nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2007‒08‒14
six papers chosen by
Erik Thomson
University of Chicago

  1. The Empirical Institutions-Growth Literature: Is Something Amiss at the Top? By John W. Dawson
  2. Do You Know That I Am Biased? An Experiment By Sandra Ludwig; Julia Nafziger
  3. Mercantilism in the Reign of Frederick II and Prussian Industrial Politics in Upper Silesia 1740-1786 By Toni Pierenkemper
  4. Towards an economic perspective of the religious associativism - the case of Lisbon active laical brotherhoods By Mourao, Paulo
  5. Towards a new theory of economic policy: Continuity and innovation By Acocella, Nicola; Di Bartolomeo, Giovanni
  6. Inequality and Envy By Frank A Cowell; Udo Ebert

  1. By: John W. Dawson
    Abstract: The initial publication of the Fraser Institute’s Economic Freedom of the World index prompted an explosion of empirical research on the institutions-growth relationship. To date, little of this research has appeared in the top economics journals. Subsequently, a number of empirical growth studies using alternative sources of data on institutions have appeared in top journals. This paper explores the two tracks of empirical research on the institutions-growth relationship—one track that recognizes all the relevant literature, and one that seems wanting in that respect.
    Date: 2007
  2. By: Sandra Ludwig; Julia Nafziger
    Abstract: This experiment explores whether individuals know that other people are biased. We confirm that overestimation of abilities is a pervasive problem, but observe that most people are not aware of it, i.e. they think others are unbiased. We investigate several explanations for this result. As a first one, we discuss a possible unfamiliarity with the task and the subjects' inability to distinguish between random mistakes and a real bias.  Second, we show how the relation between a subject's belief about others and his belief about himself might be driven by a false consensus effect or self-correction mechanism. Third, we identify a self-serving bias when comparing how a subject evaluates his own and other people's biases.
    Keywords: Bias, Overconfidence, Beliefs, Experimental Economics, Self-Serving Bias
    JEL: D83 C91 D01
  3. By: Toni Pierenkemper (Department of Economic and Social History, Cologne University Germany)
    Abstract: In late 18th century Prussia, the conditions were laied down that were to form the basis of the economic upturn of the 19th century. This period of transition was marked by a break with the former “mercantilist” or “camerialist” system as it is termed in its specific German form of promotion of trade and industry by the state in the 18th century. It was not mercantilist policy but its avoidance that contributed considerably to the success of industrialisation beginning the late 18th century. The Prussian political economy in the middle of the 18th century, labelled ‘Friederician Mercantilism’ according to Frederick II (1740-1786), is addressed in the context of the international mercantilist system (France and England). The traditional view of German economic history is that “Friederician Mercantilism” laied down the conditions for industrial development in the 19th century. The results of this paper are different: The mercantilist sytem impeded development and, combined with the King’s obstinacy in adhering to the system, did nothing to help pave the way for development into a modern industrial nation. This is demonstrated using the example of the newly acquired Silesian province (1740), which was in no good economic state in the mid-18th century; and the first decades subsequent to Prussia’s acquisition were marked by the belligerent circumstances associated with its takeover. Later, “Friederician Mercantilism” only made a limited contribution to the transformation of Silesia into a modern industrial region. In spite of an active trade policy, the measures implemented by the Prussians in order to boost industry proved to be misdirected: financial, trade, and industrial policies emerged as irrelevant or even disadavantageous to the Silesian province. This was even more so the case for the Upper Silesian coal mining district, which was, over the course of the 19th century, to grow into a powerful industrial centre. The new Prussian administration completely underestimated this area’s potential for development. In the 1770s there was a broad discussion of the economic situation in Upper Silesia that resulted in state activity in the domain of the Upper Silesian iron industry. However, it was shaped by the state’s military and fiscal interests. “Friederician Mercantilism” had no perspective for economic development and it was only with the death of Frederick II in 1786 that the potentiality of Prussia’s and Upper Silesia’s development into a modern economiy characacterised by free enterprise emerged.
    Keywords: Mercantilism, State, Prussia, Silesia, Industrial Politics
    JEL: N33 N93
    Date: 2007–01
  4. By: Mourao, Paulo
    Abstract: Where are the brotherhoods of the Patriarchate of Lisbon? Why are these brotherhoods located in such spaces? The present work answers to these two questions, being a pioneer attempt about the thematic, in Portugal. Through the empirical validation recurring to logit models, this paper identifies as determinants the human diversity of the spaces (parishes) and the related tradition, not confirming the hypothesis of the purchase power of the resident people. Therefore, it is confirmed that the resources constraint of this kind of social groups considers the cultural and the traditional richness as fundamental to the detriment of the exclusive budget restriction.
    Keywords: regional economics; social economics; religious brotherhoods
    JEL: Z13 Z12 R23
    Date: 2006–09
  5. By: Acocella, Nicola; Di Bartolomeo, Giovanni
    Abstract: This paper outlines the evolution of the theory of economic policy from the classical contributions of Frisch, Hansen, Tinbergen and Theil to situations of strategic interaction. Andrew Hughes Hallett has taken an active and relevant part in this evolution, having contributed to both the development and recent rediscovery of the classical theory, with possible relevant applications for model building.
    Keywords: policy games; policy effectiveness; controllability; equilibrium existence.
    JEL: A10 E00
    Date: 2007–06
  6. By: Frank A Cowell; Udo Ebert
    Abstract: Using a simple axiomatic structure we characterise two classes ofinequality indices - absolute and relative - that take into account "envy"in the income distribution. The concept of envy incorporated hereconcerns the distance of each person's income from his or herimmediately richer neighbour. This is shown to be similar to justiceconcepts based on income relativities.
    Keywords: Inequality, envy, transfer principle.
    JEL: D63
    Date: 2006–12

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