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on Heterodox Microeconomics |
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Issue of 2025–09–01
eleven papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | TORTIA, Ermanno |
| Abstract: | This paper examines the economic and financial implications of implementing a comprehensive system of dividend-based labor compensation for members of worker cooperatives. The economic implications, as presented in the existing literature, are discussed at both the microeconomic and macroeconomic levels, as already presented prominently in the work of James Meade and Martin Weitzman. The financial implications concern the creation of a clear link between dividend-based remuneration and the financial position of worker-members as owners of a cooperative's capital; the alignment of interests between worker-members and non-member financial investors when creating a true cooperative share market; and the decoupling of financial participation of members and non-members from control rights (cooperative shares would be non-voting) to protect the formal and substantive role of the mutualistic ‘one member, one vote’ principle of democratic governance. |
| Keywords: | Dividend-based labor remuneration; undercapitalization; cooperative shares; interest alignment; cooperative property rights; mutualistic governance |
| JEL: | D21 D23 D24 G32 G35 |
| Date: | 2025–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125504 |
| By: | Furse, Simon |
| Abstract: | This paper examines two literatures that try to understand the biophysical constraints placed on the economy and economic growth. Firstly, exergy economics uses the second law of thermodynamics to examine the aggregate exergy conversion process to the useful stage. This shows the dependency of the economy on physical laws and highlights the limits to continued productivity growth. I argue that exergy economics provides a vital contribution to economics, but previous attempts to integrate it into an economic framework are undermined by a reliance on the neoclassical production function. Secondly, ecological macroeconomics examines biophysical constraints to the economy using heterodox economic theory and models. My review of this literature shows that productivity growth is often modelled as unconnected to energy and materials and able to increase exponentially into the future despite biophysical constraints. The paper argues that biophysical limits to productivity growth need to be considered alongside the more commonly modelled damage functions and limits to resource availability and quality in ecological macroeconomics. |
| Keywords: | Exergy, Energy, Societal Exergy Analysis, Ecological Macroeconomics, Technical Change, Production Functions, Limits to Growth |
| JEL: | E12 O44 Q43 Q57 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:324638 |
| By: | Rob Van Eynde; Kevin J. Dillman; Jefim Vogel; Daniel W. O'Neill |
| Abstract: | Post-growth has emerged as an umbrella term for various sustainability visions that advocate the pursuit of environmental sustainability, social equity, and human wellbeing, while questioning the continued pursuit of economic growth. Although there are increasing calls to include post-growth scenarios in high-level assessments, a coherent framework with what is required to model post-growth adequately remains absent. This article addresses this gap by: (1) identifying the minimum requirements for post-growth models, and (2) establishing a set of model elements for representing specific policy themes. Drawing on a survey of modellers and on relevant post-growth literature, we develop a framework of minimum requirements for post-growth modelling that integrates three spheres: biophysical, economic, and social, and links them to post-growth goals. Within the biophysical sphere, we argue that embeddedness requires the inclusion of resource use and pollution, environmental limits, and feedback mechanisms from the environment onto society. Within the economic sphere, models should disaggregate households, incorporate limits to technological change and decoupling, include different types of government interventions, and calculate GDP or output endogenously. Within the social sphere, models should represent time use, material and non-material need satisfiers, and the affordability of essential goods and services. Specific policies and transformation scenarios require additional features, such as sectoral disaggregation or representation of the financial system. Our framework guides the development of models that can simulate both post-growth and pro-growth policies and scenarios, an urgently needed tool for informing policymakers and stakeholders about the full range of options for pursuing sustainability, equity, and wellbeing. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.07974 |
| By: | Godinho, Enzo; Mattos, Beatriz |
| Abstract: | This paper investigates the role of the New Development Bank (NDB) in challenging global financial hierarchies while fostering an ecological transition. The NDB, established by BRICS, has a mechanism of providing development finance in local currency, which could reduce dependency on core currencies like the dollar (USD) and the euro (EUR), offering an alternative for peripheral economies to finance sustainable development. Given the institutionalization of the green economy agenda and the rise of green finance, the paper raises elements to assess the NDB's contribution to the ecological transition through its investment strategy. Our analysis builds on structuralist and dependency theories, identifying three interlinked hierarchies - productive, currency, and environmental - that shape global financial asymmetries. We examine the NDB's project portfolio from 2016 to 2024 and the interplay between the projects' area of operation, currency of funding, and country of implementation. The findings indicate that, while the NDB has made strides in funding sustainable infrastructure, its operations remain largely embedded within dominant currency systems. |
| Keywords: | New Development Bank (NDB), BRICS, Green Finance, Currency Hierarchy, Ecological Transition, Development Finance, Sustainable Infrastructure |
| JEL: | F33 F55 O44 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:324644 |
| By: | Luan M. T. de Moraes; Ant\^onio M. S. Mac\^edo; Giovani L. Vasconcelos; Raydonal Ospina |
| Abstract: | We introduce a method for describing eigenvalue distributions of correlation matrices from multidimensional time series. Using our newly developed matrix H theory, we improve the description of eigenvalue spectra for empirical correlation matrices in multivariate financial data by considering an informational cascade modeled as a hierarchical structure akin to the Kolmogorov statistical theory of turbulence. Our approach extends the Marchenko-Pastur distribution to account for distinct characteristic scales, capturing a larger fraction of data variance, and challenging the traditional view of noise-dressed financial markets. We conjecture that the effectiveness of our method stems from the increased complexity in financial markets, reflected by new characteristic scales and the growth of computational trading. These findings not only support the turbulent market hypothesis as a source of noise but also provide a practical framework for noise reduction in empirical correlation matrices, enhancing the inference of true market correlations between assets. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.14325 |
| By: | Santiago Barbosa Naranjo (Universidad del Rosario [Bogota]); Antoine Godin (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord); Gustavo Adolfo Hernandez Diaz (National University of Colombia); Guilherme Riccioppo Magacho (AFD - Agence française de développement, CEPN - Centre d'Economie de l'Université Paris Nord - Université Sorbonne Paris Nord); Yehison Mejia Ascanio (National University of Colombia); Annabelle Moreau Santos (AFD - Agence française de développement) |
| Abstract: | Based on input-output matrices, the final chapter explores Colombia's structural dynamics in the light of the low-carbon transition. It first examines the openness of the economy and the productive matrix, highlighting how premature deindustrialisation has historically affected the country. The results indicate uneven structural changes between sectors, with significant transformations in the industrial sector under the influence of globalisation and the need to substitute domestic inputs, leading to a weakening of production chains and a reduction in economic complexity. Demand was the driving force behind production growth, hampered by limited technological progress and import substitution. Next, the chapter uses a sectoral perspective to highlight the country's current challenges in reducing GHG emissions, highlighting the fiscal, external, and socio‑economic vulnerabilities affecting its decarbonisation efforts. Results show that Colombia is indeed exposed to transition risks, with almost 20% of the wage bill depending on sunset industries. Furthermore, about 60% of foreign currency revenue and 20% of fiscal revenue come directly from oil and coal, making it vulnerable in both external and fiscal dimensions. Agriculture, agribusiness, and tourism could partly reduce the negative impacts of decarbonisation and help secure economic stability, moving away from dependence on oil and coal. |
| Abstract: | Basándose en las matrices de insumo-producto, el último capítulo analiza la dinámica estructural de Colombia a la luz de la transición hacia una economía baja en carbono. En primer lugar, examina la apertura de la economía y la matriz productiva, destacando cómo la desindustrialización prematura ha afectado históricamente al país. Los resultados indican cambios estructurales desiguales entre sectores, con transformaciones significativas en el sector industrial bajo la influencia de la globalización y la necesidad de sustituir insumos nacionales, lo que ha llevado a un debilitamiento de las cadenas de producción y a una reducción de la complejidad económica. La demanda ha impulsado el crecimiento de la producción, obstaculizado por el limitado progreso tecnológico y la sustitución de importaciones. A continuación, el capítulo utiliza una perspectiva sectorial para resaltar los retos actuales del país en la reducción de las emisiones de GEI, destacando las vulnerabilidades fiscales, externas y socioeconómicas que afectan a sus esfuerzos de descarbonización. Los resultados muestran que Colombia está realmente expuesta a los riesgos de transición, ya que casi el 20% de la masa salarial depende de las industrias en declive. Además, cerca del 60% de los ingresos en divisas y el 20% de los ingresos fiscales proceden directamente del petróleo y el carbón, lo que la hace vulnerable tanto en la dimensión externa como en la fiscal. La agricultura, la agroindustria y el turismo podrían reducir en parte los efectos negativos de la descarbonización y contribuir a garantizar la estabilidad económica alejándose de la dependencia del petróleo y el carbón. |
| Abstract: | Basé sur des matrices entrées-sorties, le dernier chapitre s'intéresse aux dynamiques structurelles de la Colombie à l'aune de la transition bas carbone. Il examine d'abord l'ouverture de son économie et de sa matrice productive, en soulignant l'impact qu'a eu, historiquement, la désindustrialisation prématurée du pays. Les résultats indiquent des changements structurels inégaux entre les secteurs, avec des transformations significatives dans le secteur industriel sous l'influence de la mondialisation et de la nécessité de substituer des intrants nationaux, ce qui a entraîné un affaiblissement des chaînes de production et une réduction de la complexité économique. La demande a été le moteur de la croissance de la production, entravée par des progrès technologiques limités et la substitution des importations.Ensuite, le chapitre adopte une perspective sectorielle pour mettre en évidence les défis actuels du pays en matière de réduction des émissions de GES, en soulignant les vulnérabilités fiscales, externes et socio-économiques qui affectent ses efforts de décarbonisation. Les résultats montrent que la Colombie est effectivement exposée aux risques de transition, près de 20 % de la masse salariale dépendant des industries en déclin. En outre, environ 60 % des recettes en devises et 20 % des recettes fiscales proviennent directement du pétrole et du charbon, ce qui rend le pays vulnérable à la fois sur le plan extérieur et sur le plan fiscal. L'agriculture, l'agro-industrie et le tourisme pourraient en partie réduire les impacts négatifs de la décarbonisation et contribuer à garantir la stabilité économique, en s'éloignant de la dépendance au pétrole et au charbon. |
| Keywords: | Carbon neutrality, Social inclusion, Colombia, Climate finance, Energy transition, Sustainable development, Climate resilience, Transition énergétique, Inclusion sociale, Financement climatique, Résilience climatique, Développement durable, Neutralité carbone, Colombie |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05209518 |
| By: | Ryuji Hashimoto; Kiyoshi Izumi |
| Abstract: | We investigate the mechanisms behind the power-law distribution of stock returns using artificial market simulations. While traditional financial theory assumes Gaussian price fluctuations, empirical studies consistently show that the tails of return distributions follow a power law. Previous research has proposed hypotheses for this phenomenon -- some attributing it to investor behavior, others to institutional demand imbalances. However, these factors have rarely been modeled together to assess their individual and joint contributions. The complexity of real financial markets complicates the isolation of the contribution of a single component using existing data. To address this, we construct artificial markets and conduct controlled experiments using optimal transport (OT) as a quantitative similarity measure. Our proposed framework incrementally introduces behavioral components into the agent models, allowing us to compare each simulation output with empirical data via OT distances. The results highlight that informational effect of prices plays a dominant role in reproducing power-law behavior and that multiple components interact synergistically to amplify this effect. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.09863 |
| By: | Alberto Baccini; Lucio Barabesi; Carlo Debernardi |
| Abstract: | This paper investigates the impact of the global financial crisis on the shape of economics as a discipline by analyzing EconLit-indexed journals from 2006 to 2020 using a multilayer network approach. We consider two types of social relationships among journals, based on shared editors (interlocking editorship) and shared authors (interlocking authorship), as well as two forms of intellectual proximity, derived from bibliographic coupling and textual similarity. These four dimensions are integrated using Similarity Network Fusion to produce a unified similarity network from which journal communities are identified. Comparing the field in 2006, 2012, and 2019 reveals a high degree of structural continuity. Our findings suggest that, despite changes in research topics after the crisis, fundamental social and intellectual relationships among journals have remained remarkably stable. Editorial networks, in particular, continue to shape hierarchies and legitimize knowledge production. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.09079 |
| By: | Ozili, Peterson K |
| Abstract: | This study examines what constitutes social in social finance. It addresses the lack of understanding of the multifaceted ways in which social finance might be social. The common understanding is that social finance is only social in its use. This study challenges this narrow premise and argues that social finance can be social in its attributes both in its source, uses, infrastructure, policy and design. In other words, social finance can be social in (i) its source, (ii) its uses, (iii) the policy that enables social financing, (iv) the infrastructure used to facilitate social financing, and (iv) the nature or design of the contract that produces the financial instruments used to raise social funds. The implication is that social finance mechanisms can be designed to be social in several ways. Understanding the different ways in which social finance can be social will ensure that we do not dismiss emerging social finance innovations that are not social in their use, but are social in other aspects. |
| Keywords: | social finance, green finance, digital finance, society, financial services, loans |
| JEL: | G21 G23 Q01 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125396 |
| By: | Leonardo Rojas Rodriguez (National University of Colombia. Laboratory (UNAL), Bogotá,); Álvaro Martín Moreno Rivas (National University of Colombia. Laboratory (UNAL), Bogotá,) |
| Abstract: | This chapter presents a general overview of the macroeconomic and environmental characteristics of the Colombian economy. The main thread of the analysis seeks to establish the structural specificities of the economy and the institutional constraints that define the initial conditions for shaping an ordered and sustainable process of decarbonisation of productive activities. This characterisation is fundamental for situating the expectations and objectives of adaptation to climate change in the short, medium, and long term. Taking a holistic view of the transformation processes—which includes adapting different theoretical models—, the responsibilities of institutional actors are evaluated in terms of their use of material and energy resources, as well as their greenhouse gas (GHG) emissions. This evaluation takes place within the framework of structural feasibility for transformation, the limits of which are defined by the three gaps of the economy: the external sustainability gap (growth restricted by the balance of payments); the social gap (the need to overcome levels of inequality and poverty); and the environmental gap (requirements to achieve environmental efficiency targets and fulfil Paris Agreement commitments to reduce GHG emissions by 2030). |
| Abstract: | Ce chapitre présente un aperçu général des caractéristiques macroéconomiques et environnementales de l'économie colombienne. Le fil conducteur de l'analyse vise à établir les spécificités structurelles de l'économie et les contraintes institutionnelles qui définissent les conditions initiales pour façonner un processus ordonné et durable de décarbonisation des activités productives. Cette caractérisation est fondamentale pour situer les attentes et les objectifs d'adaptation au changement climatique à court, moyen et long terme. En adoptant une vision holistique des processus de transformation — qui inclut l'adaptation de différents modèles théoriques —, les responsabilités des acteurs institutionnels sont évaluées en termes d'utilisation des ressources matérielles et énergétiques, ainsi que de leurs émissions de gaz à effet de serre (GES). Cette évaluation s'effectue dans le cadre de la faisabilité structurelle de la transformation, dont les limites sont définies par trois écarts de l'économie : l'écart de durabilité externe (croissance limitée par la balance des paiements) ; l'écart social (la nécessité de surmonter les niveaux d'inégalité et de pauvreté) ; l'écart environnemental (les exigences pour atteindre les objectifs d'efficacité environnementale et respecter les engagements de l'Accord de Paris visant à réduire les émissions de GES d'ici 2030). |
| Keywords: | Energy transition, Social inclusion, Climate finance, Sustainable development, Climate resilience, Carbon neutrality, Développement durable, Résilience climatique, Neutralité carbone, Transition énergétique, Inclusion sociale, Financement climatique |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05163818 |
| By: | Sarracino, Francesco; Slater, Giulia |
| Abstract: | Nearly one hundred years ago, John M. Keynes envisioned a future where material concerns would fade, allowing individuals to focus on leisure and well-being. Similar expectations were common in Keynes' days, when industrial progress promised to yield productivity gains, which would increase wages and lift workers out of poverty. Freed from material constraints, individuals would devote more attention to personal interests, relationships, and quality of life. One hundred years later, history proved that Keynes was right about economic growth, but individuals remain focused on material concerns at the expense of quality of life and of the environment. Why did economic activity deliver affluent, but socially and environmentally unsustainable societies? What possibilities are there for our future, the one of our grandchildren? In this article, we first review the evidence on the unsustainability of the current economic model. We discuss the role of economic growth for well-being, providing new evidence on defensive consumption, and illustrating a new explanation of unsustainability. We then discuss Neo-humanism, an evidence-based narrative to promote sustainable quality of life, ensures thriving lives in socially and environmentally sustainable societies. A shift towards sustainable quality of life is possible thanks to the insights from decades of research in this field. |
| Keywords: | neo-humanism, subjective well-being, post-growth, sustainability, social capital, quality of life, defensive growth, beyond GDP |
| JEL: | I00 I3 I31 O10 P0 Q50 |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125369 |