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on Heterodox Microeconomics |
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Issue of 2024‒05‒13
eight papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Giovanni Dosi; Marcelo C. Pereira; Andrea Roventini; Maria Enrica Virgillito |
| Abstract: | This chapter presents an application of the multi-sector labour augmented K+S agent-based model to two contemporary challenges in political economy, namely declining unionization and rising inequality, with reference to mid-term evidence in the US. What has been the effect of declining unionization? We focus, as an example, upon the introduction of legislations such as Right- to-Work (RTW) laws, disfavouring union firms and the way they affected the dynamics of the labour market. The model proves to be a solid and rich tool in order to confront different scenarios emerging out of the interaction of an endogenous dynamic competition between union and non union firms, the latter arriving at a specific time, mimicking the exogenous introduction of RTW laws. The arrival of non union firms induces direct first-order effects, as rising inequality at the workplace and macro level, but also, indirect, second order effects, as lower rates of employment absorption and consumption patterns skewed toward wealthy, luxury consumption goods. In that, complexity economics proves to be a promising avenue to incorporate and confront the grand challenges of contemporary capitalism. |
| Keywords: | Complexity, Capitalism, Socio-economic structure, Macro-evolutionary agent-based models |
| Date: | 2024–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/13&r=hme |
| By: | Bardoscia, Marco (Bank of England); Carro, Adrian (Banco de España, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford); Hinterschweiger, Marc (Bank of England); Napoletano, Mauro (Scuola Superiore Sant’Anna); Popoyan, Lilit (Queen Mary, University of London); Roventini, Andrea (Scuola Superiore Sant’Anna); Uluc, Arzu (Bank of England) |
| Abstract: | We develop a macroeconomic agent-based model to study the joint impact of borrower and lender-based prudential policies on the housing and credit markets and the economy more widely. We perform three experiments: (i) an increase of total capital requirements; (ii) an introduction of a loan-to-income (LTI) cap on mortgages to owner-occupiers; and (iii) a joint introduction of both experiments at the same time. Our results suggest that tightening capital requirements leads to a sharp decrease in commercial and mortgage lending, and housing transactions. When the LTI cap is in place, house prices fall sharply relative to income, and the homeownership rate decreases. When both policy instruments are combined, we find that housing transactions and prices drop. Both policies have a positive impact on real GDP and unemployment, while there is no material impact on inflation and the real interest rate. |
| Keywords: | Prudential policies; housing market; macroeconomy; agent-based models |
| JEL: | C63 D10 D31 E58 G21 G28 R20 R21 R31 |
| Date: | 2024–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:1066&r=hme |
| By: | GUÉNIN--CARLUT, Avel |
| Abstract: | We attempt here to assess the possibility of reorganizing contemporary societies toward the coupled imperatives of fulfilling human needs while respecting planetary boundaries. We first show that social organization respects the property of (biological) autonomy, and suggest a principled manner to describe social change. We conclude an “ecological redirection” is possible, but necessitates an overall reorganization of social activity around lower scale, dynamic forms of organization. |
| Date: | 2024–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:bcyku&r=hme |
| By: | Yu, Chen |
| Abstract: | "The Rise of Supermoney in World Politics" examines the escalating influence of an elite group of wealthy individuals, multinational corporations, and financial entities on the global political and economic landscape. This article traces the historical evolution of financial power, identifying key milestones that have led to the emergence of Supermoney - a term used to describe entities with significant financial resources and global influence. Through a comprehensive analysis, the article delineates the mechanisms through which Supermoney exerts influence, including financial investments, policy lobbying, philanthropic endeavors, and technological innovation. Looking ahead, the article discusses potential scenarios for the increasing influence of Supermoney, highlighting the role of regulation, international cooperation, and the opportunities and challenges this influence presents. The conclusion underscores the dual nature of Supermoney's rise, acknowledging its potential to contribute to global good while also cautioning against the risks of power concentration, economic disparities, and the undermining of democratic governance. |
| Date: | 2024–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:thesis:6nqtf&r=hme |
| By: | Talan B. İşcan; Benjamin Dennis |
| Abstract: | Targeted financing of transition to a "net zero" global economy entails climate transition risk. We propose a measure of transition risk at the country-sector dyad level composed of five tiers of transition risk based on two factors: i) the gap between a dyad's existing emission factor (EF) - a measure of the greenhouse gas intensity of output – and the global 'frontier' sectoral EF, and ii) a dyad's recent convergence towards the frontier EF. Dyads that are either close to the frontier or converging towards the frontier carry lower transition risk. Our measure, using 45 sectors across 66 countries, accounts for both direct greenhouse gas emissions as well as those that enter into production through complex supply chains as captured by intercountry, input-output tables, and can be applied at different levels of stringency to high-, middle-, and low-income economies. Our measure thus accounts for, and sheds light on, EF reductions through investment in lower emissions production techniques in own facilities as well as sourcing intermediate inputs with lower embodied emissions. |
| Keywords: | Transition risk; Greenhouse gas emissions; Direct emissions; Production emissions; Convergence |
| JEL: | E16 G10 Q54 |
| Date: | 2024–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2024-17&r=hme |
| By: | Charles Gottlieb (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | Across countries, women and men allocate time differently between market work, domestic services, and care work. In this paper, we document the gender division of work, drawing on a new harmonized data set that provides us with high-quality time use data for 50 countries spanning the global income distribution. A striking feature of the data is the wide dispersion across countries at similar income levels. We use these data to motivate a macroeconomic model of household time use in which country-level allocations are shaped by wages and a set of “wedges” that resemble productivity, preferences, and disutilities. Taking the model to country-level observations, we find that a wedge related to the disutility of market work for women plays a crucial role in generating the observed dispersion of outcomes, particularly for middle-income countries. Variation in the division of non-market work is principally shaped by a wedge indicating greater disutility for men, which is especially large in some low- and middle-income countries. |
| Keywords: | labor supply, home production, care work, time use, gender inequality, gender norms |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:2411&r=hme |
| By: | Budzinski, Oliver; Stöhr, Annika |
| Abstract: | In this paper, we comment on the debate about guidelines for Art. 102 TFEU in the face of the challenges brought by digital ecosystems and abuse of dominance in related markets. We take the perspective of dynamic competition economics and derive four recommendations for the future enforcement of abuse control and related merger control: (i) we advocate to abandon the as-efficient-competitor standard embraced in the late 2000s, (ii) we emphasize the relevance on focusing on exploitative abuses as well as on exclusionary ones, (iii) we suggest to implement a concept of systemic market power as a guideline to enforcement, and (iv) we argue that the same enhanced market power standard should also be applied in the corresponding merger control. While going beyond pure guideline recommendations and focusing on a dynamic-economic view, we are convinced that these steps are necessary to move towards a more effective competition policy towards abuse of digital dominance. |
| Keywords: | abuse of market power, Art. 102 TFEU, digital ecosystems, antitrust, European competition policy, as-efficient-competitor standard, exclusionary abuse, exploitative abuse, dynamic competition, merger control |
| JEL: | K21 L41 L40 L12 L14 L81 L86 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:289607&r=hme |
| By: | Athias, Laure |
| Abstract: | The theory of social choice stresses that the general interest determined through the aggregation of individual preferences implies interpersonal utility comparisons and hence necessarily a notion of common good beyond individual preferences. The pursuit of the common good falls to all services of the state and drives their individual decisions. Economic model of identity in the workplace predicts that outsider public sector workers may internalize the common good value to minimize cognitive dissonance. To test this hypothesis, I study the dynamics of preferences for workers in public versus private sector jobs. For identification, I use panel data and exploit within-individual variations, alleviating endogeneity concern related to selection into occupation. Further addressing the dynamic omitted variable concern, I find that switching into the public sector increases by one third the likelihood of exhibiting the common good value while having a negative effect on public trust and left-wing ideology. By contrast, switching into the private sector crowds out common good value. Examining causal mechanisms, I show that the public sector effect is most pronounced for workers with higher dissonance costs. Furthermore, I find that workers adopting the common good value in the workplace adopt a general behavior consistent with active participation in the public realm, pointing to value internalization. Overall, this paper provides empirical evidence of a rich and rapid, dynamic interaction between individual preferences and economic institutions. |
| Keywords: | Value dynamics; Identity in the workplace; Cognitive dissonance; Common good; State; Public versus private sector; Crowding out effect; Workplace socialization; Institutional narrative. |
| JEL: | A13 D02 D63 D73 D83 H11 L33 N43 Z13 Z18 |
| Date: | 2024–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120588&r=hme |