nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒07‒17
twenty-one papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Peter Howitt - A Keynesian Still in Recovery By David Laidler
  2. Open Science vs. Mission-oriented Policies and the Long-run Dynamics of Integrated Economies: An Agent-based Model with a Kaldorian Flavour. By Andrea Borsato; Andre Lorentz
  3. Assessing the Economic Impact of Lockdowns in Italy: A Computational Input-Output Approach By Severin Reissl; Alessandro Caiani; Francesco Lamperti; Mattia Guerini; Fabio Vanni; Giorgio Fagiolo; Tommaso Ferraresi; Leonardo Ghezzi; Mauro Napoletano; Andrea Roventini
  4. Value Judgements, Positivism and Utility Comparisons in Economics By Drakopoulos, Stavros A.
  5. Vieses orto-heterodoxos e os algoritmos economistas do ChatGPT By Iazdi, Oz
  6. Structural Change in Production Networks and Economic Growth By Paul Gaggl; Aspen Gorry; Christian vom Lehn
  7. Introduction : Labour, between acting and suffering By Emmanuel d'Hombres; Riccardo Rezzesi
  8. Provisioning for sufficiency: envisaging production corridors By Bärnthaler, Richard; Gough, Ian
  9. Piero Sraffa – Doing ‘History in Reverse' By Eric Rahim
  10. How Rich Were the Rich? An Empirically-Based Taxonomy of Pre-Industrial Bases of Wealth By Milanovic, Branko
  11. Equilibrium pricing of securities in the co-presence of cooperative and non-cooperative populations (Forthcoming in ESAIM: Control, Optimisation and Calculus of Variations) (Revised version of CARF-F-545) By Masaaki Fujii
  12. Discrete $q$-exponential limit order cancellation time distribution By Vygintas Gontis
  13. Interbank Decisions and Margins of Stability: an Agent-Based Stock-Flow Consistent Approach By Jessica Reale
  14. La monnaie morale en Afrique subsaharienne ? Garantir l'éthique pour favoriser l'investissement durable By Kohnert, Dirk
  15. An Estimation of the Italian Banking Sector Profit Rate in a Crisis Period By Zolea, Riccardo
  16. What are you talking about? Applying cognitive interviewing to improve survey questions on women’s economic empowerment for market inclusion By Myers, Emily; Heckert, Jessica; Salazar, Elizabeth; Kalagho, Kenan; Salamba, Flora; Mzungu, Diston; Mswero, Grace; Adegbola, Ygue Patrice; Crinot, Geraud Fabrice; Kouton-Bognon, Baudelaire; Pereira, Audrey; Rubin, Deborah; Malapit, Hazel J.; Seymour, Greg
  17. Dataviva: espaço de atividades e indicadores regionais de complexidade econômica By Elton Eduardo Freitas; João Prates Romero; Gustavo Britto; Alexandre de Queiroz Stein; Ramon Torres
  18. Teoria do Valor dos Trabalhadores: empiricamente correta e politicamente robusta By Tiago Camarinha Lopes
  19. Monetary policy rules and the inequality-augmented Phillips Curve By Lilian Rolim; Laura Carvalho, Dany Lang
  20. Догоняющее развитие в условиях санкций: стратегия позитивного сотрудничества By Polterovich, Victor
  21. Technological capabilities and the twin transition in Europe: Opportunities for regional collaboration and economic cohesion By Bachtrögler-Unger, Julia; Balland, Pierre-Alexandre; Boschma, Ron; Schwab, Thomas

  1. By: David Laidler
    Abstract: Peter Howitt is best known for his contributions to growth theory, but his work in short-run economics, which began with his Ph.D thesis and still continues, is important and deserves attention. It lies firmly in the Keynesian macro-disequilibrium tradition of Robert Clower and Axel Leijonhufvud, and for a long time has been overshadowed by New-classical and New-Keynesian orthodoxy. However, the development of agent based modelling and behavioural economics is perhaps giving disequilibrium macroeconomics a new lease on life.
    Keywords: equilibrium, disequilibrium, money, New classical Economics, New Keynesian Economics, Keynes, Lucas, Howitt, Clower, Leijonhufvud, Phelps
    JEL: B22 B59 E12 E13 E31 E32
    Date: 2023–06
  2. By: Andrea Borsato; Andre Lorentz
    Abstract: This paper offers a contribution to the literature on science policies and on the possible trade-off that might arise between broad spectrum science-technology policies and missionoriented programs. We develop a multi-country, multi-sectoral agent-based model of economic dynamics with endogenous structural change that represents a small-scale monetary union. Findings are threefold. Firstly, science policies from national governments, even when symmetric, act as a source of growth divergence across countries. Secondly, even if economic growth is largely driven by the sectors with absolute advantages, having at least a little flow of open science investments is sufficient for the other industries to survive and innovate, hence preserving the bio-diversity of the economic structure. Thirdly, science policy alone is a sufficient means to break monopolistic tendencies, trigger competition and reduce income inequality. Still, such results are conditioned to the flow of open science. Yet, the working of the model suggests that supply-side science policies should be paired with demand-side policies for the wide re-organisation of consumption habits, if grand societal challenges are to be met.
    Keywords: Science policies, Structural and technical change, Economic growth.
    JEL: E11 E32 O33 O41
    Date: 2023
  3. By: Severin Reissl; Alessandro Caiani; Francesco Lamperti; Mattia Guerini; Fabio Vanni (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Giorgio Fagiolo; Tommaso Ferraresi; Leonardo Ghezzi; Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Andrea Roventini (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: We build a novel computational input-output model to estimate the economic impact of lockdowns in Italy. The key advantage of our framework is to integrate the regional and sectoral dimensions of economic production in a very parsimonious numerical simulation framework. Lockdowns are treated as shocks to available labor supply and they are calibrated on regional and sectoral employment data coupled with the prescriptions of government decrees. We show that when estimated on data from the first "hard" lockdown, our model closely reproduces the observed economic dynamics during spring 2020. In addition, we show that the model delivers a good out-of-sample forecasting performance. We also analyze the effects of the second "mild" lockdown in fall of 2020 which delivered a much more moderate negative impact on production compared to both the spring 2020 lockdown and to a hypothetical second "hard" lockdown.
    Keywords: Input-output, Covid-19, Lockdown, Italy
    Date: 2021–10
  4. By: Drakopoulos, Stavros A.
    Abstract: The issue of interpersonal comparisons of utility is about the possibility (or not) of comparing the utility or welfare or the mental states in general, of different individuals. Embedded in the conceptual framework of utilitarianism, interpersonal comparisons were admissible in economics as part of the theoretical justification of welfare policies until the first decades of the twentieth century. Under the strong influence of the scientific philosophy of positivism as reflected in the works of early neoclassical economists and as epitomized by Lionel Robbins, utility comparisons were subsequently rejected as a value judgement. Robbins’ methodological stance is still prevalent among mainstream economists. Despite the explicit rejection of comparability by the majority of economists, interpersonal comparisons are necessary for many key policy issues, such as progressive taxation, social welfare policies, GDP based welfare comparisons, cost-benefit analysis, and public goods provision. In this paper, the case of interpersonal utility comparisons is discussed as an illustrative example of the usefulness of the study of the role of value judgements, and generally of the interrelationship between ethics and economics. It is also argued that the current tension between theory and policy practice might be resolved through the efforts of prominent economists and philosophers to challenge positivism, and especially its problematic treatment of value judgements and of ethical assumptions in general.
    Keywords: Value Judgements; Utility Comparisons; Positivism and Economics; Ethics and Economic Policy
    JEL: A12 B00 B40 D60
    Date: 2022–12
  5. By: Iazdi, Oz
    Abstract: Recommendations for economic policies can be based on different theoretical perspectives and may present biases that are not always perceptible to the public. Identifying these biases is even more challenging when they are embedded in recommendations coming from sources with high technological and social disruptive potential, where a high level of impartiality is expected, such as contemporary large language models. Thus, a questionnaire was administered to economists affiliated with the Brazilian academic community to assess their perception of the presence of orthodox or heterodox biases in economic policy recommendations derived from interactions with ChatGPT in April 2023. The results showed that: i) there is still no consensus on the concepts of orthodoxy and heterodoxy in Brazil; ii) there are indications of a positive relationship between how self-proclaimed heterodox (orthodox) an economist is and how heterodox (orthodox) the perceived bias in an economic policy is; iii) it was not possible to identify a consistently orthodox or heterodox bias in ChatGPT's recommendations, which exhibited a good degree of impartiality.
    Keywords: ChatGPT, orthodoxy, heterodoxy, biases, economic policy, artificial intelligence.
    JEL: A13 B41 B50 L86
    Date: 2023–06–17
  6. By: Paul Gaggl; Aspen Gorry; Christian vom Lehn
    Abstract: This paper studies structural change in production networks for intermediate inputs (input-output network) and new capital (investment network). For each network, we document a declining fraction of production by goods sectors and a rising fraction of production by services sectors. We develop a multisector growth model that admits structural change in production networks along the balanced growth path to study these trends. Disaggregated final expenditure data reveal that inputs to investment production are substitutes, rather than strong complements as suggested by existing work. Hence, resources endogenously reallocate toward the fastest growing producers of investment. Growth accounting exercises demonstrate that investment-specific technical change has risen in importance for aggregate U.S. growth over time, with 20-25% of aggregate growth after 2000 stemming from reallocation induced by structural change. At the same time, productivity growth within the input-output network has stagnated, contributing to the recent slowdown in aggregate growth.
    Keywords: structural change, input-output network, investment network, economic growth, technical change, balanced growth
    JEL: E23 O14 O40 O41
    Date: 2023
  7. By: Emmanuel d'Hombres (UR CONFLUENCE : Sciences et Humanités (EA 1598) - UCLy - Université Catholique de Lyon (UCLy)); Riccardo Rezzesi (UR CONFLUENCE : Sciences et Humanités (EA 1598) - UCLy - Université Catholique de Lyon (UCLy))
    Abstract: Throughout the history of thought, from the depths of the Greek age, from Hesiod onwards, as well as in the biblical tradition, we find traces of the ambivalence of labour, a bipolarity inscribed at the very heart of the labour experience. labour is an activity that is sometimes classified as action, or even creation, in what these registers contain that is eminently positive for the human being, and sometimes as misfortune and necessity, reminding us of our finiteness; sometimes it is considered as a punishment, a calamity, an accidental or principal misfortune, and sometimes as a means of salvation, of liberation, of access to the ethical sphere, to the fullness of life. Beyond their diversity of approach and field, the studies gathered in this issue are united in the requirement to honour the bipolarity of acting and suffering that characterises the question (questions) of work. It is to the analysis of this bipolarity, or ambivalence, of the labour experience that we have devoted this introduction, while at the same time questioning the 'place' (meaning, value, reaffirmation or loss of its centrality) that labour occupies in our societies.
    Abstract: Tout au long de l'histoire de la pensée, du fond de l'âge grec, depuis Hésiode et au-delà, comme dans la tradition biblique, nous retrouvons trace de l'ambivalence du travail, bipolarité inscrite au cœur même de l'expérience laborieuse. Le travail est une activité tantôt rangée du côté de l'action, voire de la création, dans ce que ces registres contiennent d'éminemment positif pour l'être humain, tantôt du côté de l'infortune et de la nécessité, nous rappelant à notre finitude ; tantôt considérée comme une punition, une calamité, un malheur, accidentel ou principiel, tantôt comme un moyen de salut, de libération, d'accès à la sphère éthique et à la reconnaissance, à la vie plénière de l'être. Par-delà leur diversité d'approche et de terrain, les études réunies dans ce numéro se retrouvent dans l'exigence d'honorer la bipolarité de l'agir et du pâtir qui caractérise la question (les questions) du travail. C'est à l'analyse de cette bipolarité, ou ambivalence, de l'expérience laborieuse que nous avons consacré cette introduction, en interrogeant, en même temps, la « place » (sens, valeur, réaffirmation ou perte de sa centralité) que le travail occupe dans nos sociétés.
    Keywords: labour, acting, suffering, ambivalence, humanism, travail, agir, pâtir, humanisme
    Date: 2023–04
  8. By: Bärnthaler, Richard; Gough, Ian
    Abstract: This article deepens the framework of a sufficiency economy, defining sufficiency as the space between a floor of meeting needs and a ceiling of ungeneralizable excess. This framework can be applied to the domains of consumption and production. Complementing existing research on consumption corridors, our aim is to conceptualize the idea of a production corridor. To develop this notion, we survey a range of helpful concepts starting with objective and universal human needs to establish a “floor” and planetary boundaries to establish a “ceiling.” We then assess in some detail a range of conceptual debates that pertain to production: 1) Marxian categories of labor, 2) the production boundary, 3) provisioning and the foundational economy, 4) social reproduction, and 5) unnecessary labor. These debates permit us to start identifying essential production, which enables the satisfaction of human needs within planetary boundaries, and excess production, which contributes neither to need satisfaction nor human flourishing but drives planetary overshoot. This distinction further allows for an “in-between” domain of the economy, situated between the floor and ceiling. This discussion concludes with a more detailed model of production embedded in the framework of the sufficiency economy. We then “dynamize” this model to sketch a production corridor under climate-mitigation imperatives. It considers in turn the essential economy, the excess economy, and the in-between economy. The final section summarizes our depiction of the production corridor leading to rapid but fair decarbonization of the economy.
    Keywords: sufficiency; production corridors; human needs; planetary boundaries; provisioning; eco-social transformations
    JEL: J1 R14 J01
    Date: 2023–06–08
  9. By: Eric Rahim (University of Strathclyde)
    Abstract: This paper follows a suggestion made by Piero Sraffa in the late 1920s about the writing of his book that was finally published in 1960 – a suggestion he did not follow. The suggestion consisted in the writing of a history of political economy, starting with the ideas of the French Physiocrats, and its further development by Adam Smith and David Ricardo. This history was intended as an introduction to the 1960 book. The paper concludes with a brief discussion of the ‘central propositions’ of the 1960 book, seen as a rigorous theoretical statement of the political economy of these ‘old’ economists.
    Keywords: Sraffa, Physiocrats, Adam Smith, David Ricardo, Karl Marx
    JEL: J12
  10. By: Milanovic, Branko
    Abstract: The paper uses fifty social tables, ranging from Greece in 330 BC to Mexico in 1940 to estimate the share and level of income of the top 1 percent in pre-industrial societies. The share of the top 1 percent covers a vast range from around 10 percent to more than 40 percent of society’s income and does not always move together with the estimated Gini coefficient and the Inequality Extraction Ratio. I provide a taxonomy of pre-industrial societies based on the social class and type of assets (land, control of government, merchant capital, citizenship) that are associated with the top classes as well as lack of assets associated with poverty. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2023–06–12
  11. 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: 2023–06
  12. By: Vygintas Gontis
    Abstract: Identifying the best possible models based on given empirical data of observed time series is challenging. The financial markets provide us with vast empirical data, but the best model selection is still problematic for researchers. The widely used long-range memory and self-similarity estimators give varying values of the parameters as these estimators are developed for specific time series models. Previously we investigated the order disbalance time series from the general fractional L\'{e}vy stable motion perspective and discovered the stable anti-correlation in the order flow of financial markets. Nevertheless, a more detailed consideration of empirical data suggests we construct a more specific order flow model based on the power-law distribution of limit order cancellation times. In the event time consideration, the limit order cancellation times follow the discrete probability mass function derived from the Tsallis q-Exponential distribution. The power-law distribution of the limit order volumes and power-law cancellation times form the new approach to modeling order disbalance in the financial markets. Proposed modeling can be an example of opinion dynamics in social systems.
    Date: 2023–05
  13. By: Jessica Reale
    Abstract: This study investigates the functioning of modern payment systems through the lens of banks' maturity mismatch practices, and it examines the effects of banks' refusal to roll over short-term interbank liabilities on financial stability. Within an agent-based stock-flow consistent framework, banks can engage in two segments of the interbank market that differ in maturity, overnight and term. We compare two interbank matching scenarios to assess how bank-specific maturity targets, dependent on the dictates of the Net Stable Funding Ratio, impact the dynamics of the interbank market and the effectiveness of conventional monetary policies. The findings reveal that maturity misalignment between deficit and surplus banks compromises the interbank market's efficiency and increases reliance on the central bank's standing facilities. Monetary policy interest-rate steering practices also become less effective. The study also uncovers a dual stability-based configuration in the banking sector, resembling the segmented European interbank structure. This paper suggests that heterogeneous maturity mismatches between surplus and deficit banks may result in asymmetric funding frictions that might precede credit- and sovereign-risk explanations of interbank tensions. Also, a combined examination of macroprudential tools and rollover-based interbank dynamics can enhance our understanding of how regulatory changes impact the stability of heterogeneous banking sectors.
    Date: 2023–06
  14. By: Kohnert, Dirk
    Abstract: Money rules the world. But the importance of money is far greater than conventional economic theory and its heroic equations suggest. People have invented their own forms of currency, they have used money in ways that baffle market theorists, they have incorporated money into friendship and family relationships, and they have changed the process of spending and saving. Individuals, families, governments and businesses have given money a social meaning in ways that economists could not even dream of before. A century ago, Georg Simmel, in his Philosophy of Money, pointed to various systems of exchange for goods and services that made possible the existence of incomparable value systems (land, food, honour, love, etc.) that supposedly made personal freedom possible. More recently, Ariel Wilkis brought Pierre Bourdieu's sociology of power into dialogue with Viviana Zelizer's sociology of money. He showed that money is a crucial symbol used to negotiate not only material possessions but also the political, economic, class, gender and generational ties between people. The growing threat of international terrorism has raised awareness that its existence is in itself an economic fact, as it is financed in various ways. The Moral Money Summit Africa, to be held in Johannesburg, South Africa, in November 2023, aims to unlock capital to promote sustainable growth in Sub-Saharan Africa (SSA). This is overdue, considering that multinational companies in SSA have been polluting the environment for decades and that corruption, money laundering, investments in conflict diamonds, arms and drug trafficking are widespread. The summit aims to answer questions such as: What role can Africa play in the global decarbonisation dilemma? How can ethics be ensured in commodity supply chains? How can ethical investors avoid investing in "sin stocks" such as "blood diamonds", arms and drug trafficking? However, given the unbroken power of multinational corporations and investment managers, the outcome of such summits is questionable. Comparative analyses of ESG awareness and frameworks in Anglophone, Francophone and Lusophone African countries reveal significant differences. The most powerful three global asset managers, BlackRock, Vanguard and State Street, still show "rational restraint", especially with regard to firm-specific sustainability activism. Also they can use their power to engage in "rational hypocrisy", similar to corporate.
    Keywords: Banque éthique; ESG; Institutions financières internationales; entrepreneur de morale; économie du développement; banques commerciales; Afrique subsaharienne; développement durable; post-colonialisme; secteur informel; commerce international; APD; Afrique du Sud; Nigeria; Sénégal; Angola; Études africaines;
    JEL: D63 E26 F18 F22 F35 F54 I31 L26 N17 N27 O17 O35 O55 P16 Z13
    Date: 2023–06–28
  15. By: Zolea, Riccardo
    Abstract: In this paper an attempt is made to calculate the profit rate of the banking sector, in order to compare it with that of other real productive sectors. Various techniques are used, highlighting the differences and commonalities among the results. The study suggests the use of a new methodology for calculating the banking and financial profit rate, based on central bank data. Furthermore, this study confirms some weakness in bank profitability in recent years, less visible using national accounts data. Furthermore, the evidence suggests the validation of certain insights from Marx's Book III of Capital.
    Keywords: Bank profit; bank crisis; banking rate of profit; data analysis
    JEL: B51 E51 G21
    Date: 2023
  16. By: Myers, Emily; Heckert, Jessica; Salazar, Elizabeth; Kalagho, Kenan; Salamba, Flora; Mzungu, Diston; Mswero, Grace; Adegbola, Ygue Patrice; Crinot, Geraud Fabrice; Kouton-Bognon, Baudelaire; Pereira, Audrey; Rubin, Deborah; Malapit, Hazel J.; Seymour, Greg
    Abstract: Monitoring progress toward women’s empowerment requires tools that reflect its underlying concepts. Cognitive interviewing is a qualitative approach for identifying sources of error in how respondents respond to survey items. This study identifies cognitive errors in survey modules included in the project level Women’s Empowerment in Agriculture Index for Market Inclusion (pro-WEAI+MI) in Benin and Malawi. Comprehension, retrieval, judgment, and response errors were all found to different degrees in the nine modules comprising the survey instrument. There are variations in findings by country context and, to a lesser extent, gender. The findings of this study informed revisions to the pro-WEAI+MI survey instrument and offer insights into how best to design survey modules used for monitoring progress toward gender equality in agricultural value chains and development efforts.
    Keywords: BENIN; WEST AFRICA; MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; surveys; errors; methods; women; gender; agriculture; market access; gender equality; value chains; development; gender-based violence; women's empowerment; cognitive interview; WEAIMI; sexual harassment
    Date: 2023
  17. By: Elton Eduardo Freitas (UFS); João Prates Romero (Cedeplar/UFMG); Gustavo Britto (Cedeplar/UFMG); Alexandre de Queiroz Stein (Cedeplar/UFMG); Ramon Torres (Cedeplar/UFMG)
    Abstract: The article presents methodological details regarding the calculation of regional indicators of economic complexity, which have been introduced in the new version of the DataViva platform launched in 2023. This updated platform includes three new indicators, derived from the original methodology of economic complexity, which was initially formulated based on export data. However, in this new version, the methodology has been adapted to utilize employment and occupation data from RAIS, addressing the issues associated with regional-level export data. This adaptation also allows for a flexible definition of regions by aggregating municipal data. The newly introduced indicators are as follows: (i) regional economic complexity indicator (ICE-R); (ii) activity complexity indicator (ICA-R); and (iii) activity density indicator (D), which can be used to calculate the productive coherence indicator (CP) of the regions. Additionally, the article describes the methodology employed for constructing the Activity Space.
    Keywords: Economic complexity. Regional indicators. Activity space. DataViva
    Date: 2023–06
  18. By: Tiago Camarinha Lopes (FACE-UFG)
    Abstract: Devido ao caráter progressista que a teoria do valor dos clássicos adquiriu sob a pena dos socialistas utópicos, Marx foi obrigado a desenvolver uma teoria do valor trabalho muito peculiar. Seu argumento de fundamentação da teoria do valor trabalho realiza duas conquistas que sintetizam a superação do sistema clássico. Primeiro, ela desmistifica a noção de que trabalho cria valor em qualquer modo de produção e, segundo, ela permite a continuação do raciocínio de determinação quantitativa dos preços a partir do tempo de trabalho. Essa permissão na segunda conquista é altamente relevante para a luta pelo domínio da ciência econômica e incita uma revisão da visão rupturista de Marx em relação aos socialistas não-marxistas.
    Keywords: Teoria do valor, Economia Política, história do pensamento econômico
    JEL: B12 B14
    Date: 2021–12
  19. By: Lilian Rolim; Laura Carvalho, Dany Lang
    Abstract: We explore the relationship between inequality, unemployment, and inflation by considering the evidence that low-wage workers are more exposed to business cycle fluctuations. The analysis is undertaken in an extended version of the stock-and-flow consistent agent-based model by Rolim et al. (2023), in which inflation and inequality result from the social conflict over income distribution. The inflation-unemployment-inequality nexus leads to the inequality-augmented Phillips curve relating higher levels of unemployment to lower inflation rates and more inequality. We then perform two sets of experiments to investigate the implications of this nexus further. The first experiment shows that the decrease in low-wage workers’ bargaining power could explain the flattening of the Phillips curve and the increase in income and wage inequalities. The second experiment contrasts different monetary policy rules and compares the implications for inequality dynamics. In line with the inequality-augmented Phillips curve, the rules have important implications for wage and income inequalities: a monetary policy rule that prioritizes low inflation rates is associated with higher unemployment and higher inequality levels.
    Keywords: Phillips curve; inflation; unemployment; inequality; monetary policy; bargaining power
    JEL: C63 D3 E2 E3 E4
    Date: 2023–06–27
  20. By: Polterovich, Victor
    Abstract: The article is devoted to the elaboration of a long-term strategy for the socio-economic development of Russia. It is noted that Western civilization is in a deep crisis due to the exhaustion of the potential of the mechanisms of economic and political competition. In the fight against unfavorable trends, countries are relatively successful, where the mechanisms of collaboration in the spheres of economy and politics play a significant role. In this regard, there is a need to revise the development strategies of catching- up countries. For Russia, engulfed in a war of sanctions, this problem is especially relevant. Usually, two options are considered for its solution: a mobilization strategy, which provides for a tightening of power, and a liberalization strategy, which involves a sharp reduction in the role of the state. This paper attempts to show that the most preferable strategy is positive (not directed against third parties) collaboration, which at the first stage provides for the formation of catching-up development institutions and the reduction of inequality. As a result, as the experience of the economic miracle countries shows, it is possible to launch rapid economic growth and achieve a high level of trust of citizens in each other and in state institutions. With successful development, the role of the state should decrease, and the role of market interactions should temporarily increase. At the same time, efforts should be directed to ensure that Russia finds itself in the class of coordinated market economies with a high level of corporate social responsibility, and, by the nature of the political system, can be attributed to consensus democracies. Following the strategy of positive collaboration would contribute to the formation of a modern ideology of collaboration and, hence, to the success of further development. It is shown that such an ideology has deep roots in Russian philosophical culture. As a result of the growth of welfare, the level of technology, and civic culture, this strategy will provide Russia with a collaborative advantage, which means joining the group of the most successful countries. It is noted that the discrepancies between the United States and the European Union are of a deep nature and are determined by differences in value orientations, in cultural characteristics, in the structure of economic and political mechanisms. The above arguments give reason to hope that the strategy of positive collaboration after the resolution of the conflict in Ukraine and the inevitable loss of dominant positions by the United States will contribute to the rapprochement between Russia and the EU countries.
    Keywords: postmodernism, competition, catching-up development, civic culture, coordinated market economy, collaborative advantage
    JEL: B52 D02 D64 O20 P21
    Date: 2023–06–16
  21. By: Bachtrögler-Unger, Julia; Balland, Pierre-Alexandre; Boschma, Ron; Schwab, Thomas
    Abstract: Technological capabilities vary substantially across European regions. Combining these diverse sets of capabilities is crucial to develop the technologies necessary to master the green and digital transition. However, collaboration between regions is sparse today. To increase inter-regional cooperation, linkages that spur the development of green and digital technologies must be identified. In this study, we provide an overview of inter-regional collaborations already in place and map new opportunities for these between regions. A special emphasis is placed on potential collaborations between economically leading and lagging regions. Our results provide new impetus for policy designs that strengthen regional innovation capabilities and cohesion across Europe’s regions.
    Keywords: Regional diversification; Relatedness; Technological capabilities; European Union; Europe; Cohesion
    JEL: B52 H54 O33 R11
    Date: 2023–04–04

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