nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2010‒06‒26
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. Monetary Theory from a Chinese Historical Perspective By Zheng Xueyi; Yaguang Zhang; John Whalley
  2. At the Mercy of the Prisoner Next Door. Using an Experimental Measure of Selfishness as a Criminological Tool By Thorsten Chmura; Christoph Engel; Markus Englerth; Thomas Pitz
  3. An entrepreneurial model of economic and environmental co-evolution By Jason Potts; John Foster; Anna Straton
  4. Moody choice By Arnab Bhattacharjee; Jie Hany
  5. A note on the theory of fast money flow dynamics By Andrey Sokolov; Tien Kieu; Andrew Melatos
  6. Before Going Any Further With Social Capital: Eight Key Criticisms to Address By Haynes, Paul
  7. Post crisis blues By Beja, Jr., Edsel
  8. An Experimental Contribution to the Theory of Customary (International) Law By Christoph Engel
  9. Left, Right and Beyond: the Pragmatics of Political Mapping By Jonathan White
  10. Incidences de la crise economique mondiale de 2008/09 et des options de la politique de reponse sur la pauvreté des enfants au Cameroun By Sami Bibi; John Cockburn; Luca Tiberti; Ismaël Fofana; Paul Ningaye; Christian Arnault Emini; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO)
  11. Capitalism, the state, and the underlying drivers of human development By Michael Walton

  1. By: Zheng Xueyi; Yaguang Zhang; John Whalley
    Abstract: We discuss monetary thought in ancient China from the perspective of Western monetary theory. It sets out the structure of economic activity in the various dynasties of ancient China and emphasizes the differences in monetary structure from Europe (and later North America). Imperial China was a politically integrated structure with regional segmentation of economic activities and hence with regional money. Monetary policy was one body conducted at regional level, but overseen naturally politically before national integration under the Ming dynasty (14th century). In various regions different forms of money circulated, with gold, silver, copper, and paper all present at various times. Monetary policy was guided by monetary thought, such as later in Europe. Basic concepts such as monetary function, the velocity of circulation, inflation, interest rate parity and the quantity theory were all present. The economics of Imperial China witnessed boom and bust, inflation and deflation and monetary control much like Europe to follow. Monetary thought thus seemingly preceded Western thought, and had remarkable similarities. Whether much of this thought travelled down the silk road remains unknown, but the possibility is intriguing.
    JEL: N20
    Date: 2010–06
  2. By: Thorsten Chmura (University of Bonn); Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Markus Englerth (Max Planck Institute for Research on Collective Goods, Bonn); Thomas Pitz (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: Do criminals maximise money? Are criminals more or less selfish than the average subject? Can prisons apply measures that reduce the degree of selfishness of their inmates? Using a tried and tested tool from experimental economics, we cast new light on these old criminological questions. In a standard dictator game, prisoners give a substantial amount, which calls for more refined versions of utility in rational choice theories of crime. Prisoners do not give less than average subjects, not even than subjects from other closely knit communities. This speaks against the idea that people commit crimes because they are excessively selfish. Finally those who receive better marks at prison school give more, as do those who improve their marks over time. This suggests that this correctional intervention also reduces selfishness.
    Keywords: experiment, Crime, Prison, Dictator Game, Hurdle Model
    JEL: K42 C91 K14 C34
    Date: 2010–06
  3. By: Jason Potts; John Foster; Anna Straton (School of Economics, The University of Queensland)
    Abstract: A basic tenet of ecological economics is that economic growth and development are ultimately constrained by environmental carrying capacities. It is from this basis that notions of a sustainable economy and of sustainable economic development emerge to undergird the ‘standard model’ of ecological economics. However, the belief in ‘hard’ environmental constraints may be obscuring the important role of the entrepreneur in the coevolution of economic and environmental relations, and hence limiting or distorting the analytic focus of ecological economics and the range of policy options that are considered for sustainable economic development. This paper outlines a co-evolutionary model of the dynamics of economic and ecological systems as connected by entrepreneurial behaviour. We then discuss some of the key analytic and policy implications.
    Date: 2010
  4. By: Arnab Bhattacharjee; Jie Hany
    Abstract: If choices depend on the decision maker's mood, is the attempt to derive any consistency in choice doomed? In this paper we argue that, even with full unpredictability of mood, the way choices from a menu relate to choices from another menu exhibits some structure. We present two alternative models of moody choice. and show that, in either of them, not all choice patterns are possible. Indeed, we characterise both models in terms of consistency requirements of the observed choice data.
    Keywords: Bounded rationality, procedural rationality, utility maximization, choice behavior.
    JEL: D01
    Date: 2010–05
  5. By: Andrey Sokolov; Tien Kieu; Andrew Melatos
    Abstract: The gauge theory of arbitrage was introduced by Ilinski in [arXiv:hep-th/9710148] and applied to fast money flows in [arXiv:cond-mat/9902044]. The theory of fast money flow dynamics attempts to model the evolution of currency exchange rates and stock prices on short, e.g.\ intra-day, time scales. It has been used to explain some of the heuristic trading rules, known as technical analysis, that are used by professional traders in the equity and foreign exchange markets. A critique of some of the underlying assumptions of the gauge theory of arbitrage was presented by Sornette in [arXiv:cond-mat/9804045]. In this paper, we present a critique of the theory of fast money flow dynamics, which was not examined by Sornette. We demonstrate that the choice of the input parameters used in [arXiv:cond-mat/9902044] results in sinusoidal oscillations of the exchange rate, in conflict with the results presented in [arXiv:cond-mat/9902044]. We also find that the dynamics predicted by the theory are generally unstable in most realistic situations, with the exchange rate tending to zero or infinity exponentially.
    Date: 2010–06
  6. By: Haynes, Paul
    Abstract: The concept of social capital emerged as an influential research theme in a number of disciplines in the past twenty years, as measured by the exponential growth in social capital literature throughout the 1990s and the early 2000s. While some of the assumptions of social capital theory have been challenged individually, its limitations as a unified concept have not been adequately tackled within the academic literature. This paper is an attempt to address this challenge, identifying eight key questions that the concept needs to tackle. The paper concludes that a stronger concept of social capital will emerge only by addressing these limitations explicitly and as a cluster rather than individually.
    Date: 2009–06–26
  7. By: Beja, Jr., Edsel
    Abstract: Debates that emphasize rapid economic recovery from major crises can extinguish progressive views that examine fundamental issues for sound economic management of present-day capitalist systems, such as: the determination of appropriate modes of cooperation including the procedures for intervention during crises, the introduction of structural changes that enable domestic economies to pursue appropriate industrial policies as well as erect institutions that could withstand external shocks, and, more importantly, the pursuit of fundamental reforms in the international economic architecture to allow for the management of cross-border flows of resources as well as coordinated adjustments to economic imbalances. There remains a lot to be done to make present-day capitalist systems reach a balance between domestic and global goals and thereby allow them to enlarge economic welfare without compromising national sovereignty.
    Keywords: 1997 Asian Crisis; 2008 Global Crisis; post-crisis; economic policy
    JEL: H10 E32 F02 O20 E61
    Date: 2010–06–18
  8. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: In their majority, public international lawyers postulate that for a new rule of customary law to originate, two conditions must be fulfilled: there must be consistent practice, and it must be shown that this practice is motivated by the belief that such behaviour is required in law. Maurice Mendelson (Recueil des Cours 272 (1998) 155) has challenged this view. He believes that the majority view ignores the fundamentally incomplete nature of public international law. He claims that the new rule emerges because mere practice leads to convergent expectations. This paper uses data from student experiments with a linear public good to show that behaviour con-verges even absent verbal communication; that convergence is guided by mean contributions in the previous round, which serve as an implicit norm; that freeriding on this implicit norm is re-garded as illegitimate; that cooperation can be stabilised at a high level if “reprisals” are permitted. Hence the mechanism of norm formation proposed by Maurice Mendelson is fully borne out by the experimental data.
    Keywords: experiment, customary international law, opinio iuris, linear public good
    JEL: H41 K33 D23 C91 F53
    Date: 2010–04
  9. By: Jonathan White
    Abstract: This paper examines the political categories of ‘Left’ and ‘Right’, in particular as they are evoked and instrumentalised by political actors in the democratic process. Drawing on some of the insights of positioning theory, it shows how ‘Left’ and ‘Right’ are discursive resources deployed, contested and resisted in political exchange. The paper looks in depth at some of the political uses to which Left-Right talk may be put, discussing in particular acts of partisan profiling, of legitimisation and subversion, and the evocation or rejection of political continuity. The paper argues that while these usages can be seen as strategic moves pursued for political advantage, they have a larger significance insofar as they indicate one of the ways the democratically important imagery of Left and Right may remain active in European politics.
    Date: 2010–06
  10. By: Sami Bibi; John Cockburn; Luca Tiberti; Ismaël Fofana; Paul Ningaye; Christian Arnault Emini; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO)
    Abstract: Cette étude vise, d’une part, à explorer les effets potentiels de la crise économique mondiale de 2008/09 sur la pauvreté des enfants au Cameroun. D’autre part, elle a pour but d’explorer les effets potentiels, sur cette même population-cible, des politiques qui seraient prises en réponse à ladite crise. Pour ce faire l’étude utilise une approche méthodologique top/down où, dans un premier temps, un modèle d’équilibre général calculable (EGC) de dynamique récursive est employé pour simuler les divers scénarios de crise économique et de politiques de réponse à la crise, en prenant en compte les différents canaux de transmission de la crise mondiale à l’économie camerounaise. Par la suite, les résultats produits par le modèle EGC sont utilisés dans un module micro-économétrique afin d'évaluer l’incidence des chocs simulés, sur les ménages en général et les enfants en particulier. Cinque dimensions de pauvreté des enfants sont examinées: la pauvreté monétaire; la pauvreté calorique; le taux de scolarité et/ou de participation des enfants au travail; enfin, l’accès des enfants aux soins de santé. L’étude montre que la crise engendrait une augmentation de 1,05% du nombre d’enfants pauvres en termes monétaires en 2008, de plus de 4% en 2009, 2010 et 2011, comparativement à la situation où elle ne serait pas survenue. Par rapport à cette même situation de référence, les simulations suggèrent que la crise augmenterait le nombre d’enfants pauvres sur le plan calorique de 0,56% en 2009, 1,08% en 2010 et de 1,60% en 2011, et influencerait négativement bien que légèrement la scolarité et l’accès des enfants aux soins de santé. Quatre politiques alternatives de réponse à cette crise sont simulées: une réduction de la TVA prélevée sur la vente des produits alimentaires; une suppression des droits de douane appliqués sur les importations de produits alimentaires; la gratuité de l’inscription des enfants de moins de 15 ans aux cantines scolaires dans les districts où le taux de pauvreté monétaire est supérieur au taux national; l’octroi de transferts en espèces aux ménages dont les enfants sont pauvres. Ces mesures, avec un cout respectif équivalent à 1%, 0,4%, 0,19% et 1% du PIB d’avant-crise au Cameroun, sont financées soit par l’aide internationale, soit par une ponction des réserves extérieures de l’Etat. Il ressort des simulations qu’en termes de réduction de la pauvreté, l’octroi des transferts en espèces se révèle comme étant la plus efficace des quatre politiques de réponse susmentionnées, bien que cette politique soit la plus inefficace de toutes pour améliorer le taux de croissance du PIB réel. Au plan national, la politique des transferts en espèces annihile intégralement l’augmentation des pauvretés monétaire et calorique due à la crise, durant toute la période d’étude. Qui plus est, elle entraîne une baisse sensible de ces deux types de pauvreté, comparativement aux niveaux de prévalence respectifs de ceux-ci dans la situation où la crise ne serait pas survenue. Par ailleurs, les effets des transferts sur le plan de la scolarité, de la participation des enfants au travail et sur l’accès de ces derniers aux soins de santé sont globalement meilleurs bien que légers. Derrière la politique des transferts en espèces, celle de la subvention des cantines scolaires, avec pourtant un coût relativement bas, donne aussi une réponse considérablement bénéfique face à la crise, surtout sur le plan de la pauvreté calorique; tandis que les deux autres politiques s’avèrent inefficaces, quelle que soit la dimension de la pauvreté considérée.
    Keywords: child education; child health; child labour; child poverty; econometric models; economic crisis; hunger; social protection;
    JEL: I32
    Date: 2010
  11. By: Michael Walton (Harvard University and the Centre for Policy Research, New Delhi)
    Abstract: What are the underlying drivers of human development? This essay argues that long-term human development, in incomes, social conditions, security and so on, is fundamentally driven by capitalist dynamics and state functioning. The big issue is not state versus market, or growth versus equity, or dynamism versus security. It is the jointly determined functioning of both capitalism and the state. It is in particular a consequence of the extent to which both capitalist and state behaviour is oligarchic, extractive, exploitative and divisive as opposed to being inclusive, innovative, accountable, responsive and effective at mediating distributional conflict. This can be conceptualized, at a point of time, in terms of the nature of the political equilibrium, or, alternatively, the way in which social contracts work. This is a product of the historically shaped interaction between political and economic elites, and between these and various social groups. Specific policy designs of course matter, whether in terms of market-related policy, regulation, designs for social provisioning. But the ways in policy and institutional choices work, and indeed the choices societies make, is intimately linked to the nature and functioning of the underlying social contracts that in turn shape capitalist dynamics and state behaviour.
    Keywords: capitalism, growth, poverty, human development
    JEL: I00 O10 P10 P16
    Date: 2010–06

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