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on Heterodox Microeconomics |
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Issue of 2025–05–12
fourteen papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Davis (Department of Economics Marquette University); (Department of Economics Marquette University) |
| Abstract: | Hans-Michael Trautwein’s presidential address to the European Society raised provocative questions regarding the nature of current economics that should concern not just historians of economics but economists as well (Trautwein, 2017). Are the processes driving current research in economics creating a greater and greater specialization in subjects and economic thinking that is fragmenting and disunifying the field? Here I discuss Trautwein’s question and his answer to it particularly as bear on the future status and responsibilities of the history of economics as a field within economics. First, I give an account of what is involved in research specialization in science and economics. Second, I place increasing specialization in the subjects investigated in economics in an historical context, specifically, the postwar WWII history of the field. Third, I discuss Trautwein’s recommendations regarding a possible special, future role for the field of history of economics. Last, I offer praise for Trautwein for his perceptiveness and leadership as both an economist and historian of economics, and frame this in terms of what his insights can mean for thinking about the state of pluralism in economics. |
| Keywords: | Trautwein, history economics, specialization |
| JEL: | B20 B31 B41 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2025-01 |
| By: | Vinicius Curti Cicero (Department of Global Commerce, Denison University, USA); Daniele Tavani (Department of Economics, Colorado State University) |
| Abstract: | This paper addresses the factors driving economic stagnation and inequality in the US over recent decades. We study a demand-driven model with joint adjustment of the functional distribution and capacity utilization in the short run, and explore the dynamics of wealth accumulation and labor productivity growth in the long run. Our analysis formally explains several stylized facts observed in the US economy in the neoliberal period: the decline in labor share of income, the increase in the top 1% wealth share, the slowdown in labor productivity growth, and the reduction in the income-capital ratio. Institutional changes that weakened workers’ bargaining power or strengthened firms’ market power have reduced the labor share of income. While these changes may have initially stimulated short-term economic activity and accumulation, their long-term effects are concerning. In particular, a lower labor share negatively impacts labor productivity growth and, in turn, slows down the growth rate of the economy in the long run. To achieve balanced growth, the rate of capacity utilization must eventually decrease. Importantly, our model’s long run boils down to a simple 2D dynamical system in the capitalist wealth share and the labor share of income. Our findings demonstrate that an institutionally-driven decline in the labor share exacerbates wealth inequality and ultimately depresses demand in the long run; and that taxation of capital gains can lower both wealth and income inequality. These results point to the importance of policies counterbalancing the labor-crushing developments of the past decades. |
| Keywords: | Secular stagnation, income shares, wealth inequality, aggregate demand |
| JEL: | D31 D33 E12 E21 E25 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2506 |
| By: | Borsos, András (Magyar Nemzeti Bank, Complexity Science Hub Vienna and Institute for New Economic Thinking at the Oxford Martin SchoolMagyar Nemzeti Bank, Complexity Science Hub Vienna and Institute for New Economic Thinking at the Oxford Martin School); Carro, Adrian (Banco de España and Institute for New Economic Thinking at the Oxford Martin School); Glielmo, Aldo (Banca d’Italia); Hinterschweiger, Marc (Bank of England); Kaszowska-Mojsa, Jagoda (Narodowy Bank Polski, Institute for New Economic Thinking at the Oxford Martin School and Institute of Economics, Polish Academy of Sciences); Uluc, Arzu (Bank of England) |
| Abstract: | Over the past decade, agent-based models (ABMs) have been increasingly employed as analytical tools within economic policy institutions. This paper documents this trend by surveying the ABM-relevant research and policy outputs of central banks and other related economic policy institutions. We classify these studies and reports into three main categories: (i) applied research connected to the mandates of central banks, (ii) technical and methodological research supporting the advancement of ABMs; and (iii) examples of the integration of ABMs into policy work. Our findings indicate that ABMs have emerged as effective complementary tools for central banks in carrying out their responsibilities, especially after the extension of their mandates following the global financial crisis of 2007–09. While acknowledging that room for improvement remains, we argue that integrating ABMs into the analytical frameworks of central banks can support more effective policy responses to both existing and emerging economic challenges, including financial innovation and climate change. |
| Keywords: | Agent-based models; household analysis; financial institutions; central bank policies; monetary policy; prudential policies |
| JEL: | C63 E37 E58 |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:1122 |
| By: | Takahashi, Shinichi |
| Abstract: | This paper proposes a conceptual framework called the “Empathy-Based Economy (Kindness Capitalism)” and the “Compassionate Local Network” as a response to the structural limitations of contemporary capitalism. The current economic system, driven by a logic of competition and accumulation, has led to widening inequality, environmental degradation, and increasing psychological distress. This study explores the potential for a new institutional paradigm in which empathy, rather than competition, forms the core of economic value. At the center of this model is the idea of a “Compassion Token”—a system that records and visualizes acts of kindness and mutual aid as a unit of social and economic value. The proposed structure envisions a stepwise transition: beginning with small-scale social experiments on platforms like X (formerly Twitter), expanding into local community networks, and ultimately evolving into a sustainable civilization model that no longer relies on traditional state systems or currency-based exchange. This paper is not intended as a finalized theory built upon disciplinary expertise, but rather as a civic-level proposal arising from personal reflection and lived experience. The author acknowledges the need for rigorous academic analysis and welcomes interdisciplinary engagement and future research to critically examine and develop the ideas presented. It is hoped that this work serves as a starting point for rethinking the foundations of economy and society. |
| Date: | 2025–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:eg2yq_v1 |
| By: | Nelli, Linnea (Università Cattolica del Sacro Cuore); Virgillito, Maria Enrica (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | The aim of this paper is to understand whether what has been labelled as “twin transition”, at first as a policy flagship, endogenously emerges as a new technological trajectory stemming by the convergence of the green and digital technologies. Embracing an evolutionary approach to technology, we first identify the set of relevant technologies defined as “green”, analyse their evolution in terms of dominant blocks within the green technologies and concurrences with digital technologies, drawing on 560, 720 granted patents by the US Patent Office from 1976 to 2024. Three dominant blocks emerge as relevant in defining the direction of innovative efforts, namely energy, transport and production processes. We assess the technological concentration of the dominant blocks and construct counterfactual scenarios. We hardly find evidence of patterns of actual endogenous convergence of green and digital technologies in the period under analysis. On the whole, for the time being, the “twin transition” appears to be just a policy flagship, rather than an actual endogenous technological trajectory driving structural change. |
| Keywords: | technological trajectories, policy flagship, twin transition |
| JEL: | O33 Q55 Q58 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17779 |
| By: | Mario R. Pinheiro; Mario J. Pinheiro |
| Abstract: | The proposed framework introduces a novel multidimensional representation of money using tensor analysis, enabling a more granular examination of economic interactions and capital flow. By treating money as a multidimensional entity, this approach allows for detailed tracking and modeling of sectoral, temporal, and agent-based dynamics. This enhanced perspective facilitates the design of adaptive economic policies that can effectively respond to evolving macroeconomic conditions, ensuring resilience and inclusivity in financial systems. Furthermore, the tensor-based modeling framework bridges traditional economic analyses with advanced computational techniques, offering a robust foundation for algorithmic governance and data-driven decision-making in complex economies. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.06286 |
| By: | Alon Goldrat (UAM - Uniwersytet im. Adama Mickiewicza w Poznaniu = Adam Mickiewicz University in Poznań); Ariel Fuchs (6th Granados St., 90885 Jerusalem - Gaia College, Department of Management) |
| Abstract: | This paper advances a novel theoretical framework synthesizing empirical data with mathematical modeling to elucidate the multidimensional dynamics of social movement trajectories within digital spheres. Moving beyond reductive analytic approaches that privilege immediate virality metrics, our integrated model explicitly incorporates the historical-cultural substrate-the "memetic past"-upon which contemporary social media movements necessarily emerge. Through differential equations derived from Fluid Reality Theory, we formalize the interrelationships between cultural resonance, network topology, and boundary permeability to predict three critical parameters: the probability of a movement becoming a center of digital attraction, its maximum influence amplitude, and its temporal persistence. Computational validation against empirical data from recent social movements demonstrates that the inclusion of cultural-historical foundations (E_h) significantly enhances predictive accuracy, accounting for approximately 42% of environmental input in movement propagation. This research bridges persistent epistemological divides between sociological theories of collective action and computational approaches by reconceptualizing social movements emerging from dynamic boundary processes mediating between established cultural narratives and emergent digital practices. The resulting theoretical synthesis offers explanatory power and practical utility for scholars, activists, and policymakers navigating the increasingly complex landscape of digital socialization. |
| Keywords: | Fluid Reality Theory, Social Movement Dynamics, Cultural Foundations, Mathematical Modeling, Social Media Influence, Digital Mobilization, Network Topology, Virality Metrics, Boundary Permeability, Cultural Resonance, Memetic Diffusion, Phase Transitions, Amplitude Prediction, Temporal Persistence, Quasi-Organic Memetics, Interdisciplinary Synthesis, Social Influence Spectrum, Epidemiological Modeling, Hawkes Processes, Narrative Alignment |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05019965 |
| By: | Attar, Shoaib; Kodali, Chaitrathejasvi |
| Abstract: | In this study, we explore the dynamics of financial markets by adapting the Ising model—a cornerstone of statistical physics—to simulate market crashes. By representing individual market participants as spins on a lattice, our model captures local interactions that collectively give rise to emergent phenomena analogous to phase transitions observed in magnetic systems. We investigate how varying interaction strengths, external influences, and system “temperature” affect the stability of market conditions, particularly in the vicinity of critical thresholds. Through extensive simulations, our findings reveal that minor perturbations in local agent behavior can trigger cascading effects, ultimately precipitating market crashes. These results not only demonstrate the potential of physics-inspired models to mimic complex market dynamics but also provide insights into the predictive power of critical phenomena in anticipating systemic financial instabilities. The implications of this work extend to both the theoretical understanding of market behavior and the development of more robust risk management strategies. |
| Date: | 2025–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:e28mq_v1 |
| By: | Krebs, Tom (University of Mannheim); Weber, Isabella (University of Massachusetts Amherst) |
| Abstract: | The structural theory of green transformation acknowledges the complexity of the transformation process and suggests a state-led approach with green industrial policy at its core. In contrast, the market-fundamentalist approach to the transformation problem relies on carbon pricing and the assumption of smooth adjustment to rising market prices. We argue that the recent energy crisis in Germany provides a test of market fundamentalism. We show that the behavior of key macroeconomic variables contradicts the market-fundamentalist theory of green transformation. We also detail how mainstream economists and the policy establishment held on to their belief in self-regulating markets despite the empirical failure of market fundamentalism, which led to policy mistakes with large economic and political costs. Policy making based on market fundamentalism caused substantial damage to Germany’s economy and helped the far-right Alternative for Germany (AfD) double its political support. |
| Keywords: | inflation, energy crisis, market fundamentalism, green industrial policy, green transformation, fiscal austerity, price controls. |
| JEL: | E12 E32 E64 L50 L60 Q43 Q48 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17834 |
| By: | Peter Skott; Adam Aboobaker |
| Abstract: | Like the functional distribution of income, wage inequality is subject to fairly regular cyclical fluctuations. In this paper, we (i) analyze sources of these fluctuations, (ii) present models of endogenous cycles that in- clude heterogeneous labor and wage inequality, (iii) show that these mod- els generate patterns of both wage inequality and the functional income distribution that are in line with the evidence, and (iv) caution against any extrapolation of cyclical patterns to long-term trends and beliefs in expansionary aggregate demand policy as the key instrument to promote greater economic equality. |
| Keywords: | Wage inequality, Goodwin cycles, functional distribution, aggregate demand policy |
| JEL: | D31 D33 E32 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2512 |
| By: | Marc Tabani (CREDO - Centre de Recherche et de Documentation sur l'Océanie - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Critical essays by Joel Robbins have regularly taken aim at a certain anthropological culture that is too oriented towards "continuity thinking" (2007), in the wake of a discipline that in its early days was the perfect embodiment of a "science of continuity" (ibid.). Anthropologists were trained to be uncomfortable with the study of radical cultural change and rapid, drastic social transformation. Even today, Robbins adds, few anthropologists are capable of laying the foundations for an "anthropology of revolution" (ibid.: 10). While this observation may seem debatable for the contemporary period, epistemic conservatism has long remained a feature of political anthropology of the Pacific. The absence of anthropological reflection on the social and cultural implications of nation-building policies in this part of the world until the 1980s was characteristic of the perpetuation of models that privileged the analysis of cultural continuities. A case representative of his era illustrates well the weight of conservatism that characterized Pacific anthropology until recently. When the first wave of decolonization in the Pacific began in 1962 with the accession to sovereignty of the Western Samoan Islands, anthropologists overwhelmingly preferred to focus on Marshall Sahlins' famous article Poor Man, Rich Man, Big Man, Chiefs:Political Types in Melanesia and Polynesia (1963). In fifteen pages, the author proposed a regional theory of power based on a classic colonial comparison, the ethnocultural opposition between Melanesia and Polynesia. A few years later, the Tongan-born anthropologist Epeli Hau'ofa was the first Pacific voice to criticize what he considered to be "a clever, thoughtless and insulting piece of writing [...] ; the whole article is a pseudo-evolutionary comparison, in Sahlins' terminology, between Polynesian polities and the 'underdeveloped' Melanesian ones (Hau'ofa 1975: 285)." 1 In the context of 1 The antagonism between these two great thinkers would fade, however, to change two decades later, as Tomlinson noted, into a perfect convergence with the respective publication of the essays Our Sea of Islands for Hau'ofa (1993) and The Economics of Develop-Man in the Pacific for Sahlins (1992): "Both authors share the core idea that there is a grounded set of values, practices, and interrelationships that enables Oceanic expansion. This expansion can be manifest as grander public adherence to tradition. |
| Keywords: | Socialism and post-socialism, vanuatu, ideology, development, sahlins |
| Date: | 2024–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05028326 |
| By: | Nikolaos Kalyviotis; Christopher D. F. Rogers; Geoffrey J. D. Hewings |
| Abstract: | Transport infrastructure systems operate in, and are shaped by, the specific context in which they are expected to perform and contribute to the system-of-systems that support civilised life; they must strive to be sustainable and resilient. However, transport, one of the economic infrastructures, is viewed narrowly in political circles as a vehicle for economic prosperity: political focus falls on the economic pillar of sustainability. One perennial challenge concerns the inclusion of social and environmental value into such performance judgements. A deep understanding of system interdependencies is essential when comparing input output tables (a top down approach) with cost benefit analysis (CBA, a bottom up approach). CBA works best when there is adequate information to calculate a monetary value for all economic, social, and environmental outcomes, whereas input output tables are most effective when environmental and social value are kept distinct from economic value and where the beneficial economic impacts extend across multiple sectors (CBA is inadequate in this regard). This research uses the World Input Output Database and principal component analysis to develop a model to capture this complex accounting process.In recognising how past interdependencies inform future development, this study s model provides new insights into indirect economic value creation within infrastructure systems. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.15306 |
| By: | Donehower, Gretchen (University of California, Berkeley) |
| Abstract: | Aging populations in Asia are worried that they are facing a “care crisis, ” with many older people in need of care having no one to care for them. However, we do not have a clear picture of current care patterns: How much care is currently being consumed? Who is providing that care? Are women and men serving equally as paid or unpaid caregivers? We explore the methods for answering some of these basic empirical questions about unpaid care work using the National Time Transfer Accounts, which show that older people are far from being a major source of unpaid care demand, but are making net transfers of time to other age groups well into their elder years. In our group of Asian countries (Bangladesh, India, the Republic of Korea, Mongolia, Thailand, Türkiye, and Viet Nam), these time transfers come on average from women. |
| Keywords: | eldercare; childcare; unpaid care work; time use; transfers |
| JEL: | J13 J14 J16 J22 |
| Date: | 2025–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0777 |
| By: | Aspiazu, Eliana; Becher, Pablo; Beliera, Anabel |
| Abstract: | En Argentina, las ocupaciones de cuidado representan alrededor de la mitad de la fuerza laboral femenina. Las principales son el cuidado de niñes y adultes dependientes en casas particulares, la docencia de nivel maternal e inicial, la enfermería y los servicios comunitarios. Entre estas ocupaciones hay muchos aspectos en común; pero también se presentan diferencias sustanciales entre esos trabajos, tanto en las condiciones laborales, como en los niveles de institucionalización y formalización, así como en su valorización económica y social. Este trabajo tiene por objetivo problematizar la noción de ocupaciones de cuidado a partir de la identificación de convergencias y divergencias entre las diferentes actividades que la componen. Se busca comprender qué dimensiones del trabajo generan mayor o menor reconocimiento social y económico en cada una de estas ocupaciones. El estudio se basa en una encuesta online realizada a trabajadoras de cuidado en el año 2023, en el marco del Proyecto PICTO Género 2022 "Jerarquización de los cuidados remunerados en Argentina. Transformaciones, continuidades y propuestas en pandemia y pospandemia". A partir de los datos relevados en 2023, se busca responder en qué medida la mayor visibilización de la centralidad de los cuidados a partir de la pandemia se traduce en una mayor valorización social y económica de estas ocupaciones. |
| Keywords: | Ocupaciones; Enfermería; Trabajo de Cuidados; Trabajo Doméstico; Argentina; |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nmp:nuland:4279 |