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on History and Philosophy of Economics |
| By: | Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise) |
| Abstract: | Les ingénieurs économistes français avaient accueilli avec beaucoup de réticences l'œuvre de Walras. Ils ne pensaient pas que l'emploi des mathématiques puisse constituer une méthode normale même en économie politique pure. Progressivement leurs réticences s'estompèrent quand ils reconnurent le rôle crucial de l'interdépendance dans l'analyse des phénomènes économiques. La théorie de l'équilibre général s'imposa alors comme le cadre nécessaire de référence. Dans cette évolution, la publication en 1928 de L'économique rationnelle marque une étape importante non seulement parce que Divisia propose, dans cet ouvrage, un nouvel exposé de la théorie de l'équilibre général mais parce qu'il met en évidence les difficultés que soulèvent les analyses que faisait Walras des choix intertemporels et de la formation des prix monétaires. C'est en s'appuyant sur ces critiques et sur les analyses de Fisher et de Pareto qu'Allais proposa, dans son Traité d'économie pure, un nouveau modèle d'équilibre général qui prend en compte de façon systématique le caractère temporel des phénomènes économiques. C'est à juste raison que ce modèle fut qualifié de néo-walrasien car c'est bien du modèle que Walras avait élaboré dans les Éléments d'économie politique pure que s'inspire Allais pour construire sa propre théorie de l'équilibre économique. |
| Keywords: | Walras, Divisia, Colson, Rueff, Roy, Allais, Théorie de l'équilibre général, histoire de la pensée économique |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00104574&r=hpe |
| By: | Marco Piatti (QUT); Benno Torgler (QUT) |
| Abstract: | 20 years ago, William Baumol provided an interesting wish list that outlined his hopes for the future of economics over the next hundred years. Impatiently, this paper puts his wish list to the test by comparing the characteristics of publications that appeared in the American Economic Review before Baumol’s contribution in 1991 (1984 to 1988) and those published 20 years later (2004 to 2008), and by looking at the Job Openings for Economists between 1991 and 2009. Focusing on issues such as the role of mathematics, the short-run orientation of macroeconomics, the emphasis of economic history versus the history of economic ideas, as well as a more concrete menu of wishes for applied economics, we observe that this was not just a wish list, but is in many ways a list that offers an accurate picture of what has changed over time and what has happened in recent years. |
| Keywords: | American Economic Review, William Baumol, Mathematics, Macroeconomics, Applied Economics, Job Openings |
| JEL: | B41 A20 A10 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:264&r=hpe |
| By: | L. Randall Wray |
| Abstract: | In this paper I will follow Hyman Minsky in arguing that the postwar period has seen a slow transformation of the economy from a structure that could be characterized as "robust" to one that is "fragile." While many economists and policymakers have argued that "no one saw it coming," Minsky and his followers certainly did! While some of the details might have surprised Minsky, certainly the general contours of this crisis were foreseen by him a half century ago. I will focus on two main points: first, the past four decades have seen the return of "finance capitalism"; and second, the collapse that began two years ago is a classic "Fisher-Minsky" debt deflation. The appropriate way to analyze this transformation and collapse is from the perspective of what Minsky called "financial Keynesianism"—a label he preferred over Post Keynesian because it emphasized the financial nature of the capitalist economy he analyzed. |
| Keywords: | Hyman Minsky, Fisher-Minsky Debt Deflation, Hilferding, Finance Capitalism, Money Manager Capitalism, Financial Keynesian |
| JEL: | B22 B25 B52 E11 E12 E44 G18 G20 G21 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_653&r=hpe |
| By: | Estrada, Fernando |
| Abstract: | In this brief note describes the trajectory of the fractal models/multifractal F/M by Benoit Mandelbrot. The promise was discovered by the geometry of Mandelbrot covers a broad area of research fields, from meteorology and mathematical physics to the individual and collective behavior in society, besides his contributions to the analysis of the financial crisis in his wonderful essay on «The (mis) Behavior of Markets. A fractal view of Risk, Ruin and Reward» (2004). Mandelbrot’s arguments have revealed significant anomalies in the prevailing paradigms. Is this a new paradigm in Kuhn’s sense as stated by the same Mandelbrot? |
| Keywords: | Mandelbrot; Fractals; Finance; Financial Markets; Epistemology; Thomas Kuhn. |
| JEL: | B10 B0 B4 C70 C7 G00 D7 B16 G32 G0 B41 |
| Date: | 2011–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29137&r=hpe |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group) |
| Abstract: | A long time ago most economists would have limited themselves to stating that agreements should be individually rational and efficient and that selecting a specific agreement from that set depends on bargaining and negotiation power whatever that may be. Nowadays hardly any economist will argue that way. The change has been brought about by the strategic approach to bargaining and cooperation and the parallel experimental studies of bargaining and negotiation. When arguing what should be explored more thoroughly, we will point out directions where previous efforts may have been misdirected, where importing new methods may be helpful or even needed, and where new research questions need to be asked and answered. |
| Keywords: | (un)bounded rationality, (non-)cooperative game theory, bargaining and negotiation (theory and experiments) |
| JEL: | C90 C92 C93 D63 D64 D71 D74 |
| Date: | 2011–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-012&r=hpe |
| By: | L. Randall Wray |
| Abstract: | In the aftermath of the global financial collapse that began in 2007, governments around the world have responded with reform. The outlines of Basel III have been announced, although some have already dismissed its reform agenda as being too little (and too late!). Like the proposed reforms in the United States, it is argued, Basel III would not have prevented the financial crisis even if it had been in place. The problem is that the architects of reform are working around the edges, taking current bank activities as somehow appropriate and trying to eliminate only the worst excesses of the 2000s. Hyman Minsky would not be impressed. Before we can reform the financial system, we need to understand what the financial system does—or, better, what it should do. To put it as simply as possible, Minsky always insisted that the proper role of the financial system is to promote the "capital development" of the economy. By this he did not simply mean that banks should finance investment in physical capital. Rather, he was concerned with creating a financial structure that would be conducive to economic development to improve living standards, broadly defined. In this paper, we first examine Minsky's general proposals for reform of the economy—how to restore stable growth that promotes job creation and rising living standards. We then turn to his proposals for financial reform. We will focus on his writing in the early 1990s, when he was engaged in a project at the Levy Economics Institute on reconstituting the financial system (Minsky 1992a, 1992b, 1993, 1996). As part of that project, he offered his insights on the fundamental functions of a financial system. These thoughts lead quite naturally to a critique of the financial practices that precipitated the global financial crisis, and offer a path toward thorough-going reform. |
| Keywords: | Global Financial Crisis; Hyman Minsky; Financial Reform; Basel III; Capital Development; Banks |
| JEL: | B22 B25 B52 E11 E12 E44 G18 G20 G21 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_655&r=hpe |
| By: | Dean Spears (Princeton University) |
| Abstract: | Economic theory and common sense suggest that time preference can cause or per- petuate poverty. Might poverty also or instead cause impatient or impulsive behavior? This paper reports a randomized lab experiment and a partially randomized field ex- periment, both in India, and analysis of the American Time Use Survey. In all three studies, poverty is associated with diminished behavioral control. The primary contri- bution is to isolate the direction of causality from poverty to behavior; three theoretical mechanisms from psychology cannot be deffinitively separated. One supported expla- nation is that poverty, by making economic decision-making more difficult for the poor, depletes cognitive control. |
| Keywords: | impatient, impulsive behavior, poverty, psychology, cognative control |
| JEL: | D19 D63 I39 J19 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1293&r=hpe |
| By: | John Erik Fossum |
| Abstract: | This chapter scrutinises MacCormick’s liberal nationalism. The first issue with which he grapples is how well the post-sovereign constellation can re-configure nationalism through disposing of the exclusivist and suppressive (of regional forms of nationalism)propensities built into the sovereign state. Second, is the question of the status of liberal nationalism in MacCormick’s broader theoretical conception of the post-sovereign constellation. This also raises the issue as to whether there might be other, alternative, modes of allegiance that might be compatible with MacCormick’s general approach to law and politics in the post-sovereign constellation. In the concluding section, it is argued that a cosmopolitan constitutional patriotism might be a more suitable mode of allegiance for the post-sovereign constellation. The potential for harnessing this to a democratic end, the chapter argues, is best ensured by building upon the deep insights in MacCormick’s approach, and subsuming them under the theory of constitutional synthesis. |
| Keywords: | identity; democracy; Nation-state |
| Date: | 2011–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:reconx:p0092&r=hpe |
| By: | Tausch Franziska; Potters Jan; Riedl Arno (METEOR) |
| Abstract: | Redistribution is an inevitable feature of collective pension schemes. It is still largely an open question what people‘s preferences are regarding redistribution—both through pensions schemes as well as more generally. It would seem that economists have little to say about this question, as they routinely assume that people are predominantly selfish. Economic experiments have revealed, however, that most people do in fact have redistributional preferences that are not merely inspired by self-interest. This paper reviews this experimental evidence. For that purpose we distinguish between three fundamentally different types of situations. The first deals with distributional preferences behind a veil of ignorance. What type of income distribution do people prefer when they do not know whether they will end up in an advantaged or disadvantaged position? A main result here is that, contrary to what John Rawls suggested, people do not prefer the maximin rule, but rather favor a utilitarian justice concept appended with a safety net for the poorest. Another result is that people are willing to accept income inequalities—as long as these are due to choices for which people can be held accountable. In the second type of situation, individuals make choices in front of the veil of ignorance and know their position. Experiments show that preferences for redistribution are strongly dependent on a person‘s own position. People in a relatively disadvantaged position want more redistribution than those in a relatively advantaged position, which shows that preferences for redistribution are clearly affected by self-interest. Still, even many of those in an advantaged position display a preference forredistribution. This holds, in particular, if inequality is due to chance rather than effort. There are also significant differences in preferences between the genders and between people with different political orientations. Finally, we discuss situations in which income is determined by interdependent rather than individual choices. People are dependent upon the cooperation of others for the achievement of their (income) goals. Experiments show that behavioral factors such as trust and reciprocity play a crucial role, and they also indicate that these factors are strongly affected by the institutional setting. In the closing parts of the paper we discuss whether and how these experimental results speak to the redistribution issues of pensions. For example, do they argue for or against mandatory participation? Should we have less redistribution and more actuarial fairness? How does this depend on the type of redistribution involved? |
| Keywords: | public economics ; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2011014&r=hpe |
| By: | Micheal Hudson |
| Abstract: | In this paper I want to discuss the financial sector’s tendency to dominate, deflate and polarize economies, thwarting economic potential. Understanding these financial dynamics is essential to explain why all nations are not operating up to the technological potential toward which classical liberalism aimed, and why the world economy is polarizing, as are domestic economies even in the most advanced industrial nations. |
| Date: | 2011–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:col:000418:008010&r=hpe |
| By: | Hammitt, James; Robinson, Lisa |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:23892&r=hpe |
| By: | Heinrich August Winkler |
| Abstract: | First Annual Ralf Dahrendorf Memorial Lecture, London School of Economics, 7 October 2010 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:leqsxx:p0030&r=hpe |
| By: | Smith, Matthew |
| Abstract: | This paper develops upon the Keynesian theory of demand-led growth in order to provide an analytical framework conducive to explaining economic growth and development in concrete terms consistent with the fundamental idea that growth in output and employment is determined by the growth in aggregate demand. The framework employs an historical approach to identify the main factors and their role in explaining demand-led growth and the accumulation process. The theoretical model developed abandons steady-state conditions by proposing that capacity utilization varies in the long run as well as in the short run to ensure output has the elasticity to accommodate levels of autonomous demand free of any capacity saving constraint. On the basis of our analytical framework, the paper considers the main factors which explain the growth in aggregate demand: first, by examining the variables that determine the ‘super-multiplier' and what social, institutional and technical conditions can cause its value to change over time; second, by identifying the components of autonomous demand and the main forces explaining their growth; and third, by considering the manner in which technical progress promotes demand-led growth. |
| Keywords: | economic history; classical economics; Keynesian demand-led growth; growth theory |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2123/7214&r=hpe |
| By: | Grindle, Merilee (Harvard University) |
| Abstract: | Good governance has grown rapidly to become a major ingredient in analyses of what's missing in countries struggling for economic and political development. Intuitively and in research, good governance is a seductive idea--who, after all, can reasonably defend bad governance? Nevertheless, the popularity of the idea has far outpaced its capacity to deliver. In its brief life, it has also muddied the waters of thinking about the development process, and has become conflated with the capacity to generate growth, alleviate poverty, and bring effective democracy to peoples in poor countries. Scholars and practitioners need to develop a reasonable understanding of what good governance can deliver--and what it cannot. They must also assume more realistic expectations about how much good governance can be expected in poor countries struggling with a plethora of demands on their capacities to pursue change. In this paper, I explore how and why the concept of good governance emerged and grew, and then suggest ways that academics and practitioners can become more sensitive to the limitations of fads and to curb the tendency toward idea inflation. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp10-023&r=hpe |
| By: | Don Harding (La Trobe University); Adrian Pagan (QUT and UTS) |
| Abstract: | The fact that the Global Financial Crisis, and the Great Recession it ushered in, was largely unforeseen, has led to the common opinion that macroeconomic models and analysis is deficient in some way. Of course it has probably always been true that businessmen, journalists and politicians have agreed on the proposition that economists canÂ’t forecast recessions. Yet we see an enormous published literature that presents results which suggest it is possible to do so, either with some new model or some new estimation method e.g. Kaufman (2010), Galvao (2006), Dueker (2005), Wright (2006) and Moneta (2005). Moreover, there seem to be no shortage of papers still emerging that make claims along these lines. So a question that naturally arises is how one is to reconcile the existence of an expanding literature on predicting recessions with the scepticism noted above? |
| Keywords: | Global Financial Crisis, Great Recession, |
| Date: | 2010–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2010_16&r=hpe |
| By: | Sascha Frohwerk |
| Abstract: | The new economic geography explains agglomerations based on a microeconomic general equilibrium model, witch is usually assumed to be symmetric in the sense, that regions are of the same size and transport costs and expenditure shares are the same. As a result, the models can explain why an agglomeration occurs, but not in witch region. This book modifies three of the most influential models of the new economic geography and assumes various asymmetries. It compares the results to the symmetric cases. Not only theoretical aspects but also methods of simulation are discussed in detail. This methods can be applied to a wide variety of models. To show the political implications of the theoretical results, one of the asymmetric models is applied to the economical development in germany after reunification. The model is able to explain the persistent difference in wages between east and west and the simultaneous incomplete agglomeration in the west. |
| Keywords: | new economic geography, methods of simulation, agglomeration, regional development |
| JEL: | P25 C63 R13 R23 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:pot:psrawi:03&r=hpe |
| By: | David K Levine |
| Date: | 2011–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000030&r=hpe |