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on Heterodox Microeconomics |
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Issue of 2026–01–12
fourteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Nicolò Bellanca |
| Abstract: | Why is sustained, adaptive development so rare despite decades of institutional reform, industrial policy, macroeconomic stabilization and innovation strategies? This paper advances a structural explanation. It defines generative development as a process that is simultaneously endogenous, cumulative, structurally irreversible and transformatively adaptive, and argues that sustaining these four properties requires four irreducible causal functions: Collective Action (A), Production (P), Stabilization (S) and Redefinition of Goals (F). The core claim is that the joint reproduction of these functions through a configuration of functional causal closure provides a necessary structural condition for sustaining development as a self-reinforcing and adaptive historical process. No dyadic or triadic subset of these functions is structurally sufficient to reproduce all four constitutive properties at once. Partial closures may generate growth, learning, institutional reform or strategic direction, but they remain intrinsically fragile and structurally exposed to stagnation, crisis or lock-in. The paper offers a unified structural reinterpretation of institutional, evolutionary, developmental state and mission-oriented approaches as partial theories of distinct development functions. It also derives a typology of development regimes as systematic configurations of partial and full functional closure. A minimal dynamic representation presented in the Online Supplement illustrates the internal consistency of the argument. Overall, the paper reframes development as a problem of causal architecture rather than factor accumulation, with direct implications for development theory, industrial policy, institutional reform, mission-oriented strategies and comparative historical research. |
| Keywords: | Generative development; Structural transformation; Industrial policy; Institutions and development; Mission-oriented policies |
| JEL: | O10 O25 P16 O33 O43 B52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2025_23.rdf |
| By: | P. Rajguru; I. R. Churchill; G. Graham |
| Abstract: | The Peter Principle posits that organizations promoting their best performers risk elevating employees to roles where their competence no longer translates, thereby degrading overall efficiency. We investigate when this dynamic emerges and how to mitigate it using a large-scale agent-based model (ABM) of a five-level hierarchy. Results show the Peter Principle is most pronounced under merit promotion when role requirements change substantially between levels; seniority and random exhibit the weakest Peter effects. Both interventions mitigate performance declines, with merit-with-training particularly effective when skill transfer is limited, and selective demotion restoring agents whose 'true' peak performance is at lower levels. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.21467 |
| By: | Matthieu Mastio (UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT-SMAC - Systèmes Multi-Agents Coopératifs - IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Paul Saves (IRIT-SMAC - Systèmes Multi-Agents Coopératifs - IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Gaudou Benoit (UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT-SMAC - Systèmes Multi-Agents Coopératifs - IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Nicolas Verstaevel (UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT-SMAC - Systèmes Multi-Agents Coopératifs - IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, IRIT - Institut de recherche en informatique de Toulouse - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - TMBI - Toulouse Mind & Brain Institut - UT2J - Université Toulouse - Jean Jaurès - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EPE UT - Université de Toulouse - Comue de Toulouse - Communauté d'universités et établissements de Toulouse) |
| Abstract: | Industrial symbiosis fosters circularity by enabling firms to repurpose residual resources, yet its emergence is constrained by socio-spatial frictions that shape costs, matching opportunities, and market efficiency. Existing models often overlook the interaction between spatial structure, market design, and adaptive firm behavior, limiting our understanding of where and how symbiosis arises. We develop an agent-based model where heterogeneous firms trade byproducts through a spatially embedded double-auction market, with prices and quantities emerging endogenously from local interactions. Leveraging reinforcement learning, firms adapt their bidding strategies to maximize profit while accounting for transport costs, disposal penalties, and resource scarcity. Simulation experiments reveal the economic and spatial conditions under which decentralized exchanges converge toward stable and efficient outcomes. Counterfactual regret analysis shows that sellers' strategies approach a near Nash equilibrium, while sensitivity analysis highlights how spatial structures and market parameters jointly govern circularity. Our model provides a basis for exploring policy interventions that seek to align firm incentives with sustainability goals, and more broadly demonstrates how decentralized coordination can emerge from adaptive agents in spatially constrained markets. |
| Keywords: | Market Analysis, Circular Economy, Industrial Symbiosis, Agent Based Simulation |
| Date: | 2026–05–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05426172 |
| By: | Alejandro Corvalan |
| Abstract: | Economists often define the middle class based on income distribution, yet selecting which segment constitutes the `middle' is essentially arbitrary. This paper proposes a definition of the middle class based solely on the properties of income distribution. It argues that for a collection of unequal societies, the poor and rich extremes of the distribution unambiguously worsen or improve their respective income shares with inequality. In contrast, such an effect is moderated at the center. I define the middle class as the segment of the income distribution whose income shares are insensitive to changes in inequality. This unresponsiveness property allows one to single out, endogenously and with minimal arbitrariness, the location of the middle class. The paper first provides a theoretical argument for the existence of such a group. It then uses detailed percentile data from the World Income Database (WID) to empirically characterize the world middle class: a group skewed toward the upper part of the distribution - comprising much of the affluent population below the very rich - with stable borders over time and across countries. The definition aligns with the prevailing view in political economy of the middle class as as a moderating actor, given their null incentives to engage in distributive conflict. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.23523 |
| By: | Alberto Botta |
| Abstract: | In this paper, we present a Balance-of-Payments (BoP)-constrained center-periphery growth model extended for the inclusion of international finance and the accumulation of external debt. With respect to previous works in this stream of literature, we show how the long-run BoP-constrained growth rate changes endogenously alongside the evolution of periphery’s external position. We describe a complex non-linear system that may feature multiple equilibria with different stability properties. A stable equilibrium characterized by high long-run BoP-constrained growth and low external indebtedness is paired with a saddle-path unstable one in which a more fragile external position associates with lower growth. We also show that periods of (temporary) financial “bonanza”, i.e., surges in foreign capital pouring into the economy, may modify the long-run growth trajectory of the periphery and its overall macro stability. Financial bonanza can boost economic growth in the short term. However, it can also give rise to tougher debt service payments and possibly lead to cases of premature de-industrialization. Despite short-term benefits, the periphery may well get worse off in the long run. If the financial boom is strong and protracted enough, it can even generate radical instability driving the periphery towards default on external debt. In the final part of the paper, we discuss the policy implications of the model, namely the role of capital controls as part of a broader development strategy aimed at taming finance-led instability and boosting structural change in the periphery. |
| Keywords: | External constraint; international capital; financial bonanza; premature de-industrialization |
| JEL: | E12 F43 F62 O11 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2601 |
| By: | Robert P. Gilles; Marialaura Pesce |
| Abstract: | This paper introduces a novel framework for analysing equilibrium in structured production systems incorporating a static social division of labour by distinguishing between consumption goods traded in competitive markets and intermediate goods exchanged through bilateral relationships. We develop the concept of viability -- the requirement that all producers earn positive incomes -- as a foundational equilibrium prerequisite. Our main theoretical contribution establishes that acyclic production systems -- those without circular conversion processes among goods -- are always viable, a condition that implies coherence. We characterise completely viable systems through input restrictions demonstrating that prohibiting consumption goods as inputs for other consumption goods is necessary for ensuring viable prices exist for all consumption good price vectors. The analysis reveals fundamental relationships between production system architectural design and economic sustainability. The introduced framework bridges Leontief-Sraffa production theory with modern network economics while capturing institutional realities of contemporary production systems. This also results in a contribution of the literature on the existence of a positive output price system and the Hawkins-Simon condition. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.24777 |
| By: | Anton Samokish; Valeriy Egorushkin |
| Abstract: | This paper develops a unified framework in which economic dynamics is treated as evolutionary process analogous to those studied in natural sciences, including physics. Using methods from gauge field theory and plasticity, we show that the traditionally elusive influence of the invisible hand in economic markets can be made explicit and mathematically tractable. Derived equations demonstrate that market adaptation proceeds through localized nonlinear waves processes, closely resembling self-induced transparency in electrodynamics. Taken together, the results provide a physically grounded interpretation of the invisible hand as a real, dynamically operating field mechanism governed by choice, competition, and profit. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.15265 |
| By: | Owusu Ansah, Michael; Skevas, Theodoros; Grashuis, Jasper |
| Abstract: | This study examines the temporal effects of mergers and acquisitions (M&A) on the productivity of U.S. grain marketing cooperatives from 2004 to 2020. While prior research has explored the drivers and outcomes of M&A, limited attention has been paid to how the passage of time since an M&A event affects productivity, particularly in terms of total factor productivity (TFP). Using a system GMM model, we explore how M&A age, defined as the number of years since a cooperative’s most recent merger of acquisition, influences TFP. M&A age serves as a temporal measure of post-M&A experience, reflecting the integration period during which cooperatives absorb operational, managerial, and cultural changes. The results show that M&A age does not significantly impact productivity, suggesting that the integration and adjustment process may offset productivity gains in the short term. Secondary findings reveal that exporting cooperatives tend to have higher productivity, while those exiting the sector experience declines. These results highlight the need for cooperatives to develop long-term strategies to manage post M&A integration. This paper contributes to a deeper understanding of the temporal dynamics of M&A in agricultural cooperatives and offers insights for strategic decision-making within the sector. |
| Keywords: | Productivity Analysis, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361178 |
| By: | Dimitrios Bachtis; David S. Berman; Arabella Schelpe |
| Abstract: | We use a $\phi^{4}$ quantum field theory with inhomogeneous couplings and explicit symmetry-breaking to model an ensemble of financial time series from the S$\&$P 500 index. The continuum nature of the $\phi^4$ theory avoids the inaccuracies that occur in Ising-based models which require a discretization of the time series. We demonstrate this using the example of the 2008 global financial crisis. The $\phi^{4}$ quantum field theory is expressive enough to reproduce the higher-order statistics such as the market kurtosis, which can serve as an indicator of possible market shocks. Accurate reproduction of high kurtosis is absent in binarized models. Therefore Ising models, despite being widely employed in econophysics, are incapable of fully representing empirical financial data, a limitation not present in the generalization of the $\phi^{4}$ scalar field theory. We then investigate the scaling properties of the $\phi^{4}$ machine learning algorithm and extract exponents which govern the behavior of the learned couplings (or weights and biases in ML language) in relation to the number of stocks in the model. Finally, we use our model to forecast the price changes of the AAPL, MSFT, and NVDA stocks. We conclude by discussing how the $\phi^{4}$ scalar field theory could be used to build investment strategies and the possible intuitions that the QFT operations of dimensional compactification and renormalization can provide for financial modelling. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.17225 |
| By: | Laurent Busca (UM - Université de Montpellier, MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier, MRM-MKG - Montpellier Research in Management - Marketing - MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier) |
| Abstract: | The literature on market system dynamics often conceptualizes the coexistence of multiple discourses within a market as problematic, typically resulting in either conflict or the dominance of one discourse over others (through mechanisms such as invisibilization or co-optation). This study challenges that assumption by positing that coexistence is not inherently problematic. Drawing on the anthropological concept of the fetish, it analyzes these dynamics. We demonstrate that the fetishization of a technology enables the attribution of specific qualities to it while obscuring its creation process. Consequently, this fetishized technology engenders a division of roles that reconfigures the surrounding social space, shaped by the ambivalences generated through the fetishization process. This research contributes to the literature on market system dynamics by showing how the fetishization of technologies can reconfigure high-technology markets and by proposing that ambivalence may serve as a mechanism for stabilizing social roles. |
| Abstract: | La littérature sur les market system dynamics tend à concevoir la coexistence de plusieurs discours au sein d'un marché comme un problème, menant soit à un affrontement, soit à la domination d'un discours sur les autres (via invisibilisation ou cooptation). Cette recherche part du principe que la coexistence n'est pas forcément problématique, et mobilise le concept anthropologique de fétiche pour analyser ces dynamiques. Nous montrons que la fétichisation d'une technologie permet de lui attribuer des qualités en obscurcissant son procédé de création. Dès lors, cette technologie fétichisée produit une séparation des rôles qui reconfigure l'espace social autour d'elle, en fonction des ambivalences produites par le processus de fétichisation. Nous contribuons ainsi à la littérature sur les market system dynamics en montrant comment la fétichisation des technologies permet de reconfigurer les marchés de haute technologie, et en proposant de considérer les ambivalences comme un mécanisme de stabilisation des rôles sociaux. |
| Keywords: | ambivalence, technology, anthropology, market dynamics, Ambivalence, Technologie, Anthropologie, Dynamiques de marché, Fétiche |
| Date: | 2025–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05381850 |
| By: | Amado, Lindorf |
| Abstract: | Standard economic models often treat money as a social construct independent of physical laws. This paper proposes a unified thermodynamic theory of value, positing that monetary systems are information protocols evolved to maximize entropy production in dissipative structures (civilizations). By analyzing 10, 000 years of economic history—from the Neolithic era to the Digital Age—we demonstrate a strict linear relationship (R2 = 0:9934) between the Real Cost of Energy (E) and the Granularity of Money (G). We derive the Equation of Value, G / E, where the value of the accounting unit scales directly with the energy cost of labor. This framework resolves historical anomalies such as the collapse of the Roman Denarius and the failure of the 20th-century Gold Standard, interpreting them not as policy errors, but as thermodynamic phase transitions. The theory predicts that the current decline in the marginal cost of energy (via AI and renewables) necessitates a transition to a monetary substrate with near-infinite divisibility and zero friction. |
| Keywords: | Thermodynamics, Monetary Theory, Entropy, Granularity, Econophysics, AI, Gold Standard, Collapse, Deterministic |
| JEL: | B52 C10 E42 N10 O33 |
| Date: | 2025–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127378 |
| By: | Mathai, Manu V. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:gluwps:334527 |
| By: | Watt, Edward |
| Abstract: | The scale and scope of disadvantage in remote indigenous communities means that ethical dilemmas are day-to-day realities for practitioners. Persistent hardship, disadvantage and discrimination - amid omnipresent policy initiatives aimed at combating them - exacerbate these dilemmas and are a perennial source of workplace tension. Frequently these tensions escalate to the point of unworkability among those tasked with collaborating in the interests of the community. Under the guise of accountability or advocacy of justice, and backed by the (perceived) power of the state, conflict among practitioners often leads to factionalism, standoffs and can escalate to bullying, harassment, violence and lawsuits. This article proposes a simple heuristic for ethical deliberation among those working in remote Indigenous community governance. Drawing on deontological and consequentialist ethics, as well as the policy literature, it provides a framework to structure conversations on ethics in decision-making. |
| Date: | 2025–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:rj84b_v1 |
| By: | Haibo Wang |
| Abstract: | The growing economic influence of the BRICS nations requires risk models that capture complex, long-term dynamics. This paper introduces the Bank Risk Interlinkage with Dynamic Graph and Event Simulations (BRIDGES) framework, which analyzes systemic risk based on the level of information complexity (zero-order, first-order, and second-order). BRIDGES utilizes the Dynamic Time Warping (DTW) distance to construct a dynamic network for 551 BRICS banks based on their strategic similarity, using zero-order information such as annual balance sheet data from 2008 to 2024. It then employs first-order information, including trends in risk ratios, to detect shifts in banks' behavior. A Temporal Graph Neural Network (TGNN), as the core of BRIDGES, is deployed to learn network evolutions and detect second-order information, such as anomalous changes in the structural relationships of the bank network. To measure the impact of anomalous changes on network stability, BRIDGES performs Agent-Based Model (ABM) simulations to assess the banking system's resilience to internal financial failure and external geopolitical shocks at the individual country level and across BRICS nations. Simulation results show that the failure of the largest institutions causes more systemic damage than the failure of the financially vulnerable or dynamically anomalous ones, driven by powerful panic effects. Compared to this "too big to fail" scenario, a geopolitical shock with correlated country-wide propagation causes more destructive systemic damage, leading to a near-total systemic collapse. It suggests that the primary threats to BRICS financial stability are second-order panic and large-scale geopolitical shocks, which traditional risk analysis models might not detect. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.20515 |