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on Heterodox Microeconomics |
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Issue of 2025–08–18
thirteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Heise, Arne |
| Abstract: | Keynes's Principle of Effective Demand is widely recognized not only as a major theoretical innovation but also as one of the core concepts uniting various post-Keynesian strands. However, Keynes's own treatment of the Principle of Effective Demand - known as the Z/D model and identified by himself as central to his attempt to fundamentally refute Say's Law - has been ignored or even outright rejected by many post-Keynesians on the grounds that it remains too deeply rooted in mainstream economics. This paper addresses such criticism by emphasizing that any evaluation of the Z/D model must take into account the paradigmatic shift Keynes sought to initiate. |
| Keywords: | Keynes, Z/D model, principle of effective demand |
| JEL: | B50 E12 E24 J23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:321891 |
| By: | Magacho, Guilherme; Spinola, Danilo |
| Abstract: | This paper presents a continuous-time behavioural ecological macroeconomic model grounded in the dynamic input–output (IO) framework, named ESTEEM, and applies it to the Brazilian economy. The model is calibrated using Brazil’s IO matrix, and its primary goal is to serve as a policy and scenario-building toolbox, illustrated here through the Brazilian Economic Transformation Plan (Plano de Transformação Ecológica), announced at COP28 in 2023. Tailored for open developing economies, the model extends traditional IO analysis by integrating dynamic feedback loops, sectoral investment behaviour, inventory dynamics, wage and price formation, environmental pressures and constraints, and a range of policy instruments. Combining structuralist foundations with system dynamics, ESTEEM captures both short-term disequilibrium and long-term development paths, allowing simulations of industrial policy, fiscal and monetary interventions, structural change, and ecological transitions. Key innovations include the endogenisation of capital accumulation, adaptive expectations, and green technological change. |
| Keywords: | Dynamic input-output; Ecological macroeconomics; Brazilian economy; Structuralism; Sustainable finance; Balance-of-Payment constraints; Green industrialization. |
| Date: | 2025–08–08 |
| URL: | https://d.repec.org/n?u=RePEc:akf:cafewp:38 |
| By: | Gallie, Duncan; Zhou, Ying |
| Abstract: | Since the mid-20th Century, theory and research in sociology on workers' responses to their experience of work can be broadly divided into three overlapping phases. The immediate post-war decades from the late 1940 to the 1970s saw the pervasive influence of an 'essentialist' conception of the meaningfulness of work. From the 1960s this was challenged by a 'liberal' view that rejected the idea that there was an inherent human nature in favour of an emphasis on the importance of individual value choice. It argued that a growth of instrumentalism in work orientations would make job quality decreasingly relevant to the meaning of work. Then in the first decades of the 21st Century, there was a revival of theory and research on meaningfulness, premised on the notion of fundamental human needs, but emphasising at the same time broader societal needs. These different perspectives have given a very different importance to the role of technology as a determinant of the meaning of work. Technological change was at the core of the essentialist arguments, it was marginalised by the liberal arguments and has become once more an important preoccupation of more recent work on meaningfulness. |
| Keywords: | meaningfulness, alienation, job quality, skills, control, technology |
| JEL: | J24 J28 J81 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1652 |
| By: | Gallo, Ettore; Zamparelli, Luca |
| Abstract: | This paper presents a demand-led growth model augmented with induced technical change to address the two Harrod's problems in growth theory. Building on recent developments in the supermultiplier literature, we investigate how both Harrodian instability problems can be resolved through two complementary mechanisms: (1) autonomous, non-capacity-creating demand components growing at an exogenous rate, and (2) endogenous technical change responsive to income distribution. While existing supermultiplier models show how autonomous expenditures stabilize demand-led growth, we integrate induced technical change into the determination of the natural rate of growth. The model achieves twin stabilization through the interplay of two stabilizing mechanisms: the supermultiplier and induced technical change. On the one hand, demand shocks are absorbed via adjustments in the investment share, allowing capital accumulation to align with the exogenously determined growth rate of autonomous expenditures. On the other hand, labor market imbalances trigger productivity adjustments that reconcile natural and warranted growth through changes in the wage share. This dual adjustment mechanism allows the system to sustain normal capacity utilization and stable employment rates, while preserving demand-led growth outcomes. The results suggest that incorporating induced technical change enhances the supermultiplier's capacity to address both of Harrod's instability problems within a unified demand-led framework. |
| Keywords: | Harrodian instability; Supermultiplier model; Induced technical change; Demand-led growth |
| JEL: | E12 E21 O33 O41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125533 |
| By: | Celestino, Marcelo Salvador; de Carvalho, José Willegaignon de Amorim; Valente, Vânia Cristina Pires Nogueira |
| Abstract: | The rise of autonomous algorithmic systems has been reconfiguring the ontological, epistemological, and relational foundations of the human condition. Confronted with the social and ethical gap of the “erosion of human agency” and the urgency of a perspective of “society shaping the algorithms, ” actively rather than passively, we still lack integrated frameworks that articulate trust, empathy, ethics, biases, and autonomy in diagnosis, in sociotechnical structure, and in institutional implications. This study develops such a model, presenting Human Hypersubstitution Theory as a novel conceptual proposal, systematically named, structured, and here formalized for the first time. It analyzes the effects of algorithmic automation on subjectivity, language, and social practices, offering directions for confronting the algorithmic situation. The theory is anchored in a genealogy that comprises Anders’s philosophy of technology (erosion of agency and responsibility), Baudrillard’s critique of simulation (implosion of the real and dissolution of the Other), and McLuhan’s media theory (sensory environments, hyperextension, and the global village). It dialogues with contemporary critical perspectives and is structured around three axes of response: planetary ethical governance, critical and algorithmic literacy, and institutional practices of rehumanization. Empirical evidence in fields such as education, health, and culture supports its propositions, revealing unprecedented forms of alienation—simulated bonds, parameterized subjectivities, and automated decisions as the norm. The notion of an Algorithmic Nebula, designed on fuzzy logic, models the transition from personalization to personification. The study concludes that Human Hypersubstitution Theory provides foundations for ethical, political, and critical-literacy interventions, calling for sociotechnical governance capable of reclaiming autonomy, empathy, and responsibility in an AI-mediated future. |
| Date: | 2025–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:eaxsg_v1 |
| By: | Schedelik, Michael; Nölke, Andreas |
| Abstract: | The paper departs from the perspective of "second image IPE, " i.e., the need to closely combine Comparative Political Economy (CPE) and International Political Economy (IPE). More specifically, it focuses on the observation that the growth models in the (former) periphery of the global economy (a typical focus of CPE) are strongly shaped by their interdependencies with the structural transformations of the global economy (as studied by IPE). At the same time, the changes within the growth models of large economies in this periphery (CPE) can have a major impact on global interdependencies (IPE). For example, the rise of China as a major player in world trade and investment ("China shock") has had a substantial impact on growth models elsewhere in the periphery, via import penetration, direct investment, and export demand. This paper shows how these growth models shape (and are shaped through) international interdependencies by analyzing (1) the effects of global commodity cycles on the growth experience of several major exporters of primary resources, such as Brazil or Indonesia, during and after the recent commodity boom. (2) We further elaborate on the effects of global financial cycles on peripheral countries, particularly those pursuing debt-led growth models, such as South Africa or Turkey. (3) We finally point to the role of global production chains and foreign direct investment for FDI-led growth models of manufacturing exporters such as Thailand or Vietnam in South East Asia. |
| Abstract: | Das Discussion Paper geht von der "second image IPE"-Perspektive aus, das heißt der Notwendigkeit, die Vergleichende Politische Ökonomie (VPÖ) und die Internationale Politische Ökonomie (IPÖ) eng miteinander zu verknüpfen. Konkret konzentriert es sich auf die Beobachtung, dass die Wachstumsmodelle in der (ehemaligen) Peripherie der Weltwirtschaft (ein typischer Schwerpunkt der VPÖ) stark von ihren Interdependenzen mit den strukturellen Transformationen der Weltwirtschaft (wie sie von der IPÖ untersucht werden) geprägt sind. Gleichzeitig können die Veränderungen innerhalb der Wachstumsmodelle großer Volkswirtschaften in dieser Peripherie (VPÖ) erhebliche Auswirkungen auf globale Interdependenzen (IPÖ) haben. So hatte beispielsweise der Aufstieg Chinas zu einem wichtigen Akteur im Welthandel und bei Investitionen ("China-Schock") über Importpenetration, Direktinvestitionen und Exportnachfrage erheblichen Einfluss auf die Wachstumsmodelle in anderen Teilen der Peripherie. Das Paper zeigt, wie diese Wachstumsmodelle internationale Interdependenzen prägen (und durch sie geprägt werden), indem es erstens die Effekte globaler Rohstoffzyklen auf die Wachstumserfahrungen mehrerer bedeutender Exporteure von Primärressourcen wie Brasilien oder Indonesien während und nach dem jüngsten Rohstoffboom analysiert. Zweitens erörtert das Paper die Auswirkungen globaler Finanzzyklen auf Peripherieländer, insbesondere auf jene, die schuldengetriebene Wachstumsmodelle verfolgen, wie Südafrika oder die Türkei. Drittens untersucht es die Rolle globaler Produktionsketten und ausländischer Direktinvestitionen für FDI-getriebene Wachstumsmodelle von Exporteuren von Fertigungsgütern wie Thailand oder Vietnam in Südostasien. |
| Keywords: | commodity prices, comparative political economy, emerging economies, financial flows, foreign direct investment, global economy, global production chains, growth models, international political economy, middle-income trap, second image IPE, ausländische Direktinvestitionen, Falle des mittleren Einkommens, Finanzströme, globale Produktionsketten, Internationale Politische Ökonomie, Rohstoffpreise, Schwellenländer, Vergleichende Politische Ökonomie, Wachstumsmodelle, Weltwirtschaft |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:mpifgd:323933 |
| By: | Marwil J. Davila-Fernandez; Serena Sordi |
| Abstract: | Behavioural finance offers a valuable framework for examining foreign exchange (FX) market dynamics, including puzzles such as excess volatility and fat-tailed distributions. Yet, when it comes to their interaction with the `real' side of the economy, existing scholarship has overlooked a critical feature of developing countries. They cannot trade in their national currencies and need US dollars to access modern production techniques as well as maintain consumption patterns similar to those of wealthier societies. To address this gap, we present a novel heterogeneous agents model from the perspective of a developing economy that distinguishes between speculative and non-speculative sectors in the FX market. We demonstrate that as long as non-speculative demand responds to domestic economic activity, a market-clearing output growth rate exists that, in steady-state, is equal to the ratio between FX supply growth and the income elasticity of demand for foreign assets, i.e., a generalised dynamic trade-multiplier. Numerical simulations reproduce key stylised facts of exchange rate dynamics and economic growth, including distributions that deviate from the typical bell-shaped curve. Data from a sample of Latin American countries reveal that FX fluctuations exhibit similar statistical properties. Furthermore, we employ time-varying parameter estimation techniques to show that the dynamic trade-multiplier closely tracks observed growth rates in these economies. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.02252 |
| By: | Mikolajczak, Katarzyna; Gannon, Kate; Vincent, Katharine; Taing, Lina; Ingram, Will; de Bont, Chris; Damiba, Lucien; Shreedhar, Ganga; Kanyumba, Gloria; Truelove, Julie; Conway, Declan |
| Abstract: | This brief explores how behavioural research can better address complex, ‘wicked’ problems such as inclusive water security and climate adaptation by integrating systems thinking, human-centred design and critical social sciences. The BASIN project argues that behavioural research can be advanced by integrating systems thinking, human-centred design and critical social sciences. This expanded approach to applying behavioural research to wicked problems aims to foster more holistic, equitable and sustainable solutions to water insecurity in a changing climate. |
| JEL: | R14 J01 |
| Date: | 2025–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129046 |
| By: | Menéndez de Medina, Maria (RS: GSBE MGSoG, Maastricht Graduate School of Governance) |
| Abstract: | Trade worldwide is being reshaped by two major megatrends: advanced digitalization of production and the transition towards environmentally sustainable goods. This chapter examines for the first time the perspective of twin transition export and import diversification within a multi-dimensional economic complexity approach (Nomaler & Verspagen, 2024b, 2024d) and investigate whether this type of productive transformation perpetuates path-dependency processes in 80 countries over 2000-2018. The results suggest that an export/import productive structure based on twin transition products exhibit different economic performance, sustainability, and inequality implications. Productive specialization in these products has been very path-dependent and with a low engagement of developing countries and hence, reinforcing the core-periphery trade division. Furthermore, results suggest that developments in digital and green technological paradigms mainly take place in a selected number of countries that are already highly developed. |
| JEL: | F14 O10 Q01 |
| Date: | 2024–11–21 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024032 |
| By: | Xu, Tao Louie; Zhou, Shengjie |
| Abstract: | This perspective critically examines the global alignment of good governance as a crusader complex to ideologically universalise Western market-oriented institutions across the South. With the case of Sub-Saharan Africa, the essay interrogates the historical, sociopolitical, and economic implications of imposing one-size-fits-all governance standards without sufficient contextualisation. The political settlements approach is called to recognise diverse power structures and local realities. Scanning South Africa, Mauritius, Senegal, and Botswana, it demonstrates the necessity of tailoring governance to specific contexts with pragmatic political settlements. |
| Keywords: | good governance; political settlements framework; Africa |
| JEL: | B5 B52 Z1 Z13 Z18 |
| Date: | 2024–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122765 |
| By: | Hepburn, Cameron; Ives, Matthew C.; Loni, Sam; Mealy, Penny; Barbrook-Johnson, Pete; Farmer, J. Doyne; Stern, Nicholas; Stiglitz, Joseph |
| Abstract: | Reaching net-zero emissions will involve a structural transformation of the global economy. The transition is complicated by deep uncertainty about the new economic configurations that will emerge, coordination challenges, and non-linear dynamics amidst shifting political winds, where nation states are actively intervening to gain comparative advantage in key technologies. Here, we consider key economic questions about the net-zero transition that are of interest to finance ministries, based on a recent survey. Specifically, this paper asks: ‘What is the most effective way economic models and frameworks can help guide policy, given the complexity and uncertainty involved?’ We suggest five general criteria that models and frameworks should meet, and provide some guidance on how to select the right model for the question at hand—there is no single model to rule them all. A range of examples are offered to illustrate how models can be used and abused in the provision of economic advice to policy-makers. We conclude by noting that there are several gaps in our collective modelling capability that remain to be addressed. |
| Keywords: | carbon price; carbon tax; climate; climate policy; economy; finance ministry; integrated assessment models |
| JEL: | Q54 Q55 Q58 C63 C68 |
| Date: | 2025–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129031 |
| By: | Nikolova, Milena |
| Abstract: | A growing body of research in economics shows that workers care about more than just pay, often seeking social status, career mobility, or meaningful work. This chapter introduces the work orientations framework - a concept from psychology - as a unifying lens for understanding these motivations. Work orientations capture individuals' core beliefs about the role of work: earning a living ("paycheck"), achieving recognition and advancement ("career"), or finding fulfillment ("calling"). These orientations are not mutually exclusive, and many people hold a mix that shapes their workplace behavior. Economists have long examined financial incentives, alignment with an organization's mission, and career ambitions, but these strands remain fragmented. Integrating them within the work orientations framework broadens standard economic models, offers a richer view of labor supply and effort, and suggests new priorities for data collection, measurement, and theory development. The chapter reviews current evidence and outlines avenues for future empirical and conceptual research. |
| Keywords: | Work orientations, Job orientation, Career orientation, Calling orientation, Labor economics |
| JEL: | J22 J24 J28 I31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1645 |
| By: | Matthew Sprintson; Edward Oughton |
| Abstract: | It is estimated that over one-fourth of US households experienced a power outage in 2023, costing on average US $\$150$ Bn annually, with $87\%$ of outages caused by natural hazards. Indeed, numerous studies have examined the macroeconomic impact of power network interruptions, employing a wide variety of modeling methods and data parameterization techniques, which warrants further investigation. In this paper, we quantify the macroeconomic effects of three significant natural hazard-induced US power outages: Hurricane Ian (2022), the 2021 Texas Blackouts, and Tropical Storm Isaias (2020). Our analysis evaluates the sensitivity of three commonly used data parameterization techniques (household interruptions, kWh lost, and satellite luminosity), along with three static models (Leontief and Ghosh, critical input, and inoperability Input-Output). We find the mean domestic loss estimates to be US $\$3.13$ Bn, US $\$4.18$ Bn, and US $\$2.93$ Bn, respectively. Additionally, data parameterization techniques can alter estimated losses by up to $23.1\%$ and $50.5\%$. Consistent with the wide range of outputs, we find that the GDP losses are highly sensitive to model architecture, data parameterization, and analyst assumptions. Results sensitivity is not uniform across models and arises from important a priori analyst decisions, demonstrated by data parameterization techniques yielding $11\%$ and $45\%$ differences within a model. We find that the numerical value output is more sensitive than intersectoral linkages and other macroeconomic insights. To our knowledge, we contribute to literature the first systematic comparison of multiple IO models and parameterizations across several natural hazard-induced long-duration power outages, providing guidance and insights for analysts. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.19989 |