nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2007‒02‒10
eleven papers chosen by
Erik Thomson
University of Chicago

  1. Milton Friedman - A Brief Obituary By David Laidler
  2. Milton Friedman and U.S. monetary history: 1961-2006 By Edward Nelson
  3. On the divergence of research paths in evolutionary economics: a comprehensive bibliometric account By Sandra T. Silva; Aurora A.C. Teixeira
  4. A micro-meso-macro perspective on the methodology of evolutionary economics: integrating history, simulation and econometrics By Prof John Foster
  5. Bayesian Decision Theory and the Representation of Beliefs By Edi Karni
  6. Social Justice with Credits to the Poor By Marek Hudon
  7. Behavioral Law and Economics By Christine Jolls
  8. Intentions, Trust and Frames: A note on Sociality and the Theory of Games By Vittorio Pelligra
  9. Preface to the Japanese Translation of An Evolutionary Theory of Economic Change By Richard R. Nelson; Sidney G. Winter
  10. The Political Economy of Warfare By Edward L. Glaeser
  11. Rating philosophies: some clarifications By Varsanyi, Zoltan

  1. By: David Laidler (University of Western Ontario)
    Abstract: Milton Friedman is rivaled only by John Maynard Keynes as the most influential political economists of the 20th Century. His approach was that of a classical liberal, rather than a conservative, though this put him on the political right in the United States. Friedman’s work demands to be evaluated all of a piece, but his outstandingly important technical contributions to economics influenced the development of the discipline in ways that extended far beyond the purview of any particular political agenda.
    Date: 2007
  2. By: Edward Nelson
    Abstract: This paper brings together, using extensive archival material from several countries, scattered information about Milton Friedman's views and predictions regarding U.S. monetary policy developments after 1960 (i.e., the period beyond that covered by his and Anna Schwartz's Monetary History of the United States). I evaluate these interpretations and predictions in light of subsequent events.
    Keywords: Friedman, Milton ; Economic history
    Date: 2007
  3. By: Sandra T. Silva; Aurora A.C. Teixeira
    Abstract: In the last two decades there has been a noticeable increase in published research in evolutionary economics. The idea that formal modelling is a sine qua non condition for establishing a rigours and coherence scientific frame, has led to an over concern with formalization issues among evolutionary researchers. The general perception is that formalization lags behind the appreciative work. Notwithstanding, this general reading has not yet been supported by real data analysis. This work presents a comprehensive survey on evolutionary economics, intending at exploring the main research paths and contributions of this theorizing framework using bibliometric methods. This documentation effort is based on an extensive review of the abstracts from articles published in all economic journals gathered from the Econlit database over the past fifty years. Evolutionary contributions apparently have not converged to an integrated approach. In the present paper, we document the more important paths emergent in this field. Before 1990, the importance of published evolutionary related research is almost negligible - more than 90% of total papers were published after that date. Our results further show two rather extreme main research strands: ‘History of Economic Thought and Methodology’ and ‘Games’. Moreover, formal approaches have a reasonable and increasing share of published papers between 1969 and 2005. In contrast, purely empirical-related works are relatively scarce, involving a meagre and stagnant percentage of published works. This recalls for a need to redirect the evolutionary research agenda.
    Keywords: evolutionary, methodology, bibliometry, Econlit Length 44 pages
    JEL: B41 B52 C89
    Date: 2007–01
  4. By: Prof John Foster (School of Economics, The University of Queensland)
    Abstract: Applied economics has long been dominated by multiple regression techniques. In this regard, econometrics has tended to have a narrower focus than, for example, psychometrics in psychology. Over the last two decades, the simulation and calibration approach to modeling has become more popular as an alternative to traditional econometric strategies. However, in contrast to the well-developed methodologies that now exist in econometrics, simulation/calibration remains exploratory and provisional, both as an explanatory and as a predictive modelling technique although clear progress has recently been made in this regard (see Brenner and Werker (2006)). In this paper, we suggest an approach that can usefully integrate both of these modelling strategies into a coherent evolutionary economic methodology.
    Date: 2007
  5. By: Edi Karni
    Date: 2007–01–26
  6. By: Marek Hudon (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Harvard University, Boston.)
    Abstract: Fair prices have been recently addressed through debates on fair trade or fair wage. This paper addresses the fairness of credits to the poor. It first analyzes a few definitions of fair interest rates. It then determines the extent of the ‘just’ range of a price, its major constraints and the methodology to assess the fairness of the distribution. Based on Gauthier’s (1986) work on imperfect markets, a contractarian position is presented.
    Keywords: justice, microfinance, interest rate, contractarian.
    JEL: L31 M54 O16 Q14
    Date: 2007–01
  7. By: Christine Jolls
    Abstract: Behavioral economics has been a growing force in many fields of applied economics, including public economics, labor economics, health economics, and law and economics. This paper describes and assesses the current state of behavioral law and economics. Law and economics had a critical (though underrecognized) early point of contact with behavioral economics through the foundational debate in both fields over the Coase theorem and the endowment effect. In law and economics today, both the endowment effect and other features of behavioral economics feature prominently and have been applied in many important legal domains. The paper concludes with reference to a new emphasis in behavioral law and economics on "debiasing through law" - using existing or proposed legal structures in an attempt to reduce people's departures from the traditional economic assumption of unbounded rationality.
    JEL: A12 B00 D30 D61 D63 D91 J70 K00 K12 K13 K41
    Date: 2007–01
  8. By: Vittorio Pelligra
    Abstract: Psychological Game Theory (PGT) extends classical game theory allowing for the formal analysis of belief-dependent sentiments and emotions such as resentment, pride, shame, gratefulness, and the like. PGT incorporates these factors by relating agents' subjective expected utility to players' strategies, to their beliefs about others' strategies, but also to their beliefs about others' beliefs about their strategies, and so on. This paper argues that, thanks to the epistemic consequences of this hierarchy of beliefs, PGT is well-endowed to address, and to some extent solve three of the most challenging problems recently emerged in classical game theory, namely, the problem of intentions, that of trust and that of decision frames.
    Keywords: Psychological games, intentions, trust, decision frames.
    JEL: C72 C79 C9
    Date: 2007
  9. By: Richard R. Nelson; Sidney G. Winter
    Date: 2007–01–24
  10. By: Edward L. Glaeser
    Date: 2007–01–26
  11. By: Varsanyi, Zoltan
    Abstract: In this paper I try to give answers to some of the questions and problems that arise in relation to point in time (PIT) and through the cycle (TTC) rating philosophies. One of the most confusing of these is the definition of the two approaches that, as I argue, should be based on the scope of information behind the systems. Through a simple model I demonstrate that the results of quantitative analyses can be very sensitive to the definitions and, additionally, the stress concept applied. I analyze the role played by the rating philosophies in capital requirements calculations and stress tests, and touch on their implications on the pro-cyclicality of credit risk capital regulation.
    Keywords: rating model; rating philosophy; stress test; pro-cyclicality
    JEL: G28 C1
    Date: 2007–01

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