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on History and Philosophy of Economics |
| By: | Bruno S. Frey |
| Abstract: | Four types of “economics” relevant for institutional analysis are distinguished: Standard Neoclassical Economics; Socio-Economics or Social Economics; New Institutional Economics; and Psychological Economics (often misleadingly called Behavioural Economics). The paper argues that an extension of Neoclassical Economics with elements from other social sciences (including political science, sociology, psychology, law and anthropology) is fruitful to explain institutions because it allows us to maintain the strength of that approach. Social Economics can play an important role helping to overcome the limitations of Neoclassics. However, it should become more concrete, integrate what is useful in Neoclassics, and should seriously engage in empirical research. |
| Keywords: | Institutional Economics, Neoclassics, Psychological Economics, Behavioural Economics, institutions. |
| JEL: | Z11 H77 P16 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:420&r=hpe |
| By: | Monga, Celestin |
| Abstract: | For decades, many researchers argued that economics had nothing to fear from enriching itself with lessons and advances from other disciplines. Unfortunately, these suggestions were either neglected or dismissed upfront in what was then arbitrarily considered mainstream economics. The global crisis has led even Nobel Prize winners to acknowledge that the problem facing economists and policy makers today is mostly intellectual - it is the need to confront the systematic failure of thinking, especially on the part of macroeconomists. Despite its unprecedented magnitude and heavy financial, human, and intellectual cost, the crisis certainly does not invalidate everything that has been learned about macroeconomics. However, the costs highlight some of mistakes of the dominant intellectual macroeconomic framework. Post-macroeconomics should not be understood as another metanarrative of the end of metanarratives. The use of the prefix post here suggests and emphasizes much more than temporal posterity. Post-macroeconomics should follow from macroeconomics more than it follows after macroeconomics. The theorizing of post-macroeconomics is therefore neither systematically oppositional nor hegemonic. It does not advocate a - dialectic opposition - between macroeconomics and post-macroeconomics. Rather, it suggests that the latter builds on the former and goes beyond it. |
| Keywords: | Economic Theory&Research,Debt Markets,,Banks&Banking Reform,Access to Finance |
| Date: | 2009–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4986&r=hpe |
| By: | Sérgio Fornazier Meyrelles Filho (Curso de Ciencias Economicas, Universidade Federal de Goiás) |
| Abstract: | This essay presents a brief review of Alfred Marshall’s contributions in three main theoretical fields: first of all, we focus on the Marshallian interest rate theory; following, his analysis about the determination of the aggregate price level is considered. Finally, we approach Marshall’s ideas concerning the nature of business cycles. In our view this kind of recovering has great relevance for an adequate understanding of the evolution of economic thought since the classics, and for accurately appreciating the theoretical elements subsequently developed by Pigou and Robertson in the context of a loanable funds theory of interest determination and in their respective explanations about the nature of cycles. This conception, subsequently opposed by Keynes in his General Theory, emerged where aggregate demand failures viewed as persistent phenomena does not constitute relevant theoretical possibility in a context where there is a clear dichotomy between the short and the long run in the economic processes. |
| Keywords: | interest rates, money, cycles |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ufb:wpaper:006&r=hpe |
| By: | Nordberg, Morten (The Ragnar Frisch Centre for Economic Research); Røgeberg, Ole Jørgen (The Ragnar Frisch Centre for Economic Research) |
| Abstract: | Theories that involve plainly false and even bizarre assumptions are argued to have an important role in bundling empirical facts in a way that allows these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories are subcomponents used in a valid explanatory strategy as long as the mechanisms only derive the implications of the facts summarised. This provides a defence and explanation of many economic theories, but also imposes hard limits on such theorising. |
| Keywords: | As-if theory; Economic methodology; welfare economics |
| JEL: | B41 D00 |
| Date: | 2009–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2003_018&r=hpe |
| By: | Bruno S. Frey; Alois Stutzer |
| Abstract: | In economics there is presently an almost revolutionary development. The direct measurement of subjective welfare challenges traditional economics, inspires it, and opens new avenues for scientific research. The approaches and possibilities of an economic analysis of happiness are shown and illustrated with two specific applications. The relationship between income and life satisfaction is strongly shaped by the aspiration level serving to evaluate life conditions. The aspiration levels are formed by social comparisons and adaptation processes. The Life Satisfaction Approach is a new method to capture the value of public goods. The short discussion of governmental „happiness policy“ from a constitutional viewpoint suggests a comparative institutional analysis of subjective well-being. The happiness revolution in economics is only at its beginning. More insights concerning institutions allowing people to pursue their own conception of a good life are to be expected. |
| Keywords: | Happiness, Life Satisfaction, Economics, Income, Terrorism |
| JEL: | A12 D31 H41 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:417&r=hpe |
| By: | Martti Vihanto (Department of Economics, Turku School of Economics) |
| Abstract: | Social institutions are persistent regularities in contracting and other relations amongst men and in the unintended consequences of such rule-like behavior. They include morality and law as well as institutions of governance such as branding and advertising. Institutions are studied in all approaches and schools of economics, and each involves its peculiar emphases. The purpose of the paper is to give an overview of the forms, importance and working of social institutions by taking examples from decision making of consumers. Use is made in particular of the findings of transaction-cost, evolutionary and behavioral economics. The paper is part of a Finnish open access textbook Principles of Institutional Economics in progress (www.ace-economics.fi/mvihanto). |
| Keywords: | social institutions, institutional economics, transaction costs, heuristic behavior |
| JEL: | B52 D11 D02 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp49&r=hpe |
| By: | Rémy VOLPI (labrii, ULCO) |
| Abstract: | La crise du credit crunch, au-delà du rideau de fumée de ses aspects techniques, n’est autre qu’un profond déficit d’éthique. De telles crises, cependant, ne sont en rien nouvelles. Le capitalisme s’est édifié et consolidé à partir de l’avènement de crises financières. Chaque fois, comme le décrit le schéma schumpetérien de la destruction créative, un meilleur système s’est instauré, depuis le Banco del Rialto et la Casa di San Giorgio, à la Wisselbank, la Banque d’Angleterre, ou la Federal Reserve. Mais cela n’a pas empêché les folies telles que la Tulipmania ou la bulle de la Compagnie des Mers du Sud, pour n’en citer que quelques unes, situées loin dans le temps. Le modèle conventionnel de l’homo oeconomicus n’est pas à même de nous fournir une explication solide sur l’effet Veblen ou sur les bulles financières. Les économistes, qui recourent à des explications de types vaudou et zombie qu’ils désapprouvent, en disent long sur leurs propres limites. Tout à l’opposé, la très parcimonieuse théorie de René Girard sur le désir mimétique, avec les concepts de médiation externe et interne, est étonnamment convaincante. La médiation externe mène à l’émulation sans violence, qui est spécifique des temps modernes, grâce à l’éthos de confiance. Mais quand la confiance s’estompe, se produit un changement en faveur de la médiation interne, menant à un emballement du système, caractéristique, dans le vocabulaire de Girard, d’une crise sacrificielle. Pour s’y opposer, les réglementations rigides de la realpolitik peuvent proliférer, elles seront pratiquement vaines sans une attitude de Realutopie exigeant davantage d’éthique. Trois buts doivent être atteints : un gouvernement mondial, une monnaie mondiale, le pouvoir aux actionnaires, pas aux managers. Aussi, soyons réalistes, visons l’impossible : l’éthique. The credit crunch crisis, beyond the smokescreen of its technicalities, is but a deep lack of ethics. Such crises, however, are nothing new. Capitalism did build up from the occurrences of financial crises. Each time, as described by the Schumpeterian creative-destruction pattern, a better system was set up, from the Banco del Rialto and the Casa di San Giorgio, to the Wisselbank, the Bank of England, or the Federal Reserve. But this did not prevent such follies as the Tulipmania or the South-Sea Bubble, to name but a few and remote ones. The conventional homo oeconomicus model fails to give us any sound explanation about the Veblen effect or about financial bubbles. Economists reprovingly resorting to voodoo and zombie behaviours as an explanation are just speaking volumes about their own limits. In contrast, René Girard’s eminently parsimonious theory of mimetic desire, with the notions of internal and external mediation, is amazingly convincing. External mediation leads to emulation without violence, which is specific of modern times, thanks to the ethos of confidence. But when confidence fades away, then a shift towards internal mediation happens, leading to a runaway system which typifies a sacrificial crisis in Girard’s parlance. To counter it, stiff realpolitik regulations may proliferate, they would be almost useless without a Realutopie attitude demanding more ethics. Three goals are to be achieved: a world government, a world currency, power to the shareholders, not to the managers. So let us be realistic and look for what is impossible: ethics. |
| Keywords: | Gerard, mimetic theory |
| JEL: | Y50 Z10 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:217&r=hpe |
| By: | dIMITRI UZUNIDIS (labrii, ULCO); Dimitris PATELIS (labrii, ULCO) |
| Abstract: | Comment comprendre la crise actuelle qui est déterminante sur le plan mondiale ? Dans ce texte, en suivant la pensée de Joan Robinson, nous présenterons dans la première partie le contenu de la définition du « nouveau mercantilisme », puis nous verrons comment ces pratiques ont contribué et ont soutenu ce que nous appelons communément la mondialisation. Cette mondialisation, du fait des barrières internes et externes auxquelles s’est heurté le capitalisme a été vite mue par la finance. Cette dernière alimentant l’« économie virtuelle » est de venue par son essoufflement une cause de dévalorisation et de destruction de capitaux excédentaires. Et après ? Quel peut être l’avenir de l’« économie monde » ? Le capitalisme peut-il se passer du mercantilisme ? How to understand the current crisis which is decisive at the World level? In this text, following the thought of Joan Robinson, we present in the first part the content of the definition of “new mercantilism”, and we then explain how these practices have helped and supported what we commonly call globalization. Globalization, because of the internal and external barriers that capitalism had to face, was quickly driven by finance. The latter, supplying the “virtual economy”, has become -because of its shortcomings-a cause of devaluation and destruction of surplus capital. And after? What can be the future of the “world economy”? Can Capitalism escape from mercantilism? |
| Keywords: | new mercantilsm, crisis, capitalism, globalization |
| JEL: | B31 B20 F30 P17 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:215&r=hpe |
| By: | Serge-Christophe Kolm |
| Abstract: | The most general and central principle of social and economic optimality and justice is shown to be equal freedom. The standard and central case is that of freedom valued for the choice it permits. Allocations abiding by this principle are characterized, with the main structures of constraints and possibilities and the main alternatives as regards the corresponding entitlements and accountabilities. When such first best equal freedom is not possible or cannot be efficient or in the core, second-best freedom egalitarian principles are defined, notably in the category of freedom maximins. These solutions rest on the properties of freedom comparisons and of freedom-ordered allocations. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2009-120&r=hpe |