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on Heterodox Microeconomics |
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Issue of 2026–03–16
sixteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Srinivas Raghavendra (University of Galway, Ireland) |
| Abstract: | This paper examines how the financialization of advanced capitalist economies in the 1990s relates to the rise of artificial intelligence (AI) as the dominant technological framework in the 21st century. Using insights from political economy and Kaleckian theory, it suggests that AI is not a break from previous trends but a continuation and intensification of the computational rationality developed during the late 20th century's shift toward finance-led capitalism. The study highlights three structural limits that AI introduces to capitalist reproduction: the zero-slack labor constraint, the full-employment constraint, and resource limitations. These limits and their interactions threaten to destabilize the class relationship between capital and labor, the territorial basis of the state, and the legitimacy of democratic capitalism. The paper proposes that the emerging oligarchic state faces a legitimacy crisis that might be alleviated by universal basic income (UBI), which could serve as a political tool to maintain democratic support amid automation and inequality. It concludes by reflecting on how capitalism, much like an adaptive biological system, sustains itself through ongoing structural transformations, reshaping its institutions and practices to enable it to deflect existential threats while preserving its core logic of private appropriation. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ico:wpaper:178 |
| By: | Engelbert Stockhammer |
| Abstract: | Blecker and Setterfield’s outstanding Heterodox Macroeconomics book covers, as its subtitle suggests, a lot of ground on “models of demand, distribution and growth”, but issues of finance are largely absent. This is symptomatic of the state of heterodox macroeconomics, which has a developed common framework for the analysis of distribution and growth, but not for finance. The paper takes this as a starting point for some reflections on the role of finance in post-Keynesian (PK) and Marxist approaches. In PKE, financial factors play a constitutive role and determine the equilibrium values of key macroeconomic variables. Hyman Minsky’s work puts finance at the heart of PK business cycle theory. Marxist macroeconomics often treats finance as subordinate to real (productive) processes or not at all. We consider three episodes of how PK-Marxist debates played out: the Woytinsky-Hilferding debate of the 1930s, the debate on heterodox explanations of business cycles and the debate on financialisation. In these, the relation between PK and Marxism was confrontational, largely non-interactive and productive, respectively. The paper concludes that heterodox macroeconomics lacks an effective framework for a productive articulation of the different views on the role of finance. |
| Keywords: | finance, macroeconomics, post-Keynesian economics, Marxian economics |
| JEL: | B50 E60 G01 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2607 |
| By: | Martinez-Felip, Daniel; Schilizzi, Steven G.M.; Nguyen, Chi; Pannell, David |
| Abstract: | The resolution of collective-action problems often depends on social norms and pressure to conform to group behaviour, yet individuals typically differ in how strongly they perceive and internalise these norms. While existing models of norm change and social tipping often assume homogeneous and static normative expectations, recent evidence suggests substantial heterogeneity in the perceived norm strength. We study how different compositions of such heterogeneity within a community shape the emergence and internalisation of cooperative behaviour. We develop a spatial agent-based model in which agents follow a conditional-cooperation norm but differ in norm strength, characterised as either tight or loose. Agents interact locally and update their cooperation thresholds endogenously through a combination of payoff-driven learning and social learning from experiencing group behaviour. Our results show that introducing a moderate share of loose-norm individuals into otherwise tight-dominated communities can facilitate the emergence of cooperative tipping points by enabling cooperation to seed and spread locally, even when agents place zero weight on social-relative-to-financial learning. However, whether cooperation becomes internalised and persists depends critically on the relative weight given to social and financial learning. A higher weight on social learning amplifies local behavioural feedbacks, sharpens tipping-point dynamics, and allows agents with tight social norms to internalise cooperation such that it can be sustained with fewer cooperating group members. Once cooperation spreads, conformity pressure stabilises cooperative behaviour among loose-social-norm agents. Taken together, our findings highlight the importance of community composition and norm-strength heterogeneity for collective-action dynamics, and show how heterogeneity in perceived norm strength can generate abrupt and persistent transitions in cooperative behaviour. |
| Date: | 2026–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:4tfvj_v1 |
| By: | Rodríguez Weber, Javier |
| Abstract: | This paper develops a historical hypothesis on the dynamics of income inequality in core capitalist societies, expanding Branko Milanovic’s Kuznets Waves framework. While Milanovic argued that inequality follows long-term cyclical patterns driven by technological revolutions and their political consequences, this study extends his theory by emphasizing the link between inequality and systemic instability at both extremes—when inequality is either too high or too low. It contends that capitalism becomes unstable not only when excessive inequality erodes political legitimacy and financial balance, but also when very low inequality undermines profitability and capital accumulation. In both cases, the resulting instability precipitates crises that compel institutional transformation. Reforms reinforcing the status quo tend to fail, as inequality cannot rise or fall indefinitely; only structural change can restore stability and initiate a new cycle. Through a historical examination of major turning points—from the Industrial Revolution and the Great Depression to postwar reconstruction and the neoliberal turn—the paper illustrates how inequality trajectories emerge from critical junctures of crisis and reform. It concludes that the current phase of high inequality may be nearing its upper limit, potentially heralding another institutional realignment—though not necessarily one of greater equality or stability. |
| Keywords: | Inequality, Political Instability, Economic crisis, Kuznets waves, Capitalism |
| JEL: | D31 D33 E39 N10 P16 |
| Date: | 2025–11–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127306 |
| By: | Dingxin Tang (UB - Université de Bordeaux); Maider Saint-Jean (UB - Université de Bordeaux); Guido Sonnemann (UB - Université de Bordeaux) |
| Abstract: | To assess sustainable development, the Life Cycle Sustainability Assessment (LCSA) framework integrates LCA, LCC, and SLCA. However, LCC (LCSA's economic pillar) fails to address economic sustainability's complexity. The Ecological Economics approach integrates ecological principles with economic analysis, recognizing that the economy is a subsystem of the larger ecological system. Thus, links between LCSA economic indicators and ecological economics progress measures, with indicator compatibility, need exploration, in order to have a clear economic impact pathway in supporting public decision-makings. |
| Keywords: | Life Cycle Sustainability Assessment, Ecological economics, Impact pathway |
| Date: | 2025–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05525565 |
| By: | Domenico Dentoni (MBS - MBS School of Business); Marija Roglic (MBS - MBS School of Business) |
| Abstract: | This chapter clarifies the meaning and role of systems mapping in supporting social innovators as they confront complex societal challenges. While recognized for its capacity to visually represent intricate relationships between interconnected elements, systems mapping remains underutilized in management and organization theory and practice. Moreover, ambiguity in the definitions and uses of systems mapping endure also in other scientific fields – such as ecological economics, innovation studies, and sustainability science. Hence, this chapter redefined and highlights the multiple roles of systems mapping in strategizing for social innovation. We distinguish between the meanings of systems mapping as tool, event and process, and between its roles for making sense of complex issues, for deliberating where and how to address them, and for strategizing novel partnerships that address them. From the literature on participatory social innovation processes and the nexus with visual approaches of representing systems, we therefore shed light on the affordances and limitations of systems mapping in fostering multiple pathways of social-ecological transformation across scales. |
| Date: | 2025–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05525573 |
| By: | Yihang Luo; Robert S. MacKay; Nick Chater |
| Abstract: | The theory of thermal macroeconomics (TM) analyses economic phenomena within the mathematical framework of classical thermodynamics, using a set of axioms that apply to the purely macroscopic aspects of an economy [CM]. The theory shows that the possible macro-behaviours are governed by an entropy function. In simple idealised cases, the entropy function can be calculated from the rules governing the interactions of individual agents. But where this is not possible, TM predicts that the entropy can nonetheless be measured empirically through an economic analogue of calorimetry in physics. We show using computer simulations the in-principle feasibility of this approach: an entropy function can successfully be measured for a range of simulated economies that we tested. In cases where entropy can be calculated analytically from microfoundational assumptions, the measured entropy agrees well. In more complex cases, where microfoundational analysis is infeasible, our method of measuring entropy still applies and is validated by demonstrations that entropy is a state function of an economic system, i.e., exhibits path independence. This appears to hold even for some systems to which we don't have a proof that the Axioms of TM apply. Furthermore, in all cases tested, entropy is concave, as predicted by TM. As shown in [CM], once the entropy function is established for a simulated exchange economy, it is possible to derive prices, the value of money and various other quantities, and make predictions about the effects of putting two or more economies in contact. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.10155 |
| By: | Fabricio Jose Missio (Cedeplar/UFMG) |
| Abstract: | Economic inequality is often explained by redistributive policies, tax systems, or labor market dynamics. This article argues that a significant share of inequality is determined before redistribution, within the productive structure itself. Different patterns of specialization and economic complexity are associated with distinct distributive profiles, as they shape how income, learning, and ownership are organized along production chains. Concentrated structures tend to generate restricted gains and limited domestic diffusion, whereas diversified and dense productive structures increase the potential for broader income distribution and opportunities. To explore this connection empirically, the article employs indicators that associate products and export baskets with typical distributive patterns, particularly the Product Gini Index (PGI) and the XGini. The central argument is that structural transformation affects not only average income, but also who captures the gains from development. |
| Keywords: | Productive Structure; Economic Inequality; Structural Change; Economic Complexity; Economic Development |
| JEL: | O11 O15 O14 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td697 |
| By: | Kabeer, Naila |
| Abstract: | The structures of patriarchy are characterized by considerable variety across the world, but they have one feature in common which appears with monotonous regularity across a range of different contexts: an asymmetrical gender division of labour which assigns primary responsibility for unpaid care and domestic work to women and girls within the household while giving men privileged access to material resources and economic opportunities. This asymmetry, and the form that it takes in different contexts, is foundational to the varying patterns of gender injustice we see across the world. This paper focuses on how it shapes various forms of gender disadvantage in the economic domain and its implications for gendered risks of poverty and illbeing. |
| Keywords: | unpaid and domestic work; labour markets; vertical and horizontal segregation |
| JEL: | J70 D10 Z10 |
| Date: | 2026–03–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137181 |
| By: | Devi Vijay (IIM Calcutta); Héloïse Berkowitz (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, AMU - Aix Marseille Université); Marianna Fotaki (WBS - Warwick Business School - University of Warwick [Coventry]) |
| Abstract: | This special issue invites conversations that bridge organization studies with marketing theory to examine how imaginaries that scaffold and inspire organizational processes shape and are shaped by livable and unlivable worlds. Imaginaries affect how organizations, markets, and societies are organized. Imaginaries offer "collective projections of a desirable and feasible future" (Benjamin, 2024, p. vii; Taylor, 2004). They are not merely abstract representations, but shared frameworks that frame the ways people live, work, and organize. In the current conjuncture, we witness a ‘crisis of imagination1' (Haiven, 2014). Or, what Rivera Cusicanqui (2020) called a ‘colonization of the imaginary.' Even as we encounter manifold political, social, economic, and ecological crises that render this world unlivable, our responses to these remain enclosed within dominant neoliberal imaginaries. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05528369 |
| By: | Rapetti, Martin |
| Abstract: | The article presents a simple three-sector macroeconomic model that incorporates key structural features common to many Latin American economies. The model allows for the formal identification of three benchmark levels of the real exchange rate (RER). The macroeconomic equilibrium RER is the level consistent with the simultaneous achievement of internal and external balance (i.e., full employment and a sustainable balance of payments). The social equilibrium RER corresponds to a state in which workers, at full employment, obtain a real wage consistent with their income aspirations. The developmental RER is defined as a benchmark level that ensures the labor-absorbing tradable sector earns a risk-adjusted rate of profit comparable to that in developed countries, thereby fostering investment. The three-RER-levels framework provides a unified analytical setting to organize and compare alternative theories developed in Latin America —including unbalanced productive structures, distributive conflict, structural inflation, macroeconomic populism, and stop-and-go cycles— and to clarify how different configurations of the benchmark RER levels underpin competing diagnoses and development strategies in the region. |
| Keywords: | real exchange rate, Latin America, equilibrium, conflict, development. |
| JEL: | E12 F41 N16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127649 |
| By: | Di Carlo, Donato; Hadziabdic, Sinisa; Baccaro, Lucio |
| Abstract: | This article demonstrates the applicability of the growth model framework at the regional level. Focusing on Italy as a paradigmatic case of persistent regional inequalities, we test two theories of center-periphery relations between Northern and Southern Italy: the dependency theory and the subsidization theory. Using EUREGIO regional input-output tables between 2000 and 2007, we decompose the GDP and GDP growth of Italian regions into final demand components and economic sectors. The results highlight the importance of distinguishing between static and dynamic analyses. The former reveal a greater reliance of the economy of the Southern regions on the public sector, corroborating the subsidization perspective. By contrast, the latter indicate that in 2000–2007 Southern Italy’s GDP growth was driven by low value-added exports to Northern regions, buttressing the Gramscian dependency argument. We link changes in regional growth models to the impact of EU fiscal policy rules. |
| Keywords: | regional inequality; Europe; dependency; public expenditures; economic growth |
| JEL: | P51 R12 R15 |
| Date: | 2026–03–08 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137567 |
| By: | Martin Kolmar |
| Abstract: | Revealed preference theory (RPT) and its behavioral extension (BRPT) underpin an important strand of welfare economics. Their normative appeal rests on the claim that welfare can be inferred from observed behavior without substantive assumptions about what agents should value - a property I call value neutrality. This paper argues that such neutrality is structurally impossible. I develop a framework - the triangulation problem - identifying five dimensions along which inference from behavior to welfare is underdetermined: the partitioning of the alternative space, the preference domain, the choice rule, the social technology, and the phenomenological mapping from preferences to experience. A sixth problem - the agent's lack of experiential acquaintance with novel alternatives - compounds the underdeterminacy. Resolving these dimensions requires substantive commitments about value rationality - about what agents ought to care about and what counts for welfare. No specification of (B)RPT is both determinate enough to yield welfare rankings and neutral with respect to value rationality. I show that this impossibility entails a collapse thesis: (B)RPT understands itself as a subjectivist theory of well-being, but every operational specification embeds objectivist commitments - attitude-independent claims about what is basically good for the agent - in its auxiliary assumptions. In normative use, (B)RPT is a de-facto objectivist theory that presents itself in subjectivist form, concealing commitments that require philosophical justification behind an appearance of empirical neutrality. |
| Keywords: | revealed preference theory, (behavioral) welfare economics, value rationality, underdeterminacy, normative economics, subjectivism, objectivism, well-being |
| JEL: | B41 D01 D60 D63 I31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12519 |
| By: | von Haslingen, Henrik |
| Abstract: | This paper interprets the division of labor through the temporal lens of the market process: specialization fundamentally reorganizes time allocation between necessity and discretion, not merely output per unit of time. Productivity gains manifest through three sequential effects - income, diversification, and displacement. As markets mature and diversification exhausts, displacement dominates: organizational improvements reduce the time required per unit of output, liberating discretionary time. The relation TS + TC ≡ O(S) formalizes how discretionary time (TC) and Time for necessities (TS) and organization of specialization are two sides of the same coin, with TC = TS × M where M is the multiplying effect of cooperation and exchange. Freed discretionary time enables Productivity-Yielding Demand: wants requiring discretionary time as input that cannot be known ex ante because they depend on temporal conditions not yet realized. This represents genuine ignorance about future possibilities. Alert entrepreneurs discover profit opportunities in discretionary time, driving further specialization that increases M and liberates more time—an autocatalytic process of spontaneous order. The mechanism reveals why the market process cannot equilibrate. Coordination success alters the temporal structure of action, enabling previously impossible wants. Entrepreneurial responses disrupt existing coordination patterns. Economic change is endogenous: specialization creates discretionary time, which enables unforeseen demand, which drives further specialization. The very process of coordinating involves discoordination. |
| Keywords: | Time Allocation, Division of Labor, Spontaneous Order, Endogenous Growth, Austrian Economics |
| JEL: | B53 D23 D83 J22 O10 O40 |
| Date: | 2026–01–27 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127873 |
| By: | Gabriel Santos Carneiro (IUSS - Istituto Universitario di Studi Superiori, AFD - Agence française de développement); Guilherme Magacho (IUSS - Istituto Universitario di Studi Superiori); Etienne Espagne (AFD - Agence française de développement) |
| Keywords: | Planetary boundaries, Global trade, Footprint assessment, Environmental input-output, Multi-regional input-output |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05521266 |
| By: | Fabricio Jose Missio (Cedeplar/UFMG) |
| Abstract: | If productive structure matters for development, how can it be captured empirically? This article discusses the main indicators used to measure structural transformation and productive capacity, showing that different metrics reveal complementary dimensions of the development process. Starting from traditional measures—such as sectoral shares, export composition, and technological intensity, the analysis advances toward more sophisticated indicators of productive diversification, intersectoral linkages, and export sophistication. The article concludes by presenting the concept of economic complexity as an empirical synthesis of a country’s capacity to internalize technical progress and sustain cumulative learning. The central argument is that development cannot be assessed solely through growth or income per capita, but requires examining the density, diversity, and sophistication of the productive structure. |
| Keywords: | Productive Structure; Structural Change; Economic Complexity; Productive Diversification; Economic Development |
| JEL: | O11 O14 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td696 |