nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒09‒05
eight papers chosen by
Erik Thomson
University of Chicago

  1. The Process of Circulation in Quesnay's Tableau Économique By Hernando Matallana
  2. A pioneer of a new monetary policy? Sweden’s price level targeting of the 1930s revisited By Tobias Straumann; Ulrich Woitek
  3. Social Quality and Precarity: Approaching New Patterns of Societal (Dis)Integration By Herrmann, Peter; van der Maesen, Laurent J.G.
  4. Rationalization and Cognitive Dissonance: Do Choices Affect or Reflect Preferences? By M. Keith Chen
  5. Emergent Innovation and Sustainable Knowledge Co-creation. A Socio-Epistemological Approach to “Innovation from within” By Peschl, Markus F.; Fundneider, Thomas
  6. New Keynesian models: not yet useful for policy analysis By V. V. Chari; Patrick J. Kehoe; Ellen R. McGrattan
  7. Comparing Models of Strategic Thinking in Van Huyck, Battalio, and Beil’s Coordination Games By Miguel A Costa-Gomes; Vincent P Crawford; Nagore Iriberri
  8. Causal Relations via Econometrics By Zaman, Asad

  1. By: Hernando Matallana
    Abstract: At the end of the 17th century capitalism had become the new social and economic order in northern Western Europe. Ever since the trading channels through which money and commodities change hands between the different agents, the actual sequence of these all-comprising monetary exchange processes, and the intertwining of the processes of production and circulation have always been a central issue in heterodox economic thought. The paper discusses Quesnay’s contribution to the theoretical foundation of the social process of circulation of capital in a monetary production economy in the Tableau économique. Additionally, the accounting dynamics of the circulation process of the agricultural kingdom is described by means of system of credit-debit tables currently used by German authors.
    Date: 2008–08–06
  2. By: Tobias Straumann; Ulrich Woitek
    Abstract: The paper re-examines Sweden’s price level targeting during the 1930s which is regarded as a precursor of today’s inflation targeting. According to conventional wisdom the Riksbank was the first central bank to adopt price level targeting as the guideline for its activities, although in practice giving priority to exchange rate stabilisation over price level stabilisation. On the basis of econometric analysis (Bayesian VAR) and the evaluation of new archival sources we come to a more skeptical conclusion. Our results suggest that it is hard to reconcile the Riksbank’s striving for a fixed exchange rate with the claim that it adopted price level targeting. This finding has implications for the prevailing view of the 1930s as a decade of great policy innovations.
    Keywords: Sweden, monetary policy, price level targeting, Great Depression
    JEL: N14 E42
    Date: 2008–08
  3. By: Herrmann, Peter; van der Maesen, Laurent J.G.
    Abstract: The main issue of this article is to discuss the question of ‘precarity’ in the context of the theory of social quality (see Beck et al, 2001), with which to pave the way for developing further the theoretical foundation of precarity. Societal practice is the main challenge this concept tries to address. However, the danger is to introduce a new term, yet maintaining a discussion on traditional problems as poverty, marginalisation and exclusion. Our thesis is that these problems, far from being sufficiently tackled, are currently going along with and being adjunct to another challenge, namely precarity. Although the ‘old problems’ are not problems of individuals and expression of their ‘personal failure’, precarity – seen in the context of the theory of social quality – means a new stage of socialisation of the problems by further individualisation of the victims. In principle, we can say that this understanding of precarity is an expression of a further erosion of society, characterising especially periods of transformation of economic systems.
    Keywords: Social Quality; Precarity; Social Exclusion; Social Disintegration; Social Policy
    JEL: I30 I31 D90 Z13 H70 J40 J00 B20 I00 H80 B24 D50 I0 D30 L10 B30 H00 B00 A10 I32 A30 I39 H40 B40 J10 I38 D60
    Date: 2008–01
  4. By: M. Keith Chen
    Date: 2008–08–29
  5. By: Peschl, Markus F.; Fundneider, Thomas
    Abstract: Innovation has become one of the most important issues in modern knowledge society. As opposed to radical innovation this paper introduces the concept of Emergent Innovation: this approach tries to balance and integrate the demand both for radically new knowledge and at the same time for an organic development from within the organization. From a more general perspective one can boil down this problem to the question of how to cope with the new and with profound change (in knowledge). This question will be dealt with in the first part of the paper. As an implication the alternative approach of Emergent Innovation will be presented in the second part: this approach looks at innovation as a socio-epistemological process of “learning from the future” in order to create (radically) new knowledge in a sustainable and “organic” manner. Implications for knowledge society will be discussed.
    Keywords: Knowledge society; (radical vs. incremental) innovation; emergent innovation; knowledge creation; change
    JEL: Q55 O32 D83 O31 O3
    Date: 2008–09
  6. By: V. V. Chari; Patrick J. Kehoe; Ellen R. McGrattan
    Abstract: Macroeconomists have largely converged on method, model design, reduced-form shocks, and principles of policy advice. Our main disagreements today are about implementing the methodology. Some think New Keynesian models are ready to be used for quarter-to-quarter quantitative policy advice; we do not. Focusing on the state-of-the-art version of these models, we argue that some of its shocks and other features are not structural or consistent with microeconomic evidence. Since an accurate structural model is essential to reliably evaluate the effects of policies, we conclude that New Keynesian models are not yet useful for policy analysis.
    Keywords: Keynesian economics ; Macroeconomics
    Date: 2008
  7. By: Miguel A Costa-Gomes; Vincent P Crawford; Nagore Iriberri
    Date: 2008–08–29
  8. By: Zaman, Asad
    Abstract: Applied econometric work takes a superficial approach to causality. Understanding economic affairs, making good policy decisions, and progress in the economic discipline depend on our ability to infer causal relations from data. We review the dominant approaches to causality in econometrics, and suggest why they fail to give good results. We feel the problem cannot be solved by traditional tools, and requires some out-of-the-box thinking. Potentially promising approaches to solutions are discussed.
    Keywords: causality; regression; Granger Causality; Exogeneity; Cowles Commission; Hendry Methodology; Natural Experiments
    JEL: C59
    Date: 2008–05–31

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