nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒09‒04
thirteen papers chosen by
Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza”

  1. Amortized neural networks for agent-based model forecasting By Denis Koshelev; Alexey Ponomarenko; Sergei Seleznev
  2. Imprisoning Complexity in Modules By Richard N. Langlois
  3. The quality of work (QoW): towards a capability theory By Stephens, Thomas C.
  4. Dynamics of socio-ecological transformation of territories: what contribution from social ecological economics? By Olivier Petit; Philippe Méral; Iratxe Calvo-Mendieta; Hélène Melin
  5. Frank Knight and the Problem of the Twentieth Century By Richard N. Langlois
  6. Stopping Firestone and starting a citizen ‘revolution from below’: reflections on the enduring exploitation of Liberian land and labour By Pailey, Robtel Neajai
  7. Desenvolvimento de uma Matriz de Contabilidade Social para a análise do efeito das alterações climáticas no turismo By Cristiana Gião; Rita Sousa
  8. (Shadow) money without a central bank: towards a theory of monetary time By Gabor, Daniela
  9. Information Recovery in Complex Economic Systems By Judge, George
  10. Systemic Financial Crises and Income Inequality in OECD Countries By Puneet Arora; Alberto Chong; Carla Srebot
  11. Solving equilibrium problems in economies with financial markets, home production, and retention By Julio Deride; Roger J-B Wets
  12. "Sustaining Change: Unravelling the Socio-cultural Threads of Sustainable Consumption" By Asuamah Yeboah, Samuel
  13. A new mapping of technological interdependence By A. Fronzetti Colladon; B. Guardabascio; F. Venturini

  1. By: Denis Koshelev; Alexey Ponomarenko; Sergei Seleznev
    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
    Date: 2023–08
  2. By: Richard N. Langlois (University of Connecticut)
    Abstract: In a modular system, complexity is effectively imprisoned within subsystems, thus mitigating the propagation of influences to distant parts of the larger system. This paper briefly outlines the idea of modularity as a design principle; explores its benefits – which go beyond the imprisonment of complexity – as well as its limitations; and applies the ideas of modularity to social institutions. Although modular design may or may not be an optimal response to a given environment (typically understood as a given optimization problem), modular design shines in the far more important realm of innovation, which is driven by the recombination of knowledge. The concepts of encapsulation and information hiding in the theory of modular systems turn out to be analogous in many ways to the principles of constitutional design articulated in constitutional political economy. The paper considers the difficulty of creating a modularconstitutional structure as well as the threats to established modular-constitutiona systems that arise from rent seeking and externalities, including intangible externalities or moralisms. The paper concludes by applying these ideas to one particular set of social institutions, present-day Internet social networks.
    JEL: D02 D23 D71 D74 K11 P14 P16
    Date: 2023–08
  3. By: Stephens, Thomas C.
    Abstract: This paper introduces a comprehensive conceptual framework for measuring the Quality of Work (QoW) using the Capability Approach (CA). Drawing from Robeyns’ (2017) modular framework for developing Capability Theories, it proposes we conceive of work as a body of resources existing in a ‘space’ of work. Dimensions of QoW can be identified based on how work resources enhance, or impede, the achievement of important ‘beings and doings’ (Functionings) both inside (intrinsic importance) or outside (instrumental) this space – such as intrinsic Functionings like meaningful work; or instrumental Functionings like family- and life-fulfilment. However, it further argues that many approaches to QoW are under-specified, since they neglect the crucial ways that peoples’ wider circumstances, outside this space of work, determine peoples’ overall work-related wellbeing. This calls for indices of multi-dimensional QoW to also measure (a) the range of wider Functionings people could achieve outside their current work activity (the Capability Set); and (b) personal, social, and environmental factors which affect how work resources are converted into Functionings (Conversion Factors). It is only by taking these circumstances into account that indices can capture the true impact of the worst forms of work, by understanding who is forced to engage in this work.
    Keywords: capability approach; work; job quality; employment; platform labour; gig economy; PhD studentship; T&F deal
    JEL: J80
    Date: 2023–08–03
  4. By: Olivier Petit (UA - Université d'Artois, CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Philippe Méral (IRD - Institut de Recherche pour le Développement); Iratxe Calvo-Mendieta (ULCO - Université du Littoral Côte d'Opale, TVES - Territoires, Villes, Environnement & Société - ULR 4477 - ULCO - Université du Littoral Côte d'Opale - Université de Lille); Hélène Melin (Université de Lille, CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Date: 2023–06
  5. By: Richard N. Langlois (University of Connecticut)
    Abstract: Much has been written, especially in economics and management, about Frank Knight’s account of uncertainty and entrepreneurship. This paper attempts to put that theory in the larger context of the intellectual currents, and to a significant extent the economic history, in which Knight found himself. In response to rapid economic growth and the emergence of the large industrial enterprise in the U. S. in the late nineteenth and early twentieth centuries, many came to believe that the classical liberalism of the nineteenth century would need to be amended – if not jettisoned entirely. Frank Knight was among these. He was, along some dimensions, a Progressive and an Institutionalist. What set him apart from Progressives like John Dewey, however, was his theory of economic knowledge. Whereas Dewey and others insisted on the panacea of science as the solution to the “social question, ” Knight understood that in a world of uncertainty, the cognitive faculty of judgment was essential and unavoidable, thus providing a new intellectual underpinning for many of the institutions of nineteenth-century liberalism. Yet Knight did not follow the implications of his theory of knowledge all the way to their conclusions. This is because – perhaps among other reasons – he began with a well-developed model of perfect competition, which, unlike such contemporaries as Joseph Schumpeter and F. A. Hayek, he was never willing to relinquish as a normative ideal. Perhaps surprisingly, Frank Knight was a Progressive and an Institutionalist because he believed in the neoclassical model of the economy.
    Keywords: Frank Knight, uncertainty, entrepreneurship, liberalism, democracy, central planning
    JEL: B25 B3 B52 L2
    Date: 2023–08
  6. By: Pailey, Robtel Neajai
    Abstract: Attempting to reduce America’s dependence on foreign-sourced rubber, Firestone established in 1926 the world’s largest industrial plantation in Liberia under a controversial 99-year-lease agreement. Nearly a century later, backlash against the exploitative nature of corporate hegemony and economic globalisation crystallised in a transnational campaign, Stop Firestone, and class action suit to hold the multinational accountable. I argue in this article that Liberia’s unequal incorporation into global capitalism has configured and reconfigured the set of relations between government and citizens through parallel, albeit interrelated, processes—the globalisation of capital (via trade and investments) and the globalisation of rights (via universalised notions of citizenship as a human right). While the pursuit of foreign direct investment (FDI) in particular placed the interests of investors like Firestone ‘above’ the state thus undermining government–citizen relations, it simultaneously created a politicised workforce and network of Liberian activists thus strengthening citizen–citizen relations. Based on careful review of concession agreements and court proceedings as well as interviews conducted with government officials, activists and legal advocates based in Liberia and the United States, this article is the first to meld historical and contemporary developments, underscoring the twenty-first century implications of Firestone’s enduring exploitation of Liberian land and labour.
    Keywords: capitalism; citizenship; Firestone; globalisation; labour rights; Liberia; T&F deal
    JEL: R14 J01
    Date: 2023–08–04
  7. By: Cristiana Gião (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Rita Sousa (NIPE/Center for Research in Economics and Management, University of Minho, Portugal)
    Abstract: Uma Matriz de Contabilidade Social (Social Accounting Matrix, SAM) pode ser utilizada para medir os impactos das mudanças climáticas no turismo e consequentemente na restante economia, através da análise das relações entre os diversos setores económicos e setores específicos. A SAM ajuda assim a identificar os setores e agentes mais afetados pelas mudanças e a magnitude dos seus impactos. No presente estudo optou-se por acrescentar à SAM não só uma dimensão micro do turismo, através da identificação das atividades e produtos caraterísticos do set, como também uma perspetiva geográfica macro, de forma a evidenciar padrões do turismo internacional relacionados com a economia portuguesa. Assim, com este estudo será possível desenvolver modelos de equilíbrio geral que permitirão aos formuladores de políticas económicas desenvolver estratégias eficazes de adaptação e mitigação para o setor do turismo.
    Date: 2023
  8. By: Gabor, Daniela
    Abstract: Since (at least) Keynes we think of money as a time machine that links the irrevocable past to the uncertain future by credibly storing value. But time as shorthand for uncertainty downplays its role in the emergence of new forms of money. Instead, this paper theorizes monetary time as the set of practices through which the state and private finance order time on their balance sheets in the process of creating credible promises to pay at par. While time makes money, there is no unique temporal order that characterizes money/credit creation in capitalism. Rather, monetary time varies across different modes of organizing credit creation, in relationship banking vs market-based finance where credit is created via securities markets and financed through shadow money, promises to pay backed by collateral securities. The alchemy of (shadow) banking is the alchemy of monetary time, of money that can extinguish time without the state. To illustrate, the paper explores the money-time order perfected by New York broker-dealers in the call market that powered the American credit machine before the creation of the Federal Reserve in 1913. Brokers developed practices for daily re-pricing of collateral securities that rendered call (shadow) money credible stores of value. The day-based temporal order allowed brokers to pump credit into circulation via securities markets, liquidity into the payment system and moneyness into bank and paper money.
    Date: 2023–08–10
  9. By: Judge, George
    Keywords: Social and Behavioral Sciences
    Date: 2023–08–21
  10. By: Puneet Arora (Charles University); Alberto Chong (Department of Economics, Georgia State University and Department of Economics, Universidad del Pacifico); Carla Srebot (University of British Columbia)
    Abstract: We offer a theory and evidence that support the view that systemic financial crises impact income inequality negatively in richer countries, where institutions such as social safety nets work better than in developing countries. More generally, to our knowledge, our work is the first to provide empirical evidence that supports the view that systemic financial crises may have a causal impact on income inequality and that a driving mechanism may be vulnerable employment. In order to do this, we apply a difference-in-difference approach and provide evidence that the parallel trends assumption is complied with.
    Date: 2023–08
  11. By: Julio Deride; Roger J-B Wets
    Abstract: We propose a new methodology to compute equilibria for general equilibrium problems on exchange economies with real financial markets, home-production, and retention. We demonstrate that equilibrium prices can be determined by solving a related maxinf-optimization problem. We incorporate the non-arbitrage condition for financial markets into the equilibrium formulation and establish the equivalence between solutions to both problems. This reduces the complexity of the original by eliminating the need to directly compute financial contract prices, allowing us to calculate equilibria even in cases of incomplete financial markets. We also introduce a Walrasian bifunction that captures the imbalances and show that maxinf-points of this function correspond to equilibrium points. Moreover, we demonstrate that every equilibrium point can be approximated by a limit of maxinf points for a family of perturbed problems, by relying on the notion of lopsided convergence. Finally, we propose an augmented Walrasian algorithm and present numerical examples to illustrate the effectiveness of this approach. Our methodology allows for efficient calculation of equilibria in a variety of exchange economies and has potential applications in finance and economics.
    Date: 2023–08
  12. By: Asuamah Yeboah, Samuel
    Abstract: This paper explores the relationship between socio-cultural factors and sustainable consumption, aiming to uncover the elements that contribute to long-term change in consumer behaviour. Sustainable consumption is recognized as a crucial aspect of achieving global sustainability goals, encompassing social, economic, and environmental dimensions. The study focuses on three key socio-cultural factors: social norms, cultural values, and social influence processes. Social norms strongly influence behaviour, as individuals conform to gain social acceptance and avoid sanctions. Aligning consumption choices with perceived norms helps individuals maintain social approval and avoid being seen as deviant. Understanding how social norms are established, transmitted, and reinforced is vital for effective promotion of sustainable consumption. Cultural values provide shared meanings that guide behaviour. Certain values, such as those emphasizing environmental protection and social responsibility, foster pro-sustainability attitudes and behaviours. Conversely, values emphasizing materialism and short-term gains hinder sustainable consumption. Exploring cultural diversity and context-specific influences sheds light on consumption patterns across societies. Social influence processes, including peer pressure and the desire for social belonging, play a significant role in driving sustainable consumption. Individuals are influenced by their social networks, such as family, friends, and opinion leaders, aligning their choices with those around them. Understanding the dynamics of social influence, including communication and social media impact, informs strategies to promote sustainable behaviours. Examining the durability of socio-cultural influences is crucial for long-term change. Research should focus on information dissemination, social learning, role modelling, and innovation diffusion mechanisms. By understanding these socio-cultural threads, interventions and strategies can be developed to encourage sustainable lifestyles and foster lasting change at individual, social, and cultural levels.
    Keywords: Sustainable consumption; Socio-cultural influences; Behaviour change; Environmental consciousness; Consumer attitudes; Social norms; Cultural values; Sustainable lifestyles
    JEL: D12 D91 Q01 Q56 Z13
    Date: 2023–04–16
  13. By: A. Fronzetti Colladon; B. Guardabascio; F. Venturini
    Abstract: Which technological linkages affect the sector's ability to innovate? How do these effects transmit through the technology space? This paper answers these two key questions using novel methods of text mining and network analysis. We examine technological interdependence across sectors over a period of half a century (from 1976 to 2021) by analyzing the text of 6.5 million patents granted by the United States Patent and Trademark Office (USPTO), and applying network analysis to uncover the full spectrum of linkages existing across technology areas. We demonstrate that patent text contains a wealth of information often not captured by traditional innovation metrics, such as patent citations. By using network analysis, we document that indirect linkages are as important as direct connections and that the former would remain mostly hidden using more traditional measures of indirect linkages, such as the Leontief inverse matrix. Finally, based on an impulse-response analysis, we illustrate how technological shocks transmit through the technology (network-based) space, affecting the innovation capacity of the sectors.
    Date: 2023–07

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