nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒11‒11
eight papers chosen by
Erik Thomson
University of Manitoba

  1. La critique d’ad hocité en économie. L’exemple des théories de la croissance By Stéphane CARCILLO; Véronique REIFFERS
  2. Excavating for economics in africana studies By Mason, Patrick L.
  3. In pursuit of balance : randomization in practice in development field experiments By Bruhn, Miriam; McKenzie, David
  4. The Experimental Approach to Development Economics By Abhijit V. Banerjee; Esther Duflo
  5. The Quantity Theory of Money is Valid. The New Keynesians are Wrong! By Hillinger, Claude; Süssmuth, Bernd
  6. The growing evidence of Keynes's methodology advantage and its consequences within the four macro-markets framework By Angel Asensio
  7. Are children 'normal'? By Dan Black; Natalia Kolesnikova; Seth G. Sanders; Lowell J. Taylor
  8. Reconciling resource economics and ecological economics: the economics of sustainability and resilience By Beard, Rodney

  1. By: Stéphane CARCILLO (MATISSE-SET, Université de Paris 1); Véronique REIFFERS (C3ED, Université de Versailles)
    Abstract: La critique d'ad hocité est courante en économie, mais elle reste con¬fuse, reposant aussi bien sur des arguments d'ordre heuristique (fondements microéconomiques), que sur des arguments d'ordre empirique (ajustement d'une théorie aux faits). Si l'épistémologie d'inspiration poppérienne fourni des définitions utiles, quoique discutables, de l'ad hocité, une revue de quel¬ques commentaires récents révèle un autre sens attribué par les économistes : une hypothèse qui manque de fondements empiriques tout en étant essen¬tielle à la dérivation des certaines conclusions. Nous cherchons ensuite à déterminer dans quelle mesure les théories de la croissance endogène sont exposées à la critique d'ad hocité. Tout d'abord, s'il est impossible d'affirmer que certaines hypothèses communes à tous les modèles (rendements con¬stants dans la production et forme des fonctions d'utilité) sont ad hoc d'un point de vue empirique ou heuristique, la véritable critique qui peut leur être adressée relève plutôt d'un manque de réalisme. Ensuite, la tentative d'ajustement du modèle néoclassique à l'absence de convergence internatio¬nale illustre la difficile application de l'ad hoc dans son acception empirique. Enfin, l'utilisation de l'agent représentatif dans les modèles de croissance en concurrence imparfaite est évaluée à la lumière d'une définition heuristique de l'ad hocité.
    Keywords: hypothèses, ad hoc, ad hocité, méthodologie, théories de la croissance
    JEL: B41
    Date: 2008–09–01
  2. By: Mason, Patrick L.
    Abstract: For 30 years, Africana Studies has developed as an interdisciplinary field. Although much attention has been paid within the field to the humanities and arts, much less has been paid to the social sciences, particularly economics. This analysis documents the presence of economists and economics course content among Africana Studies programs. The authors also discuss the presence of economists and economic content among leading general interest journals in Africana Studies and of economics content in several influential Africana Studies texts. Only 1.72% of the faculty members in leading Africana Studies departments are economists, and economics course content among Africana Studies programs is anemic. Also, there is little economics content in Africana journals, particularly peer-reviewed journals. Recommendations include incorporating accessible economics texts into course reading lists; encouraging African American students to take economics, calculus, and statistics; teaching statistics and economic theory in the context of course content; and adding economists to the editorial boards of Black Studies journals.
    Keywords: black studies; Africana studies; African American studies; interdisciplinary studies; Black political economy; African American economists; Africana Studies; African American intellectual history
    JEL: J15 A2 A14
    Date: 2008
  3. By: Bruhn, Miriam; McKenzie, David
    Abstract: Randomized experiments are increasingly used in development economics, with researchers now facing the question of not just whether to randomize, but how to do so. Pure random assignment guarantees that the treatment and control groups will have identical characteristics on average, but in any particular random allocation, the two groups will differ along some dimensions. Methods used to pursue greater balance include stratification, pair-wise matching, and re-randomization. This paper presents new evidence on the randomization methods used in existing randomized experiments, and carries out simulations in order to provide guidance for researchers. Three main results emerge. First, many researchers are not controlling for the method of randomization in their analysis. The authors show this leads to tests with incorrect size, and can result in lower power than if a pure random draw was used. Second, they find that in samples of 300 or more, the different randomization methods perform similarly in terms of achieving balance on many future outcomes of interest. However, for very persistent outcome variables and in smaller sample sizes, pair-wise matching and stratification perform best. Third, the analysis suggests that on balance the re-randomization methods common in practice are less desirable than other methods, such as matching.
    Keywords: Statistical&Mathematical Sciences,Scientific Research&Science Parks,Science Education,Economic Theory&Research,Climate Change
    Date: 2008–10–01
  4. By: Abhijit V. Banerjee; Esther Duflo
    Abstract: Randomized experiments have become a popular tool in development economics research, and have been the subject of a number of criticisms. This paper reviews the recent literature, and discusses the strengths and limitations of this approach in theory and in practice. We argue that the main virtue of randomized experiments is that, due to the close collaboration between researchers and implementers, they allow the estimation of parameters that it would not otherwise be possible to evaluate. We discuss the concerns that have been raised regarding experiments, and generally conclude that while they are real, they are often not specific to experiments. We conclude by discussing the relationship between theory and experiments.
    JEL: O1
    Date: 2008–11
  5. By: Hillinger, Claude; Süssmuth, Bernd
    Abstract: We test the quantity theory of money (QTM) using a novel approach and a large new sample. We do not follow the usual approach of first differentiating the logarithm of the Cambridge equation to obtain an equation relating the growth rate of real GDP, the growth rate of money and inflation. These variables must then again be ‘integrated’ by averaging in order to obtain stable relationships. Instead we suggest a much simpler procedure for testing directly the stability of the coefficient of the Cambridge equation. For 125 countries and post-war data we find the coefficient to be surprisingly stable. We do not select for high inflation episodes as was done in most empirical studies; inflation rates do not even appear in our data set. Much work supporting the QTM has been done by economic historians and at the University of Chicago by Milton Friedman and his associates. The QTM was a foundation stone of the monetarist revolution. Subsequently belief in it waned. The currently dominant New Keynesian School, implicitly or explicitly denies the validity of the QTM. We survey this history and argue that the QTM is valid and New Keynesians are wrong.
    Keywords: new Keynesian theory; quantity theory of money
    JEL: B22 E31 E41 E52
    Date: 2008–10–30
  6. By: Angel Asensio (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)
    Abstract: Recent developments in econometrics and economic theory attest the growing evidence of strong uncertainty. The paper argues that these developments both question seriously the methodological foundations of the mainstream macroeconomics and support Keynes’s powerful concepts and theory. It emphasizes how replacing ‘risk’ with strong uncertainty suffices to transform the standard four-macro-markets system into a shifting demand-driven system, with the result that price rigidity is not to be considered the cause of the effective demand leadership (although, as Keynes pointed out, some rigidity is required to give us some stability in a monetary economy). As it is not based on a restrictive definition of uncertainty, Keynes’s theory is more realistic than the mainstream. It is also more general, for the equilibrium level of employment depends on the views about the future, instead of having a unique ‘natural’ anchor.
    Keywords: General equilibrium, Uncertainty, Post-Keynesian
    Date: 2008–09–20
  7. By: Dan Black; Natalia Kolesnikova; Seth G. Sanders; Lowell J. Taylor
    Abstract: In his classic work on the economics of fertility, Becker (1960) suggests that children are likely "normal." We examine this contention. Our first step is documenting an empirical regularity about the cross section of white married couples in the U.S.: when we restrict comparisons to households living in broadly similar locations (e.g., in expensive urban areas, or in rural areas), completed fertility is positively correlated with the husband's income. Two alternative models rationalize the data-one in which children are "normal" and a second in which the observed pattern emerges solely as a consequence of rational sorting by households. In an effort to sort out causal effects, we undertake a rather specialized empirical exercise to analyze the localized impact on fertility of the mid-1970s increase in world energy prices-an exogenous shock that substantially increased men's incomes in the Appalachian coal-mining region. We find that children are indeed "normal."
    Keywords: Demography
    Date: 2008
  8. By: Beard, Rodney
    Abstract: Cross disciplinary dialogue between economics and ecology has within economics centered on the two subdisciplines of bioeconomics and ecological economics. This division in economics re ects the division in ecology between population and sys- tems ecologists. Recent developments in ecology are aimed at a more integrated approach to ecologic al research. One example of such an approach is that of models based on thermodynamic reaction networks. By applying the \Law of Mass Action" to biochemical descriptions of ecological networks, it is possible to reformulate eco- logical systems models as population dynamic models, which can then be embedded within a bioeconomic model framework. Analysis of bioeconomic models far from thermodynamic equilibrium is then possible from within either a steady-state or ergodic framework. The Glansdorff-Prigogine or other related stability criteria from non-equilibrium thermodynamics may then be applied to the study of bioeconomic systems.
    Keywords: Ecological economics; bioeconomic modelling; resource economics
    JEL: B49 B59 Q57
    Date: 1995

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