nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2007‒08‒08
nine papers chosen by
Erik Thomson
University of Chicago

  1. Live and Dead Issues in the Methodology of Economics By David Colander; Richard P.F. Holt; J. Barkley Rosser, Jr.
  2. A Schumpeterian Renaissance? By Chris Freeman
  3. The Benefits of Being Economics Professor A (and not Z) By C. Mirjam van Praag; Bernard M.S. van Praag
  4. Probabilities in Economic Modeling By Itzhak Gilboa; Andrew Postlewaite; David Schmeidler
  5. SU MANDLER E LA “INDETERMINATEZZA SRAFFIANA” By Enrico Sergio Levrero; Saverio M. Fratini
  6. Woodford and Wicksell: a Cashless Economy or a Moneyless Economy Framework ? By Nicolas Barbaroux
  8. The Reliability of Subjective Well-Being Measures By Alan B. Krueger; David A. Schkade
  9. Why Is Child Labor Illegal? By Sylvain Dessy; John Knowles

  1. By: David Colander; Richard P.F. Holt; J. Barkley Rosser, Jr.
    Abstract: We attempt to clarify divisions made by us in previous work (Colander et al., 2004a,b) between “orthodox, mainstream, and heterodox” in economics, following very useful remarks in Dequech (2007), whom we thank. We also provide specific advice for heterodox economists, namely: worry less about methodology, focus on being economists first and heterodox economists second, and prepare ideas to leave the incubator of heterodoxy to enter the mainstream economic debate.
    Date: 2007–04
  2. By: Chris Freeman (SPRU, University of Sussex)
    Abstract: In the last few decades of the twentieth century, the attention paid to technical innovation in the economics and management literature and in social science generally has justified some such description as "a Schumpeterian renaissance". This article, in justifying the concept of such a renaissance, distinguishes in particular Schumpeter's work on the clustering of innovations and technological revolutions as a major contribution to contemporary theory. As always during his lifetime, the relevance of these ideas to his work on Business Cycles remains controversial but the debate on this topic has certainly enlivened the renaissance of neo-Schumpeterian economic theory and research.
    Keywords: innovation clusters, technological revolution, Schumpeter, business cycles
    JEL: E11 O30
    Date: 2007–06–05
  3. By: C. Mirjam van Praag (Universiteit van Amsterdam); Bernard M.S. van Praag (Universiteit van Amsterdam)
    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: A11; A140; J32; J44
    Date: 2007–06–21
  4. By: Itzhak Gilboa (Tel-Aviv University, HEC, and Cowles Foundation, Yale University); Andrew Postlewaite (Department of Economics, University of Pennsylvania); David Schmeidler (Tel-Aviv University and Ohio State University)
    Abstract: Economic modeling assumes, for the most part, that agents are Bayesian, that is, that they entertain probabilistic beliefs, objective or subjective, regarding any event in question. We argue that the formation of such beliefs calls for a deeper examination and for explicit modeling. Models of belief formation may enhance our understanding of the probabilistic beliefs when these exist, and may also help up characterize situations in which entertaining such beliefs is neither realistic nor necessarily rational.
    Keywords: Decision making, Bayesian, Behavioral Economics
    JEL: B4 D8
    Date: 2007–08–02
  5. By: Enrico Sergio Levrero; Saverio M. Fratini
    Abstract: Abstract: This paper is aimed at discussing Mandler’s interpretation of Sraffa’s price theory. In particular we will analyse Mandler’s idea that an institutional determination of distribution, suggested by Sraffa, could be solidly advanced only in the case of equilibrium price indeterminacy in intertemporal sequential models. First it will be shown that this kind of indeterminacy arises from an arbitrary use of the tendency to a uniform rate of return on the supply prices of capital goods. Second, it will be pointed out that, when Sraffa’s contribution is placed, as it should, within the classical theory of value and distribution, no price or Sraffian indeterminacy will result. Finally, we will argue that Mandler’s emphasis on the non-arbitrariness of the capital goods endowments, which is at the root of his indeterminacy result, naturally leads to those normal positions of the economy whose only possible consistent determination is to be found in Sraffa’s price theory.
    Keywords: Sraffa; indeterminacy; sequential equilibria; market incompleteness; classical
    JEL: B51 D46 D52
    Date: 2007–07
  6. By: Nicolas Barbaroux (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne])
    Abstract: Recently, one of the most fruitful debate in monetary macroececonomics that fascinates -and opposed- academics and policymakers has lied in the relevancy of money within the monetary policy analysis. Since the publication of King and Goodfriend 1997’s article that gave birth to a new current -the New Neoclassical Synthesis- money seems to be de-emphasized1. A new step has been reached in 2003 with Woodford’s monetary treatise that legitimates a Cashless framework. Woodford captures the "implied path of the money supply or the determinants of money demand" (Woodford, 2003, p.237) in the determination of the equilibrium of output and prices, without having to model the volume of money explicitly. Woodford gives his theory a Wicksellian flavour by comparing his cashless economy framework with Wicksell’s pure credit economy framework. Such a legacy gives the impression that Wicksell’s original writings downgraduated money for the conduct of monetary policy.
    Keywords: Monetary Policy ; De-emphasis of Money ;Monetarism.
    Date: 2007–07–13
  7. By: Nicolò Bellanca (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: The fundamental theme underlying Hirshman’s thought regards the nature of the process of the economic choice. He argues that the search of “appropriateness” between too much and too little, expresses our aspiration to well-being, better than the idea of an objective concerning pleasure maximization. Besides this is due to the fact that the most relevant among our choices don’t allow us to characterize an optimal solution, but press for the “appropriate” alternation of different criteria. Once the choice has been carried out, we usually aim, trough a mechanism of reduction of the cognitive dissonance, to weaken disappointment and regret for the criteria we have discarded. It is on the very base of these theses that Hirschman discusses which “strategies” could better enhance our economic choices.
    Keywords: Economic development, cognitive dissonance, tragic choices
    JEL: O10 O29
    Date: 2007
  8. By: Alan B. Krueger (Princeton University); David A. Schkade (University of California, San Diego)
    Abstract: Economists are increasingly analyzing data on subjective well-being. Since 2000, 157 papers and numerous books have been published in the economics literature using data on life satisfaction or subjective well-being, according to a search of Econ Lit.1 Here we analyze the test-retest reliability of two measures of subjective well-being: a standard life satisfaction question and affective experience measures derived from the Day Reconstruction Method (DRM). Although economists have longstanding reservations about the feasibility of interpersonal comparisons of utility that we can only partially address here, another question concerns the reliability of such measurements for the same set of individuals over time. Overall life satisfaction should not change very much from week to week. Likewise, individuals who have similar routines from week to week should experience similar feelings over time. How persistent are individuals’ responses to subjective well-being questions? To anticipate our main findings, both measures of subjective well-being (life satisfaction and affective experience) display a serial correlation of about 0.60 when assessed two weeks apart, which is lower than the reliability ratios typically found for education, income and many other common micro economic variables (Bound, Brown, and Mathiowetz, 2001 and Angrist and Krueger, 1999), but high enough to support much of the research that has been undertaken on subjective well-being.
    Date: 2007–01
  9. By: Sylvain Dessy (Université Laval); John Knowles (University of Pennsylvania and IZA)
    Abstract: We present a theory of the emergence of laws restricting child labor or imposing mandatory education that is consistent with the fact that poor parents tend to oppose such laws. We find that if altruistic parents are unable to commit to educating their children, child-labor laws can increase the welfare of higher-income parents in an ex ante sense. On the basis of an empirical analysis of Latin-American household surveys, we demonstrate that per capita income in the country of residence has the predicted effect on child labor supply, even after controlling for other household characteristics.
    Keywords: macroeconomic analyses of economic development, labor force composition
    JEL: J82 O11
    Date: 2007–07

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