nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒11‒13
ten papers chosen by
Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza”

  1. Mind the Knowledge Gap! The Origins of Declining Business Dynamics in a Macro Agent-Based Model By Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco
  2. Stagnation and cycles in Marx’s Circuit of Capital By Nikolaos Chatzarakis
  3. Housing cooperatives facing the energy transition. Insights from Poland and Czechia By Jan Frankowski; Tomasz Œwietlik; Aleksandra Prusak; Jakub Sokolowski; Joanna Mazurkiewicz; Wojciech Be³ch; Nicol Staòková
  4. Cooperative Property Rights and Development: Evidence from Land Reform in El Salvador: A Comment By Anders Kjelsrud; Andreas Kotsadam; Ole Rogeberg
  5. Are sanctions for losers? A network study of trade sanctions By Fabio Ashtar Telarico
  6. Beyond Cost Benefit Analysis: A SAM Model for Project-Program Evaluation By Scandizzo Pasquale Lucio; Cufari Daniele
  7. Sraffian indeterminacy of steady-state equilibria in the Walrasian general equilibrium framework By Naoki Yoshihara; Se Kwak
  8. Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure By Ullah, Nazim; Mat Nor, Fauzias; Abu Seman, Junaidah; fadly, ahmed; ainna, nur
  9. The Classical Model of Growth and Distribution By Daniele Tavani
  10. Le conservatisme culturel des entreprises familiales au Maroc : la pièce manquante du puzzle By Nidaazzi, Hamza; Hourmat Allah, Hind

  1. By: Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco
    Abstract: In this paper we replicate most of the stylized facts characterizing the decline in business dynamism in the USA highlighted by Akcigit and Ates (2021) and provide an explanation of their emergence by means of a macroeconomic agent-based model populated by two types of firms: innovators who generate new and more productive capital goods, and entrepreneurs who employ labor and capital goods to produce consumption goods. A key ingredient of the model is the assumption that the entrepreneurs’ access to new and better capital goods depends on the knowledge gap, i.e., the wedge between the firm’s technical knowledge and the state of technology embodied in new capital goods. Within this framework, we investigate the obstacles to knowledge diffusion subsequently leading to declining business dynamism. Our findings indicate that only when knowledge diffusion decreases in both the technology imitation and adoption processes does it lead to high market concentration and markups, falling labor share and productivity growth. Patents are an important obstacle to knowledge diffusion. We find an inverse U-shaped relationship between patent strength and growth: moderate levels of patent protection can stimulate growth, but strong protection leads to rising market power and slower growth.
    Keywords: innovation, imitation, knowledge diffusion, knowledge gap, patents
    JEL: O31 O32 O33 O34
    Date: 2023
  2. By: Nikolaos Chatzarakis (Department of Economics, New School for Social Research, USA)
    Abstract: Marx’ circuit of capital describes the circular process of transformation of money to commodities and of commodities to money, the unified process of capital turnover from production to exchange. It becomes the prime tool Marx used to analyze the process of labor, the reproduction and accumulation of capital, and the possibility and actuality of crises in the capitalist mode of production. In a paper in 1982 and two books is 1986, Foley formulated a mathematical model for the circuit of capital. In the present work, we reformulate this model into a closed and autonomous dynamical system and we proceed to analyze its phase space; not surprisingly, this model resembles the famous epidemiological models, used to describe a similar circular process for the spread of a disease. The equilibrium points of the system reveal the cases for a ‘normal’ phase of expansion, as well as for an ‘excess capital’ crisis; the shift of stability from the one to the other reveals a possibility theory of crisis as a secular stagnation process, while the shift from stability to cycles reveals an actuality theory of short-run fluctuations due to ‘excess commodities’ and ‘excess money’.
    Keywords: Circuit of capital, capital accumulation, economic crisis, financialization
    Date: 2023–10
  3. By: Jan Frankowski; Tomasz Œwietlik; Aleksandra Prusak; Jakub Sokolowski; Joanna Mazurkiewicz; Wojciech Be³ch; Nicol Staòková
    Abstract: This study constitutes preliminary analytical material concerning the adaptative capacity of housing cooperatives to accommodate energy transition in Poland and Czechia. This report comprehensively utilises administrative data from Polish and Czech national registers for the first time. These data have been employed to (1) compare Polish and Czech housing cooperatives based on their type, age, and size, as well as (2) to provide an initial assessment of the support offered to housing cooperatives in the field of energy efficiency (3) and an initial evaluation of their susceptibility to energy crises. The results indicate that Polish and Czech housing cooperatives are at different stages of institutional transformations, which may influence their flexibility in response to crises and capacity to implement solutions related to energy transition.
    Keywords: housing cooperatives, energy transition, energy crisis, Poland, Czechia
    JEL: J21 L71 Q43
    Date: 2023–10
  4. By: Anders Kjelsrud (Oslo Business School, Oslo Metropolitan University); Andreas Kotsadam (The Frisch Centre, Oslo/Norway); Ole Rogeberg (The Frisch Centre, Oslo/Norway)
    Abstract: Montero (2022) explores a discontinuity in a land reform in El Salvador and reports two main findings. First, relative to outside-owned haciendas operated by contract workers, the productivity of worker-owned cooperatives is higher for staple crops and lower for cash-crop. Second, cooperative property rights increase workers' incomes and compress wage distributions. In this comment, we show that the latter result rests on two mistakes: three-quarters of the observations are duplicates and income inequality is calculated over too few workers to be meaningful. When corrected, the data sources and research design provide no credible evidence regarding the causal effects of ownership structure on income levels and inequality.
    Date: 2023–03–10
  5. By: Fabio Ashtar Telarico
    Abstract: Studies built on dependency and world-system theory using network approaches have shown that international trade is structured into clusters of 'core' and 'peripheral' countries performing distinct functions. However, few have used these methods to investigate how sanctions affect the position of the countries involved in the capitalist world-economy. Yet, this topic has acquired pressing relevance due to the emergence of economic warfare as a key geopolitical weapon since the 1950s. And even more so in light of the preeminent role that sanctions have played in the US and their allies' response to the Russian-Ukrainian war. Applying several clustering techniques designed for complex and temporal networks, this paper shows that a shift in the pattern of commerce away from sanctioning countries and towards neutral or friendly ones. Additionally, there are suggestions that these shifts may lead to the creation of an alternative 'core' that interacts with the world-economy's periphery bypassing traditional 'core' countries such as EU member States and the US.
    Date: 2023–10
  6. By: Scandizzo Pasquale Lucio (University of Rome “Tor Vergata” and OpenEconomics); Cufari Daniele (Independent Researcher)
    Abstract: This paper presents a new methodology of project evaluation based on the use of a social accounting matrix (SAM). The method proposed considers both the project as an autonomous shock and as an endogenous activity, thus capturing both the demand and the supply side effects, that can be associated to investment. In assessing project impact, these two effects have to be considered complementary, even though they may be combined in different proportions and with different strength in different practical cases. The autonomous dimension is however a distinctive feature of a project as an economic concept. Its consideration has important implications to assess the structural impact of a project as an activity ranging complete isolation to total embeddedness in the economic system. The paper also shows that both in its construction and operational phases the project displays structural effects on the economic system and that these effects may be sizable and may be partly offsetting the direct impact of the project on demand and supply variables.
    Keywords: Project, autonomy, embeddedness, structure, social accounting matrix, social rate of return
    JEL: C67 C68 H43
    Date: 2023–10
  7. By: Naoki Yoshihara (University of Massachusetts Amherst); Se Kwak (University of Massachusetts Amherst)
    Abstract: In contrast to Mandler’s (1999a; Theorem 6) generic determinacy of steady-state equilibria, we first show that any non-trivial steady-state equilibrium is indeterminate under a general overlapping generation economy with a fixed Leontief technique. We also check that this indeterminacy is generic. These results are obtained by explicitly introducing a general model of every generation’s utility function and individual optimization program to the overlapping generation economy, which also verifies that Mandler’s (1999a; section 6) claim on generic determinacy is invalid. We also argue the distinctiveness of our results in comparison with the standard literature, like Calvo (1978), of overlapping generation indeterminacy.
    Keywords: Sraffian indeterminacy, functional income distribution, general equilibrium framework
    JEL: B51 D33 D50
    Date: 2023–05
  8. By: Ullah, Nazim; Mat Nor, Fauzias; Abu Seman, Junaidah; fadly, ahmed; ainna, nur
    Abstract: Merger and acquisition known as a market expansion strategy. This paper examines several factors associated with M&A namely bank size, intermediary role, modes of financing, bank-specific variables, and macro-economic variables on the operational performance and stability along with the mediation role of market structure for Islamic banks. This paper employs panel data techniques and SEM to analyse a set of unbalanced panel samples of 10 Islamic banks during 2004Q1 to 2020Q4 from six countries, namely Qatar, Kuwait, Saudi Arabia, United Arab Emirate, Bahrain, and Pakistan. The results indicate that M&A improve post-M&A performance of Islamic banks while stability does not improve. Interestingly, there is no mediation effects of market structure on the relationship between M&A, operational performance, and stability. Policymakers should emphasis M&A towards the Islamic bank, however, to be stable, it may take more than 5 years.
    Keywords: Merger and Acquisition (M&A); operational performance; bank stability; market structure; Islamic banks.
    JEL: G34
    Date: 2023–03–02
  9. By: Daniele Tavani (Department of Economics, Colorado State University, USA)
    Abstract: This paper provides a pedagogical introduction to the basic classical model of growth and distribution, building on Foley et al. (2019). Its distinctive features are: (a) the focus on class as a fundamental aspect of a capitalist economy; (b) the rejection of a neoclassical aggregate production function; and (c) the ability of the model to accommodate both a labor-abundant and a labor-constrained closure. I outline the main comparative statics of the model under both alternative closures. I then study in detail the cyclical dynamics around a labor-constrained equilibrium, that is the Goodwin (1967) model of the growth cycle. Finally, I discuss the role of workers’ savings, the Pasinetti (1962) paradox, and the implications for the distribution of wealth between classes. In the Appendix, I show how to derive a version of the labor-abundant closure through the generalized Nash (1950) solution to the bargaining problem, and briefly outline how to obtain a saving rule through intertemporal optimization.
    Date: 2023–10
  10. By: Nidaazzi, Hamza; Hourmat Allah, Hind
    Abstract: This article examines the impact of cultural conservatism on family businesses from a sociological perspective, drawing on theories such as social capital theory, social identity theory, symbolic interactionism theory, conflict theory, and the Resource-Based View (RBV). The aim is to understand how cultural conservatism, defined as resistance to change, persistence of traditional beliefs, and maintaining the status quo, influences decision-making processes, organization, and the strategic posture of family businesses. The study focuses on the case of Moroccan family businesses, where cultural conservatism proves to be a crucial variable, representing the values and beliefs of their founders. The results of this reflection indicate that cultural conservatism can lead to a lack of diversity in management and decision-making processes, a rigid organizational structure, and resistance to change and innovation. This can ultimately hinder the competitiveness of family businesses. The article advocates for a balanced approach that takes into account the need to preserve tradition and intergenerational continuity while adapting to change in order to ensure the sustainability of family businesses.
    Keywords: Change; Competitiveness; Cultural conservatism; Family businesses; Morocco
    JEL: L2 M1 M14
    Date: 2023–10

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