nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒06‒26
twenty-two papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The Complexity of Corporate Culture as a Potential Source of Firm Profit Differentials By Frederik Banning; Jessica Reale; Michael Roos
  2. Divesting from the Green Investments Paradigm By Nelo Magalhães
  3. IFPRI key facts series: Agricultural cooperatives By Banda, Chimwemwe; Duchoslav, Jan
  4. The Kaldor-Verdoorn Law at the Age of Robots and AI. By Andrea Borsato; Andre Lorentz
  5. Climate-induced liquidity crises: interbank exposures and macroprudential implications By Paola D'Orazio; Jessica Reale; Anh Duy Pham
  6. We Already Live in a Degrowth World, and We Do Not like It By Naudé, Wim
  7. Qanats By Alireza Naghavi; Mohsen Shaeyan
  8. (R)evolution? Exploring the potential of post-development approaches for reforming development cooperation By Köllner, Francy
  9. On Herbert A. Simon and Jorge Luis Borges about Free Will By Crespo, Ricardo F.
  10. Rentiership and Intellectual Monopoly in Contemporary Capitalism: Conceptual Challenges and Empirical Possibilities By Baines, Joseph; Hager, Sandy Brian
  11. A contemporary class structure: Capital disparities in the Netherlands By Vrooman, J. Cok; Boelhouwer, Jeroen; Gijsberts, Mérove
  12. Primary agricultural cooperatives in Malawi: Structure, conduct, and performance By Davis, Kristin; Kazembe, Cynthia; Benson, Todd; De Weerdt, Joachim; Duchoslav, Jan
  13. COVID-19 pandemic through the lens of Leontief multipliers for Emerging Economies By César Carrera
  14. Dual Argument, Double Truth: On the continued importance of the state in neoliberal thought By Innset, Ola
  15. Innovation Studies, Social Innovation, and Sustainability Transitions Research: From mutual ignorance towards an integrative perspective? By Attila Havas; Doris Schartinger; K. Matthias Weber
  16. Can cooperatives commercialize farming in Malawi? By Davis, Kristin; Kazembe, Cynthia; Benson, Todd; De Weerdt, Joachim; Duchoslav, Jan
  17. Ecological Resources Depletion, Inequality and Poverty By Khan, Haider
  18. The Art and Gender – A Gender Perspective Analysis The 2022 Calendar – Comorile Muzeului By Daniela Felicia Roman
  19. Finance-led premature de-industrialization and the role of external macroprudential policy for post-COVID-19 transformative development: Latin America in a comparative perspective By Botta, Alberto; Yajima, Giuliano; Porcile, Gabriel
  20. A baseline stock-flow model for the analysis of macroprudential regulation guidelines and policies for Latin America and the Caribbean By Pérez Caldentey, Esteban; Nalin, Lorenzo; Rojas Rodríguez, Leonardo
  21. Post-COVID Inflation & the Monetary Policy Dilemma: An Agent-Based Scenario Analysis By Max Sina Knicker; Karl Naumann-Woleske; Jean-Philippe Bouchaud; Francesco Zamponi
  22. Regional Eco-Innovation Trajectories By Hendrik Hansmeier; Sebastian Losacker;

  1. By: Frederik Banning; Jessica Reale; Michael Roos
    Abstract: This paper proposes an addition to the firm-based perspective on intra-industry profitability differentials by modelling a business organisation as a complex adaptive system. The presented agent-based model introduces an endogenous similarity-based social network and employees' reactions to dynamic management strategies informed by key company benchmarks. The value-based decision-making of employees shapes the behaviour of others through their perception of social norms from which a corporate culture emerges. These elements induce intertwined feedback mechanisms which lead to unforeseen profitability outcomes. The simulations reveal that variants of extreme adaptation of management style yield higher profitability in the long run than the more moderate alternatives. Furthermore, we observe convergence towards a dominant management strategy with low intensity in monitoring efforts as well as high monetary incentivisation of cooperative behaviour. The results suggest that measures increasing the connectedness of the workforce across all four value groups might be advisable to escape potential lock-in situation and thus raise profitability. A further positive impact on profitability can be achieved through knowledge about the distribution of personal values among a firm's employees. Choosing appropriate and enabling management strategies, and sticking to them in the long run, can support the realisation of the inherent self-organisational capacities of the workforce, ultimately leading to higher profitability through cultural stability.
    Date: 2023–05
  2. By: Nelo Magalhães (LADYSS - Laboratoire Dynamiques Sociales et Recomposition des Espaces - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper we shed light and analyze a very broad consensus that exists among economists regarding green investments. Beyond some divergences, mainstream and heterodox economists present green investments as a necessary and first condition to solve the ecological crisis. The main part of our research focuses on the pitfalls of what we call the Green Investment Paradigm. We highlight the reductionist, normative, ahistorical and depoliticizing vision, a consequence of a problem-solving framework. We finally discuss what is outside of the box and highlight some of the debates that need to be invested to contribute to a serious assessment of the causes of ecological crises.
    Abstract: Dans ce travail, nous montrons que, par-delà leurs divergences (sur les montants et les outils à mettre en œuvre), un très large consensus existe chez les économistes pour présenter les investissements verts comme une condition nécessaire et première pour résoudre la crise écologique. Nous expliquons d'abord ce qui rend ce « paradigme des investissements verts » (PIV) si puissant. Nous mettons ensuite en évidence différents écueils : la vision réductionniste, normative, anhistorique et dépolitisante qui l'accompagne, laquelle est la conséquence d'un cadrage de type problem-solving qui est indifférent aux enseignements de l'histoire et des sciences sociales. Nous évoquons, enfin, ce qui est hors-cadre du PIV et concluons sur quelques débats à investir pour penser les crises écologiques.
    Date: 2021–10
  3. By: Banda, Chimwemwe; Duchoslav, Jan
    Abstract: Highlights • There is an operational agricultural cooperative in every tenth community in Malawi, but they are not well utilized to access markets or services. • Almost no farmers (0.6 percent in 2019/20) receive extension advice through cooperatives. • Although an increasing share of farmers engage in input and output markets, few do so through cooperatives. • Few farmers buy inputs on credit in general, and almost none receive credit from cooperatives. • Farmers who buy inputs from cooperatives do not pay less than farmers who buy inputs elsewhere. • Farmers who sell their produce to cooperatives also do not obtain better prices than farmers who sell to other buyers.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; agricultural cooperatives; markets; farmers; extension services; inputs; credit; agricultural products; prices
    Date: 2023
  4. By: Andrea Borsato; Andre Lorentz
    Abstract: This paper contributes to the literature around the Kaldor-Verdoorn law and analyses the impact of robotisation on the channel through which the law shapes labour-productivity growth. We start with a simple evolutionary interpretation of the law that combines Kaldorian and Post-Keynesian arguments with the neo-Schumpeterian theory of innovation and technological change. Then we apply a GMM estimator to a panel of 17 industries in 25 OECD capitalist economies for the period 1990-2018. After elaborating on the general evidence of the Kaldor-Verdoorn law in the sample, we investigate the effect of increasing robotisation. The estimates suggest that for industries with a higher-than-average robot density, the increasing adoption of robots weakens, at least, the meso-economic channel that relates productivity growth to mechanisation. Yet, the higher degree of robotisation strengthens the mechanism that links labour productivity growth at the industrial level to the macro-level dynamic increasing returns to scale that emerge from a general expansion of economic activities through the many interactions between sectors. Such results are in agreement with the empirical literature that suggests different impacts from robotisation on the basis of the level of economic activity considered.
    Keywords: Labour productivity, Kaldor-Verdoorn law, Robotisation, GMM.
    JEL: J23 O33 O47
    Date: 2023
  5. By: Paola D'Orazio (Chair of Economics, Faculty of Economics and Business Administration, Technische Universitaet Chemnitz); Jessica Reale (Institute for Macroeconomics, Faculty of Economics and Management, Ruhr-Universitaet Bochum); Anh Duy Pham (Department of Computer Science, Hochschule Bonn-Rhein-Sieg)
    Abstract: Although climate-induced liquidity risks can cause significant disruptions and instabilities in the financial sector, they are frequently overlooked in current debates and policy discussions. This paper proposes a macro-financial agent-based integrated assessment model to investigate the transmission channels of climate risks to financial instability and study the emergence of liquidity crises through interbank market dynamics. Our simulations show that the financial system could experience serious funding and market liquidity shortages due to climate-induced liquidity crises. Our investigation contributes to our understanding of the impact - and possible solutions - to climate-induced liquidity crises, besides the issue of asset stranding related to transition risks usually considered in the existing studies.
    Keywords: Agent-Based Modeling, Climate Risks, Prudential Regulation, Interbank Market, Liquidity Crises
    Date: 2023–06
  6. By: Naudé, Wim (RWTH Aachen University)
    Abstract: The Degrowth Movement calls for "degrowth" – a reduction in GDP in advanced economies – to avert an ecological crisis. This paper argues that the Degrowth Movement misses that the West is already in a state resembling degrowth – a Great Stagnation. This state of degrowth and its correlates, declining entrepreneurship, innovation, science, and research productivity, are described. It is concluded that the notion that a degrowth economy can generate the technological progress necessary to tackle ecological and social crises and challenges is far-fetched. Moreover, as economic stagnation has taught, the consequence of degrowth is a zero-sum society: redistribution, instead of production, becomes the basis of the economy. In such a context, more degrowth will only make problems worse. This paper concludes by discussing scenarios for moving beyond Degrowth. Whether collapse or unimaginable riches through breakthrough technological progress will be the future, these scenarios suggest that there is more to humanity's future than envisaged by the Degrowth Movement.
    Keywords: economic growth, Degrowth, ecology, sustainable development, collapse
    JEL: O40 O33 D01 D64
    Date: 2023–05
  7. By: Alireza Naghavi (University of Bologna); Mohsen Shaeyan (Johannes Gutenberg University Mainz)
    Abstract: Qanats – traditional Persian irrigation systems first built around 1000 B.C. – required a complex of cooperative local institutions for their construction and maintenance. We show that these institutions produced a (local) culture of cooperation in Iran that persists to the present day when qanats are no longer of economic value. We use unique geo-coded data on qanat coordinates in Iran together with information collected and digitized on cooperative enterprises and find a positive relationship between qanat locations and cooperative activities today. We build an IV using grid-level geological preconditions necessary for the construction and functioning of qanats: gently sloped terrains and intermediate clay content. The cooperation culture persists particularly close to historical trade routes and in areas with stable climatic conditions. The results hold for alternative proxies of social capital, namely the degree to which people trust their neighbours and the pervasiveness of charity-based Islamic microfinance establishments.
    Keywords: Irrigation, Cooperation, Qanat, Cooperatives, Social capital, Trade routes, Culture, Persistence
    JEL: N55 O13 O53 Q13 Q15 Z10 D70
    Date: 2023–06–14
  8. By: Köllner, Francy
    Abstract: The concept and mainstream approaches of development cooperation (DC) have been criticised since the early beginning of their existence. Post-development (PD) scholars have been criticising international DC since 1990 for both its Western perspective and the lack of reflection on asymmetrical power structures. Since also today DC has to face a variety of criticisms, we perceive PD approaches as a starting point for efforts towards change. We asked (1) to what extent and how elements of post-development approaches are reflected in the current policy initiatives of international DC, and (2) what potential do PD approaches have to reform DC. We analysed three examples: German feminist development policy (FemDP) as a relatively new idea of transformation, the locally led development approach as a long-standing concept and Global Public Investment (GPI) as an approach towards a new concept of international cooperation. By means of a content analysis, four commonly used PD elements were selected and slightly adapted to examine whether and how the three policy initiatives acknowledge PD aspects in order to reform DC: (1) the concept of alternatives to development, (2) pluralism of knowledge and power dynamics, (3) user-centred approaches and a critical stance towards the established scientific discourse and (4) the promotion of grassroots movements and local ownership. We discovered a variation in the use of the different PD elements. Although aspects related to power relations, post-colonial structures and knowledge management are prominent in all three initiatives, elements such as grassroots movements are given less consideration in all three cases. Even though FemDP does not focus on an alternative to development, as defined by PD approaches, it puts a strong emphasis on a transformative approach when it comes to its user-centred empowerment and tackles power imbalances by approaching decolonisation. Subsequently, the efforts of German Development Minister Svenja Schulze do not just describe a rhetorical reorientation but involve actual transformative efforts. However, further implementation efforts need to be analysed. The locally led development approach seems to be a suitable springboard for the inclusion of local knowledge and grassroots movements. Whereas the approach mostly uses descriptions of change as a means to reach its objectives, the GPI concept in particular uses PD elements as a reformative approach, as per the PD definition, putting the objective of the transformation of international public finance in international cooperation at its centre. Valuing PD approaches, we conclude that they do influence public initiatives in one way or another. In the future, if inner-systemic change should become an option, we see the greatest added value when PD scholars succeed in underpinning their approaches with instruments that can be used as tools in DC practice.
    Keywords: development cooperation, post-development, post-colonialism, decolonisation, feminist developemt policy, locally led initatives, Global Public Investment, transformation, knowledge cooperation
    Date: 2023
  9. By: Crespo, Ricardo F.
    Abstract: In 1970 Herbert Simon had been invited by the Sociedad Argentina de Organización Industrial (Argentine Society of Industrial Organization, SADOI, by its initials in Spanish) to deliver some lectures on “Business Management in the Technological Era”. On this occasion, he asked for an audience with Jorge Luis Borges, who, at the time, served as Director of the Argentine National Library. Simon had read some of Borges’s stories and was particularly fascinated by La biblioteca de Babel (The Library of Babel), wherein he discovered that Borges, like him, conceived of life as a search through a labyrinth. In fact, during the interview, the roles got reversed: in order to understand Simon’s concerns, Borges ended up asking more questions to Simon than Simon to Borges. The Spanish translation of the interview was published in Primera Plana, an Argentine journal of the time. This paper will show that this brief interview sheds light on some of Simon’s ideas about determinism and free will. His critique on maximizing rationality and his suggested approach to decision-making have contributed to enlarge the concept of rationality as construed by standard economic theory, enabling psychological and sociological dimensions to come into play. Consequently, it may be argued that Simon is incorporating free will in economics. However, though Simon’s position implies an advancement for the role of free will, the whole context of his ideas conditioned it, thus resulting in a “weak” notion of it. During the course of his conversation with Borges, Simon clarified his personal stance, which is consistent with his ideas. The paper will reveal Borges´ and Simon’s understanding of free will. This paper also contains a part of the conversation between Simon and Borges that has not been published previously in English. Although not all of it deals with free will, I believe that introducing it in its entirety is a contribution to the knowledge on Borges’ and Simon’s thought.
    Date: 2023–05–17
  10. By: Baines, Joseph; Hager, Sandy Brian
    Abstract: The concepts of rentiership and intellectual monopoly have gained increased prominence in discussions about the transformation of global capitalism in recent years. However, there have been few if any attempts to construct measures for rentiership and intellectual monopoly using firm-level financial data. The absence of such work, we argue, is symptomatic of conceptual challenges in delineating what precisely qualifies as rent, intellectual or otherwise. In place of static conceptions of rent and intellectual monopoly, we develop a dynamic framework for analyzing the processes of rentierization and intellectual monopolization and apply this framework to the analysis of the transformation of non-financial firms in the United States since the 1950s. We find that the timing and intensity of rentierization and intellectual monopolization differs significantly across sector and firm size and is heavily mediated by the uneven ramifications of government policy across companies and industries. Overall, our framework illuminates the variegated landscape of corporate power in the US, and offers a useful guide for critically interrogating rentierization and intellectual monopolization in other contexts.
    Keywords: capital accumulation, competition, degree of monopoly, financialization, intangibles, intellectual property, productivity, profit, United States, rent, scarcity
    JEL: P1 D72 L12 D42 D4 O34
    Date: 2023
  11. By: Vrooman, J. Cok; Boelhouwer, Jeroen; Gijsberts, Mérove
    Abstract: The academic and public debate on social inequality has recently been fuelled by large disparities in income and wealth, profound changes in the labour market, and other emerging cleavages in post-industrial societies. This article contributes to the discussion by arguing that class divisions are theoretically based on four types of capital: people’s economic means, their social capital, their cultural resources, and the combination of their health and attractiveness (‘person capital’). From this premise, the social structure of the Netherlands is examined. A dedicated survey was linked to microdata from the national population register, tax authorities and benefit agencies. Using latent class analysis, we assess contingencies in the distribution of the different resources, and identify a structure consisting of six capital groups. The established upper echelon (15.5% of the adult population) has the most capital, followed by the privileged younger people (12.7%), the employed middle echelon (26.9%) and the comfortable retirees (16.6%). Total capital is lowest among the insecure workers (13.5%) and the precariat (14.8%). Each social class has a distinctive mix of the four types of capital, highlighting the need to look beyond economic differences in order to comprehend structural inequality. The results of this study also indicate that resource disparities between classes coincide with other forms of social hierarchy and contrasts by age. Moreover, the contemporary class structure is associated with divergent views and experiences among the Dutch. Classes with little capital tend to rate politics, society, and their own social position more negatively. In addition, they value self-enhancement and hedonism less than today’s upper classes and report lower levels of well-being.
    Date: 2023–05–15
  12. By: Davis, Kristin; Kazembe, Cynthia; Benson, Todd; De Weerdt, Joachim; Duchoslav, Jan
    Abstract: Primary agricultural cooperatives in Malawi, in contrast to other farmer-level organizations, have legal status and can own assets, borrow money for their operations, and sign contracts, making it easier for them to do business for the profit of their members. Conceptually, such cooperatives enable their member-farmers to achieve economies of scale for their commercial activities. By joining together in a cooperative, members can obtain commercial inputs at lower prices closer to wholesale prices than if they purchased the inputs as individuals. In selling their output, by aggregating their crops and other products into larger lots that the cooperative then negotiates to sell on their behalf, buyers can achieve greater efficiency in buying from them and can be expected to offer a premium over the prices that they would offer farmers selling those products individually. Cooperatives can also serve farmers in providing an important channel for obtaining information and advice to increase their productivity and the profitability of their farming. Moreover, by joining together to achieve common objectives in primary agricultural cooperatives, member-farmers can exercise greater influence on local and national policy issues of concern to them, while also building social cohesion, solidarity, and trust within their communities.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; agricultural cooperatives; finance; inputs; prices; information; productivity; farmers; development
    Date: 2023
  13. By: César Carrera
    Abstract: Coronavirus has been one of the strongest shocks that the World has suffered from in a long time. Its effects tend to dominate the modeling strategists in order to evaluate policy making decisions in terms of economic growth, inflation, or poverty. The discussion in the literature focuses on the nature of the shock, if it is either a demand or a supply shock. I argue that one way to approach this problem is by using input-output tables, based on Leontief multipliers. Following this approach, a shock to one sector, spillover to others by the required intermediate demand for products that are needed for other sectors in order to produce a final good or service. I find that trade and services have higher responses and spread to other sectors which implies a higher order of losses for a Covid shock.
    Keywords: Demand and supply shock, Input-output table, Covid
    Date: 2023–06
  14. By: Innset, Ola
    Abstract: It has been established that the neoliberal creed arising in the interwar- and early postwar years, despite its strong rejection of economic planning, also entailed a rejection of laissez-faire liberalism. This article argues that recent attempts at construing early neoliberalism as thus being a more nuanced or moderate creed than later iterations, are nonetheless flawed. The Dual Argument of early neoliberalism indicated a new approach to market liberalism in which the state was not seen as the market’s opposite, but rather its precondition. This important move is obscured by the language of moderation and nuance. In place of “the radicalization thesis”, the second part of the article considers Philip Mirowski’s concept of a “double truth-doctrine” and argues that the importance of the state for social and economic governance is a common feature of different neoliberalisms, which nonetheless differ in their preferred policy-suggestions for the use of state power.
    Date: 2023–05–17
  15. By: Attila Havas (Institute of Economics, Centre for Economic and Regional Studies, AIT Austrian Institute of Technology, Center for Innovation Systems and Policy); Doris Schartinger (AIT Austrian Institute of Technology, Center for Innovation Systems and Policy); K. Matthias Weber (AIT Austrian Institute of Technology, Center for Innovation Systems and Policy, Université Gustave Eiffel, LISIS)
    Abstract: Goal-oriented transformative change processes – that is, system-transforming processes that are guided by the ambition to resolve current or expected future societal challenges of various kinds – can only start once possible goals are considered by key stakeholders and the relevant actors are committed to act. Hence, there is a need for widening the scope of the current, partial conceptual models to consider the co-evolutionary interactions between technology, economy, and society to understand these changes. This claim is based on our review of Innovation Studies, Social Innovation research, and Sustainability Transitions research. The paper discusses the key conceptual elements of each strand; offers a definition of goal-oriented transformative change and building blocks for a new, integrative framework to analyse it; proposes directions for future research and draw tentative governance and policy implications.
    Keywords: Innovation studies; Social innovation research; Sustainability transitions research; Focussed literature review; Goal-oriented transformative change; A new, integrative analytical framework
    JEL: B52 H12 L31 O30 O31 O33 O35 O38 O44 P11 Q01 Q50 Q54 Q55 Q58
    Date: 2022–12
  16. By: Davis, Kristin; Kazembe, Cynthia; Benson, Todd; De Weerdt, Joachim; Duchoslav, Jan
    Abstract: Smallholder farmers constitute the largest group of economic actors in Malawi and there is increasing recognition that the small scale at which they operate does not offer for most a pathway out of poverty, let alone to prosperity. Increasingly the idea is gaining traction that by joining forces through primary agricultural cooperatives, smallholder farmers across Malawi can reap many of the benefits that larger farmers on commercial estates have been able to realize, such as negotiating better price for agricultural inputs through bulk purchases; negotiating better prices for agricultural outputs through aggregation and storage; adding value to raw agricultural products; accessing professional equipment, such as tractors or irrigation; hiring professional services, such as a farm or business manager; or pooling contiguous pieces of land for more efficient farming. In this brief we summarize the findings of a detailed report (Davis et al., 2022) on research conducted to assess the current status of cooperatives in the country and what project implementers and policymakers can do to enable cooperatives to contribute to increased commercialization and professionalization of smallholder farming in Malawi.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; smallholders; poverty; farmers; agricultural cooperatives; inputs; prices; agricultural products; farm equipment; land; commercialization; development
    Date: 2023
  17. By: Khan, Haider
    Abstract: In this paper, I develop a part of what I have been calling an ecological global political economy approach. I motivate the discussion by focusing on the links between ecological crisis and income distribution. I have chosen the concrete context of Bangladesh, a country likely to be affected severely by global warming and climate change to illustrate through simulation the theoretical results. Using a fairly neutral and conservative assumption of uniform distribution of loss it can be shown axiomatically that inequality increases when effective income is considered leading to ecologically adjusted income distributions. The simulations presented here for Bangladesh demonstrate that both inequality and poverty measured by some popular indexes increase significantly under even this mild assumption and the assumption of moderate income loss.
    Keywords: Ecological Global Political Economy; Axioms of Inequality Comparisons; Axioms of Poverty Comparisons; Bangladesh; Equality of Misfortune Assumption: Adverse Health Effects of Ecological Damage; Resource Depletion; Inequality; Poverty
    JEL: I1 I14 I15
    Date: 2023–05–28
  18. By: Daniela Felicia Roman (Alexandru cel Bun Military Academy, Republic of Moldova)
    Abstract: The author started this research based on an article published in The Guardian titled “Mind-blowing: Why do men’s paintings cost 10 times more than women’s?†Shocking: Why do artists’ paintings cost 10 times more than those painted by women painters? Being a feminist and interested in equal opportunities between women and men, the author looks at everything around through a gender lens. The general theme is meritocracy. As a colleague of the author used to say: I do not care if the person applying for a job is a woman or a man, but be the best. If only it were that simple! In the artistic field, as in many other fields, the value is given by the price of the product, in our case, of works of art. As we shall see, not by a long shot.
    Keywords: men’s paintings, women painters, gender equality, equality of opportunity
    Date: 2023–03
  19. By: Botta, Alberto; Yajima, Giuliano; Porcile, Gabriel
    Date: 2023–01–27
  20. By: Pérez Caldentey, Esteban; Nalin, Lorenzo; Rojas Rodríguez, Leonardo
    Date: 2023–01–27
  21. By: Max Sina Knicker; Karl Naumann-Woleske; Jean-Philippe Bouchaud; Francesco Zamponi
    Abstract: The economic shocks that followed the COVID-19 pandemic have brought to light the difficulty, both for academics and policy makers, of describing and predicting the dynamics of inflation. This paper offers an alternative modelling approach. We study the 2020-2023 period within the well-studied Mark-0 Agent-Based Model, in which economic agents act and react according to plausible behavioural rules. We include in particular a mechanism through which trust of economic agents in the Central Bank can de-anchor. We investigate the influence of regulatory policies on inflationary dynamics resulting from three exogenous shocks, calibrated on those that followed the COVID-19 pandemic: a production/consumption shock due to COVID-related lockdowns, a supply-chain shock, and an energy price shock exacerbated by the Russian invasion of Ukraine. By exploring the impact of these shocks under different assumptions about monetary policy efficacy and transmission channels, we review various explanations for the resurgence of inflation in the United States, including demand-pull, cost-push, and profit-driven factors. Our main results are four-fold: (i)~without appropriate policy, the shocked economy can take years to recover, or even tip over into a deep recession; (ii)~the response to policy is non-monotonic, leading to a narrow window of ``optimal'' policy responses due to the trade-off between inflation and unemployment; (iii)~the success of monetary policy in curbing inflation is primarily due to expectation anchoring, rather than to direct impact of interest rate hikes; (iv)~the two most sensitive model parameters are those describing wage and price indexation. The results of our study have implications for Central Bank decision-making, and offers an easy-to-use tool that may help anticipate the consequences of different monetary and fiscal policies.
    Date: 2023–06
  22. By: Hendrik Hansmeier; Sebastian Losacker;
    Abstract: Given that eco-innovations and the associated renewal of economic structures are pivotal in addressing environmental problems, economic geography research is increasingly focusing on their spatio-temporal dynamics. While green technological and industrial path developments in specific regions have received considerable attention, little effort has been made to derive general patterns of environmental inventive activities across regions. Drawing on unique data capturing both green incumbent and green start-up activities in the 401 German NUTS-3 regions over the period 1997-2018, this article aims to trace and compare the long-term green regional development. For this purpose, we introduce social sequence analysis methods to economic geography that allow us to understand the constitution of regional eco-innovation trajectories. The findings suggest that regions mainly display distinct trajectories. Yet, structural similarities emerge in the sense that regions of the same type occur in spatial proximity to each other and show persistent specialization patterns. These range from the simultaneous presence or absence of green incumbents and green start-ups to the dominance of just one of the two groups of actors. Only some regions manage to establish an above-average eco-innovation specialization over time. Since this greening originates from either green incumbent or green start-up specialization, green regional trajectories can be assumed to unfold mainly in a path dependent and less radical manner. In summary, this study provides important empirical and methodological impulses for further in-depth analyses to disentangle spatio-temporal phenomena in economic geography.
    Keywords: eco-innovation, green regional development, path dependency, regional transitions, social sequence analysis
    Date: 2023–06

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