nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒07‒24
eighteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. An agent based model of fads By Leonardo Bargigli; Filippo Pietrini
  2. Pollution Abatement and Lobbying in a Cournot Game. An Agent-Based Modelling approach By Marco Catola; Silvia Leoni
  3. Energy as a limiting factor of economic growth: the profit rate channel By Alban Pellegris
  4. Amortized Neural Networks for Agent-Based Model Forecasting By Denis Koshelev; Alexey Ponomarenko; Sergei Seleznev
  5. What Went So Wrong in Economics By Jennings, Frederic
  6. Endogenous Heterogeneous Gender Norms and the Distribution of Paid and Unpaid Work in an Intra-Household Bargaining Model By Theresa Hager; Patrick Mellacher; Magdalena Rath
  7. Valuing intangible capital in agribusinesses: A re-examination of the neoclassical theory of investment By Mashange, Gerald; Briggeman, Brian C.
  8. Proud to Not Own Stocks: How Identity Shapes Financial Decisions By Luca Henkel; Christian Zimpelmann
  9. Complexity measure, kernel density estimation, bandwidth selection, and the efficient market hypothesis By Matthieu Garcin
  10. Structural change and the National Initiative for Human Development in Morocco: Subnational insights By Al-mouksit Akim; Wissal Sahel
  11. Syn(thèse) La blockchain en support aux communs 2023 Malafosse Maxime By Maxime Malafosse
  12. Modèles socio-économiques versus Social Business Models By Patrick Gianfaldoni; Laurent Gardin; Florence Jany-Catrice
  13. Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework By Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
  14. The educated class and the fragility of consumer society By Gilles Saint-Paul
  15. Interactions Issues in Risk Analysis of Complex Systems By Ayeley Tchangani
  16. Just transition processes: From theory to practice. By Ana Pueyo; Catherine Leining
  17. Structural transformation and sources of growth in Turkey By Ahmet Ihsan Kaya; Cumhur Çiçekçi
  18. Development strategies in a context of world system disorder By Lundvall, Bengt-Åke

  1. By: Leonardo Bargigli; Filippo Pietrini
    Abstract: We examine the dependence of the cyclical fluctuations of demand on specific behavioral attitudes of heterogeneous agents. Extending the model of Tassier (2004), we use simulations to investigate consumption dynamics when agents are inclined both to conformism and distinction, and they use goods as elements of a communication system. Our results challenge the view stating that conspicuous consumption is typical only of a wealthy class and of some positional goods, since in our model there are no assumptions about features of the goods or income distribution.
    Keywords: goods cycles, agent based model, sociology of consumption.
    JEL: D91
    Date: 2023
  2. By: Marco Catola; Silvia Leoni
    Abstract: The application of Agent-Based Modelling to Game Theory allows us to benefit from the strengths of both approaches, and to enrich the study of games when solutions are difficult to elicit analytically. Using an agent-based approach to sequential games, however, poses some issues that result in a few applications of this type. We contribute to this aspect by applying the agent-based approach to a lobbying game involving environmental regulation and firms’ choice of abatement. We simulate this game and test the robustness of its game-theoretical prediction against the results obtained. We find that while theoretical predictions are generally consistent with the simulated results, this novel approach highlights a few differences. First, the market converges to a green state for a larger number of cases with respect to theoretical predictions. Second, simulations show that it is possible for this market to converge to a polluting state in the very long run. This result is not envisaged by theoretical predictions. Sensitivity experiments on the main model parameters confirm the robustness of our findings.
    Keywords: Agent-Based-Modelling, Environmental Regulation, Industrial Organisation, Lobbying
    JEL: C63 D72 L13 L51
    Date: 2023–06–01
  3. By: Alban Pellegris (UR2 UFRSS - Université de Rennes 2 - UFR Sciences sociales - UR2 - Université de Rennes 2)
    Abstract: Within ecological economics, there is a diversity of traditions highlighting the fundamental role of energy in the growth process. Faced with the limitations of neo-thermodynamic (Ayres, Warr...) and neo-physiocratic (Court, Hall...) approaches, our work proposes to consider another paradigm: Marxist political economy. The latter allows us to theoretically identify a profit rate channel through which relative energy prices affect the macroeconomic profit rate. Econometric work carried out over the period 1995-2019 on a panel of 16 countries confirms its existence. These results are discussed in the light of recent literature on the burden of the energy bill.
    Keywords: energy bill, economic growth, marxist political economy, energy consumption
    Date: 2023–01–07
  4. By: Denis Koshelev (Bank of Russia, Russian Federation); Alexey Ponomarenko (Bank of Russia, Russian Federation); Sergei Seleznev (Bank of Russia, Russian Federation)
    Abstract: In this paper, we propose a new procedure for unconditional and conditional forecasting in agent-based models. The proposed algorithm is based on the application of amortized neural networks and consists of two steps. The first step simulates artificial datasets from the model. In the second step, a neural network is trained to predict the future values of the variables using the history of observations. The main advantage of the proposed algorithm is its speed. This is due to the fact that, after the training procedure, it can be used to yield predictions for almost any data without additional simulations or the re-estimation of the neural network.
    Keywords: agent-based models, amortized simulation-based inference, Bayesian models, forecasting, neural networks.
    JEL: C11 C15 C32 C45 C53 C63
    Date: 2023–07
  5. By: Jennings, Frederic
    Abstract: Abstract What went so wrong in economics started in 1939 with ‘The Hicksian Getaway, ’ where – after over ten years of debate assuming increasing returns – Hicks asserted decreasing returns as the basis for his competitive frame, dismissing any “useful analysis” of increasing returns. After winning the 1972 Nobel Prize for his 1939 work, Hicks (1977, pp. v-vii) apologized for ‘The Hicksian Getaway, ’ calling it “nonsense” and “an indefensible trick that ruined the ‘dynamics’ of Value and Capital.” After a series of failed attempts to integrate time into production theory, in 1958 Armen Alchian proposed a method to do so with nine propositions showing the relation of time to cost, which Julius Margolis (1960) extended into a horizonal theory of price. Jack Hirshleifer (1962) saw Alchian’s (1958) frame as a threat to neoclassical theory, declaring his aim as “rescuing the orthodox cost function.” ‘The Hirshleifer Rescue’ of decreasing returns was seamlessly folded into economics as a ‘proof’ that decreasing returns was “a general and universally valid law” of economics, according to Alchian (1968). The present paper debunks ‘The Hirshleifer Rescue’ to show the case for decreasing returns and competition rests on unfounded assertion, especially for all long-run analyses. The paper explores the implications of an increasing returns economy of complementarity and abundance in networks, with a case for efficient cooperation. The claims in Nicholas Kaldor’s papers are thus extended into an integral theory of planning horizons, as a formalization of Herbert Simon’s notion of bounded rationality. An increasing returns economics is a horizonal economics.
    Keywords: Keywords: increasing and decreasing returns to scale, rising and falling costs, time, knowledge, planning horizons, John Hicks, Jack Hirshleifer, Armen Alchian, Herbert Simon, Nicholas Kaldor
    JEL: B2 B21 B3 B31 B4 B41 B5 B52 D4 D40 D46 D5 D6 D62 L0 P0 Z1
    Date: 2023–06–20
  6. By: Theresa Hager (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Patrick Mellacher (Schumpeter Centre, University of Graz, Austria); Magdalena Rath (Schumpeter Centre, University of Graz, Austria)
    Abstract: We study the impact of gender norms on the distribution of paid and unpaid labor between women and men in an intra-household bargaining model featuring endogenous social norms. In contrast to the previous literature, which assumes a homogeneous social norm, agents are connected via explicitly modeled social networks and accordingly face heterogeneous perceptions of gender norms. In our model, social pressure to conform to gender norms exacerbates gender inequalities in the distribution of paid and unpaid labor that may result from a gender pay gap or gender-specific preferences. However, we show that the behavior of agents connected in different standardized social networks is significantly closer to a situation in which agents face no social pressure than in a scenario in which the whole of society perceives homogeneous gender norms. This is particularly true if agents are more likely to form connections to other agents that have similar preferences.
    Date: 2023–06
  7. By: Mashange, Gerald; Briggeman, Brian C.
    Keywords: Agricultural Finance, Agribusiness, Marketing
    Date: 2023
  8. By: Luca Henkel; Christian Zimpelmann
    Abstract: This paper introduces a key factor influencing households’ decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8, 500 individuals from eleven countries, we document that a large majority of respondents view stockholders negatively – they are perceived as greedy, gambler-like, and selfish individuals. We then provide experimental evidence that such perceptions of identity-relevant characteristics causally influence decision-making: if people view stockholders more negatively, they are less likely to choose stock-related investments. Furthermore, by linking survey and administrative data, we show that negative perceptions strongly predict households’ stock market participation, more so than leading alternative determinants. Our findings provide a novel explanation for the puzzlingly low stock market participation rates around the world, new perspectives on the malleability of financial decision-making, and evidence for the importance of identity in economic decision-making.
    Keywords: Identity, Perceptions, Stock Market Participation, Financial Decision-Making
    JEL: G41 G51 D14 D83
    Date: 2023–06
  9. By: Matthieu Garcin (Research Center - Léonard de Vinci Pôle Universitaire - De Vinci Research Center)
    Abstract: We are interested in the nonparametric estimation of the probability density of price returns, using the kernel approach. The output of the method heavily relies on the selection of a bandwidth parameter. Many selection methods have been proposed in the statistical literature. We put forward an alternative selection method based on a criterion coming from information theory and from the physics of complex systems: the bandwidth to be selected maximizes a new measure of complexity, with the aim of avoiding both overfitting and underfitting. We review existing methods of bandwidth selection and show that they lead to contradictory conclusions regarding the complexity of the probability distribution of price returns. This has also some striking consequences in the evaluation of the relevance of the efficient market hypothesis. We apply these methods to real financial data, focusing on the Bitcoin.
    Keywords: bandwidth selection, Bitcoin, kernel density estimation, market information, nonparametric density, Shannon entropy
    Date: 2023–05–22
  10. By: Al-mouksit Akim; Wissal Sahel
    Abstract: This paper aims to revisit the pace and patterns of structural change in Morocco with a renewed perspective focusing on subnational trends to document the macro patterns. In that perspective, we first build a within-country sectoral longitudinal dataset covering employment and value added (VA) that expands the international databases mostly used in the literature. Based on this novel dataset, our results shed light on the different contributions of subnational units (regions) to labour productivity growth and, subsequently, structural change.
    Keywords: Structural change, Human development, Subnational, Morocco
    Date: 2023
  11. By: Maxime Malafosse (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)
    Abstract: La blockchain et les communs sont deux concepts qui suscitent de plus en plus d'intérêt. Par des approches différentes, on prête à ces deux notions beaucoup d'espoir pour transformer notre société et répondre aux enjeux actuels de transition sociale et écologique. Pourtant peu de recherches les mettent en lien. D'autant plus que les travaux qui rapprochent la blockchain et les communs restent essentiellement théoriques. Nos recherches visent à mieux cerner comment la blockchain peut s'inscrire en support aux communs en situation réelle. Nous avons exploré plusieurs terrains qui incarnaient, de différentes manières, le rôle d'une technologie comme un outil au service d'une finalité collective. Nous avons commencé par observer la place centrale de la blockchain dans un dispositif sociotechnique de communs qui vise à produire et à autogérer la création monétaire (essai 1). Pour investir ce premier terrain de recherche, nous avons réalisé une étude de cas. Dans l'essai suivant, nous avons cherché à éclairer le rôle de la blockchain comme outil intégré dans un dispositif plus large d'expérimentation de communs de la donnée à l'échelle d'une ville (essai 2). Cette deuxième étude de cas a été mûrie par la réalisation d'une mission d'expertise de deux années dans un tiers lieu et s'est finalement focalisé sur le projet Européen DECODE. Enfin, notre dernier essai s'appuie sur les résultats du premier essai et permet d'approfondir comment la blockchain pourrait permettre de soutenir économiquement les communs puisqu'elle bouleverse les perspectives de la monnaie par la démocratisation de ses formes alternatives, la facilitation de sa création et la complexification de son design (essai 3).
    Keywords: gouvernance, blockchain, systèmes de registres distribués monnaie, monnaie libre, Ğ1, Duniter, monnaie complémentaire, dividende universel, création monétaire, DECODE, Barcelone, communs de la donnée, communs, Ostrom, production par les pairs sur la base des communs, Commons-Based Peer Production (CBPP)
    Date: 2023
  12. By: Patrick Gianfaldoni (LBNC - Laboratoire Biens, Normes, Contrats - AU - Avignon Université); Laurent Gardin (CRISS - Centre de Recherche Interdisciplinaire en Sciences de la Société - UPHF - Université Polytechnique Hauts-de-France); Florence Jany-Catrice (CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: What socio-economic model(s) do associations, and more generally SSE actors, deploy? How do they balance their books? How do they keep the promises of virtue of the SSE (social utility, shared governance, interest in human, social and ecological matters) and ensure their economic sustainability? In other words, what meaning should be given to this notion of "SSE" in the diversity of interpretations it induces or suggests?
    Abstract: Quel(s) modèle(s) socio-économique(s) déploient les associations, et plus généralement les acteurs de l'ESS ? Comment font-ils pour équilibrer leurs comptes ? Pour tenir tout à la fois les promesses de vertu de l'ESS (utilité sociale, gouvernance partagée, intérêt pour les choses humaines, sociales et écologiques) et assurer leur pérennité économique ? En d'autres termes, quelle signification doit-on accorder à cette notion de « MSE » dans la diversité des interprétations qu'elle induit ou qu'elle suggère ?
    Date: 2023–03–01
  13. By: Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
    Abstract: This paper adopts a relatedness-complexity framework to assess the likelihood of functional upgrading and downgrading in global value chains in EU regions in the period 2000-2010. We use relatedness and economic complexity measures based on value added content of gross exports and labour structures at the regional level. We show how economic complexity metrics can be used as an alternative for value added data, to measure both functional upgrading and downgrading in GVCs. We find that relatedness between functions (industry-occupations) is a factor impacting both functional upgrading and downgrading. Regions tend to functionally upgrade their global value chains towards more complex functions that are related to functions in which they are specialised. And regions are more likely to functionally exit and downgrade in global value chains when they are not specialised in related functions.
    Keywords: Global value chains, upgrading, downgrading, economic complexity, relatedness, EU regions
    JEL: F14 F63 O19 R11 R12
    Date: 2023–07
  14. By: Gilles Saint-Paul (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, PJSE - Paris Jourdan Sciences Economiques - 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)
    Abstract: We analyze the importance of the educated class for the persistence of mass consumption societies in an economy with a hierarchy of needs.Through the demand for managerial talent (which is needed to operate advanced industrial technologies), the latter generate their own demand for skills. In turn, high wages for skilled labor raise the demand for a broad range of industrial products. Thus, mass consumption society is self-sustaining but may also collapse. An increase in the managerial labor requirement, while a form of technical regress, may sustain a high skilled wage, high industrialization, equilibrium. In the dynamic analysis, a collapse of mass consumption society may be triggered after the economy has accumulated a critically high level of human capital. Following a collapse, the educated class disappears but gradually recovers as its own scarcity ignites a positive feedback loop between the demand for skills and the income of skilled workers. But collapses may happen again, and the economy may experience cycles.
    Date: 2023–06
  15. By: Ayeley Tchangani (LGP - Laboratoire Génie de Production - ENIT - Ecole Nationale d'Ingénieurs de Tarbes - Toulouse INP - Institut National Polytechnique (Toulouse) - UT - Université de Toulouse)
    Keywords: Risk analysis, Complex systems, Interactions
    Date: 2023–06–07
  16. By: Ana Pueyo (Motu Economic and Public Policy Research); Catherine Leining (Motu Economic and Public Policy Research)
    Abstract: Aotearoa New Zealand needs large-scale and rapid transformations across all sectors to meet sustainability goals. Past experiences have shown that rapid economic transition is possible, but it can become deeply political, producing trade-offs, winners and losers. It can lead to conflict as politically influential and well-resourced incumbents resist change, while those less able to adjust face the brunt of the costs. As Aotearoa shifts toward a low-emissions, climate-resilient, and more sustainable economy, we have opportunities to find processes and pathways that support a just transition with socially progressive outcomes by design. This paper explores how to move just transitions from theory to practice, through a literature review. It starts with a conceptual framework, defining what we mean by transitions, specifically sustainable and just transitions. It then reviews some of the theories that explain how transitions happen and how they are governed. It provides some further insights on governance, asking if transitions can be engineered and planned from above (top-down), or if they must instead emerge organically from below (bottom-up), concluding that a combination of both is needed. Historical examples and recent toolkits offer some insights about how to plan localised just transitions. Finally, a brief compilation of indigenous approaches to sustainability transitions is presented with a recommendation for further extension to reflect the diversity of indigenous views. The paper is useful for policymakers in Aotearoa and beyond, seeking to understand what just transitions are; who and what drives them or blocks them; how to plan, implement and govern them; and how indigenous knowledge can contribute to the process.
    Keywords: Just transition, Aotearoa New Zealand, climate change, sustainable development, social justice
    JEL: Q01 Q54 Q58 Z18
    Date: 2023–07
  17. By: Ahmet Ihsan Kaya; Cumhur Çiçekçi
    Abstract: This paper provides a comprehensive analysis of the supply and demand side of structural transformation in Turkey. Using the GGDC/UNU-WIDER Economic Transformation Database, we find that labour productivity improvements explain more than half of economic growth in the period 1980-2021. This is mainly thanks to within-sector productivity improvements, while the contribution of structural change declines over time. Time-series regression analysis shows that structural change is driven by per capita income growth and financial openness but is halted by trade integration.
    Keywords: Labour productivity, Structural transformation, Economic growth, Input–output, Economic linkages
    Date: 2023
  18. By: Lundvall, Bengt-Åke (Aalborg Business School, Aalborg University)
    Abstract: The world has been through several major crises since the beginning of the new millennium and the old-world order, with the US as hegemonic power, is challenged by the rise of China. There has been a reversal of, as well as directional change in, the globalization trend. A weakening of international collaboration is taking place against a backdrop of global challenges such as climate change, digital revolution and global inequality, challenges calling for coordinated action. Starting from a knowledge-based world system perspective, the paper reflects on, what this means for innovation and development strategies in the South. Which are the main threats and opportunities in the current era? Which lessons can be drawn from the rise of China? What are the implications for research agendas?
    Keywords: world system theory; development theory; Wallerstein; Freeman; knowledge; innovation systems
    JEL: B52 O19 O30
    Date: 2023–06–22

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