nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒09‒20
fifteen papers chosen by
Erik Thomson
University of Chicago

  1. Structural changes in economics during the last fifty years By Mishra, SK
  2. Do we need time series econometrics By Rao, B. Bhaskara; Singh, Rup; Kumar, Saten
  3. John R. Commons, Wesley N. Hohfeld and the Origins of Transactional Economics By Luca Fiorito
  4. The principle of effective demand and the state of post Keynesian monetary economics By Colin Rogers
  5. Quelle place pour l'entrepreneur dans les théories de la croissance régionale ? By Martin Koning; François Facchini
  6. Against Applicability: A critique of Guala’s Methodology of Experimental Economics By Martin K. Jones
  7. The Economics Major and a Liberal Education By Dave Colander; KimMarie McGoldrick
  8. What Economics Students Think of the Economics Major By Steven Jones; Eric Hoest; Richie Fuld; Mahesh Dahal; Dave Colander
  9. The Professional Development of Graduate Students in Economics By KimMarie McGoldrick; Gail Hoyt; Dave Colander
  10. Learning About Learning in Dynamic Economic Models By David A. Kendrick; Hans M. Amman; Marco P. Tucci
  11. Organization Theory: Bright Prospects for a Permanently Failing Field By Heugens, P.P.M.A.R.
  12. The Concept of Institution: Context and Meaning By Piet Keizer
  13. The economic value of ideology By Gustavo Federico Torrens
  14. Capitalism and Economic Growth: A Game-Theoretic Perspective By Leong, Chee Kian
  15. Do Danes and Italians Rate Life Satisfaction in the Same Way? Using Vignettes to Correct for Individual-Specific Scale Biases. By Viola Angelini, Danilo Cavapozzi, Luca Corazzini, Omar Paccagnella.

  1. By: Mishra, SK
    Abstract: This essay portrays the major currents in recent economic thinking against the orthodoxy and dogmatism of neoclassical economics. It places behavioral economics, experimental economics, evolutionary economics, ecological economics, new institutional economics, agent-based computational economics and post-autistic economics vis-à-vis the classical and the neoclassical economics. It concludes that we may expect a synthesis of all these strands of economic thinking in the near future that will replace neoclassical economics from the citadel of mainstream. Teaching of these strands of new economics has already begun in many universities, although in an un-integrated manner. However, until the neoclassical microeconomics and macroeconomics are replaced by their alternatives and necessary as well as convincing tools of economic analysis are developed, neoclassicism would not give way to modern economics.
    Keywords: Behavioral; experimental; evolutionary; ecological; new institutional; agent-based computational; post-autistic; classical; neoclassical; economics; bounded rationality; heterodox; individualism; pluralism
    JEL: B20 B29 B25 B15
    Date: 2008–09–17
  2. By: Rao, B. Bhaskara; Singh, Rup; Kumar, Saten
    Abstract: Whether or not there is a need for the unit roots and cointegration based time series econometric methods is a methodological issue. An alternative is the econometrics of the London School of Economics (LSE) and Hendry approach based on the simpler classical methods of estimation. This is known as the general to specific method (GETS). Like all other methodological issues it is difficult to resolve which approach is better. However, we think that GETS is conceptually simpler and very useful in applied work.
    Keywords: GETS, Cointegration, Box-Jenkins’s Equations, Hendry, Granger.
    JEL: B49 C22 B41
    Date: 2008–01–16
  3. By: Luca Fiorito
    Abstract: The aim of this paper is to provide an assessment of John R. Commons’ adoption of Wesley N. Hohfeld’s framework of jural opposites and correlatives in order to construct his transactional approach to the study of institutions. Hohfeld’s influence on Commons, it is argued, was both positive and negative. On the one hand, Commons, followed Hohfeld and recognized that such concepts as property and inheritance actually represent an aggregation of numerous types of legal relations. Hohfeld’s schema provided a powerful rhetorical and analytical tool whereby these highly abstracts conceptions could be reduced to a limited number of primary elements. Moreover, Hohfeld’s schema appeared to be consistent with Commons’ general methodological and psychological commitments. On the other hand, Commons’ forging of “transaction” as the elementary unit of economic analysis can be seen as an attempt to go beyond Hohfeld. Commons was in fact unsatisfied with Hohfeld’s bi-lateral treatment of jural relations and with his neglect of the role played by state officials in enforcing transactions and, in so doing, in promoting specific individual interests as collective public policies
    JEL: B15 B25 B52 K10
    Date: 2008–07
  4. By: Colin Rogers (School of Economics, University of Adelaide)
    Date: 2008–09
  5. By: Martin Koning (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); François Facchini (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, LAEP - LAboratoire d'Economie Publique - Université Panthéon-Sorbonne - Paris I)
    Abstract: Cet article se propose de mettre en perspective les théories "traditionnelles" de la croissance régionale avec la théorie de l'entrepreneur. La revue de littérature que nous menons montre que, si la figure de l'entrepreneur n'est que très partiellement mobilisée dans les explications de la croissance régionale, il existe à la fois des similitudes et des moyens d'enrichir mutuellement les théories en présence. Le premier apport de la théorie de l'entrepreneur est d'intégrer une variable entrepreneuriale dans la fonction de production du modèle de croissance endogène. Le deuxième apport de la théorie de l'entrepreneur est une contribution à la théorie de la base. En distinguant activités productives et improductives, on se donne les moyens de montrer que la rente et le profit n'ont pas les mêmes effets sur la croissance économique régionale. Le troisième apport de la théorie de l'entrepreneur est de contribuer à la théorie du développement endogène et à ses extensions : école de la régulation et école californienne de géographie économique. Ces courants présentent de nombreuses ressemblances avec la théorie autrichienne de l'entrepreneur, tant dans leurs approches conceptuelles que dans leurs méthodologies. Pour toutes ces raisons, les théories de la croissance régionale devraient prendre plus en considération les figures de l'entrepreneur.
    Keywords: croissance régionale; entrepreneur
    Date: 2008–07
  6. By: Martin K. Jones
    Abstract: The methodology of experimental economics has developed rapidly over the last ten years with many exciting debates within the field. One of the main contributors to this debate has been Guala who has written several articles and a well- received book on the subject. This paper argues that, while much of what he argues is correct, his views on external validity are not justified and the conclusions which he draws from these views could fatally undermine the experimental economics enterprise. In rejecting the justification of these views, the paper reaffirms the importance of the experiments in economics.
    Keywords: Experiments, External Validity, Applicability
    JEL: B41
    Date: 2007–12
  7. By: Dave Colander; KimMarie McGoldrick
    Date: 2008–12
  8. By: Steven Jones; Eric Hoest; Richie Fuld; Mahesh Dahal; Dave Colander
    Date: 2008–10
  9. By: KimMarie McGoldrick; Gail Hoyt; Dave Colander
    Abstract: This paper provides insight into the skill development activities of graduate students at U.S. institutions providing graduate education in economics. It documents the extent of student participation in and preparation for research and teaching activities while in graduate school. Over fifty percent of students are involved in teaching related activities including grading, leading recitation sections, and teaching their own sections with and without guidance. Most were generally satisfied with their preparation. About fifty-five percent of graduate students attend economic conferences, twenty percent present papers, twenty-two percent submit papers and ten percent have published. Important differences by assistantship assignments, institutional rank, and gender in such activities are highlighted. Findings suggest that programs could do more to prepare students for participation in professional activities post graduation.
    Date: 2008–11
  10. By: David A. Kendrick; Hans M. Amman; Marco P. Tucci
    Abstract: This chapter of the Handbook of Computational Economics is mostly about research on active learning and is confined to discussion of learning in dynamic models in which the systems equations are linear, the criterion function is quadratic and the additive noise terms are Gaussian. Though there is much work on learning in more general systems, it is useful here to focus on models with these specifications since more general systems can be approximated in this way and since much of the early work on learning has been done with these quadratic-linear-gaussian systems. We begin with what has been learned about learning in dynamic economic models in the last few decades. Then we progress to a discussion of what we hope to learn in the future from a new project that is just getting underway. However before doing either of these it is useful to provide a short description of the mathematical framework that will be used in the chapter.
    Keywords: Active learning, dual control, optimal experimentation, stochastic optimization, time-varying parameters, forward looking variables, numerical experiments.
    JEL: C63 E61
    Date: 2008–08
  11. By: Heugens, P.P.M.A.R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Organization theory is a paradoxical field of scientific inquiry. It has struggled for more than fifty years to develop a unified theory of organizational effectiveness under girded by a coherent set of assumptions, and it has thus far failed to produce one. Yet, by other standards it is simultaneously a tremendously successful field. It has great intellectual mobilizing powers and its publications - journals as well as books - are highly esteemed. In this address I attempt to unravel this paradox by discussing the field’s considerable pathologies, such as its tendency towards theoretical fragmentation and methodological factionalism, as well as its formidable strengths, like the endlessly intriguing questions it asks itself and the considerable ambidexterity with which it handles pluralism problems. Most importantly, however, I propose three overarching methodological strategies with which organization theorists can address the problems currently hampering their field. First, I argue that greater integration amongst extant theories might be reached by exploring hidden moderators that can produce contradictory research findings across macro social contexts. Second, the field can improve upon its theoretical relevance by discovering and acknowledging the stylized facts of organizational life. Third, we can collectively increase our under standing of organization a phenomena by exploring the micro foundations of our macro theories. In short, if we dared to ruffle our methodological feathers, the prospects for the organization theory field could be very bright indeed.
    Keywords: organization theory;scientific fields;critique of social science practices;permanent failure;meta research strategies;stylized facts;micro foundations;agentic behavior;thick description;institutional moderator variables
    Date: 2008–09–13
  12. By: Piet Keizer
    Abstract: When trying to understand what is meant by the concept of institution we must analyse the context in which institutions are assumed to play their role. In a typical economic analysis institutions are rules that serve the interests of economic-rational actors, and must enhance the efficiency of their actions. In a typical sociological analysis institutions are rules that serve the interests of social actors, and must enhance the formation of stable systems of hierarchically ranked groups. In the real world human behaviour also has a psychic aspect. In a typical psychological analysis institutions must promote the integration of different parts of a personality. This article assumes that in real life humans are driven by a composite of three categories of forces, namely the economic, the social and the psychic motive. Real life institutions have the function to mould these drives in such a way that economic, social and psychic goals can be reached more effectively. As a matter of illustration of this moulding process a short sketch of the emergence of the Dutch welfare state is given.
    Keywords: economic, sociological, psychological, institution, welfare state
    JEL: A12 B15 B41 B52
    Date: 2008–08
  13. By: Gustavo Federico Torrens
    Abstract: Specialization and trade rest on institutions that protect property rights and enforce agreements. Frequently, in economic analysis institutions are just assumed to exist, or it is implicitly supposed that the political game can establish them. Once this assumption is done, the invisible hand does its work properly. It doesn’t matter if humans beings are benevolent or selfish for the gains from specialization and trade be realized. However, it is not easy to build institutions, neither are they a free lunch. The paper shows that ideology, understood as a self-imposed code of conduct, contributes to reduce the cost of instituting an industrious society, inducing people to assign their time and effort to productive activities rather than to theft.
    Keywords: ideology, self-imposed codes of conduct, crime, enforcement of property rights.
    JEL: K42 Z13
    Date: 2008–08
  14. By: Leong, Chee Kian
    Abstract: Why has capitalism prevailed as an institution in promoting economic growth despite its apparent unfairness? In this paper, we argue that within a neoclassical framework, capitalism is fairer compared to collectivism due to the absence of a rationally acceptable collective solution. This is demonstrated using a dynamic game with a vote-maximizing government(G) and profit-maximizing representative firm(F). In this GF game, collectivism or cooperation between the players appears to trump capitalism at the aggregate level. Developing countries operating below the steady state may be better off cooperating as they will enjoy positive long term economic growth and profit growth once their capital stock exceeds the steady state level. But this requires them to sacrifice short term growth and possible inequity as the firm's profits grow. Developed countries operating above the steady state will find the cooperative solution attractive since both economic growth and profit growth will be positive. So, from an aggregate level, collectivism or cooperation performs better than capitalism. However, a fair imputation of cooperative or collective solutions which is rationally acceptable for all players does not exist. In every stage of development, the firm always finds it rationally unacceptable to cooperate because the profits earned by the firm under the feedback Nash equilibrium always dominate the profits under cooperation. On the other hand, the government only finds the cooperative solution to be rationally acceptable when the economy is above the steady state. Hence, collectivist cooperation between the government and the firm are not rationally acceptable for both and a fair equilibrium cannot be attained with collectivism.
    Keywords: Fairness; Dynamic Games; Economic Growth; Capitalism
    JEL: D63 O49
    Date: 2008
  15. By: Viola Angelini, Danilo Cavapozzi, Luca Corazzini, Omar Paccagnella.
    Abstract: Self-reported life satisfaction is highly heterogeneous across similar countries. We show that this phenomenon can by largely explained by the fact that individuals adopt different scales and benchmarks in evaluating themselves. Using a cross sectional dataset on individuals aged 50 and over in ten European countries, we compare estimates from an Ordered Probit in which life satisfaction scales are invariant across respondents with those from a Hopit model in which vignettes are used to correct for individual-specific scale biases. We find that variations in response scales explain a large part of the differences found in raw data. Moreover, the cross countries ranking in life satisfaction dramatically depends on scale biases.
    Keywords: Life satisfaction, scale biases, vignette, counterfactuals.
    JEL: C42 D12 I31 J14

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