nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2024‒02‒05
eleven papers chosen by
Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza”

  1. Essay on the Philosophy of Islamic Economics By Ahmed Mohammed, Abdullahi
  2. Moonshots and the New Industrial Policy: Questioning the Mission Economy By Henrekson, Magnus; Sandström, Christian; Stenkula, Mikael
  3. Development Orders and Disorders: Real Competition in Complex Global Capitalist System, China’s Ambiguous Case, and the Need for Democratic Socialism in the 21st Century By Khan, Haider
  4. Dialectics of Emergy in a Social Accounting Matrix By Khan, Haider
  5. Deep Causality and Counterfactuals for Scientific Explanation and Ethically Efficacious Economics and Social Sciences: How can the social sciences help make policies for advancing the common good? By Khan, Haider
  6. Graziani’s circuit scheme. A methodological exploration By Baron, Hervé
  7. The Evolutionary and Correlative SWOT Analysis in Geoeconomics: Examining the RCEP within Today’s Global Political Economy By Chatzinikolaou, Dimos; Kapaltzoglou, Foteini (Feni); Vlados, Charis
  8. Harnessing social norms to gain cost-effectiveness in conservation schemes through dynamic scheme design: implications of bounded rationality and other-regarding preferences for Payments for Ecosystem Services (PES) By De Petris, Caterina; Drechsler, Martin
  9. Subjective complexity under uncertainty By Valenzuela-Stookey, Quitzé
  10. Bibliometric dataset (1995–2022) on green jobs: A comprehensive analysis of scientific publications By Alexandre Mathieu
  11. Deep Learning Solutions to Master Equations for Continuous Time Heterogeneous Agent Macroeconomic Models By Zhouzhou Gu; Mathieu Laurière; Sebastian Merkel; Jonathan Payne

  1. By: Ahmed Mohammed, Abdullahi
    Abstract: ABSTRACT The paper explores the principle that in Islamic perspective ethics dominates economics, which unambiguously portray the essential attribute of Islamic economics system. Similarly, Islamic economics repudiates the ground that economics is independent of ethics and the idea of value free economics propagated by Robbins and the neo-classical notion of Homo-economicus (economic man) who only considers his utility function of his selfish interest. But in replacement and discarding economic from ethical economic behavior Anas Zarqa substituted homo economics (economic man) for Homo-Islamicus (economic man with Islamic ethics). The fundamental difference between the two prototypes to Zarqa, is that the consumption behavior of Homo-Islamicus is deeply influenced by a consideration of the penalty or reward in the life after death and he embraced the Islamic ethics in regulating his economic choices and behavior. Similarly, we explore that Islamic economics is closely related Islamic jurisprudence that deals with business laws, providing general framework and premise for economic dealings and its operation in an Islamic society (fiqh mu’amalat). It draws conditions and criterion governing economic and financial relationships in an Islamic economy. We argued that economics also as normative discourse involving ethical consideration and evaluation of human behavior. Hence Economist are in the position to advocate, Condemn, and proper solution to problems within the context of social scenario and ethical point of view. Economist are called upon to prescribe solution to some of the old age economic problem of mankind like poverty, income inequality, and problem unemployment This prescription will be uttered based on the people’s social reality, and that indicates value judgment which is normative.
    Keywords: Epistemology, Islamic Economics, Homo-Economicus, Homo-Islamicus, Ethics, Normative Economics
    JEL: A1 I3 P51 Z12 Z13
    Date: 2023–08–09
  2. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sandström, Christian (Jönköping International Business School); Stenkula, Mikael (Research Institute of Industrial Economics (IFN))
    Abstract: The notion that society should be organized around large so-called missions has gained momentum in public debate, and the reemergence of active industrial policy across the world has been inspired by academic scholars promoting the idea of Mission-Oriented Innovation Policies (MOIPs). The volume Moonshots and the New Industrial Policy: Questioning the Mission Economy provides a comprehensive assessment and normative critique of the efficacy of such policies. Besides the introductory chapter, it consists of 16 chapters distributed across three overarching themes: theoretical perspectives, empirical evidence, and alternative paths. This paper provides some additional analysis, pins down the most important general conclusions and suggests future research questions. Today’s economies are highly dependent on a well-functioning process of decentralized experimentation, selection, and screening. Instead of large scale MOIPs, governments should strive to create an institutional framework that levels the playing field for potential entrepreneurs while encouraging productive entrepreneurship.
    Keywords: Mission-oriented policies; Innovation policy; New industrial policy; Moonshots; Rent seeking; Public choice
    JEL: H50 L26 L52 O31 O38 P16
    Date: 2024–01–09
  3. By: Khan, Haider
    Abstract: The main purpose of this paper is to locate the so-called developing economies (DEs) analytically within the complex dynamics of the global capitalist order(GCO). Using the ideas of disorder at the micro level and the emergence of order at the macro level out of this disorder, the capitalist order/disorder dynamics in the developing economies is explored theoretically and empirically. The classical idea of real competition can be used to explore how a crisis-ridden dynamics of uneven development emerges particularly for the DEs as part of the GCO dynamics. Some limits of policies and of the so-called developmental state capacities can be identified through this analysis. A related purpose of this paper is to explore the possibilities of industrialization and development with equity in the 21st century with an emphasis on rapidly growing developing economies in the global system such as the BRICS . The formal nonlinear model presented in the appendix may be seen as an initial step to put the analysis within a complex economic systems framework. Real competition and relative surplus value extraction play critical conceptual roles in this complex dynamic process. China is selected from among the BRICS as a special case study of DEs. More specifically, the complex dynamics underlying the relative surplus value extraction is explored in the context of growth, inequality and poverty. In addition--- and crucially--- the paper then analyzes the problems of industrialization and innovation in the 21st century context for China from a strategic perspective. The problems revealed through this case study can highlight many of the challenges of development, industrialization and innovation in the 21st century for the other BRICS as well as for many other developing countries. However, it must be pointed out that China is also a special ambiguous case in many respects with elements of capitalism along with some socialist elements reemphasized in the last 20 years and especially under Xi. There are also ecological issues that PRC is trying to tackle but it is not certain that it can do so in time to save our planet when the US is clearly going the other way.
    Keywords: Real Competition, Relative Surplus Value, GCO, Complex Dynamics, Emergence, Development, Limits of Development under GCO, Crisis, Sustainable Capabilities Enhancing National Innovation System(SCENIS)
    JEL: B5 B51 O1
    Date: 2024–01–01
  4. By: Khan, Haider
    Abstract: The main purpose of this paper is to clarify some crucial links between the important ecological systems concept of Emergy and its physio-social accounting dialectically via a consistent interdependent System of Social Accounting. It is hoped that a brief but historically accurate background and description of Emergy, SAM, SAM-based and Emergy-based dialectically formulated fixed price multiplier models will be helpful to the increasing number of ecological systems researchers who are interested in using SAMs for both FPM and other types of socially and ecologically relevant modeling.
    Keywords: Dialectics of Abstract and Concrete, Emergy, Disequilibrium Dynamics, Dialectical SAM, Dialectical EmSAM, Socio-economic ecological accounting, EmSAM-based modeling
    JEL: C6 Q0 Q4
    Date: 2024–01–02
  5. By: Khan, Haider
    Abstract: What does a causal explanation deliver in any science, but particularly in the social sciences? How are relatively deeper scientific explanations to be distinguished from superficial or shallower ones? Furthermore, what roles can counterfactual analysis play in social sciences and policy making? For a competent, morally motivated scientific policy maker, it is important to avoid inflicting harm and promote the common good. The purpose of this paper is to clarify how the idea of depth can play a role in finding the more "approximately true" explanation through causal comparisons and counterfactual conditionals that are scientifically salient in principle. In doing so, we must also be able to avoid inflicting harm and promote the common good. It is not an exhaustive treatment but rather focuses on a few aspects that may be the most critical in evaluating the explanatory strengths of a theory in the social sciences. It presents a general argument which is anti-Humean on the critical side and scientific realist on the positive and normative side. It also elucidates how explanations in political economy and other social sciences can be judged by the scientific realist criterion of causal depth by an extensive example from research in the political economy of development. In this case, an "intentional" and methodologically individualist neoclassical explanation is contrasted with a "structural" dual-dual approach as rival theories purporting to explain the same set of phenomena. Finally, avoiding harmful policies and aiding in making policies for advancing the common good are more likely if the methodological approach advocated here is adopted for responsible practice. Ultimately, following the methodology advanced here , it will be possible to drive further the tendencies towards the creation of an ethically efficacious economics(EEE) for ecologically sustainable humane policy making.
    Keywords: Scientific Explanations, Social and Economic Explanations, Causal Depth, Critical Scientific Realism, Political Economy, Neoclassical Economics, Structuralism, Social Science Theories, Economic Models, Ethics and Economics, Counterfactuals and Causal Efficacy, Common Good. Economic Justice, Ethically Efficacious Economics(EEE)
    JEL: B4 C9 I3
    Date: 2024–01–01
  6. By: Baron, Hervé
    Abstract: In the following paper, we shall focus on the Italian branch of the monetary circuit (or monetary theory of production). In particular, we shall attempt a methodical exploration of the theoretical production of the one who may rightly be considered the founding father of this branch: Augusto Graziani. We shall do this along three lines. Firstly, in the wake of Lunghini and Bianchi (2003), we shall argue that that of Graziani, far from being a complete model, is presented as a historically “open” scheme, which therefore needs “closure”. Secondly, we shall argue that this scheme should be considered as a logical, not historical, re-construction of the functioning of the capitalist economy. Finally, we shall illustrate how such a scheme stands at the highest possible level of abstraction.
    Keywords: Monetary Circuit, Graziani, Methodology.
    JEL: B31 B41
    Date: 2023
  7. By: Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Kapaltzoglou, Foteini (Feni) (Democritus University of Thrace, Department of Economics); Vlados, Charis (Democritus University of Thrace, Department of Economics)
    Abstract: We aim at presenting a dynamic interpretation and use of SWOT (evolutionary and correlative) as a strategic evaluation tool in geoeconomics, using the Regional Comprehensive Economic Partnership (RCEP) as an illustrative example. We identify the arising challenges and hazards by assessing the relative strengths and weaknesses of the RCEP, its participating countries, and the worldwide system. Our findings suggest that applying a correlative SWOT methodology in geoeconomics aids in gaining a well-rounded comprehension of the current stage of the new globalization. It appears that dynamic geoeconomics investigates contrasting opinions and objectives dialectically. We discover that, in comparison to other multilateral institutions, the RCEP’s objectives and aspirations lack substantial socioeconomic depth. This issue presents strategic dangers to the trade bloc’s endurance and socioeconomic viability.
    Keywords: evolutionary SWOT evaluation; geoeconomics; geostrategic planning; global political economy; RCEP; economic development; new globalization
    JEL: B52 F60 P16
    Date: 2023–12–27
  8. By: De Petris, Caterina; Drechsler, Martin
    Abstract: Payments for Ecosystem Services (PES) are an incentive-based policy instrument encouraging landowners to adopt conservation practices that enhance ecosystem services in exchange for a compensation payment. PES schemes vary considerably in their design, yielding important implications for their conservation outcome and their cost-effectiveness. Given that a landowner’s probability of re-enrolling in a PES scheme is significantly influenced by social norms, this article explores whether the cost-effectiveness of PES schemes could be increased by leveraging on social norms. In particular, we explore whether designing dynamic PES schemes in which a homogenous PES payment is reduced in subsequent contracts would be more cost-effective than static schemes under the assumption that some landowners will enrol or re-enrol in the scheme encouraged by the behaviours of neighbouring landowners. We analyse whether, by initially setting a high payment so as to build a partially conserved landscape, it would be possible to leverage on social norms and reduce the PES payment without losing much conservation engagement. For this purpose, a conceptual agent-based simulation model entailing social norms and bounded rationality as well as other-regarding preferences has been developed.
    Keywords: Payment for Ecosystem Services (PES); agri-environment schemes (AES); social norms; bounded rationality; ecological-economic modelling; agent-based modelling (ABM)
    JEL: C6 Q57 Q58
    Date: 2023–12–20
  9. By: Valenzuela-Stookey, Quitzé
    Keywords: Economics, Applied Economics, Economic Theory, Drug Abuse (NIDA only), Substance Misuse, Complexity, Uncertainty, Bounded rationality, Ambiguity, Mathematical Sciences, Studies in Human Society, Human society, Mathematical sciences
    Date: 2023–11–01
  10. By: Alexandre Mathieu (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement)
    Abstract: The realm of green jobs presents a fertile ground for understanding the intersecting pathways between sustainable transition and the labor market. We have crafted a bibliometric dataset centered on this concept, amassing 414 articles from the Scopus and Web of Science databases, following a laid down protocol, PRISMA, spanning the period from 1995 to 2022. This endeavor aims to depict the dynamics, themes, and conceptual approaches shaping the discourse on green jobs. The dataset, structured around 13 descriptive variables such as authors, keywords, and cited references, is made available to researchers, institutions, and decision-makers to provide insight into the academic debates on ecological transition through the lens of employment, especially in the wake of a green economy. The potential for reutilizing these data is expansive. They can serve as a foundation for comparative analyses with the media and institutional portrayals of green jobs. Furthermore, the dataset can be enriched by integrating other forms of literature, such as books, chapters, or conference proceedings, while retaining the existing structure. This expansibility paves the way for a multidisciplinary and multilingual exploration, thereby enhancing the richness and diversity of possible analyses.
    Abstract: Le domaine des emplois verts représente un terrain fertile pour comprendre les chemins croisés entre la transition soutenable et le marché du travail. Nous avons élaboré un ensemble de données bibliométriques centré sur ce concept, accumulant 414 articles des bases de données Scopus et Web of Science, suivant un protocole établi, PRISMA, couvrant la période de 1995 à 2022. Cette entreprise vise à dépeindre la dynamique, les thèmes et les approches conceptuelles qui façonnent le discours sur les emplois verts. L'ensemble de données, structuré autour de 13 variables descriptives telles que les auteurs, les mots-clés et les références citées, est mis à disposition des chercheurs, des institutions et des décideurs pour fournir un aperçu des débats académiques sur la transition écologique à travers le prisme de l'emploi, notamment dans le sillage d'une économie verte. Le potentiel de réutilisation de ces données est vaste. Elles peuvent servir de base pour des analyses comparatives avec les représentations médiatiques et institutionnelles des emplois verts. De plus, l'ensemble de données peut être enrichi en intégrant d'autres formes de littérature, telles que des livres, des chapitres ou des actes de conférence, tout en conservant la structure existante. Cette expansibilité ouvre la voie à une exploration multidisciplinaire et multilingue, améliorant ainsi la richesse et la diversité des analyses possibles.
    Keywords: Bibliometrics, Green Job, Green collar job, Green work, Green employment, Green economy, Sustainable development, Bibliometrics Green Job Green collar job Green work Green employment Green economy Sustainable development, Bibliométrie, Emploi vert, Travail vert, Travail soutenable, Économie verte, Développement soutenable
    Date: 2024–02
  11. By: Zhouzhou Gu (Princeton University); Mathieu Laurière (NYU Shanghai, NYU-ECNU Institute of Mathematical Sciences); Sebastian Merkel (University of Exeter); Jonathan Payne (Princeton University)
    Abstract: We propose a new global solution algorithm for continuous time heterogeneous agent economies with aggregate shocks. First, we approximate the state space so that equilibrium in the economy can be characterized by one high, but finite, dimensional partial differential equation. Second, we approximate the value function using neural networks and solve the differential equation using deep learning tools. We refer to the solution as an Economic Model Informed Neural Network (EMINN). The main advantage of this technique is that it allows us to find global solutions to high dimensional, non-linear problems. We demonstrate our algorithm by solving two canonical models in the macroeconomics literature: the Aiyagari (1994) model and the Krusell and Smith (1998) model.
    Keywords: Heterogeneous agents, computational methods, deep learning, inequality, mean field games, continuous time methods, aggregate shocks, global solution
    JEL: C70
    Date: 2023–08

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