nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2004‒12‒20
seven papers chosen by
Andy Denis
City University

  1. The Weak Rationality Principle in Economics By Gebhard Kirchgässner
  2. (Why) Are Economists Different? By Gebhard Kirchgässner
  3. Literature Review of Frameworks for Macro-indicators By Andrew Sharpe
  4. Would Mandatory Attendance Be Effective for Economics Classes? By JS Armstrong
  5. NeuroEconomics By Dr. Peter Kenning; Hilke Plassmann
  6. Peer Review for Journals: Evidence on Quality Control, Fairness, and Innovation By JS Armstrong
  7. Input-Output Economics and Material Flows By Faye Duchin

  1. By: Gebhard Kirchgässner
    Abstract: The weak rationality principle is not an empirical statement but a heuristic rule how to proceed in social sciences. It is a necessary ingredient of any understanding’ social science in the Weberian sense. In this paper, first this principle and its role in economic theorizing is discussed. It is also explained why it makes sense to use a micro-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the ?bounded rationality’ approach, the informational assumptions are discussed. Third, we address the assumption of self-interest which is often seen as a part of the rationality assumption. We conclude with some remarks of handling the problems of ?free will’ as well as ?weakness of the will’ within the economic approach.
    Keywords: Rationality, Self Interest, Micro-Foundation, Bounded Rationality
    JEL: B41
    Date: 2004–12
  2. By: Gebhard Kirchgässner
    Abstract: After presenting some casual evidence about the difference between economists and the rest of the population, first the survey and experimental evidence which has been presented on this topic during the last 20 years is discussed. But can these results really be transferred to real world situations? To show this, examples of referenda results in Switzerland are presented where the citizens decided against recommendations of most economists. But what is so particular in economic theory that causes these different convictions? Some explanations are given with respect to positive economic theory and with respect to the normative convictions of economists. The paper concludes with possible consequences which economists might draw. Nachdem an Fallbeispielen Unterschiede in den Auffassungen von Ökonomen einerseits und dem Rest der Bevölkerung andererseits aufgezeigt wurde, wird zunächst die empirische Evidenz zu diesem Faktum aus Umfragen und Experimenten zusammengefasst. Wie weit sind diese Ergebnisse auf Situationen realen Handelns übertragbar? Um dies zu zeigen, wird auf Ergebnisse von Referenden verwiesen, in welchen sich die Bürger entgegen den Empfehlungen fast aller Ökonomen entschieden haben. Dann wird gezeigt, welche Eigenheiten der (positiven) ökonomischen Theorie wie der normativen Überzeugungen der (meisten) Ökonomen zu diesen Unterschieden führen. Die Arbeit schliesst mit Hinweisen zu Konsequenzen, zu denen sich Ökonomen in dieser Situation veranlasst sehen könnten.
    Keywords: Cooperative Behaviour, Indoctrination, Self-Selection, Referenda Results, Economic Model of Behaviour, Commitment, Fairness of the Market
    JEL: B40
    Date: 2004–12
  3. By: Andrew Sharpe
    Abstract: There has been an explosion of interest in recent years in Canada and other countries in macro-indicators and composite indexes of economic and social well-being. This reflects growing recognition of the important role macro-indicators can play as a tool for evaluating trends in and levels of economic and social development and for assessing the impact of policy on well-being. This report provides a literature review of conceptual/operational frameworks for the development of macro-indicators that give an assessment of economic, labour market and social conditions or states of well-being. The report provides an analysis of frameworks for macro-indicators by discussing general framework issues; identifies and describes six specific frameworks for macro-indicators which the author regards as particularly important or relevant, and discusses the strengths and weaknesses of these sets of indicators/composite indexes; and provides a description of an additional 31 sets of indicators and composite indexes broken down into economic, social, economic/social, and labour market areas. The report concludes that no existing framework currently includes all important concepts and linkages and that it is unlikely that one ever will. As the survey of the macro-indicators literature reveals, the development of a framework for macro-indicators involves choices related to the domains of interest, the purpose for which the indicator is designed, and the population to be covered, among others. Choices or tradeoffs must be made and a balance struck between conceptual sophistication and transparency and between complex linkages that could potentially confuse the user and simplicity.
    Keywords: Well-being, Wellbeing, Well Being, Indicators, Indexes, Indices, Methodology, Economic Well-being, Economic, Social, Societal, Labour Market
    JEL: C82 C81 I31 I32 Z13
    Date: 2004–02
  4. By: JS Armstrong (The Wharton School - University of Pennsylvania)
    Abstract: Romer (1993) suggests that universities should undertake experiments that would test the value of mandatory attendance for economics courses. He presents evidence showing that those who attended his classes received higher grades on his exams and concluded that “an important part of the relationship [to the course grade] reflects a genuine effect of attendance.” This conclusion is likely to be welcomed by some economics professors. In this note, I address two issues. First, what does prior research imply about a relationship between attendance and learning? Second, does Romer’s own evidence support his conclusion that mandatory attendance is beneficial?
    Keywords: classes, attendance, forecasting
    JEL: A
    Date: 2004–12–10
  5. By: Dr. Peter Kenning (University of Muenster); Hilke Plassmann (University of Muenster)
    Abstract: Over the last two years a research field has developed under the banner of 'neuroeconomics' in which recent neuroscientific methods are deploid to analyze economically relevant processes. This paper aims to provide an overview of the methodology and current state of neuroeconomic research by giving a brief definition of the concept of neuroeconomics, outlining relevant methodologies, and describing studies undertaken in the current research areas to date. Finally, some future prospects are considered.
    JEL: C9
    Date: 2004–12–15
  6. By: JS Armstrong (The Wharton School - University of Pennsylvania)
    Abstract: I reviewed the published empirical evidence concerning journal peer review, which consisted of 68 papers, all but three published since 1975. Peer review improves quality, but its use to screen papers has met with limited success. Current procedures to assure quality and fairness seem to discourage scientific advancement, especially important innovations, because findings that conflict with current beliefs are often judged to have defects. Editors can use procedures to encourage the publication of papers with innovative findings such as invited papers, early-acceptance procedures, author nominations of reviewers, results-blind reviews, structured rating sheets, open peer review, and, in particular, electronic publication. Some journals are currently using these procedures. The basic principle behind the proposals is to change the decision from whether to publish a paper to how to publish it
    Keywords: peer review, journals, publications
    JEL: A
    Date: 2004–12–10
  7. By: Faye Duchin (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA.)
    Abstract: This paper argues that resources constitute the fundamental area of overlap between the interests of input-output economists and industrial ecologists. Three misconceptions about input-output economics obscure this fact: the frequent failure to utilize combined quantity and price input-output models, treatment of value-added as a monetary concept only, and the belief that all input-output models assume a linear relationship between output and final deliveries. The paper dispels these misconceptions by describing a quantity input-output model with resources measured in physical units and the corresponding price model with both resource prices and product prices. The model is illustrated with a numerical example of a hypothetical economy and analysis of a scenario where that economy is subsequently obliged to extract a lower grade of ore. Then three other input-output models are presented: a model closed for household consumption, a dynamic model, and a model of the world economy. Unlike the basic model, the last two are non-linear in final deliveries and in factor prices while also retaining the desirable features of the basic model.
    JEL: Q31 C67
    Date: 2004–12

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