers (Kaldorian systems). Our framework and results are discussed in light of the heterogeneity assumptions underlying several types of macroeconomic models with heterogeneous agents (Kaldorian, TANK & HANK, OLG, and ABM models). A negative relationship between behavioral heterogeneity and the economy’s saving rate is also documented. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2022–10–26
  2. By: Karl Naumann-Woleske (LadHyX - Laboratoire d'hydrodynamique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Max Sina Knicker (TUM - Technische Universität München = Technical University of Munich); Michael Benzaquen (LadHyX - Laboratoire d'hydrodynamique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Jean-Philippe Bouchaud (Académie des Sciences - Institut de France)
    Abstract: Agent-Based Models (ABM) are computational scenario-generators, which can be used to predict the possible future outcomes of the complex system they represent. To better understand the robustness of these predictions, it is necessary to understand the full scope of the possible phenomena the model can generate. Most often, due to high-dimensional parameter spaces, this is a computationally expensive task. Inspired by ideas coming from systems biology, we show that for multiple macroeconomic models, including an agent-based model and several Dynamic Stochastic General Equilibrium (DSGE) models, there are only a few stiff parameter combinations that have strong effects, while the other sloppy directions are irrelevant. This suggests an algorithm that efficiently explores the space of parameters by primarily moving along the stiff directions. We apply our algorithm to a medium-sized agent-based model, and show that it recovers all possible dynamics of the unemployment rate. The application of this method to Agent-based Models may lead to a more thorough and robust understanding of their features, and provide enhanced parameter sensitivity analyses. Several promising paths for future research are discussed.
    Date: 2022
  3. By: Lambert, Thomas
    Abstract: When it comes to the British Industrial Revolution of the 18th Century, much of the mainstream economics literature has tended to focus on how property rights, limitations on the crown or government, and changes in agricultural and manufacturing techniques have caused a great transformation in the nation’s economic formation. Marxian and other heterodox economics views acknowledge these developments but also emphasize the enclosure movement and the development of a class of people that becomes an exploited proletariat. Both sets of views acknowledge the role of the British government in facilitating the Industrial Revolution, but in doing a review for this paper, there is only a small amount of literature on how government investment and spending and the housing of workers may have helped to spur on or exist simultaneously with the revolution. This is especially true within heterodox schools of thought, and this paper aims to add to the heterodox economics literature by discussing how government investment and spending, and investment in housing, dramatically assist with surplus absorption during the Industrial Revolution, which in turn helps the British economy to achieve greater heights. Datasets that have been developed over the last 15 years or so can be used to illustrate this. Finally, by using the concept of the Baran Ratio, it can be shown that a significant portion of the nation’s economic surplus is absorbed by government spending and investment and housing investment, and much of this in turn would have helped private business investment and spending in absorbing as much of the surplus as possible.
    Keywords: Baran Ratio, government investment and spending, housing, Industrial Revolution, heterodox economics
    JEL: B50 B52 N13 N43
    Date: 2022–10–28
  4. By: C. Feger (AgroParisTech, MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Harold Levrel (AgroParisTech, CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Alexandre Rambaud
    Abstract: Outline – The first part of this paper will discuss our reasons to turn to the academic and practical field of ecological accounting at different levels of decision and organization (national, business and ecosystem); and our choice to adopt a strong sustainability and maintenance cost-based approach. Based on these foundations, we will then present three complementary ecological accounting methods at the national level (the Unpaid ecological costs approach); at the business level (the Comprehensive Accounting in Respect of Ecology model) and at ecosystem management level (the Ecosystem-centric management accounting approach). We will conclude by highlighting the need to continue to progress towards the interlinking of these methods. Issue addressed in this paper – In order to contribute to the multiple efforts for the transformation of our economy into a system that effectively maintains and restores biodiversity, we introduce a proposal aimed at going further in the integration of ecosystem-interdependencies information at the heart of organizational processes and decision-making procedures at different levels. These methods also aim to take into consideration the great variety of decision-making and action contexts that characterize the realm of biodiversity conservation. We argue that such an endeavor requires to turn to the field of "ecological accounting", both on a conceptual level and on a practical level, to put forward concrete methods and tools for collective decision and action. The paper hence addresses the following question: what kind of ecological accounting concepts and methods can be sense-making and scientifically sound, to support the management of biodiversity-related risks and reorganize our economic system towards the achievement of biodiversity conservation/restoration goals ?
    Keywords: biodiversity,accounting,strong sustainability
    Date: 2021–11
  5. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: Marxists love to hate the theory of capital as power, or CasP for short. And they have two good reasons. First, CasP criticizes the logical and empirical validity of the labour theory of value on which Marxism rests. And second, it offers the young at heart a radical, non-Marxist alternative with which to research, understand and contest capitalism. With these reasons in mind, it is only understandable that most Marxists prefer to keep Pandora's box closed, and few challenge CasP directly. Sometimes, though, the wall of silence breaks, typically by a lone Marxist who lashes at the 'idealist' renegades of forward-looking capitalized power and reiterates the good old 'material reality' of backward-looking labour time. Since these occasional critics are often confident in their dogma and rarely bother to understand the CasP research they criticize (let alone the broader body of CasP literature), their critiques scarcely merit a response. But occasionally, they accuse us of empirical wrongdoing - and these charges do call for a reply. Such accusations are levelled in a recent paper by Nicolas D. Villarreal (2022), titled 'Capital, Capitalization, and Capitalists: A Critique of Capital as Power Theory'. In his article, Villarreal claims that our empirical analysis of the relation between business power and industrial sabotage in the United States is unpersuasive, to put it politely. He argues that we cherry-pick specific data definitions and smoothing windows to 'achieve the desired results'; that these 'results are driven by statistical aberrations'; and that his own choice of variables pretty much invalidates our conclusions. Unfortunately, Mr. Villarreal's empirical counter-analysis leaves much to be desired. His 'reproduction/refutation' of our work is not only poorly documented, but also uses incorrect variables, including ones that differ from those labelled in his own figures (gross instead of net income, domestic instead of national variables, national categories mixed with domestic ones, etc.). So instead of trying to reverse-engineer his results, here is our own easy-to-follow, step-by-step reply to his complaints. Hopefully, this reply will make future critics a bit more careful with their dismissive arguments.
    Keywords: business,capital as power,capital income,industry,sabotage,unemployment,Thorstein Veblen
    JEL: P16 E13 E11
    Date: 2022
  6. By: Bartels, Lara; Kesternich, Martin
    Abstract: Cities are increasingly hold accountable for climate action. By demonstrating their proenvironmentality through own climate-related activities, they not at least aspire to encourage individual climate protection efforts. Based on standard economic theory there is little reason to assume that this is a promising strategy. Financed by taxpayers' money, cities' contributions are considered as substitutes that crowd-out private contributions to the same public good. Inspired by research on providing information on reference group behavior, we challenge this argument and conduct a framed-field experiment to analyze the impact of reference group information on the voluntary provision of a green public good. We investigate whether information on previous contributions by fellow citizens or the city affect individual contributions. We do not find statistical evidence that city-level information crowds-out additional individual contributions. A reference to fellow citizens significantly increases the share of contributors as it attracts subjects that are not per-se pro-environmentally oriented.
    Keywords: Voluntary provision of environmental public goods,Social Norms,Crowding-out,Willingness to pay,Framed-field experiment
    JEL: C93 C83 D9 H41 Q54
    Date: 2022
  7. By: Mohajan, Devajit; Mohajan, Haradhan
    Abstract: This paper develops memo writing techniques within the framework of grounded theory methodology of qualitative research in social sciences. In grounded theory, memoing is one of the most important processes to develop and enrich theory. Memo is the written record of the researcher’s thinking. It is an analytical strategy that facilitates the researcher to achieve clear concept and truth from the data. It is considered as the tool of all kinds of notes taken by the researchers in grounded theory during their research. But yet there is a limited use of memo writing in other qualitative researches. Memoing increases investigation, inspection and continuity of data during the research analysis. In this study an attempt has been taken to discuss the aspects of memoing along with its benefits.
    Keywords: Grounded Theory, qualitative research, data analysis, memoing
    JEL: A13 A14 I31 P2 Z13
    Date: 2022–08–03
  8. By: Otero, Iago; Rigal, Stanislas; Pereira, Laura M.; Kim, HyeJin; Grêt-Regamey, Adrienne
    Abstract: Economic growth contributes to biodiversity loss and does not necessarily contribute to wellbeing. Thus, when developing biodiversity scenarios, we should explore societal futures where economic growth is not a pre-condition. However, it is not clear how and by whom a degrowth scenario for biodiversity could be developed. This is so because there are different approaches to develop scenarios (some of them nascent) and because degrowth is only loosely connected to biodiversity questions. In this perspective paper we explain how the Nature Futures Framework (NFF) could be used to generate a degrowth scenario for biodiversity, Nature's Contributions to People (NCP) and Good Quality of Life (GQL) based on multiple societal values. We present key methodological avenues of such an endeavour, including: (i) generating degrowth visions for biodiversity, NCP and GQL; (ii) identifying the leverage points and characterizing the transition; (iii) identifying relevant social-ecological feedbacks and selecting indicators; and (iv) modelling biodiversity, NCP and GQL along a degrowth transition. We frame our proposal in current efforts to improve scenario development across the biodiversity and climate communities. We end with a call for collaboration between natural and social sciences, quantitative and qualitative approaches, and northern and southern perspectives. This collaboration could lead to a community of practice that tests and improves the scenario in national and international science-policy interfaces.
    Date: 2022–10–21
  9. By: M S, Navaneeth
    Abstract: Any modern economy faces the periodic tendency of fluctuations that disrupts the macroeconomic variables leading to massive downturns in economic activity- conceptualized as business cycles. This review article examines the countercyclical policies adopted by Central Banks during recessions in light of the various arguments laid out by Modern Monetary Theory (MMT). Finally, it also looks into the assumptions behind Phillips' curve and what MMT has to offer in terms of inflation targeting
    Keywords: MMT; NAIRU; Phillip's Curve; Business Cycle
    JEL: B50
    Date: 2021–07
  10. By: Adil Ahmad Mughal (University of Management & Technology (UMT), Lahore)
    Date: 2022–09–25
  11. By: Silas Xuereb (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, WIL - World Inequality Lab)
    Abstract: Neoclassical economics' explanations of the income distribution typically ignore the role of various forms of power. This paper explores the relationships between worker power, market power, rentseeking and the income distribution using a novel panel dataset on sector-level income distributions in Canada from 2000-2019. Levels of within-sector inequality were relatively stable throughout this time period but there is significant between-sector variation. Finance and insurance contributes disproportionately to top-end income inequality. Workers' bargaining power explains a significant portion of between-sector variation in inequality. Increases in market power and decreases in unionization are related to increases in sector-level income inequality. Increases in real average incomes at the sector level are associated with increases in top shares three years later and this effect is mitigated by high unionization. Results are discussed within the broader context of Canadian income inequality and the relationship between power and wage-setting.
    Date: 2022–09
  12. By: Ogawa, Shogo
    Abstract: In this study, we present a survey of (non-Walrasian) disequilibrium economics in which the gap between expressed demand and supply and between desired and realized transaction are allowed. We see a brief history of the disequilibrium theory and characteristics of it such as temoprary equilibria with quantity adjustment and the discontinuity of dynamics due to regime switching. We redefine the disequilibrium economics by comparing with equilibrium economics, and find that the core of it is inconsistency of transaction that is emphasized as ``dual-decision'' by Robert Clower.
    Keywords: Non-Walrasian; Disequilibrium economics; Survey; Macroeconomics; Economic Theory
    JEL: B00 C0 D5 E12
    Date: 2022
  13. By: POP, NAPOLEON (National Institute for Economic Research - Romanian Academy); IOAN-FRANC, VALERIU (National Institute for Economic Research - Romanian Academy)
    Abstract: The academic world says that the divorce between economists and politicians became visible during the financial crisis that began in 2008, when the economists were criticised for failing to preview the crisis, on the one hand, and, on the other hand, for the slowness in accompanying the solutions to remedy the crisis which should have been suggested by the politicians in an emergency situation, of financial collapse. The divorce itself has been lasting for a long time with the relationship deteriorating for many other reasons. In the background there is (1) an elite of Nobel prize winning economists with permanent training and inclination towards research and results worthy of consideration, and (2) a political class in a quasi-constant professional decline. It is a worrying fact, also publicly acknowledged. The 21st century, which marks the greatest technological advance of the fourth industrial revolution, started with avatars coming seemingly from nowhere. Yet, this century which began with so much hope, brings us in the face of yet another break between science and practice. The phenomenon we refer to in the current study is just a small part of what it should have been the collaboration between politicians and science in general, but the specifics of the divorce we approach in this essay is the fact that it deepens.
    Keywords: general economics, information and uncertainty, economic policies, politics and sociological system, national government policies, public policy
    JEL: A1 A11 B20 B52 H5 J18
    Date: 2022–11
  14. By: González Vélez, Ana Cristina
    Abstract: Este documento se concentra en el análisis de cuatro dimensiones de la nueva conceptualización de la autonomía física de las mujeres: la autodeterminación sexual y reproductiva, el ejercicio pleno de los derechos sexuales y reproductivos, la integridad corporal y física y la reproducción como tiempo de trabajo. Cuando se trabaja en la autonomía de las mujeres sus expresiones nunca son fragmentadas e independientes; las manifestaciones de las autonomías de las mujeres tienen comprensiones y usos interrelacionales.
    Date: 2022–09–26
  15. By: Günseli Berik, Haimanti Bhattacharya, Tejinder Pal Singh, Aashima Sinha, Jacqueline Strenio,Sharin Shajahan Naomi, Sharon Talboys
    Abstract: Sexual harassment of women and girls in streets and other public spaces is often trivialized by the label of “eve teasing” in South Asia. While there exists a volume of research on intimate partner or domestic violence in South Asia, the literature on public-space harassment (PSH) is rather sparse. Based on 2021 surveys in Bangladesh and India, this paper examines the prevalence and consequences of public-space harassment using the Capability Approach. We used an online survey and snowball sampling through social media to generate both quantitative and qualitative information. We analyzed the data descriptively and coded the open-ended responses based on human capability themes. The responses to questions about twelve specific forms of harassment indicate that the experience of at least one form of PSH is ubiquitous in both country samples. We find that PSH deprives women of a range of capabilities: to lead lives free of violence, to enjoy emotional well-being, to be physically mobile, to seek educational opportunities, and to earn a living. Overall, women indicated that PSH resulted in wide-ranging restrictions on their freedom. Respondents also articulated future directions for action to reduce experiences of PSH, including education, awareness, and legal measures.
    Keywords: Sexual Harassment, Human Capabilities, Gender, India, Bangladesh JEL Classification: B54, D63, I31
    Date: 2022
  16. By: Palma, J.; Pincus, J.
    Abstract: The middle-income trap was initially interpreted as an inevitable slowdown in economic growth as countries approach the technological frontier. Yet growth in Latin America (LA) stalled at low levels of labour productivity – about half of the levels of the technological leaders. Productivity growth in middle-income Southeast Asia also decelerated after the East Asian Crisis even though income per capita in these countries is lower than in LA. From our perspective, one of the key question in development economics is why in so few emerging countries the level of labour productivity have managed to break through the 50 percent barrier vis-à -vis that of the technological leaders. That is, why only very few have been able to sustain productivity gains long enough to get close of achieving high-income status. The main issue is the inability of countries to “upgrade†their growth strategies when the existing one have run their course and become exhausted. Nicholas Kaldor’s argument that manufacturing has the greatest scope to realize increasing returns to scale remains true, even in today’s decentralised, fragmented and niche-oriented manufacturing systems, but the limited size of domestic markets in the great majority of middle-income countries means that they must prioritise manufactured exports using all of the policy instruments still available to them.
    Date: 2022–11–09

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