nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2011‒02‒05
twelve papers chosen by
Erik Thomson
University of Manitoba

  1. Concorrenza senza equilibrio. La "scoperta imprenditoriale" nella Teoria Economica Austriaca By Marco, Passarella; Hervé, Baron
  2. Money creation and control from Islamic perspective By Hasan, Zubair
  3. The two poverty enlightenments: historical insights from digitized books spanning three centuries By Ravallion, Martin
  4. Health, Economics and Ancient Greek Medicine By Lyttkens, Carl Hampus
  5. L'étrange victoire: Leontief et la transformation de la science économique: de la planification sans théorie à la mesure sans théorie 1920-1949 By Akhabbar, Amanar
  6. The economics of debt clearing mechanisms By Börner, Lars; Hatfield, John William
  7. On the coexistence of money and higher-return assets and its social role By Guillaume Rocheteau
  8. The Beat of Visions :The challenging features of a new global mode of production By Hanappi, Hardy
  9. Role Models that Make You Unhappy: Light Paternalism, Social Learning and Welfare By Christian Cordes; Christian Schubert
  10. Global Justice By Risse, Mathias
  11. Where is the Economics in Spatial Econometrics? By Bernard Fingleton; Luisa Corrado
  12. Reproducible Econometric Simulations By Christian Kleiber; Achim Zeileis

  1. By: Marco, Passarella; Hervé, Baron
    Abstract: The aim of this paper is to supply both a description and an interpretation-key of the recent developments in the Austrian Economics, with particular attention for the role played by the concept of «entrepreneurial discovery». Without knowing exactly «what» he is looking for and without using a particular research method, the Austrian entre-preneur, like a modern buccaneer, peers at the horizon, waiting for new money profit opportunities.
    Keywords: Austrian Economics; Entrepreneurial Discovery Approach; Methodological Individualism
    JEL: D21 D81 D41 B53 B25
    Date: 2010–08
  2. By: Hasan, Zubair
    Abstract: This paper deals with familiar facts in monetary economics from an unfamiliar angle. It argues that it is not factual to regard the legal tender money and bank credit as of different genus: they work in tandem to the same ends in an economy, conventional or Islamic. Also, it does not matter what serves as money – solid gold or flimsy paper – for keeping its value stable; only the blind would argue that staff is indispensable for walking. Money is just an instrument: it was never nor can ever be classified into Islamic and non-Islamic. What it does – good or bad – depends on how we use it. Money does not generate crises; its mismanagement does. It follows that the refuge the world is searching today from recurring financial crises does not lie in money substance: history testifies that national economies could not remain turmoil-free during the centuries of the yellow metal sway over the monetary scene. The paper concludes that it is the human factor that has been the source of good or evil for mankind including money matters. And the quality of human factor true religion can alone improve: morality without faith is rudderless.
    Keywords: Key words: Monetary policies; Gold standard; managed currency; Islamic banking; Central banks
    JEL: E62 E42 E58 B50 B25
    Date: 2011–01–23
  3. By: Ravallion, Martin
    Abstract: Word searches of Google's library of digitized books suggest that there have been two"Poverty Enlightenments"since 1700, one near the end of the 18th century and the second near the end of the 20th. The historical literature suggests that only the second came with a widespread belief that poverty could and should be eliminated. After the first Poverty Enlightenment, references to"poverty"(as a percentage of all words) were on a trend decline until 1960, after which there was a striking resurgence of interest, which came with rising attention to economics and more frequent references to both general and specific policies relevant to poverty. Developing countries also became more prominent in the literature. Both Enlightenments came with greater attention to human rights. The written record reflects the push-back against government intervention and the retreat from leftist economics and politics since the late 1970s. Although many debates from 200 years ago continue today, there is little sign that the modern revival of the classical 19th century views on the limitations of government has come with a revival of the complacency about poverty that was common early in that century.
    Keywords: Rural Poverty Reduction,Services&Transfers to Poor,Achieving Shared Growth,Poverty Reduction Strategies,Regional Economic Development
    Date: 2011–01–01
  4. By: Lyttkens, Carl Hampus (Department of Economics, Lund University)
    Abstract: A period of two and a half millennia separates us from the Classical period of ancient Greece. Nevertheless, looking at ancient Greek medicine from the perspective of modern health economics is an interesting endeavour in that it increases our understanding of the ancient world and provides insights into contemporary society. Ancient Greece is rightly famous for pioneering secular and scientific medicine, but equally noteworthy is the prominence of healing cults, such as that of Asklepios. In this paper, the market for secular physicians is illuminated with tools from modern economics, for example the concern for the physician’s reputation. The simultaneous emergence in ancient Greece of a scientific and rational approach to medicine and the proliferation of religious medicine provides an interesting vantage point for a study of the current market for alternative medicine. Similar circumstances arguably lie behind the dual nature of the health market that was present then and is still present now. The underlying mechanism in both periods is hypothesised to be increased uncertainty in everyday life.
    Keywords: health; economics; medicine; ancient Greece; alternative
    JEL: I11 N33
    Date: 2011–01–28
  5. By: Akhabbar, Amanar
    Abstract: Depuis les années 1990, l’histoire de la pensée économique s’intéresse aux « marges » de la discipline et notamment aux pratiques économiques, à la profession d’économiste ainsi qu’à l’économie appliquée et à l’économie empirique. Elle n’est plus cantonnée à une histoire des théories économiques, à un monde éthéré d’idées pures. Mais cet intérêt nouveau peut conduire à un excès inverse et à évacuer toute dimension analytique et épistémologique. À cet égard, l’analyse input-output de Wassily Leontief apparaît comme l’archétype de l’instrument économique et statistique développé pour mettre en œuvre des politiques économiques de planification. Ignorée jusque là par l’histoire de la pensée économique elle est devenue, après l’économétrie, un sujet d’étude. Pour Alain Desrosières l’analyse input-output est l’outil par excellence de l’Etat ingénieur et, pour Mary Morgan, elle est représentative de la montée de l’interventionnisme technocratique en Occident. Dans cet article nous défendons l’idée selon laquelle ces interprétations sont trop réductrices car elles se concentrent sur les seules dimensions socio-politiques et instrumentales. Nous examinons alors, dans une approche comparative, les différentes dimensions qui ont permis la formation de l’analyse input-output. Notre argument principal consiste à insister sur la relation complémentaire entre une certaine forme d’instrumentation politique et technique et une certaine configuration épistémologique et culturelle de la science. Comprendre le tableau entrées-sorties ce n’est pas seulement saisir ce qui se produit dans les bureaux de statistique ou les ministères, mais aussi comment la science économique entière s’empare d’une manière de faire de la statistique, face à des enjeux scientifiques et politiques majeurs. Nous retraçons l’entremêlement des débats sur la politique économique et les controverses épistémologiques qui constituent le terreau sur lequel prend forme l’analyse input-output, depuis les débats sur la planification soviétique (1920-1929) jusqu’à la controverse de la mesure sans théorie (1947-1949). Nous montrons que loin d’être à part, l’analyse input-output est exemplaire du mouvement qui accompagne la transformation de la science économique en une technoscience, c’est-à-dire ici une science modélisée et statistique produisant des techniques de savoir et de pouvoir.
    Keywords: input output analysis; Leontief; planning; history of economics; Koopmans; soviet; methodology; econometrics; national accounting; Tinbergen; interindustrial; interwar
    JEL: C6 P0 B2 A14
    Date: 2010–04
  6. By: Börner, Lars; Hatfield, John William
    Abstract: We examine the evolution of decentralized clearinghouse mechanisms from the 13th to the 18th century; in particular, we explore the clearing of non- or limitedtradable debts like bills of exchange. We construct a theoretical model of these clearinghouse mechanisms, similar to the models in the theoretical matching literature, and show that specific decentralized multilateral clearing algorithms known as rescontre, skontrieren or virement des parties used by merchants were efficient in specific historical contexts. We can explain both the evolutionary self-organizing emergence of late medieval and early modern fairs, and its robustness during the 17th and 18th century. --
    Keywords: market design,matching,history of decentralized clearinghouses
    JEL: C78 D02 N23
    Date: 2010
  7. By: Guillaume Rocheteau
    Abstract: This paper adopts mechanism design to tackle the central issue in monetary theory, namely, the coexistence of money and higher-return assets. I describe an economy with pairwise meetings, where fiat money and risk-free capital compete as means of payment. Whenever fiat money has an essential role, any constrained-efficient allocation is such that capital commands a higher rate of return than fiat money.
    Keywords: Monetary theory
    Date: 2011
  8. By: Hanappi, Hardy
    Abstract: This paper explores how the visions of a future global political economy might shape its actual emergence. The emergence of powerful visions themselves seems to follow a pattern of discrete steps in historical time; it follows a beat of emancipation. In Europe the fundamental note was provided by the vision of enlightenment after the Dark Ages, which were kept in an ideological stalemate by religions. The beat of Luther’s early protestant secularization, Smith’s paleo-liberalism, Marx’ communism, micro-theological marginalism (Walras, Menger, Jevons), and Keynes’ collection of singular outposts of a more global design – this succession of forceful visions enabled and accompanied the explosion of population, output, and thus of possible visions of the last 60 years. Indeed the most terrible drawback of the 20th century, Hitler’s 3rd Reich, was explicitly based on a vision too: It envisaged 1000 years of dominance of the Arian race. But Hitler failed, and a new step of emancipative evolution could start to unfold. After the bi-polar visions of the bi-polar US-SU world collapsed in 1990, the last 20 years were characterized by an accelerating divergence of contradictions between visions and realities they address. The dominating vision - a footloose, privately accumulating (i.e. capitalist) entity growing in a crudely specified market environment – rather produced less social glue, less integration. And that contradicted the enormously refined, increasing interdependence of socio-economic relations within and across all social strata. The current crisis indicates that the next discrete step towards a common consciousness, anticipated by common visions, knocks at the door. The paper highlights features of this next beat of visions, which are already visible. To name a few examples: • Take the essential features of large scale financial institutions back into the realm of democratically legitimized politics. • Design the proper places for well-specified (different) market-mechanism to do their job as scarcity indicating devices rather than to be misused as dubious element of an even more dubious religion. • Invent and implement advanced bureaucracy control mechanisms that meet the challenges of global administration. In the conclusion the dangers of constructing such a large ship at sea are discussed. The threat of fascist visions conquering considerable parts of populations is eminent – in a sense the forces of WW2 have not disappeared yet. So while the positive and creative side of vision building has to be expanded, the same intellectual project also has to defend what historically has already been achieved – to avoid the barbarism of ‘tabula rasa’, fascist visions.
    Keywords: Vision; global political economy; Europe
    JEL: O1 P00 N00
    Date: 2010–09–08
  9. By: Christian Cordes; Christian Schubert
    Abstract: Behavioral (e.g. consumption) patterns of boundedly rational agents can lead these agents into learning dynamics that appear to be “wasteful†in terms of well-being or welfare. Within settings displaying preference endogeneity, it is however still unclear how to conceptualize well-being. This paper contributes to the discussion by suggesting a formal model of preference learning that can inform the construction of alternative notions of dynamic well-being. Based on the assumption that interacting agents are subject to two biases that make them systematically prefer some cultural variants over others, a procedural notion of well-being can be developed, based on the idea that policy should identify and confine conditions that generate dynamic instability in preference trajectories.
    Keywords: Social Learning, Preference Change, Welfare, Human Cognition, Consumer Behavior Length 33 pages
    JEL: C61 D11 D63 D83 O12
    Date: 2011–01
  10. By: Risse, Mathias (Harvard Kennedy School)
    Abstract: Increasing political and economic interconnectedness draws much philosophical attention to the question of the conditions under which such stringent claims arise. Do claims of justice arise only among those who share membership in a state? Alternatively, do they arise among all those who are jointly subject to the global political and economic order? Or do they apply among all human beings simply because they are human? Inquiries into global justice differ from those into international justice precisely by not limiting inquiry to what states should do. They may well also question the very moral acceptability of states, and explore alternative arrangements. This article surveys the recent philosophical debate on global justice.
    Date: 2011–01
  11. By: Bernard Fingleton (Department of Economics, University of Strathclyde.); Luisa Corrado (Faculty of Economics, University of Cambridge)
    Abstract: Spatial econometrics has been criticized by some economists because some model specifications have been driven by data-analytic considerations rather than having a firm foundation in economic theory. In particular this applies to the so-called W matrix, which is integral to the structure of endogenous and exogenous spatial lags, and to spatial error processes, and which are almost the sine qua non of spatial econometrics. Moreover it has been suggested that the significance of a spatially lagged dependent variable involving W may be misleading, since it may be simply picking up the e¤ects of omitted spatially dependent variables, incorrectly suggesting the existence of a spillover mechanism. In this paper we review the theoretical and empirical rationale for network dependence and spatial externalities as embodied in spatially lagged variables, arguing that failing to acknowledge their presence at least leads to biased inference, can be a cause of inconsistent estimation, and leads to an incorrect understanding of true causal processes.
    Keywords: Spatial econometrics, endogenous spatial lag, exogenous spatial lag, spatially dependent errors, network dependence, externalities, the W matrix, panel data with spatial effects, multilevel models with spatial effects.
    JEL: C21 C31 R0
    Date: 2011–01
  12. By: Christian Kleiber; Achim Zeileis
    Abstract: Reproducibility of economic research has attracted considerable attention in recent years. So far, the discussion has focused on reproducibility of empirical analyses. This paper addresses a further aspect of reproducibility, the reproducibility of computational experiments. We examine the current situation in econometrics and derive a set of guidelines from our findings. To illustrate how computational experiments could be conducted and reported we present an example from time series econometrics that explores the finite-sample power of certain structural change tests.
    Keywords: computational experiment, reproducibility, simulation, software.
    Date: 2011–02

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