nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2006‒08‒19
five papers chosen by
Erik Thomson
University of Chicago

  1. The Theory of Money and Financial Institutions: A Summary of a Game Theoretic Approach By Martin Shubik
  2. Original and Derived Judgment: An Entrepreneurial Theory of Economic Organization By Kirsten Foss; Nicolai J. Foss; Peter G. Klein
  3. O papel da moeda nas teorias do desenvolvimento desigual: uma abordagem pós-keynesiana By Ana Tereza Lanna Figueiredo
  4. Geography Rules Too! Economic Development and the Geography of Institutions By Maarten Bosker; Harry Garretsen
  5. The Emerging Knowledge Governance Approach: Challenges and Characteristics By Nicolai J. Foss

  1. By: Martin Shubik
    Date: 2006–08–11
  2. By: Kirsten Foss; Nicolai J. Foss; Peter G. Klein
    Abstract: Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other assets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees “proxy-entrepreneurs,” and ask how the firm’s organizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating performance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and destructive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the economic theory of the firm.
    Keywords: Judgment; entrepreneur; delegation; employment relation; ownership
    JEL: B53 D23 L2
    Date: 2006
  3. By: Ana Tereza Lanna Figueiredo (Cedeplar-UFMG)
    Abstract: The theory of unequal development is set to inquire why some countries and/or regions grow more than others. In the attempt to solve this problem, scholars have not explicitly considered money as an important factor in such a scenario. However, in accordance with a post-Keynesian approach, money is not neutral. It does play a major role in decision-making by economic agents, and it is crucial to the determination of the accumulation dynamics of the economy. This paper purports to identify whether the theory of unequal development includes, however implicitly, the notion of money non-neutrality in the development process of a country or region. On the basis of this analysis, it may be concluded that, despite the fact that the theories of Rosenstein-Rodan (1943), Ragnar Nurske (1955), Albert Hirschman (1961), and Gunnar Myrdal (1960), presented herein, do not make explicit the role of money in this process, most of them imply it as they introduce uncertainty as a crucial factor in the determination of agents’ behavior in investment decisions.
    Keywords: money; unequal development; post-Keynesian economics
    JEL: E12 O20 O40
    Date: 2006–08
  4. By: Maarten Bosker; Harry Garretsen
    Abstract: To explain cross-country income differences, research has recently focused on the so-called deep determinants of economic development, notably institutions and geography. This paper sheds a different light on these determinants. We use spatial econometrics to analyse the importance of the geography of institutions. We show that it is not only absolute geography, in terms of for instance climate, but also relative geography, the spatial linkages between countries, that matters for a country’s gdp per capita. Apart from a country’s own institutions, institutions in neighboring countries turn out to be relevant as well. This finding is robust to various alternative specifications.
    JEL: F43 O11
    Date: 2006
  5. By: Nicolai J. Foss
    Abstract: The “knowledge governance approach” is characterized as a distinctive, emerging approach that cuts across the fields of knowledge management, organisation studies, strategy, and human resource management. Knowledge governance is taken up with how the deployment of governance mechanisms influences knowledge processes, such as sharing, retaining and creating knowledge. It insists on clear micro (behavioural) foundations, adopts an economizing perspective, and examines the links between knowledge-based units of analysis with diverse characteristics and governance mechanisms with diverse capabilities of handling these transactions. Research issues that the knowledge governance approach illuminates are sketched.
    Keywords: Governance; knowledge management; organizational economics
    JEL: L1 L2 M1
    Date: 2006

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