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on Heterodox Microeconomics |
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Issue of 2025–05–26
nineteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Patrick Llerena; Corentin Lobet; André Lorentz |
| Abstract: | We propose a disaggregated representation of production using an agent-based fund-flow model that emphasizes inefficiencies, such as factor idleness and production instability, and allows us to explore their emergence through simulations. The model incorporates productivity dynamics (learning and depreciation) and is extended with time-saving process innovations. Specifically, we assume workers possess inherent creativity that flourishes during idle periods. The firm, rather than laying off idle workers, is assumed to harness this potential by involving them in the innovation process. Results show that a firm’s organizational and managerial decisions, the temporal structure of the production system, the degree of workers’ learning and forgetting, and the pace of innovation are critical factors influencing production efficiency in both the short and long term. The coevolution of production and innovation processes emerges in our model through the two-sided effects of idleness: the loss of skills through forgetting and the deflection of time from the production of goods to the production of ideas giving birth to idleness-driven innovations. In doing so, it allows us to question the status of labour as an adjustment variable in a productive organisation. The paper concludes by discussing potential solutions to this issue and suggesting avenues for future research. |
| Keywords: | Production Theory; Firm Theory; Agent-based model; Idleness; Innovation; Fund-flow. |
| JEL: | D21 D24 D83 J24 L25 O31 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2024-45 |
| By: | Mark Setterfield (Department of Economics, New School For Social Research, USA) |
| Abstract: | This paper discusses Victoria Chick's concepts of provisional equilibrium and long run equilibrium of action. Attention is paid to the relationship between these concepts and other strands of thinking in Post Keynesian theory, as well as the relationship of the two concepts to one another. With respect to the latter, it is argued that a long run equilibrium of action is provisional, while provisional equilibrium outcomes in a Post Keynesian system can and should be thought of as depending on a long run equilibrium of action. As such, Chick's writings can be regarded as the source of a consistent vision of both short- and long-term equilibrium in Post Keynesian theory, this vision, in turn, being consistent with her preferred open-systems ontology. |
| Keywords: | Victoria Chick, provisional equilibrium, long run equilibrium of action, uncertainty, open systems |
| JEL: | B41 E12 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2508 |
| By: | Luke Petach (Jack C. Massey College of Business, Belmont University, USA); Daniele Tavani (Department of Economics, Colorado State University) |
| Abstract: | In this paper, we study a two-class ('capitalists' and 'workers') model of growth, distribution, and employment that brings together some recent literature in the classical-Marxian tradition (Petach and Tavani, 2019; Franke, 2020; Tavani and Petach, 2021; Petach and Tavani, 2022). The central innovation of the model is the treatment of aggregate demand as a positive externality for individual firms. Despite assuming competitive firms, optimizing behavior, and perfect foresight on behalf of both firms and households, we show that laissez-faire involves underutilization of the economy's productive capacity. Moreover, both the long-run labor share of income and workers' share of wealth are higher at full capacity. Thus, fiscal policies aimed at achieving full utilization are unambiguously worker-friendly. For this reason, however, capitalists may oppose fiscal policy aimed at full employment, because such policies reduce the relative standing of the capitalist class in terms of both wealth and income. As such, our model provides a formalization of the argument by Kalecki (1943) regarding the political aspects of full employment. We conclude by responding to some recent criticisms of the aggregate demand externality framework advanced by Gahn (2023). |
| Keywords: | Growth and Distribution, Classical Political Economy, John Maynard Keynes, The End of Laissez-Faire |
| JEL: | B12 O41 E11 E12 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2507 |
| By: | Gürcan, Efe Can |
| Abstract: | What are the key characteristics of the current instabilities of the capitalist world-system, and how does it compare to previous periods that led to world wars? What factors are driving the similarities and differences between the present systemic chaos and earlier transitions in the world-system? What potential trajectories might the unfolding period of systemic instabilities take, and what balance of forces could emerge as dominant in shaping the world-system? Focusing on the foundational works of Wallerstein, Chase-Dunn, Goldstein, and Arrighi, this article critically re-evaluates the contemporary relevance and explanatory power of world-systems analysis. Its key contribution to world-systems literature lies in moving beyond the predominantly cyclical interpretations of world wars by integrating analytical tools, such as conceptual schemas and statistical evidence, with narrative approaches highlighting historical contingencies. Overall, contemporary systemic instabilities within the capitalist world-system are marked by the intensification of economic competition, geopolitical rivalries, and social discontent, reflecting historical patterns of systemic chaos during prior hegemonic transitions, yet distinguished by the unanticipated disruption of economic expansion since the 2010s, China’s unexpected rise alongside the fading influence Germany and Japan, the U.S.-China decoupling, the pivotal role of frontier technologies, and the fragmented character of heightened popular mobilization. |
| Keywords: | economic Cycles; hegemony; multipolarity; systemic Chaos; world Wars; world-System |
| JEL: | N0 J1 |
| Date: | 2025–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128055 |
| By: | Daniel F. Zarama Rojas |
| Abstract: | The role of nudges is not clear in recent behavioral economics literature, while reviews call for scrutiny into the theoretical foundations from which they stem. This essay answers to that call by conceptualizing biases as part of epistemic vices and analyzing the extent to which nudges may be an adequate tool to address them. I propose a new conceptual framework for biases: virtue epistemology (VE). VE allows to associate biases with identifiable individual traits called epistemic vices, which negatively affect an individual’s capacity to judge. In this document, I discuss how a VE framework may be used for the study of cognitive biases and its possible repercussions for behavioral public policy. I advance that the different ways in which epistemic vices could lead to cognitive biases suggest that nudges are better suited to suppress the harm associated with one type of vice (obstructivist) than those brought by another (reliabilist). |
| Keywords: | nudges, biases, virtue epistemology, epistemic vices, public policy. |
| JEL: | B40 D91 D62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-06 |
| By: | Sasaki, Hiroaki; Pham, Thu Giang Huong |
| Abstract: | This study presents a three-class economy model (workers, middle class, and capitalists) and investigates how the middle-class share evolves over time. It also examines the relationship between the middle-class share and economic growth. Depending on the parameters and initial conditions, three different long-run situations arise: (i) an Anti-Dual equilibrium, in which workers and capitalists coexist while the middle class vanishes; (ii) a Pasinetti equilibrium, in which all three classes coexist; and (iii) a Dual equilibrium, in which workers and the middle class coexist while capitalists vanish. An expanding middle-class share either increases or decreases economic growth depending on the conditions. |
| Keywords: | classical growth model; middle class; income distribution |
| JEL: | E24 E25 E32 |
| Date: | 2025–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124475 |
| By: | Romane Frecheville-Faucon; Agathe Simon |
| Abstract: | This paper studies the role of public services in shaping the housework of women and promoting their labour participation in Europe. We explore how public services can be a direct source of employment, notably through schools and hospitals and how they reduce the burden of unpaid labour through their ’defamilialisation’ function. We have elaborated a novel database covering public service provision in 450 European regions, combined with data from the 2012 and 2016 European Quality of Life Surveys (EQLS). Employing a multilevel model analysis, we assess the influence of regional public service availability on women’s time spent on paid and unpaid work. Our findings indicate that the availability of public care services is associated with a decrease in unpaid work hours, while other services emerge as a source of employment for women, significantly increasing their involvement in paid work. We also show that schools and hospitals seem to be associated with an increase in unpaid work, indicating that public services do not fundamentally change the gendered division of labour but are rather instruments for the reallocation of time. |
| Keywords: | Women’s time use, public services, regional analysis, local welfare states. |
| JEL: | J16 J21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2024-42 |
| By: | Eduardo C. Ferraciolli; Francesco Renzini; Tanya V. Araújo; Flaminio Squazzoni |
| Abstract: | St. Francis of Assisi (1181/82-1226) famously called money the devil’s dung, and indeed money is often associated with greed, inequality, and corruption. Drawing on Nowak’s five rules for the evolution of cooperation, we argue here that money promotes the formation of circuits of generalized reciprocity across human groups that are fundamental to social evolution. In an evolutionary tournament, we show that money exchange is an evolutionarily stable strategy that promotes cooperation without relying on the cognitive demands of direct reciprocity or reputation mechanisms. However, we also find that excessive liquidity can be detrimental because it can distort the informational value of money as a signal of past cooperation, making defection more profitable. Our results suggest that, in addition to institutions that promoted trust and punishment, the emergence of institutions that regulated the money supply was key to maintaining generalized reciprocity within and across human groups. |
| Keywords: | money, cooperation, reputation, generalized reciprocity, evolution. |
| JEL: | C23 E52 E58 E62 G12 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03792025 |
| By: | Bruno Giorgio |
| Abstract: | This dissertation investigates the ability of the Ising model to replicate statistical characteristics, or stylized facts, commonly observed in financial assets. The study specifically examines in the S&P500 index the following features: volatility clustering, negative skewness, heavy tails, the absence of autocorrelation in returns, and the presence of autocorrelation in absolute returns. A significant portion of the dissertation is dedicated to Ising model-based simulations. Due to the lack of an analytical or deterministic solution, the Monte Carlo method was employed to explore the model's statistical properties. The results demonstrate that the Ising model is capable of replicating the majority of the statistical features analyzed. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.19050 |
| By: | Yandiev Magomet (Department of Economics, Lomonosov Moscow State University) |
| Abstract: | The paper analyzes stock trading for identifying speculative and investment transactions in stock by the example of the Moscow Exchange. The analysis uses ticks of 15 issuers for two months of 2023. It is revealed that exchange dealings are predominantly speculative in nature and that stock market speculations do not comply with the Islamic finance rules. Solutions are proposed for bringing the trading mechanism into compliance with the principles of Sharia (the Islamic finance model). |
| Keywords: | Islamic, finance, banking, speculation, stock exchange, number of transactions, stock |
| JEL: | G1 G2 Y80 Z12 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:upa:wpaper:0073 |
| By: | Zakaria Savon (Ph.D., Faculty of Legal, Economic and Social Sciences - Souissi, Mohammed V University, Rabat) |
| Abstract: | Islamic banking plays a critical role in mobilizing funds for the economy. The financing mechanisms used by Islamic banks are largely influenced by macroeconomic conditions due to their asset-backed nature. A substantial portion of the assets held by these banks originates from debt financing methods, including Murabahah and Ijarah. However, Islamic financial institutions are exposed to various risks, particularly financing or credit risks. This type of risk pertains to the potential financial losses that banks may encounter when a borrower fails to meet their obligations. The non-performing financing (NPF) rate serves as a key indicator for assessing this risk. Our study investigates the impact of key macroeconomic variables and monetary policy on the nonperforming financing rate of Islamic banks in Jordan. The analysis employs an autoregressive distributed lag (ARDL) model, utilizing data from the fourth quarter of 2013 through the first quarter of 2022. The results indicate that both monetary policy and economic growth significantly influence the non-performing financing rates of Islamic banks in Jordan. |
| Keywords: | Islamic banks, Credit-risk, Macroeconomics, Monetary policy, ARDL, JORDAN |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05011821 |
| By: | Laura Spillner (Universität Bremen [Deutschland] = University of Bremen [Germany] = Université de Brême [Allemagne]); Carlo Romano Marcello Alessandro Santagiustina (médialab - médialab (Sciences Po) - Sciences Po - Sciences Po, University of Ca’ Foscari [Venice, Italy], Venice International University); Thomas Mildner (Universität Bremen [Deutschland] = University of Bremen [Germany] = Université de Brême [Allemagne]); Robert Porzel (Universität Bremen [Deutschland] = University of Bremen [Germany] = Université de Brême [Allemagne]) |
| Abstract: | In this work, we apply a hybrid-AI framework to analyse online discourse about inequality on Twitter. Our approach integrates knowledge from natural language understanding, knowledge graph-based semantics, and network analysis to identify narratives around inequality and analyse their changes during the COVID pandemic. We present a two-step approach: A bird's-eye perspective on the overall discourse network around inequality maps how the entities, concepts, and events of the narratives are connected by linking these to existing knowledge graphs and can be filtered on tweet metadata such as time. Two connected entities can then be explored in more detail in a fine-grained analysis of how the entities and their relationship are characterised by social media users, highlighting the diffusion of different perspectives on a given topic related to inequality, such as gender, education, and poverty. |
| Abstract: | Dans cette étude, nous mettons en œuvre un cadre hybride reposant sur l'intelligence artificielle afin d'analyser les discours en ligne relatifs aux inégalités à travers Twitter. Notre approche intègre des connaissances issues de la compréhension du langage naturel, de la sémantique fondée sur des graphes de connaissances, ainsi que de l'analyse de réseaux, afin d'identifier les récits portant sur les inégalités et d'examiner leur évolution durant la pandémie de COVID. Nous présentons une démarche en deux étapes : une première vue d'ensemble du réseau discursif autour des inégalités, qui cartographie les connexions entre entités, concepts et événements en les reliant à des graphes de connaissances existants, avec la possibilité d'appliquer des filtres basés sur les métadonnées des tweets, telles que la temporalité. Ensuite, deux entités connectées peuvent être explorées plus en détail grâce à une analyse fine de la manière dont elles, ainsi que leur relation, sont caractérisées par les utilisateurs des réseaux sociaux. Cette exploration permet de mettre en lumière la diffusion de différentes perspectives sur un sujet donné lié aux inégalités, tels que le genre, l'éducation ou la pauvreté. |
| Keywords: | Social media, Social networking sites, Network analysis, Natural language understanding, Knowledge graphs, Inequality, Inequality perceptions, Socio-economic inequalities, Socio-economic inequality, Socio-economics |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05031924 |
| By: | Amarendra Sharma |
| Abstract: | This paper introduces economists to quantum-inspired approaches for modeling firm behavior in a Cournot Duopoly, designed for accessibility and pedagogical use. We present key quantum concepts -- superposition, entanglement, and quantum search algorithms (Grover's and D\"{u}rr-H\o{}yer's) -- in an intuitive manner, tailored for those without a quantum physics background. These concepts are applied to represent uncertainty, interdependence, and optimization in novel ways, offering fresh perspectives on firm decision-making. By incorporating numerical examples, we illustrate how quantum-inspired models differ from classical Cournot outcomes, highlighting potential advantages in capturing complex strategic interactions. The paper aims to bridge quantum computing and economic theory, providing a foundation for teaching and exploring advanced modeling techniques. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.19420 |
| By: | Zakaria Savon (Ph.D., Faculty of Legal, Economic and Social Sciences - Souissi, Mohammed V University, Rabat); Abdellah Yousfi (UMP - Professor, Faculty of Law, Economics and Social Sciences, University Mohammed First, Oujda, Morocco.) |
| Abstract: | The rapid rise of Islamic finance, and particularly Islamic banking, has attracted considerable attention and sparked much debate about its effects on the real sector. This work aims to empirically identify the effects of Islamic bank financing on economic growth in a panel of countries with a dual banking system, during the period from 2013 to 2022. To do this, it employs the fully modified ordinary least squares (FMOLS) approach. The results indicate a positive impact of Islamic bank financing on economic growth. |
| Abstract: | L'essor rapide de la finance islamique, et particulièrement du secteur bancaire islamique, a attiré une attention considérable et suscité de nombreux débats sur ses effets sur le secteur réel. Ce travail vise à identifier empiriquement les effets du financement bancaire islamique sur la croissance économique dans un panel de pays dotés d'un système bancaire dual, pendant la période de 2013 à 2022. Pour ce faire, Il emploie l'approche des moindres carrés ordinaires entièrement modifiées (FMOLS). Les résultats indiquent un impact positif du financement bancaire islamique sur la croissance économique. |
| Keywords: | Banques Islamiques, Financement, Croissance économique, Impact, FMOLS |
| Date: | 2024–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05011836 |
| By: | Hern\'an Larralde; Roberto Mota Navarro |
| Abstract: | We show that assuming that the returns are independent when conditioned on the value of their variance (volatility), which itself varies in time randomly, then the distribution of returns is well described by the statistics of the sum of conditionally independent random variables. In particular, we show that the distribution of returns can be cast in a simple scaling form, and that its functional form is directly related to the distribution of the volatilities. This approach explains the presence of power-law tails in the returns as a direct consequence of the presence of a power law tail in the distribution of volatilities. It also provides the form of the distribution of Bitcoin returns, which behaves as a stretched exponential, as a consequence of the fact that the Bitcoin volatilities distribution is also closely described by a stretched exponential. We test our predictions with data from the S\&P 500 index, Apple and Paramount stocks; and Bitcoin. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.20488 |
| By: | Parrinello, Sergio (University of Rome “La Sapienza”) |
| Abstract: | Recent years have seen a reinterpretation of Ricardo's numerical example on foreign trade from Sraffa's note (1930), prompting economic historians and theorists to recon-sider the scope of the example. This article seeks to clarify the revised interpretation and explain the common and distinct principles that govern the laws of comparative and absolute advantage. The condition of balanced trade in aggregated value is emphasized relative to the equations of normal prices based on this revisiting. Its special role is shown by the reformulation of Sraffa's price equations for two trading economies with-out international capital movements. It is proved that there is no additional degree of freedom for the choice of exogenous distributive variables if countries move from a state of autarky to one of free trade. |
| Keywords: | David Ricardo; comparative advantage; absolute advantage; trade balance; global economy |
| JEL: | B12 B17 F10 |
| Date: | 2025–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:ris:sraffa:0072 |
| By: | Etienne Capron (HEC Montréal - HEC Montréal); Elie Saaoud (HEC Montréal - HEC Montréal) |
| Abstract: | While some studies have sought to clarify the role of spatial settings in organizing creativity, this relationship remains theoretically ambiguous, specifically when we consider the capacity for action offered by places. Therefore, we propose to revisit this issue through the concept of affordances, which originally refers to actors' relationship to their physical environments and how it generates possibilities for action. This conceptual chapter proposes a framework for place-based affordances that theorizes the material, social, and institutional possibilities for creative practices that emerge from one's attendance of a place. This framework is exemplified through a vignette of place attendance and usage by an artist practicing projection mapping in Montreal. Through this example drawn from artistic creation, the place-based affordances framework offers a new look at the generative power of places for organizing creativity. |
| Keywords: | Place-based affordances affordance theory organizing creativity places projection mapping, Place-based affordances, affordance theory, organizing, creativity, places, projection mapping |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05034010 |
| By: | Oettinger, Sophia |
| Abstract: | This dissertation examines Latin America’s historical attempts to address urban housing precarity during the 1990s through market-based social housing policies, focusing on Chile, Mexico, and Uruguay. It assesses how these policies, shaped by national coalition- building challenges, historical social policy frameworks, and state capacities, failed to resolve housing issues. Despite advancements in housing studies, the dual nature of housing as both a social good and a commodity—along with its complex social, financial, and spatial connections within the capitalist economy—remains insufficiently understood. This research employs a Marxist-inspired perspective to explore the nuances and shortcomings of the post- Cold War mixed economy governance in Latin America, situated between economic developmentalism and political liberalisation. It revisits concepts of post-structural development deploying the notion of 'privatised Keynesianism.' Latin American governments, aiming to stimulate housing markets, exacerbated economic instability by subsidising debt-financed consumption of market-produced social housing. Contrary to optimistic expectations about the spillover effects of financial liberalisation, this approach led to increased household indebtedness and deteriorating housing conditions. The dissertation reveals how the shift to market-oriented social housing policies and overwhelming focus on macroeconomic demand stimulation, intensified the link between liberalised financial markets and housing beneficiaries. To avoid confronting the wealthy while addressing poverty, the new welfare regime rather relied on informal housing solutions, such as self-built homes and cooperative models, pointing to the inherent capitalist dichotomy between the right to housing and the right to the city. Those intricacies fundamentally altered state-market-citizen relations and the spatial dynamics of modern cities. |
| JEL: | R31 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127153 |
| By: | Masoud Ataei |
| Abstract: | This paper investigates the structural dynamics of stock market volatility through the Financial Chaos Index, a tensor- and eigenvalue-based measure designed to capture realized volatility via mutual fluctuations among asset prices. Motivated by empirical evidence of regime-dependent volatility behavior and perceptual time dilation during financial crises, we develop a regime-switching framework based on the Modified Lognormal Power-Law distribution. Analysis of the FCIX from January 1990 to December 2023 identifies three distinct market regimes, low-chaos, intermediate-chaos, and high-chaos, each characterized by differing levels of systemic stress, statistical dispersion and persistence characteristics. Building upon the segmented regime structure, we further examine the informational forces that shape forward-looking market expectations. Using sentiment-based predictors derived from the Equity Market Volatility tracker, we employ an elastic net regression model to forecast implied volatility, as proxied by the VIX index. Our findings indicate that shifts in macroeconomic, financial, policy, and geopolitical uncertainty exhibit strong predictive power for volatility dynamics across regimes. Together, these results offer a unified empirical perspective on how systemic uncertainty governs both the realized evolution of financial markets and the anticipatory behavior embedded in implied volatility measures. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.18958 |