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on Heterodox Microeconomics |
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Issue of 2026–05–04
thirteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Bayari, Celal |
| Abstract: | The Belt and Road Initiative (the BRI) is the current developmental stage of the Chinese capitalist model, and its progress through different nations depend on the governance that China established across its own vast geography over a long period of time. The levels of the BRI international activity resemble a rapid flood rather than a slow flow, due to the availability of the Chinese state finances and private capital funds, since the start of the Deng modernisations, and China’s entry into the WTO. The growth of the Chinese capitalism presented an interesting contrast to the national economic models North America, Europe, and Asia. There has been much interest on the interplay between the nature of the Chinese capitalism, the existing institutions, and the institutions that emerged subsequently. Overall, there exists a specific understanding of the growth in China in terms of the stronger and weaker institutions, that the paper discusses. China’s own development, the BRI activities, and the uneven success of the Sustainable Development Goals across the BRI membership also form an interesting debate. Further, China’s WTO entry, the WTO framework, and the subsequent BRI agreements also significant contrasts that the paper highlights. |
| Keywords: | China, Belt and Road Initiative, Institutional Economics Theory, Soft Law, SDGs, Pollution Halo, Pollution Haven |
| JEL: | A11 A12 A14 B3 B31 E2 E22 E62 E65 F1 F13 F14 F15 F18 F21 F23 F42 F43 F55 F62 F63 F64 G2 G28 I1 I31 K2 K23 K32 K33 L1 L12 L16 L22 L41 L51 L91 L98 M16 M21 N1 N10 N15 N17 N20 N25 N27 N30 N35 N37 N70 N75 N77 N90 N95 N97 O11 O14 O18 O19 O38 O43 O53 O55 O56 P1 P12 P14 P26 P33 P45 P48 P51 P52 Q01 Q02 Q2 Q27 Q32 Q37 Q43 Q52 Q53 Q54 Q56 Q58 R38 R41 R53 R58 Z1 Z13 |
| Date: | 2025–08–08 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128638 |
| By: | Juan Manuel Campana; Eckhard Hein |
| Abstract: | This paper investigates the drivers of economic growth by focusing on macroeconomic policy regimes (MPRs) as a key dimension of demand and growth regime (DGR) and growth model (GM) analysis. Building on Campana and Hein’s (2026) results on demand-led growth decomposition based on the national income and financial accounting (NIFA) and the Sraffian supermultiplier (SSM) approaches for seven economies—Germany, Spain, Argentina, Brazil, India, South Africa, and Turkey—across the periods 2000–2007 and 2011–2019, this paper applies the MPR approach to understand the differences in DGRs and their respective changes. The paper thus contributes to post-Keynesian and comparative political economy literature. The analysis shows that the configuration and coordination of monetary, wage, fiscal, and external policies play a central role in shaping dominant sources of autonomous demand and explaining regime shifts over time. While some countries, such as Germany and India, display stability in their MPRs, DGRs, and dominant autonomous demand components, others—Spain, Brazil, South Africa, and Turkey—have undergone significant transformations driven by policy changes and external conditions. Overall, the findings highlight the explanatory power of MPR analysis in understanding growth trajectories and provide foundations for the examination of the political economy dimension of these trajectories. |
| Keywords: | macroeconomic policy regimes, growth decomposition, post-Keynesian macroeconomics, growth drivers, growth models, demand and growth regimes |
| JEL: | E11 E12 E60 F43 O57 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2611 |
| By: | Guschanski, Alexander; Onaran, Özlem |
| Abstract: | We provide the first comprehensive analysis of markups and profit margins for the pandemic period and its aftermath in the UK using i) unconsolidated balance sheets of non-financial corporations, ii) data for both listed and unlisted firms, iii) the period of 2014 to 2022. Our sample consists of up to 68, 600 firms per year. The markup increases by 14.7% in nine years between 2014 and 2022. This exceeds any previously documented growth rate for UK markups, despite a pandemic and major economic, ecological and geo-political crises. The rise in markups in 2020 was largely an attempt to cover extraordinary costs that arose in the first year of the pandemic. Firms, on average, were not successful in covering these costs, as indicated by a strong decline in the 2020 profit margin. However, markups remain elevated and did not return to their pre-pandemic average. Consequently, by 2022 profit margins have reached their historical peak, and indicative evidence for 2023 suggests that they might have risen even further since. This stands in contrast to the US where margins and markups returned to pre-pandemic levels. The markup increase is driven by both rising markups within UK companies and a reallocation of output towards high-markup firms. However, the within effect has dominated since 2020. In this regard, the UK is different from the US, where the reallocation effect has dominated. Since 2014 the markup distribution of firms in the UK has become more polarised. Increasingly more firms are at risk of financial difficulties due to low profit margins while at the same time, some firms are charging historically extraordinarily high markups and reap high profits. This contributes to bankruptcy risk and economic instability while exacerbating pricing power for some companies. Over 10, 000 firms (15% of our sample) declared bankruptcy since March 2020, driven by pandemic-related restrictions, cost shocks, and rising interest rates. These are mostly small firms in service industries. Large firms have been the most consistent drivers of markup growth since 2014, but on average these are firms with relatively low markups. Key industries driving UK-wide markup dynamics include: IT, professional services, food, beverages, tobacco, and chemicals. There is indicative evidence that higher trade union density can constrain firms’ markup power because within-firm increases in markups tend to be lower in industries with higher union density. Markups, once increased, remain at a higher level. This exacerbates inflationary pressure and contributes to a redistribution of income from labour to capital, which increases income inequality. Preventing markup increases during economy-wide cost shocks like in 2020 should be a priority for policymakers. Essential steps to controlling pricing power and inflation in the UK will be to identify systemically significant prices and industries and manage future price shocks through shock absorbers such as price gauging laws or price controls, buffer stocks, financial support for especially small businesses and windfall and wealth taxes coupled with transfers to low-income households (Onaran, 2023; Weber and Wasner, 2023; Wildauer et al. 2023). |
| Keywords: | markup; profit margin; market power |
| Date: | 2024–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:gpe:wpaper:48851 |
| By: | Patrick Mellacher (University of Graz, Austria); Teresa Lackner (University of Graz, Austria) |
| Abstract: | We develop a simple computational model capturing the co-evolution of opinion formation, political decision making and economic outcomes to study how societies form opinions if their members have opposing economic interests. The model features two types of individuals, a small minority and a large majority with conflicting economic interests who form and update beliefs about which policy best serves their interest through three channels: social influence, exposure to costly advertisements, and stochastic access to unbiased outside information. Individuals receive a payoff based on a policy they decide democratically and can use their funds to influence other individuals by sending costly advertisements. Our model illustrates how a tiny, but well-informed minority can influence democratic processes in their favor - even in situations where it seems unlikely at first glance, due to a vicious cycle in which political and economic power gradually shift from one group to another. Our model offers two ways out of this misery: First, on the individual-level, bounded confidence - the tendency of humans to distrust opinions which are too different from their own - has a mitigating effect and leads to better societal outcomes. This is particularly interesting, as bounded confidence has famously been shown by Hegselmann and Krause (2002) to produce polarization which is generally considered harmful. However, bounded confidence can cause political chaos and its effectiveness can be reduced by strategic messaging. Second, on a societal level, better access to unbiased information sources can counter disinformation. Our model highlights the dangers that economic and information inequality can pose for democracies and contributes to debates on the causes of the decades-long increase in inequality in democratic countries and the persistent failure to adequately address climate change. |
| Keywords: | Opinion dynamics, Agent-based model, Social conflict, Bounded confidence, Disinformation, Strategic advertising |
| JEL: | C63 D83 D72 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2026-04 |
| By: | RODRIGUEZ, FRANCISCO |
| Abstract: | Bastos, Geloso, and Bologna Pavlik (2026) argue that the US embargo explains less than one-tenth of the difference in per capita income between Cuba and a counterfactual scenario in which the country did not follow socialist economic policies. We show that their results are driven by the use of an elasticity of income to trade openness that is neither representative nor a reasonable upper bound of the values found in the literature and by their choice to attribute the effect of the interaction between the embargo and other determinants of growth solely to those other determinants. We show that, once these problems are corrected, the embargo can account for a substantial fraction, and in some cases all, of Cuba’s post-1959 economic underperformance. |
| Keywords: | Cuba, Economic Sanctions, International Trade, Economic Growth, Socialism |
| JEL: | F13 F14 O11 O24 O47 |
| Date: | 2026–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128796 |
| By: | Greitens, Jan |
| Abstract: | This paper critically examines the relationship between Georg Friedrich Knapp's "State Theory of Money" and today's Neo-Chartalism, often associated with Modern Monetary Theory (MMT). Several contributions have questioned whether the Neo-Chartalists are right to claim Knapp as their predecessor. However, these analyses do not pay sufficient attention to the historical context in which Knapp wrote. This includes contemporary debates and the monetary history of his time. The Neo-Chartalists' reception of Knapp's ideas was almost exclusively through the 1924 translation of the "State Theory of Money". Problematically, this translation has many shortcomings, in particular a narrow focus on the legislative state. But Knapp's focus was on country-specific examples of currencies, in particular the 1892 currency reform in Austria-Hungary. There are significant differences between Knapp's published and unpublished writings. Archival findings reveal Knapp's reflections on inflation, which align him with the Real Bills Doctrine and a proto-Fiscal Theory of the Price Level. He argued that monetary state financing should be used only as a last resort. Contrary to MMT's advocacy for state-funded expenditures, Knapp supported a balanced budget, expressing concern over the impact of monetary inflation on exchange rates. Apart from fairly general principles such as the nominality of money, the similarities between Knapp and the Neo-Chartalists diminish as one critically examines Knapp's writings. Therefore, the claim that MMT is based on Knapp should be rejected. |
| Keywords: | Neo-Chartalism, Georg Friedrich Knapp, Modern Monetary Theory (MMT), Real Bills Doctrine, Fiscal Theory of the Price Level |
| JEL: | B31 E42 B50 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:340197 |
| By: | Gleb Kozliakov; Emile A. Marin; Sanjay R. Singh |
| Abstract: | Can idiosyncratic risk explain the equity premium? We revisit this question using a novel measure of imperfect risk sharing, implied by a large class of heterogeneous-agent models, constructed using household-level panel data. We identify a group of households – with relatively high income but low net worth – whose consumption is sufficiently volatile and risky to explain 94% of the observed U.S. Sharpe ratio. In contrast, the consumption dynamics of high net-worth individuals predict a negative Sharpe ratio and so do not constitute the relevant pricing factor, consistent with models featuring wealth motives. |
| Keywords: | uninsurable idiosyncratic risk; heterogeneous agents; wealth dynamics; equity premium |
| JEL: | G12 B52 E21 |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:103059 |
| By: | Langthaler, Margarita; Catalán Lorca, Marcela |
| Abstract: | In recent years, the topic of green transitions has attracted considerable attention. Notably, these transitions are often framed as a skills issue, reflecting perceived gaps in the technical skills required for green technologies. Moreover, skills are frequently presented as central to ensuring that green transitions are socially just. Since the 2010s, international organisations have played a leading role in shaping the green skills debate, with their policy literature exerting significant influence, particularly in the Global South. However, the global debate lacks conceptual clarity. The term 'green skills' encompasses a wide range of meanings. From the perspective of the Global South, additional questions emerge. What do green transitions imply for informal economies and subsistence agriculture? What does it mean, in such contexts, to ensure a just transition? What role can vocational and technical education (VET) systems play and what do they need to meet these expectations? This paper seeks to address part of this gap by analysing green skills publications produced by international organisations, with a particular focus on the Global South. It examines the underlying conceptualisations of green skills and green transitions. |
| Keywords: | green transition, skills issue, vocational education and training, education policy transfer, social dialogue, human development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:oefsew:340187 |
| By: | Valentina Yulita Dyah Utari; Asep Kurniawan; Sylvia Andriyani Kusumandari; Hening Wikan Sawiji; Hartika Arbiyanti; Esha Adnan |
| Keywords: | domestic worker, PRT, care economy, RUU PPRT, Indonesia |
| URL: | https://d.repec.org/n?u=RePEc:agg:wpaper:4540 |
| By: | Heiduk, Felix; Müller, Melanie; Aydın, Yaşar; Kluge, Janis; Scholz, Tobias; Stanzel, Angela; Thimm, Johannes |
| Abstract: | Multipolarity has become a central but, at the same time, highly ambiguous point of reference in debates about the future world order. The term is used descriptively, that is, to describe shifts in the distribution of power; and it is also used normatively, as an aspirational construct for a more just international order. However, as the following comparative analysis of seven countries shows, there is no coherent understanding of the term even in those countries that are pushing for multipolarity. Sharp dividing lines are evident between the United States, which has long understood the construct of multipolarity as being at odds with its strategic interests, and Russia and China, which both associate it with challenging US hegemony. However, while Russia is striving for a disruptive and violent transformation, China is aiming for an evolutionary one. Other states - above all, India and South Africa - hope that multipolarity will provide them with greater foreign-policy room for manoeuvre. And some derive their own reform proposals at the multilateral level from their understanding of the construct. Germany and the EU must rigorously examine the various interpretations and uses of the construct of multipolarity. They should not dismiss the term as irrelevant or inherently anti-Western as it can provide a common frame of reference on international politics. At the same time, its unreflective use carries risks, as the term is highly politicised and associated with what are at times the conflicting goals of a broad range of international actors. Rather than simply participating in conceptual debates, Germany and the EU should take concrete steps towards reforming the international order in policy areas such as trade, health, energy and climate. At the same time, they should regard the call for multipolarity as an indicator of the need for broad reforms of the international system and initiate negotiation processes with other states. To this end, they must first establish their own reference points with regard to the future international order so that they can identify suitable partners and institutions. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swprps:340177 |
| By: | Etienne Fakaba Sissoko (Université des sciences sociales et de gestion de Bamako - USSGB - Université des sciences sociales et de gestion de Bamako, CRAPES MALI - Centre de Recherche et d'Analyses Politiques, Economiques et Sociales du Mali, Faculté des Sciences économiques et de Gestion - USSGB - Université des sciences sociales et de gestion de Bamako) |
| Abstract: | This article re-examines the relationship between substantive democracy and inclusive development in Mali, Burkina Faso, Niger, and Chad. It argues that the Sahelian blockage does not stem from scarcity alone, but from a political configuration marked by militarized budgeting, fiscal opacity, territorial marginalization, and weakened mechanisms of accountability. Using a qualitative comparative strategy and a contrastive dialogue with Botswana, Ghana, Mauritius, and Senegal, the analysis identifies four mechanisms that sustain the vicious circle linking democratic erosion to social underinvestment: crowding-out by security spending, lower spending quality under opacity, peripheral exclusion, and reduced policy learning under civic closure. The article shows that substantive democracy should be treated not as a moral label but as a conditioning mechanism that improves allocative legibility, trust, and the credibility of public action under scarcity. |
| Abstract: | La relation entre démocratie substantielle et développement inclusif au Mali, au Burkina Faso, au Niger et au Tchad révèle une crise qui ne relève pas seulement de la rareté. Elle tient aussi à l'érosion de la reddition de comptes, du pluralisme, de la prévisibilité institutionnelle et de la capacité de l'État à orienter les ressources vers des biens collectifs visibles. À partir d'une comparaison qualitative, cet article identifie quatre mécanismes qui entretiennent le cercle vicieux sahélien : la budgétisation militarisée, l'opacité fiscale, la marginalisation territoriale et la dégradation de l'apprentissage politique de l'État. Le détour comparatif par le Botswana, le Ghana, Maurice et, dans une moindre mesure, le Sénégal montre qu'une démocratie substantielle ne garantit pas mécaniquement l'inclusion, mais qu'elle améliore les conditions de la prévisibilité, de la confiance et de la correction des choix publics. L'analyse conduit à préciser les conditions institutionnelles, fiscales, territoriales et sociales nécessaires à une réversibilité du blocage sahélien. |
| Keywords: | substantive democracy inclusive development political economy Sahel accountability territorial marginalization, substantive democracy, inclusive development, political economy, Sahel, accountability, territorial marginalization |
| Date: | 2026–04–19 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05597696 |
| By: | Mariano Arana (Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política (IIEP UBA–CONICET). Buenos Aires, Argentina.); Camilo Mason (Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política (IIEP UBA–CONICET). Buenos Aires, Argentina.) |
| Abstract: | Este Documento de Trabajo examina un conjunto de artículos periodísticos de Julio H. G. Olivera publicados entre noviembre de 1955 y enero de 1956, en el marco del debate suscitado por el denominado Plan Prebisch tras el golpe militar de septiembre de 1955. El documento señala que estos escritos -relativamente desconocidos en la literatura- constituyen la primera intervención sistemática de Olivera en el debate público de política económica y revelan sus primeras aproximaciones a una teoría no monetaria de la inflación. El análisis muestra que Olivera compartía con Prebisch un diagnóstico estructural de la crisis argentina, aunque divergía en los objetivos de la política de estabilización. |
| Keywords: | Plan Prebisch; Julio H. G. Olivera; Pensamiento económico argentino; Política económica; Economistas argentinos; Peronismo; Inflación estructural |
| JEL: | E65 E31 N16 B22 B25 B31 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ake:iiepdt:2026-117 |
| By: | GOTOH, Reiko; KAMBAYASHI, Ryo |
| Abstract: | This study addresses a fundamental challenge in the empirical application of the Capability Approach: the measurement of the “capability set” as an opportunity set. Unlike standard utility-based measures that focus solely on achieved outcomes, measuring capability requires assessing the welfare of potential activities—including those not chosen (counterfactuals). We propose a novel methodology that bridges normative social choice theory and econometric causal inference. Specifically, we interpret the Average Treatment Effect (ATE) derived from panel data fixed-effects models as capturing marginal counterfactual welfare differences between alternative actions, rather than level comparisons of achieved outcomes. Using a unique panel dataset of elderly individuals in Japan, focusing on “going-out” versus “staying-home” behavior, we evaluate the size of capability sets and the degree of “unfreedom” (the welfare gap between options). Furthermore, we propose and apply several aggregation rules—ranging from Utilitarian to Rawlsian—to construct group-level capability measures. Our empirical results demonstrate that the ranking of social groups varies significantly depending on the normative aggregation rule employed, highlighting the importance of explicitly defining the informational basis of social evaluation. |
| Keywords: | Capability Approach, Causal Inference, Average Treatment Effect, Social Choice Theory, Unfreedom |
| JEL: | I31 D63 C23 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hituec:778 |