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on History and Philosophy of Economics |
| By: | Khan, Haider |
| Abstract: | Milton Friedman’s “The Methodology of Positive Economies” is still one of the most widely read pieces on economic methodology. One reason for this might be Friedman’s attractive proposal that economists use theories and hypotheses as pragmatic devices to summarize data and make predictions over the relevant range of observations. Logically, this should lead to a fair minded comparison among many contending theories. However, Friedman's actual examples and discussion of these examples raise a puzzle. The field of comparison seems unduly narrow from the beginning. In my attempt to resolve this, I consider some logical and ontological problems for Friedman's position. I end up by suggesting a scientific realist approach to testing theories by causal comparisons over a wide field of contending theories. |
| Keywords: | Positive economics; normative economics; prediction; realism; scientific realism; causal comparisons; causal depth |
| JEL: | A13 B41 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7458&r=hpe |
| By: | Philip Arestis; Elisabetta De Antoni |
| Abstract: | Recent developments in macroeconomic policy, both in terms of theory and practice, have elevated monetary policy while fiscal policy has been downgraded. The latter is rarely mentioned in policy discussion, apart from arguing to place limits on budget deficits and fiscal variables. This paper presents the opposite view of Hyman P. Minsky. Rejecting the orthodox assumptions of unbounded individual and collective rationality, Minsky places uncertainty and financial instability at the centre of his analysis. The limits of individual and collective rationality feed each other, generating deviation-amplifying mechanisms that make the economy unstable. The last one thus assumes a cyclical behaviour that drives it from the torrid summers of speculative booms to the gloomy winters of financial crises, debt deflations and deep depressions. Even if Minsky is generally considered as one of the main interpreters of Keynes, according to this work his economics is very different from Keynes’s one in terms both of business cycles and of growth. In comparison with the Keynesian tradition, according to Minsky fiscal policy is even more important and effective. Government intervention is not only necessary to reach and maintain full employment; it is also indispensable to contain capitalism’s instability and to avoid the disaster. The effect of fiscal policy is not only to underpin and stabilize aggregate demand, income and employment. It has also the task to protect the robustness of the financial system by stabilizing profits and by issuing government bonds. The opening up of the economy may increase its fragility, making fiscal policy even more important. The unprecedented growth of the domestic and international financial transactions, as well as the recent financial turmoil, confirm the validity of Minsky’s insights and make his views on fiscal policy even more noteworthy and fruitful. |
| Keywords: | Minsky, bounded rationality, business cycles, financial instability, fiscal policy. |
| JEL: | E12 E32 E42 E62 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0731&r=hpe |
| By: | Oswald, Andrew J (Department of Economics, University of Warwick); Ralsmark, Hilda (Department of Economics, University of Warwick) |
| Abstract: | This short paper collects and studies the CVs of 112 assistant professors in the top-ten American departments of economics. The paper treats these as a glimpse of the future. We find evidence of a strong brain drain. We find also a predominance of empirical work. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:841&r=hpe |
| By: | Khan, Haider |
| Abstract: | The purpose of this note is to explore briefly the role that a dialectical development of logical understanding and consciousness plays in Hegel’s Phenomenology of Spirit with some references to his Science of Logic. The role played by the logic of ontological development is emphasized. Furthermore, the role of human laboring activity in particular in Hegel is singled out as an area where thinking can redirect itself to return from the heights of speculative thought to a this-worldly development of freedom through a series of internal and dialectical contradictions. In line with this approach, Hegel's non-atomistic characterization of the individual in society can also be seen in a new light. |
| Keywords: | Logic; Dialectics; Labor; Self-consciousness; Sociality |
| JEL: | B12 B40 A12 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7456&r=hpe |
| By: | Brian, HILL |
| Abstract: | It has been noticed that whether a preference relation can be represented by state-independent utilities as opposed to state-dependent utilities may depend on which acts count as constant acts [Schervish et al., 1990]. Indeed, this remark underlies an extension of Savage’s expected utility theory to the state-dependent case that was proposed by Edi Karni [Karni, 1993]. This paper contains a characterisation of the preference relations that permit a choice of acts which can play the role of constant acts, and relative to which there is a representation involving a state-independent utility function. This result applies both in the Savage and in the Anscombe & Aumann frameworks. It has as an immediate corollary an extension of Karni’s representation theorem. Finally, it is of methodological interest, insofar that it harnesses techniques from mathematical logic to prove a theorem of interest to decision theorists and economists. |
| Keywords: | Subjective expected utility; State-dependent utility; Monotonicity axiom |
| JEL: | C69 D81 |
| Date: | 2007–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0883&r=hpe |
| By: | Alexandre BERTIN |
| Abstract: | The goal of this paper is to show that Amartya Sen’s idea can be rooted in the social-liberal paradigm. Combining the respect of an unconditional freedom and the research of a real equality, Sen, thanks to the Capability Approach, proposes a framework for a new theory of justice. |
| Keywords: | capabilities, social-liberalism, democracy, liberalism, socialism |
| JEL: | B10 B14 B24 I0 I30 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-09&r=hpe |
| By: | Stefano, LOVO |
| Abstract: | We de ne belief-free equilibria in two-player games with incomplete information as se- quential equilibria for which players' continuation strategies are best-replies, after every history, independently of their beliefs about the state of nature. We characterize a set of payos that includes all belief-free equilibrium payos. Conversely, any payo in the interior of this set is a belief-free equilibrium payo |
| Keywords: | repeated game with incomplete information; Harsanyi doctrine; belief-free equilibria |
| JEL: | C72 C73 |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0884&r=hpe |
| By: | Feng, L.; Hendrikse, G.W.J. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | In the 1950s and 1960s there was a debate about the nature of an agricultural cooperative: the cooperative as extension of the farm, the cooperative as vertical integration or the cooperative as a firm. We revisit this debate with various concepts from the theory of the firm that have been formulated since 1990. Two concepts shed light on this debate: the enterprise as a system of attributes and the delineation of a governance structure in terms of ownership rights, control rights and income rights. We argue that viewing the cooperative as a system of attributes integrates these three views. It emphasizes that a cooperative is a firm in itself, with many input suppliers as owners. The feature of many input suppliers as owners implies that the behavioral differences between a cooperative and an investor owned firm have to be addressed by highlighting the unique aspects of the stakeholder owning the enterprise. |
| Keywords: | cooperative;vertical integration;extension of the farm;governance |
| Date: | 2007–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765010886&r=hpe |
| By: | Elvio Accinelli (Universidad Autónoma de San Luis Potosí, Facultad de Economía); Leobardo Plata (Universidad Autónoma de San Luis Potosí, Facultad de Economía) |
| Abstract: | In this paper we show the strong relation existing between efficiency and social welfare. We introduce the concept of Negishi path, a differentiable manifold, that show the relation existing between distributions of social weights and efficient allocation. We show that it is possible to as- sign to each e±cient allocation a certain level of social welfare, and that given the total resources of an economy and the utilities of its agents there exits a maximal level possible of social welfare for this economy. This level will be called the Negishi number and it is independent of the distribution of the total resources. We analyze also, the strong relation existing between social crisis and distribution of the initial resources, with this object we introduce the concept of singular economies, and we show that, for this economies small changes in the endowments imply big and unpredictable social changes in the social structure and in the level of social welfare. Finally we introduce in the framework of the General Equilibrium Theory a definitions of developed and underdeveloped economies. Our guide in this trip will be the Negishi approach. |
| Keywords: | Social crisis, regular and singular economies, Negishi approach. |
| JEL: | D50 D6 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:0108&r=hpe |
| By: | Antonio Cabrales; Jose Ramon Uriarte |
| Abstract: | In real life strategic interactions decision-makers are likely to entertain doubts about the degree of optimality of their play. To capture this feature of real choice-making, we present here a model based on the doubts felt by an agent about how well is playing a game. The doubts are coupled with (and mutually reinforced by) imperfect discrimination capacity, which we model here by means of similarity relations. We assume that each agent builds procedural preferences defined on the space of expected payoffsstrategy frequencies attached to his current strategy. These preferences, together with an adaptive learning process lead to doubt-based selection dynamic systems. We introduce the concepts of Mixed Strategy Doubt Equilibria, Mixed Strategy Doubt-Full Equilibria and Mixed Strategy Doubtless Equilibria and show the theoretical and the empirical relevance of these concepts |
| Keywords: | Doubts, Bounded rationality, Evolutionary dynamics, Decision theory |
| JEL: | C72 C73 D81 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we080905&r=hpe |
| By: | Elisa Baroni; Matteo Richiardi |
| Abstract: | Fifty years have passed since the seminal contribution of Guy Orcutt [Orcutt,1957],which gave birth to the field of Microsimulation. We survey, from a methodological perspective, the literature that followed, highlighting its relevance,its pros and cons vis-`a-vis other methodologies and pointing out the main open issues. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:65&r=hpe |