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on Heterodox Microeconomics |
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Issue of 2025–12–15
twelve papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Vasary, Viktoria; Hamza, Eszter; Racz, Katalin; Szabo, Dorottya; Varga, Eszter |
| Keywords: | Labor and Human Capital |
| URL: | https://d.repec.org/n?u=RePEc:ags:icae18:276070 |
| By: | Zhi, Xiaoxu; Liu, Zongzhi; Yuan, Lingran; Gong, Binlei |
| Keywords: | Institutional and Behavioral Economics, Political Economy, Industrial Organization |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343636 |
| By: | Iv\'an L\'opez-Espejo |
| Abstract: | This article examines the law of the tendency of the rate of profit to fall in the Spanish economy between 1960 and 2024, considering the organic composition of capital and the rate of surplus value as central variables. Its aim is to determine whether this law, formulated by Marx in Capital (Vol. III), continues to operate in the contemporary context. The methodology consists of transforming orthodox macroeconomic categories derived from the Spanish National Accounts (CNE), available in BDMACRO, into Marxist variables: constant capital ($c$), variable capital ($v$), and surplus value ($pv$). Based on these, historical series of the organic composition of capital ($q$), the rate of surplus value ($pv'$), and the rate of profit ($g'$) are constructed, adjusted to constant prices to ensure temporal coherence and comparability. The results show a sustained increase in $q$ and a slight decrease in $pv'$, generating a tendential decline in $g'$ with cyclical fluctuations associated with specific crises. The conclusions empirically confirm the validity of the law in Spain, highlighting the historical limits of capitalism and providing quantitative evidence on the structural dynamics of profitability. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.23427 |
| By: | Marcello Esposito |
| Abstract: | Since its inception, the Efficient Market Hypothesis (EMH) has faced persistent challenges, as numerous anomalies - such as volatility clustering, excessive trading volumes, and herding behaviour - exposed gaps between theoretical predictions and actual market dynamics. In response, economists developed alternative frameworks that relaxed EMH’s strict assumptions, distinguishing between different types of investors (e.g., “chartists†and “fundamentalists†) and incorporating bounded rationality, learning, and adaptation. This line of research gave rise to agent-based models, which conceptualize financial markets as adaptive ecosystems and rely on simulations to capture investor interactions and the evolution of trading strategies. This paper reviews central modelling choices - such as the definition of investor heterogeneity, the specification of preferences, the mechanisms of price formation, and the processes of strategy selection - and discusses their implications for balancing realism with the complexity of calibration. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:liu:liucec:2025-19 |
| By: | Jihyuan Liuh |
| Abstract: | This paper aims to provide a micro-foundation for the Cobb-Douglas production function based on statistical physics, and to launch a critique of its political-economic implications. By introducing the Maximum Entropy Principle and an axiom of scale invariance, we prove that in an economic system with incomplete information, the most unbiased distribution of micro-level technical coefficients must take the form of a truncated power law. Based on this, statistical aggregation naturally leads to the emergence of a constant-returns-to-scale Cobb-Douglas function at the macro level. This result not only provides a micro-foundation for neoclassical growth models that does not rely on a representative agent or value aggregation of capital but, more importantly, reveals that the aggregate production function is essentially a lossy compression of micro-level information. In this compression process, the social-historical relations embedded in distribution parameters are 'naturalized' into seemingly eternal technical laws, which is the manifestation of Marx's critique of 'fetishism' at the level of mathematical logic. This paper further deepens the understanding of the production function as a statistical phenomenon rather than a technical law through dialogues with Marx, the Cambridge School, and Shaikh. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.03812 |
| By: | Basilio Tavares Ramos, Erica; Dias Paes Ferreira, Marcelo; De Carvalho Reis Neves, Mateus |
| Keywords: | Production Economics, Agricultural and Food Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea24:343654 |
| By: | Jan Majewski; Francesca Giardini |
| Abstract: | Gossip has been shown to be a relatively efficient solution to problems of cooperation in reputation-based systems of exchange, but many studies don't conceptualize gossiping in a realistic way, often assuming near-perfect information or broadcast-like dynamics of its spread. To solve this problem, we developed an agent-based model that pairs realistic gossip processes with different variants of Trust Game. The results show that cooperators suffer when local interactions govern spread of gossip, because they cannot discriminate against defectors. Realistic gossiping increases the overall amount of resources, but is more likely to promote defection. Moreover, even partner selection through dynamic networks can lead to high payoff inequalities among agent types. Cooperators face a choice between outcompeting defectors and overall growth. By blending direct and indirect reciprocity with reputations we show that gossiping increases the efficiency of cooperation by an order of magnitude. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.20248 |
| By: | Stefano Vrizzi; Daniel W. O'Neill |
| Abstract: | The 'Doughnut' of social and planetary boundaries has emerged as a popular framework for assessing environmental and social sustainability. Here, we provide a proof-of-concept analysis that shows how machine learning (ML) methods can be applied to a simple macroeconomic model of the Doughnut. First, we show how ML methods can be used to find policy parameters that are consistent with 'living within the Doughnut'. Second, we show how a reinforcement learning agent can identify the optimal trajectory towards desired policies in the parameter space. The approaches we test, which include a Random Forest Classifier and $Q$-learning, are frugal ML methods that are able to find policy parameter combinations that achieve both environmental and social sustainability. The next step is the application of these methods to a more complex ecological macroeconomic model. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.02200 |
| By: | Ciliberti, Stefano; Frascarelli, Angelo; Martino, Gaetano |
| Abstract: | The study of institutions in the agro-food systems is gaining momentum since it represents an intricate and undoubtedly relevant case study as concerns intermediate-product markets. Moreover, traditionally there is a problem of organization among farmers mainly due to the scarce attitude to pool decisional and property rights on input and/or output. According to the Transaction Costs Economics framework, the paper aims to investigate which are the main drivers of the collective forms of organization in the Italian agro-food system, paying particular attention to transaction costs’ attributes and to the increasing role played by the institutional environment as well. The choice to join to cooperative or producer organization is conceptualized as a governance structure choice, also paying attention to the complementarity between the two alternatives. Based on the Italian version of the Farm Accountancy Data Network, bivariate probit and multinomial are estimated in order to account for three organizational alternatives (participation in cooperative, in OP and join participation in all the three alternatives) and to test the complementarity between the two organizational forms entailed. |
| Keywords: | Agribusiness, Farm Management |
| URL: | https://d.repec.org/n?u=RePEc:ags:icae18:276067 |
| By: | Magacho, Guilherme; Spinola, Danilo |
| Abstract: | This paper extends the traditional Leontief Input-Output (I-O) model by introducing a traverse disequilibrium framework that captures simultaneous quantity and price adjustments over time. Unlike standard static I-O models, this approach incorporates continuous-time adjustments in production, prices, and resource utilization. The analysis models how sectors respond to demand fluctuations through inventory accumulation and production adjustments, allowing for temporary imbalances between supply and demand. The model is further extended to include price-setting mechanisms. In this framework, sectors adjust markups in response to cost fluctuations and inventory deviations, and biophysical resource utilisation, leading to physical constraints and cost-push inflation. Calibrated using Brazil's Input-Output matrix and land-use data, the framework is applied to sectoral shocks, including demand surges and price rigidities, to assess their sectoral and macroeconomic impacts. The results highlight the importance of adjustment speeds in shaping economic dynamics, showing that rigid price and quantity settings amplify inventory cycles, while fast quantity adjustments increase output volatility. Sectoral interdependencies create cascading effects, demonstrating how price, and quantity shocks propagate across industries. Additionally, the dependence on environmental services illustrates how pressures on scarce resources feedback into prices and quantities. |
| Keywords: | Environmental Input-Output; Traverse Dynamics; Disequilibrium Adjustments; Price Stickiness; Inventory Adjustment; Biophysical Constraints |
| Date: | 2025–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:akf:cafewp:40 |
| By: | Morgan, Marc; Ranaldi, Marco |
| Abstract: | This paper introduces a novel application of the Kaya identity to assess the roles of technological change and consumption behaviour in shaping global greenhouse gas emissions. Drawing on numerical insights from counterfactual emission reduction scenarios, we quantify the adjustments in technology and consumption required to remain within the carbon budget by 2050 and explore their distributional implications. Building on this analysis, we develop a simple analytical model that formalizes the resulting carbon budget trilemma : under binding ecological constraints, rising consumption, technological progress, and widening inequality cannot sustainably coexist. We place these transformations in historical perspective by examining a set of precedents---from wars and epidemics to economic collapses and episodes of rapid technical upgrading---that provide comparative magnitudes for the scale of change implied by a binding carbon budget. Our conclusions unveil a race between technological innovation and consumption sobriety to reach planetary sustainability, in which global inequality acts as a boundary constraint. Given past technological progress, and current levels of global inequality, it is unlikely that sustained reductions in average consumption can be avoided if we are to respect ecological constraints. |
| Keywords: | Carbon budget, Technology, Consumption, Climate change mitigation, Kaya identity, Inequality and sustainability |
| JEL: | Q54 Q56 O44 D63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gnv:wpaper:unige:189430 |
| By: | Eddie Gerba; Gireesh Shrimali |
| Abstract: | This paper reviews the twin challenges of measurement and aggregation in economics and the natural sciences, with climate risk as a guiding example. It synthesises a broad range of theoretical and empirical perspectives, tracing ideas from early systems theory to modern macroeconomic debates, and compares the approaches of economics, complexity science, and climate science to the micro–macro aggregation problem. Several key conceptual tensions are highlighted—most notably the “micro–macro gap†—and the limitations of traditional models when confronted with heterogeneity, deep uncertainty, and non-linear feedbacks are demonstrated, especially in the climate-risk context. It also reviews emerging methodologies and proposes integrated frameworks to combine micro-level detail with macro-level consistency. Finally, the paper outlines a roadmap for future research and policy, advocating interdisciplinary collaboration, improved data infrastructure, and adaptive modelling strategies to better capture climate change |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:25/801 |