nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒12‒21
twelve papers chosen by
Erik Thomson
University of Manitoba

  1. The Monetary Foundation of the Economic Circuit and the Principle of Effective Demand in Marx, Keynes and Kalecki By Hernando Matallana
  2. Reshaping the International Monetary Architecture and Addressing Global Imbalances: Lessons from the Keynes Plan By Piffaretti, Nadia F.
  3. A ‘New Bretton Woods’: Kaldor, and the Antipodean Quest for Global Full Employment By Leanne Ussher; Sean Turnell
  4. 1958-2008, avatars et enjeux de la courbe de Phillips By Le Bihan, Hervé
  5. (Over-)Stylizing experimental findings and theorizing with sweeping generality By Werner Güth; Hartmut Kliemt; M. Vittoria Levatia
  6. Can Median-Maximizing Behavior Be Rational? By Vivek Dehejia; Jiankang Zhang
  7. Une forme minimale de coopération By Paternotte, Cédric
  8. Optimization incentive and relative riskiness in experimental coordination games By Dimitri Dubois; Marc Willinger; Phu Nguyen-Van
  9. A Short Proof of Reny's Existence Theorem for Payoff Secure Games By Pavlo Prokopovych
  10. Issues concerning the collection and interpretation of economic data in addition to an analysis regarding the impact of these issues on the economy using the Rational and Adaptive Expectations hypotheses and certain postulates of Price Theory. By Meyer, Thomas K.
  11. Monetary policies and low-frequency manifestations of the quantity theory By Sargent, Thomas; Surico, Paolo
  12. What explains the academic success of second-year economics students? An exploratory analysis By Pietie Horn; Ada Jansen; Derek Yu

  1. By: Hernando Matallana
    Abstract: Marx carried out the first full inquiry on the economics of the all-comprising circulation process of capital, first in Grundrisse in the late 1850s, and later in Capital and Theories of Surplus Value in the 1860s and the 1870s. Two substantial aspects are at the center of Marx’s analysis: (a) the monetary determination of the social process of production and circulation of capital, i.e. the fact that money-capital is a social relation determining the interaction of agents in the monetary production economy alias capitalism; and (b) the notion of the economic circuit as the key economic category for the understanding of the monetary logic of the principle of effective demand. These aspects are also at the center of Keynes’s and Kalecki’s foundation of the theory of the monetary production economy.
    Date: 2008–11–13
  2. By: Piffaretti, Nadia F.
    Abstract: As we witness profound changes in the global economy, and as it becomes apparent that the so-called “Revived Bretton Woods System” may be nothing more than a temporary non sustainable financing of the US structural internal imbalance, favored by the global role of the dollar, which has increased the overall vulnerability of the global financial architecture, it’s worth revisiting the origins of the Bretton Woods conference, and pointing out the relevance for today’s framework of Keynes’ original 1942 plan for an International Clearing Union. In this note we explore the main characteristics of Keynes’ original plan, by revisiting his original writings between 1940 and 1944, and we outline its relevance to the current debate on the international financial architecture, We’ll argue that reforms of the international financial architecture should include anchoring the international monetary system on a sounder institutional ground.
    Keywords: International Financial Architecture; Bretton Woods Institutions; Keynes Plan; International Currency; Global Imbalances
    JEL: E12 E58 F02 N20 E50 E00 E44 F33
    Date: 2008–12–16
  3. By: Leanne Ussher (Department of Economics, Queens College of the City University of New York); Sean Turnell (Macquarie University, Sydney, Australia)
    Abstract: In 1949 Nicholas Kaldor co-authored a report that, if implemented, would have revolutionised international economic policy-making. National and International Measures for Full Employment (NIFE) had been commissioned by the United Nations. A capstone to efforts throughout the 1940s to transform international economic policy-making along Keynesian lines, NIFE was without precedent in the importance it accorded global effective demand in determining employment and trade outcomes, and in the commitments it required of governments – not only to their own people, but in enunciating their responsibilities to those of other nations as well. For this it earned the enmity of many, including some prominent economists. In the end NIFE fell victim to the independence of nations within the UN as well as changing world circumstances, and the report was quietly shelved. Today it is little known, and to the extent that NIFE continues to be commented on, its ideas are presented as originating from Kaldor as just another step in his progressive thinking from national to global macroeconomics. But while Nicholas Kaldor was the principal author of NIFE, we argue that the origin for this global Keynesian macro policy should equally lie with his Australian co-authors.
    Keywords: Kaldor, Australian Keynesians, International Full Employment
    Date: 2008–08
  4. By: Le Bihan, Hervé
    Abstract: The Phillips curve is fifty years old. Since Phillips (1958)'s original contribution this econometric relationship has undergone many criticisms and evolutions. The Phillips curve yet remains a fundamental tool for inflation forecasting and monetary policy analysis. This paper reviews the various versions of the Phillips curve, using reearch carried out at the Banque de France for illustration purpose, and discusses the main issues associated with this relation.
    Keywords: courbe de Phillips; inflation; salaires
    JEL: E31 B22 J30
    Date: 2008–09
  5. By: Werner Güth (Max Planck Institute of Economics, Jena, Germany); Hartmut Kliemt (Frankfurt School of Finance & Management, Frankfurt am Main, Germany); M. Vittoria Levatia (Dipartimento di Scienze Economiche e Metodi Matematici, University of Bari, Italy)
    Abstract: Human decision making is a process guided by different and partly competing motivations that can each dominate behavior and lead to different effects depending on strength and circumstances. "Over-stylizing" neglects such competing concerns and context-dependence, although it facilitates the emergence of elaborate general theories. We illustrate by examples from social dilemma experiments and inequality aversion theories that sweeping empirical claims should be avoided.
    Keywords: Context-dependent preferences, Experimental economics, Equity theories.
    JEL: A11 D63 D70
    Date: 2008–12–09
  6. By: Vivek Dehejia (Department of Economics, Carleton University); Jiankang Zhang (Department of Economics, Carleton University)
    Abstract: In this note, we consider a perennial problem in single-person choice theory, that is, characterizing choice under uncertainty. In particular, we consider a hypothesis put forward by Joseph Stiglitz (2005), suggesting that median-maximing behavior may be optimal under certain circumstances, and consider how it might best be rationalized within choice theory as it is currently conceived. As is well known, median-maximizing behavior is not generally optimal in the classical VNM framework. Our main result is that it is possible to rationalize the Stiglitz hypothesis in the Machina-Schmeidler (1992) framework of probabilistic sophistication.
    JEL: D81
    Date: 2008–11–03
  7. By: Paternotte, Cédric
    Abstract: Dans cet article, l'auteur décrit et caractérise une forme minimale de coopération, correspondant aux actions de masse impliquant un grand nombre d'agents, telles des manifestations. Il en détaille les aspects intentionnel, épistémique,stratégique et téléologique, qui résultent pour la plupart d'un aaffaiblissement spécifique que de concepts classiques. Parallèlement, l'auteur souligne le rôle crucial de concepts issus de la théorie des jeux pour la définition d'une action conjointe, minimale ou non. En fin, il soutient que la question de la rationalité d'une telle action coopérative minimale est essentielle à sa définition, alors que les analyses habituelles la considèrent au mieux comme une caractéristique possible ou souhaitable.
    Keywords: Coopération; action collective; intention de groupe; objectif collectif; équilibre; rationalité
    JEL: C71
    Date: 2008–07–01
  8. By: Dimitri Dubois (LAMETA (UMR CNRS 5474), Université Montpellier 1, avenue de la mer, site Richter, C.S. 79606, 34960 Montpellier cédex 2, France.); Marc Willinger (LAMETA (UMR CNRS 5474), Université Montpellier 1, avenue de la mer, site Richter, C.S. 79606, 34960 Montpellier cédex 2, France.); Phu Nguyen-Van (THEMA-CNRS, Université de Cergy-Pontoise, 33 Boulevard du Port, F-95011 Cergy-Pontoise Cedex, France.)
    Abstract: We compare the experimental results of three stag-hunt games. In contrast to Battalio et al. (2001), our design keeps the riskiness ratio of the payoff-dominant and the risk-dominant strategies at a constant level as the optimisation premium is increased. We define the riskiness ratio as the relative payoff range of the two strategies. We find that decreasing the riskiness ratio while keeping the optimization premium constant increases sharply the frequency of the risk-dominant strategy. On the other hand an increase of the optimization premium with a constant riskiness ratio has no effect on the choice frequencies. Finally, we confirm the dynamic properties found by Battalio et al. that increasing the optimization premium favours best-response and sensitivity to the history of play.
    Keywords: Coordination game; Game theory; Experimental economics.
    JEL: C72 C92 D81
    Date: 2008–11
  9. By: Pavlo Prokopovych (Kyiv School of Economics and Kyiv Economics Institute)
    Abstract: A short proof of Reny (1999)'s equilibrium existence theorem for payoff secure games is provided. At the heart of the proof lies the concept of a multivalued mapping with the local intersection property. By means of the Fan-Browder collective fixed-point theorem, we show an approximate equilibrium existence theorem which covers a number of known games. Reny's theorem follows from it straightforwardly.
    Keywords: Discontinuous game, payoff security, transfer lower semicontinuity, approximate Nash equilibrium, Reny's theorem
    JEL: C72 C73
    Date: 2008–12
  10. By: Meyer, Thomas K.
    Abstract: This paper concerns the relationship between data collection and interpretation and whether or not a nation is developed. Then, the implications of this relationship on economic performance are analyzed using a Rational Expectations model, an Adaptive Expectations model, and certain elements of Price Theory.
    Keywords: Data; Rational Expectations; Adaptive Expectations; Price Theory.
    JEL: C10 B22 C01 C80
    Date: 2008–12
  11. By: Sargent, Thomas (New York University); Surico, Paolo (Monetary Policy Committee Unit, Bank of England)
    Abstract: To detect the quantity theory of money, we follow Lucas (1980) by looking at scatter plots of filtered time series of inflation and money growth rates and interest rates and money growth rates. Like Whiteman (1984), we relate those scatter plots to sums of two-sided distributed lag coefficients constructed from fixed-coefficient and time-varying VARs for US data from 1900-2005. We interpret outcomes in terms of population values of those sums of coefficients implied by two DSGE models. The DSGE models make the sums of coefficients depend on the monetary policy rule via cross-equation restrictions of a type that Lucas (1972) and Sargent (1971) emphasised in the context of testing the natural unemployment rate hypothesis. When the US data are extended beyond Lucas's 1955-75 period, the scatter plots mutate in ways that we attribute to prevailing monetary policy rules.
    Keywords: Quantity theory; policy regimes; time-varying VAR
    JEL: E40 E42 E51 E52 N10
    Date: 2008–12–08
  12. By: Pietie Horn (Department of Economics, University of Stellenbosch); Ada Jansen (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: The factors influencing academic success of first-year Economics students have received much attention from researchers. Very little attention, however, has been given to the determinants of success of senior Economics students. In the USA, Graunke and Woosley (2005: 367) indicate that college sophomores (second years) face academic difficulties, but this receives little attention in the literature. Economics is an elective subject for second-year students at Stellenbosch University. The academic performance of the second-year students has shown a decline, as compared to the first-year Economics performance and the faculty’s average performance. An observed phenomenon at Stellenbosch University is the poor attendance of lecture and tutorials by second year students, some of the factors than can perhaps explain why students perform poorly. This phenomenon may be explained in part by second year students losing interest in academic activities, focusing on other social commitments. This study investigates the academic success of second-year Economics students. It adds to the existing literature on the factors affecting the academic success of Economics students by focusing on the second-year students (a much neglected group in empirical studies, particularly in South Africa). The empirical analyses confirm some of the existing findings in the literature, namely that lecture and tutorial attendance are important contributors to academic success. We also find that as students progress to Economics at the second-year level, their performance in individual matriculation subjects is less relevant, except for those students who had taken Additional Mathematics. However, the matriculation aggregate mark is significant in explaining the academic performance, in a non-linear way. An important finding is that non-White students tend to perform more poorly in essay writing (one of the components of the course mark in the second year) than White students.
    Keywords: Education, Undergraduate, Second-year economics, Academic performance
    JEL: A2 A22 A29
    Date: 2008

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