nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2007‒03‒31
nine papers chosen by
Erik Thomson
University of Chicago

  1. Marshallian and Walrasian Theory, Complementary or Alternative Approaches ? The Views in Presence By Michel, DE VROEY
  2. Sraffa's Mathematical Economics - A Constructive Interpretation By K. Vela Velupillai
  3. All the Interesting Questions, Almost All the Wrong Reasons By Michele Boldrin; David K Levine
  4. Rationalizing the Irrational. The Principle of Relative Maximization from Sociobiology to Economics and Its Implications for Ethics By Boari, Mircea
  5. Variations on the Theme of Conning in Mathematical Economics By K. Vela Velupillai
  6. The Benefits of Being Economics Professor A (and not Z) By C. Mirjam van Praag; Bernard M.S. van Praag
  7. The empirics of social capital and economic development: a critical perspective By Fabio, Sabatini
  8. Rational seasonality By Travis D. Nesmith
  9. Status, Happiness, and Relative Income By John Beath; Felix FitzRoy

  1. By: Michel, DE VROEY (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
    Abstract: The aim of this paper is to examine economistsÕ views about the relationship between Marshallian and Walrasian theory. Are the complementary, as is usually believed, or do they constitute alternative research programmes ? My paper compares two viewpoints on this matter, the conciliatory and the antagonistic views. After describing these, I present my own standpoint : I do believe that there is a Marshall-Walras divide but I have serious objections to the way n which the argument for this divide is usually made. In particular, I object to the tendency to treat the Marshallian approach as good and the Walrasian one as bad. In the last part of the paper, I dispute the view held by several authors that an embryonic general equilibrium model is to be found in MarshallÕs Principles
    Date: 2007–01–15
  2. By: K. Vela Velupillai
    Abstract: The claim in this paper is that Sraffa employed a rigorous logic of mathematical reasoning in his book, Production of Commodities by Means of Commodities (PCC), in such a way that the existence proofs were constructive. This is the kind of mathematics that was prevalent at the beginning of the 19th century, which was dominated by the concrete, the constructive and the algorithmic. It is, therefore, completely consistent with the economics of the 19th century, which was the fulcrum around which the economics of PCC was conceived.
    Keywords: Existence Proofs, Constructive Mathematics, Algorithmic Mathematics, Mathematical Economics, Standard System.
    JEL: B23 B24 B31 B41 B51
    Date: 2007
  3. By: Michele Boldrin; David K Levine
    Date: 2007–03–25
  4. By: Boari, Mircea (ESSEC Business School)
    Abstract: Starting with the concept of “rational maximizing individual”, a meta-construct with foundational value in economics and, in general, in human sciences, the paper delineates the territory of an ethics of rationality. It does this by taking fulcrum in findings from evolutionary theory, in particular those regarding spiteful behavior. The paper formulates the principle of “differential fitness maximization”, as expression of relative maximization of fitness and derives its consequences, among which, a core set of normative propositions grounding the said ethics. Thus, the paper strengthens the backbone of the Western philosophical tradition which, in essence, always associated ethical conduct with reason and individualism.
    Keywords: Evolutionary Ethics; Fitness; Normative Ethics; Rational Maximization; Spite
    JEL: A19 B52 C73 D01 P00 Z19
    Date: 2007–02
  5. By: K. Vela Velupillai
    Abstract: The mathematization of economics is almost exclusively in terms of the mathematics of real analysis which, in turn, is founded on set theory (and the axiom of choice) and orthodox mathematical logic. In this paper I try to point out that this kind of mathematization is replete with economic infelicities. The attempt to extract these infelicities is in terms of three main examples: dynamics, policy and rational expectations and learning. The focus is on the role and reliance on standard .xed point theorems in orthodox mathematical economics.
    Keywords: General Equilibrium Theory, Mathematical Economics, Theory of Policy, Rational Expectations Equilibrium
    JEL: C02 C60 D50 E61
    Date: 2007
  6. By: C. Mirjam van Praag (University of Amsterdam, Tinbergen Institute, Max Planck Institute of Economics Jena and IZA); Bernard M.S. van Praag (SCHOLAR, University of Amsterdam, Tinbergen Institute, CESifo and IZA)
    Abstract: Alphabetic name ordering on multi-authored academic papers, which is the convention in the economics discipline and various other disciplines, is to the advantage of people whose last name initials are placed early in the alphabet. As it turns out, Professor A, who has been a first author more often than Professor Z, will have published more articles and experienced a faster growth rate over the course of her career as a result of reputation and visibility. Moreover, authors know that name ordering matters and indeed take ordering seriously: Several characteristics of an author group composition determine the decision to deviate from the default alphabetic name order to a significant extent.
    Keywords: performance measurement, incentives, economists, name ordering
    JEL: A11 A14 J32 J44
    Date: 2007–03
  7. By: Fabio, Sabatini
    Abstract: This paper provides an introduction to the concept of social capital, and carries out a critical review of the empirical literature on social capital and economic development. The survey points out six main weaknesses affecting the empirics of social capital. Identified weaknesses are then used to analyze, in a critical perspective, some prominent empirical studies and new interesting researches published in last two years. The need emerges to acknowledge, also within the empirical research, the multidimensional, context-dependent and dynamic nature of social capital. The survey also underlines that, although it has gained a certain popularity in the empirical research, the use of “indirect” indicators may be misleading. Such measures do not represent social capital’s key components identified by the theoretical literature, and their use causes a considerable confusion about what social capital is, as distinct from its outcomes, and what the relationship between social capital and its outcomes may be. Research reliant upon an outcome of social capital as an indicator of it will necessarily find social capital to be related to that outcome. This paper suggests to focus the empirical research firstly on the “structural” aspects of the concept, therefore excluding by the measurement toolbox all indicators referring to social capital’s supposed outcomes.
    Keywords: Social capital; Social networks; Trust; Economic development; Relation of economics to other disciplines; Relation of economics to social values.
    JEL: Z13 Z19
    Date: 2005–11
  8. By: Travis D. Nesmith
    Abstract: Seasonal adjustment usually relies on statistical models of seasonality that treat seasonal fluctuations as noise corrupting the `true' data. But seasonality in economic series often stems from economic behavior such as Christmas-time spending. Such economic seasonality invalidates the separability assumptions that justify the construction of aggregate economic indexes. To solve this problem, Diewert(1980,1983,1998,1999) incorporates seasonal behavior into aggregation theory. Using duality theory, I extend these results to a larger class of decision problems. I also relax Diewert's assumption of homotheticity. I provide support for Diewert's preferred seasonally-adjusted economic index using weak separability assumptions that are shown to be sufficient.
    Keywords: Seasonal variations (Economics) ; Consumer behavior
    Date: 2006
  9. By: John Beath (University of St. Andrews); Felix FitzRoy (University of St. Andrews and IZA)
    Abstract: Models of status based on Frank’s (1985) count of the number of people with lower conspicuous consumption are inconsistent with the extensive empirical literature on happiness and well-being. The alternative approach to consumption interaction which uses some form of relative income has been developed in various contexts. These predict that a representative agent’s well-being will increase with real income or consumption. However, this is again inconsistent with the time-series evidence for advanced economies. In this paper we combine a simple model of relative income with a distribution of ability that correctly predicts both time series results of near constant utility, and the positive, concave crosssectional relation between income, working time and happiness.
    Keywords: status, happiness, relative income
    JEL: D01 D31 D6
    Date: 2007–03

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