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on History and Philosophy of Economics |
| By: | Drakopoulos, Stavros A. |
| Abstract: | Theories of social comparison have a long presence in the social sciences and have provided many useful insights. In economics, the idea of comparison, aspiration or relative income belongs to this theoretical framework. The first systematic usages of this idea can be found in the works of Keynes and Duesenberry. After these works the concept was relatively ignored by orthodox theorists until its recent re-appearance mainly in the fields of labour and macroeconomics. To the contrary, however, income comparisons continued to play a role in much of Keynesian inspired and Behavioural economics literature. In the last few years it has made a strong comeback in the literature of job satisfaction and of the economics of happiness. This paper attempts to trace the development of the concept in the modern history of economic thought. It also discusses the main theoretical implications of adopting income comparisons and possible reasons for its relative disregard by orthodox economics. |
| Keywords: | Relative Income; History of Economic Thought; Wages |
| JEL: | D31 B20 J30 |
| Date: | 2008–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8713&r=hpe |
| By: | Giorgio Fagiolo (Sant'Anna School of Advanced Studies, Pisa, Italy); Andrea Roventini (Università di Verona; Dipartimento di Scienze economiche (Università di Verona)) |
| Abstract: | In the last years, a number of contributions has argued that monetary - and, more generally, economic - policy is finally becoming more of a science. According to these authors, policy rules implemented by central banks are nowadays well supported by a theoretical framework (the New Neoclassical Synthesis) upon which a general consensus has emerged in the economic profession. In other words, scientific discussion on economic policy seems to be ultimately confined to either fine-tuning this ''consensus'' model, or assessing the extent to which ''elements of art'' still exist in the conduct of monetary policy. In this paper, we present a substantially opposite view, rooted in a critical discussion of the theoretical, empirical and political-economy pitfalls of the neoclassical approach to policy analysis. Our discussion indicates that we are still far from building a science of economic policy. We suggest that a more fruitful research avenue to pursue is to explore alternative theoretical paradigms, which can escape the strong theoretical requirements of neoclassical models (e.g., equilibrium, rationality, etc.). We briey introduce one of the most successful alternative research projects - known in the literature as agent-based computational economics (ACE) - and we present the way it has been applied to policy analysis issues. We conclude by discussing the methodological status of ACE, as well as the (many) problems it raises. |
| Keywords: | Economic Policy, Monetary Policy, New Neoclassical Synthesis, New Keynesian Models, DSGE Models, Agent-Based Computational Economics, Agent-Based Models, Post-Walrasian Macroeconomics, Evolutionary Economics. |
| JEL: | B41 B50 E32 E52 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:47&r=hpe |
| By: | Marongiu, Federico |
| Abstract: | This paper shows how economic theory and history can be matched with the use of heterodox theories. This matching between history and economics is needed for a better comprehension of reality. Cliometrics, regulationism, institutional economics are some of the tentative approaches that have been used. The use of only orthodox theories is not enough for an understanding of multiple economic phenomena arising in the real world. |
| Keywords: | heterodox;theory;regulationism;institutional economics;cliometrics |
| JEL: | B10 B52 A20 N00 B25 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8746&r=hpe |
| By: | Xavier De Scheemaekere (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); Ariane Szafarz (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and DULBEA, Université Libre de Bruxelles) |
| Abstract: | The history of the mathematical probability includes two phases: 1) From Pascal and Fermat to Laplace, the theory gained in application fields; 2) In the first half of the 20th Century, two competing axiomatic systems were respectively proposed by von Mises in 1919 and Kolmogorov in 1933. This paper places this historical sketch in the context of the philosophical complexity of the probability concept and explains the resounding success of Kolmogorov’s theory through its ability to avoid direct interpretation. Indeed, unlike experimental sciences, and despite its numerous applications, probability theory cannot be tested per se. Rather it relates to practical matters by means of transition hypotheses or bridging principles that match the structure of practical problems with abstract theory. In this respect probability theory has a very special status among scientific disciplines. |
| Keywords: | probability, Kolmogorov, von Mises, axioms, epistemology |
| JEL: | B41 B16 B23 C00 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:08-017&r=hpe |
| By: | A. Chai; A. Moneta |
| Abstract: | This paper revisits Ernst Engel's (1857) original article in which he systematically investigated the relationship between consumption expenditure and income. While he is mainly remembered today for the discovery of Engel's law, we highlight how Engel addressed in a particular way the issue of the relation between statistical empirical analysis and economic theorizing. Inspired by an inductive methodology, Engel's method to inferempirical regularities made no a priori assumption on the estimated functional form and anticipates many aspects of current non-parametric regression methods. Furthermore, Engel devised a quasi-behavioral theory of consumption centered on the concept of wants to justify and explain his empirical results which he used to asses population living standards. Although incomplete, Engel's consumption theory tackles a much neglected issue in consumption theory: what accounts for the manner in which consumption patterns change as income rises. |
| Keywords: | Length 16 pages |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2008-02&r=hpe |
| By: | Sabina Alkire and James Foster |
| Abstract: | Agency is inescapably plural in both concept and measurement. In Sen’s account of agency, i) agency is exercised with respect to goals the person values; ii) agency includes effective power as well as direct control; iii) agency may advance wellbeing or may address other-regarding goals; iv) to identify agency also entails an assessment of the value of the agent’s goals; v) the agent’s responsibility for a state of affairs should be incorporated into his or her evaluation of it. This chapter refracts the literature on agency measurement through the first four of these characteristics, showing how particular survey-based measures of individual agency elucidate or obscure each distinction. It also observes that existing measures used in development tend to focus on control but not effective freedom, on goals the agent has reason to value rather than goals she values, and on own rather than other-regarding agency. The literature on measurement also raises a number of very relevant issues for the conceptual approach. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp009&r=hpe |
| By: | Izquierdo, Luis R. |
| Abstract: | This thesis advances game theory by formally analysing the implications of replacing some of its most stringent assumptions with alternatives that –at least in certain contexts– have received greater empirical support. Specifically, this thesis makes two distinct contributions in the field of learning game theory and one in the field of evolutionary game theory. The method employed has been a symbiotic combination of computer simulation and mathematical analysis. Computer simulation has been used extensively to enhance our understanding of various formal systems beyond the current limits of mathematical tractability, and also to illustrate, complement and extend various analytical derivations. The two extensions to learning game theory presented here abandon the orthodox assumption that players are fully rational, and assume instead that players follow one of two alternative decision-making processes –case-based reasoning or reinforcement learning– that have received strong support from cognitive science research. The formal results derived in this part of the thesis add to the growing body of work in learning game theory that supports the general principle that the stability of outcomes in games depends not only on how unilateral deviations affect the deviator but also, and crucially, on how they affect the non-deviators. Outcomes where unilateral deviations hurt the deviator (strict Nash) but not the non-deviators (protected) tend to be the most stable. The contribution of this thesis to evolutionary game theory is a systematic study of the extent to which the assumptions made in mainstream evolutionary game theory for the sake of tractability are affecting its conclusions. Our results show that the type of strategies that are likely to emerge and be sustained in evolutionary contexts is strongly dependent on assumptions that traditionally have been thought to be unimportant or secondary (e.g. number of players, continuity of the strategy space, mutation rate, population structure…). This latter contribution is focused on the evolutionary emergence of cooperation. Following the presentation of the main results and the discussion of their implications, this thesis provides some guidance on how the models analysed here could be parameterised and validated. |
| Keywords: | Game Theory; Learning Game Theory; Evolutionary Game Theory; Computer modelling; Stochastic Approximation; Slow Learning; Reinforcement Learning; Case-based Reasoning; Markov Chains; Stochastic Process; |
| JEL: | C63 D83 C72 C73 |
| Date: | 2008–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8664&r=hpe |
| By: | Gary Richardson; Michael McBride |
| Abstract: | When the mortality rate is high, repeated interaction alone may not sustain cooperation, and religion may play an important role in shaping economic institutions. This insight explains why during the fourteenth century, when plagues decimated populations and the church promoted the doctrine of purgatory, guilds that bundled together religious and occupational activities dominated manufacturing and commerce. During the sixteenth century, the disease environment eased, and the Reformation dispelled the doctrine of purgatory, necessitating the development of new methods of organizing industry. The logic underlying this conclusion has implications for the study of institutions, economics, and religion throughout history and in the developing world today. |
| JEL: | D02 D43 L1 L15 L2 L22 L23 N34 N64 N74 N84 N94 Z12 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14004&r=hpe |
| By: | Ivan Cherkashin (Pennsylvania State University); Demidova Svetlana (University of Georgia); Susumu Imai (Queen's University); Kala Krishna (Pennsylvania State University and NBER) |
| Abstract: | There is little work on the inner workings of journals. What factors seem to affect the ability to publish in a journal? Could simple rules (which are already used by some journals) like the immediate rejection of a significant minority of papers, help to streamline the process? At what cost? How well do journals seem to do in choosing papers? What can we say about the extent of type 1 and type 2 errors? Do editors seem to have uniform standards or are some harsher than others? We use data on submissions to the Journal of International Economics to help answer these questions. |
| Keywords: | Publishing in Economics, Performance Evaluation, Probit Model, Selection Bias |
| JEL: | F0 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1166&r=hpe |