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on History and Philosophy of Economics |
| By: | Fusari, Angelo |
| Abstract: | Although many economists do a serious and respectable work, main stream economic theory contains an almost complete disregard for the importance of social, cultural and political structures which are the very foundation of the society. Worse than that, such disregard is developed into arrogance when representatives and textbook maintain the illusions of economic main stream science as value free, and sometimes it is even asserted that only if the economic system could be free from disturbing interferences from collective bodies it would function even without any ethical principle. Such testimonies of ignorance of historical and philosophical knowledge and lack of understanding of social structures are not maintained by serious researchers of economic science but are more to be seen as ideological statements. However these testimonies are unfortunately based on a very specific apprehension of both the society as well as space and time from the 18th century where the scientific discoveries and theories of Gallilei and Newton was turned into a mechanistic and idealistic philosophy. True is that Adam Smith did not fully accept such a view but alongside the philosophical approaches of Kant and Hegel the economic theory by the later writings of Marx and the Neo-classical theorists made economic science into a machinery which culminated with Walras, Pareto and Pigou although it was mathematically refined in the so called Arrow&Debreu model. A main cause of the limitations of economics is its closure and excessive specialization in the context of sometimes very sophisticated modeling, formally rigorous but elusive of crucial aspects of reality, the causes of which remain therefore outside the adopted explanatory framework, as exogenous factors. It seems to us that a treatment of economics seen as a part of social thought is essential to an adequate deepening of social change and hence of economic dynamics. This general view will oblige us to dedicate an accurate analysis to the method of investigation and interpretation of social reality, and will imply a detailed critical review not only on mainstream economics but also the alternative proposals of a growing number of schools of thought. We shall see that our more comprehensive vision than the habitual ones is not hostile to a rigorous formalization of the economic process able to give the due importance to crucial features of the modern dynamic economies. A more detailed exposition of this matter will be given in the paragraph on the structure of the book. It is difficult to tell anything about the educational prerequisites in order to grasps the content of this book. We are well aware that much of the content is fairly abstract. But acquaintance with abstract reasoning is valuable and is not necessarily limited to economists but we think and hope that also social and political scientists will enjoy the book, since we try to bring back economic science as a subset of sociological and political sciences, where it belongs. If students of philosophy should find something of interesting in our analysis, we would be very pleased. |
| Keywords: | Growth and Development; Innovation; Radical uncertainty; Entrepreneurship; Social change and social thought; Ethics; objective and subjective values; Market system |
| JEL: | P12 O33 A10 O11 O1 A13 O16 P4 O31 A14 O12 B41 |
| Date: | 2010–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23974&r=hpe |
| By: | Georgy S. Levit; Uwe Hossfeld; Ulrich Witt |
| Abstract: | It has been suggested that, by generalizing Darwinian principles, a common foundation can be derived for all scientific disciplines dealing with evolutionary processes, especially for evolutionary economics. In this paper we show, however, that the principles of such a "Generalized Darwinism" are not those that in the development of evolutionary biology have been crucial for distinguishing Darwinian from non-Darwinian approaches and, hence, cannot be considered genuinely Darwinian. Moreover, we wonder how "Generalized Darwinism" can be made fruitful for evolutionary economics given that its principles are but an abstract hull that does not suffice to explain actual evolutionary processes in the economy. To that end specific hypotheses are required which neither follow from, nor are necessarily compatible with, the suggested abstract principles. Accordingly, we find little evidence in the literature for the claim that Generalized Darwinism can enhance the explanatory power of an evolutionary approach to economics. |
| Keywords: | Darwinism, evolution, evolutionary economics, Generalized Darwinism, variation, selection, retention Length 17 pages |
| JEL: | B25 B40 B52 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2010-07&r=hpe |
| By: | Marc Lavoie |
| Abstract: | The subprime financial crisis has forced several North American and European central banks to take extraordinary measures and to modify some of their operational procedures. These changes have made even clearer the deficiencies and lack of realism in mainstream monetary theory, as can be found in both undergraduate textbooks and most macroeconomic models. They have also forced monetary authorities to reject publicly some of the assumptions and key features of mainstream monetary theory, fearing that, on that mistaken basis, actors in the financial markets would misrepresent and misjudge the consequences of the actions taken by the monetary authorities. These changes in operational procedures also have some implications for heterodox monetary theory; in particular, for post-Keynesian theory. The objective of this paper is to analyze the implications of these changes in operational procedures for our understanding of monetary theory. The evolution of the operating procedures of the Federal Reserve since August 2007 is taken as an exemplar. The American case is particularly interesting, both because it was at the center of the financial crisis and because the U.S. monetary system and its federal funds rate market are the main sources of theorizing in monetary economics. |
| Keywords: | Federal Funds Rate; Corridor System; Interest on Bank Reserves; Money Multiplier |
| JEL: | E42 E43 E58 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_606&r=hpe |
| By: | Giraud Yann; Charles Loic (THEMA, Universite de Cergy-Pontoise; EconomiX, Universite de Reims and INED) |
| Abstract: | The rise of visual representation in economics textbooks after WWII is one of the main features of contemporary economics. In this paper, we argue that this development has been preceded by a no less significant rise of visual representation in the larger literature devoted to social and scientific issues, including economic textbooks for non-economists as well as newspapers and magazines. During the interwar era, editors, propagandists and social scientists altogether encouraged the use of visual language as the main vehicle to spread information and opinions about the economy to a larger audience. These new ways of visualizing social facts, which most notably helped shape the understanding of economic issues by various audiences during the years of the Great Depression, were also conceived by their inventors as alternative ways of practicing economics: in opposition to the abstraction of “neoclassical” economics, these authors wanted to use visual representation as a way to emphasize the human character of the discipline and did not accept the strict distinction between the creation and the diffusion of economic knowledge. We explore different yet related aspects of these developments by studying the use of visual language in economics textbooks intended for non-specialists, in periodicals such as the Survey, a monthly magazine intended for an audience of social workers, the Americanization of Otto Neurath's pictorial statistics and finally the use of those visual representations by various state departments and administrations under Roosevelt's legislature (including the much-commented Historical Section of the Farm Security Administration). We show how visualizations that have been created in opposition to neoclassical economics have lost most of their theoretical content when used widely for policy purposes while being simultaneously integrated into the larger American culture. It is our claim that those issues, which are familiar to those involved in cultural and visual studies, are also of crucial importance to apprehend the later developments of modern economics. |
| Keywords: | Visualization, economocs, American Economy, Otto Neurath, Rexford Tugwell, Roosevelt, Roy Stryker, Photographs, Pictorial Statistics |
| JEL: | B20 A14 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2010-03&r=hpe |
| By: | Marco Antonio Ribas Cavalieri (Department of Economics, Universidade Federal do Paraná); Iara Vigo de Lima (Department of Economics, Universidade Federal do Paraná) |
| Abstract: | Thorstein Veblen (1857-1929), considered the first institutionalist author, tried to formulate, in the passage of the 19th century to the 20th, an original system of political economy that was alternative to classical, neoclassical, historicist and marxist thoughts. In this paper, this system of political economy is considered from the Michel Foucault’s (1926-1984) archeology of knowledge perspective. Hence, the paper has two more specific objectives. First, to expose how Foucault’s archeology of knowledge can be used to the study of an original system of political economy. Second, to show that the Veblenian system can be viewed as an instance, incipient and hesitant as it is, in the direction of a surpassing of what Foucault named modern episteme. |
| Keywords: | Thorstein Veblen, Michel Foucault, history of economic thought, archeology of knowledge, institutionalism |
| JEL: | B15 B49 B31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fup:wpaper:0107&r=hpe |
| By: | Tibor Neugebauer (Luxembourg School of Finance, University of Luxembourg); John Hey (University of York); Carmen Pasca (LUISS) |
| Abstract: | We offer a translation into English of the original French version published in 1777 of Buffon’s Essai d’Arithmetique Morale along with some introductory remarks. In this classic work, Buffon discusses degrees of certainty, probability, the moral value of money, the different evaluations of gains and of losses; moreover, he proposes repeated experiments to determine the moral value of a game. Our hope is that this remarkable work, which anticipates and relates to many aspects discussed in more recent literature, reaches a broader audience than the French original reaches today. Our belief is that we are first to translate this classic work completely. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:crf:wpaper:10-06&r=hpe |
| By: | David J Butler (UWA Business School, The University of Western Australia); Victoria K Burbank (School of Social and Cultural Studies, The University of Western Australia); James S Chisholm (School of Anatomy and Human Biology, The University of Western Australia) |
| Abstract: | The tension between cooperative and competitive impulses is an eternal issue for every society. But how is this problem perceived by individual participants in the context of a behavioral games experiment? We first assess individual differences in players’ propensity to cooperate in a series of experimental games. We then use openended interviews with a subset of those players to investigate the various concepts (or ‘frames’) they used when thinking about self-interested and cooperative actions. More generally, we hope to raise awareness of player’s perceptions of experimental environments to inform both the design and interpretation of experiments and experimental data. |
| Keywords: | Laboratory Experiment, Frames, Selfishness, Cooperation |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:10-03&r=hpe |
| By: | John B. Taylor |
| Abstract: | This paper shows that the monetary policy paradigm that was in place before the financial crisis worked very well and that the crisis occurred only after policy makers deviated from that paradigm. The paper also evaluates monetary policy during the financial crisis by dividing the crisis into three periods: pre-panic, panic and post-panic. It shows that the extraordinary measures did not work well in the pre-panic or the post-panic periods; instead they helped bring on the panic, even though they may have some positive impact during the panic. The implication of the paper is that the crisis does not call for a new paradigm for monetary policy. |
| Keywords: | financial crisis, monetary policy rule, Taylor rule, quantitative easing |
| JEL: | E43 E52 E58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0402&r=hpe |
| By: | Mark Weder |
| Abstract: | Two dynamic general equilibrium economies compete in explain?ing the United States'interwar business cycles. Despite the demand driven contender's slight advantages, the results remain too close to call a clear winner. |
| Keywords: | Great Depression, Dynamic General Equilibrium. |
| JEL: | E32 N12 |
| Date: | 2010–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:1013&r=hpe |
| By: | Teng , Jimmy |
| Abstract: | Bayesian rational prior equilibrium requires agent to make rational statistical predictions and decisions, starting with first order non informative prior and keeps updating with statistical decision theoretic and game theoretic reasoning until a convergence of conjectures is achieved. The main difference between the Bayesian theory of games and the current games theory are: I. It analyzes a larger set of games, including noisy games, games with unstable equilibrium and games with double or multiple sided incomplete information games which are not analyzed or hardly analyzed under the current games theory. II. For the set of games analyzed by the current games theory, it generates far fewer equilibria and normally generates only a unique equilibrium and therefore functions as an equilibrium selection and deletion criterion and, selects the most common sensible and statistically sound equilibrium among equilibria and eliminates insensible and statistically unsound equilibria. III. It differentiates between simultaneous move and imperfect information. The Bayesian theory of games treats sequential move with imperfect information as a special case of sequential move with observational noise term. When the variance of the noise term approaches its maximum such that the observation contains no informational value, there is imperfect information (with sequential move). IV. It treats games with complete and perfect information as special cases of games with incomplete information and noisy observation whereby the variance of the prior distribution function on type and the variance of the observation noise term tend to zero. Consequently, there is the issue of indeterminacy in statistical inference and decision making in these games as the equilibrium solution depends on which variances tends to zero first. It therefore identifies equilibriums in these games that have so far eluded the classical theory of games. |
| Keywords: | Games Theory; Bayesian Statistical Decision Theory; Prior Distribution Function; Conjectures; Subjective Probabilities |
| JEL: | C02 C11 C72 |
| Date: | 2010–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24189&r=hpe |
| By: | Salvadori, Neri |
| Abstract: | The proof of the existence of the Standard commodity contained in Sraffa's book (section 37) has been debated recently. Lippi (2008) has argued that the algorithm in section 37 of Sraffa’s book is not precisely stated and does not need to converge to the desired eigenvalue and eigenvector. In this paper I will show that also the proof provided by Besicovitch to Sraffa on 21 September 1944 is incomplete, but it can easily be completed. |
| Keywords: | Sraffa; Besecovitch; Standard Commodity; Perron-Frobenius Theorem |
| JEL: | B31 B23 B29 |
| Date: | 2010–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24188&r=hpe |
| By: | Alberto Chilosi |
| Abstract: | Seen in historical perspective the main economic predicaments of the present world (such as poverty, inequality, backwawardness) appear in a somewhat different light than in many current discussions, especially by sociologists, radical economists and political scientits. In the present paper the achievements of the modern age, and in particular of the post-World War II period, are considered in the perspective of economic and demographic history, and in their connection with the contemporary system of production and of international relations. Some considerations concerning future possible developments conclude the paper. |
| Keywords: | poverty, population, development, distribution, inequality, extraction rate, international relations, globalization, transition, colonialism, slavery, Zen economy, migration, economic consequences of war and peace, atomic warfare |
| JEL: | P0 O10 N0 |
| Date: | 2010–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2010/97&r=hpe |